Ref: Hospitality/IOC- HPC Dt: 19.08.15

Minutes of the meeting between IOC & HPC to discuss operating procedure

for Hospitality Arrangements & Safekeeping Assistance between IOC& HPC

As per the MoU for Product Sales and Purchase being signed between lac & HPC for the

period up to 31.03.2018, the broad guidelines have been finalized for HospitalityArrangements & Safekeeping Assistance between IOC & HPC.

Accordingly, it has been decided that Hospitality Arrangements & Safekeeping Assistance

presently in vogue between our two companies at various locations shall continue till31.03.2018 as per the agreed operating procedures as given in Annexure -I. In addition tothe present locations (Annexure- II), all the future locations, if any, will also be governed by

the terms and conditions for Hospitality and Safekeeping covered under this Arrangementdepending upon the requirement of Assisted Company and available facilities of the

Assisting Company.

~ ~ /' \(~~~

(Rakesh SehgalGM (Operations)roc

~ .~)\(shle~maRaO) -:DGfv1 (Operations)HPC ------

End:

(i) Annexure I - Page 1-8 : Operating modalities of Hospitality and SafekeepingArrangements.

(ii) Annexure II - List of present locations with Hospitality and safekeeping

Arrangement (3 pages) .

Annexure-I

OPERATING MODALITIES FOR HOSPITALITY ARRANGEMENTBETWEEN IOC & HPC

\

Hospitality Arrangement envisages extending storage assistance by the company owning the facilitiesto another company who mayor may not have storage facilities at that location. This arrangementshall be at various locations in hinterland. All the locations will be covered under this arrangementdepending upon the requirement of Assisted Company and available facilities of Assisting Companyas per mutual agreement. The party extending the assistance is referred to as "Assisting Company"and party availing of the assistance is referred to as "Assisted Company".

A. Arrangement:

i) Extending assistance at Depots and Installation in hinterland of Assisting Company forhandling product of Assisted Company.

ii) Receipt of product may be by tank wagon/tank lorry.

iii) Delivery of product may be by tank lorry/tank wagon/local pipeline transfer.

iv) Assisting Company shall carry out all operations and documentation.

B. Receipt Formalities:

i) Planning of receipt by Assisted Company shall be made in close coordination withAssisting Company so that there is no over-shipment to the location. The quantitystored of both the parties at any point in time shall be approximately in proportion to thethruput of the parties at the location.

ii) Assisted Company shall be registered with local Sales Tax for receiving product from thesource of supply.

iii) In case of bonded receipts, both Assisting Company and Assisted Company shallcomplete all Excise/Customs documentation formalities as per prevailing law.

C. Determination of Receipt Quantity :

Quantity received by tank wagons shall be determined on the basis of applicable CTCC Chartand for road receipt, on the basis of valid tank lorry calibration chart as mentioned in the stocktransfer document after adjusting loss norm at natural temperature as per item "F" below andaccounted at 15°C and Metric Tonne (MT) by application of relevant ASTM Tables.

D. Determination of Delivered Quantity :

i) Quantity delivered in tank lorry shall be determined at 15°CIMT, as per validcalibration chart of the tank lorry/flowmeter as the case may be at the location.

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ii) Quantity delivered in tank wagons shall be determined on the basis of dip mentioned inthe applicable crcc chart/flowmeter as the case may be at the location.

iii) Quantity delivered by local pipeline transfer will be based on issuing tank dips asdetermined by joint gauging, before and after transfer operation.

E. DeliveryFormalities:

i) Assisting Company shall make duty payment in case of deliveries from bonded stocks ofAssisted Company on deposit basis.

ii) In case of bonded deliveries, both Assisting Company. and Assisted Company shallcomplete all Excise I Customs documentation formalities including declaration ofAssessable Value as per prevailing law.

iii) Assisted Company shall make all arrangement for positioning of fit tank lorries as perPetroleum Rules, 2002 and Motor Vehicle Act, 1988 for loading.

iv) Company owned tank lorries of both parties shall be given priority in filling as comparedto contractor tank lorries of both parties.

v) Assisting Company shall endeavour to meet prorata requirements of both parties duringthe day.

vi) Assisting Company shall handle sealing of tank lorries for Assisted Company as perIndustry Report on Mechanical Sealing of Tank lorries. However, assisted company hasto make all necessary arrangements including positioning of required manpower for tanklorry security locking system.

F. Product LossNorm:

i) Product loss norm shall be as under :-

Class "A" products (e.g. MS, Naphtha) - 0.6% at natural temperature.Class "B" products (e.g. SKO, HSD, ATF) - 0.4% at natural temperature.Class "C" products (e.g. LDO, FO) - 0.2% at natural temperature.

The loss quantity worked out for the above percentages on the stock transfer (dispatched)quantity shall be debited to Assisted Company.

ii) Product loss norm is towards transit and handling loss.

iii) Product loss certified by Railways as per joint dip certificate shall be debited to AssistedCompany in addition to above product loss norm, provided such joint certificate issubmitted to Assisted Company to enable timely lodgement of claim.

iv) In case of undelivered tank wagons, Assisting Company shall be responsible to obtainnon-delivery certificate from Railways and submit to Assisted Company to enable timelylodgement of claims.

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Page 2 of 8

v) In case of road receipts, quantity topped-up in tank lorry is comprised of two elements -product loss due to temperature variation (as determined by the standard co-efficientexpansion / contraction factors) and the balance as loss due to other causes. Thus,quantity debited to the Assisted Company shall be product loss norm plus loss due toother causes, provided Assisting Company obtains acknowledgement of the driver on thedocuments to enable Assisted Company to recover the loss due to other causes from thetransporter.

G. Charges:

i) Charges for services rendered under Hospitality Arrangement and settlement of thesame shall be covered in MOU / Bilateral Agreement for product sale and purchasesdated 31.3.2004 as applicable for rail/road dispatches.

ii) If the quantity received is not evacuated for 30 days from the date of receipt, thenadditional charges at the same rate as "i)" above (as per the rate applicable for railJroad dispatches) shall be recovered on the entire balance quantity for another cycleperiod of 30 days or part thereof unless it is established that the delay in theevacuation is attributed to Assisting Company.

iii) Charges shall be billed on the basis of Receipt & Issue Statement and otherexpense statement prepared on the monthly basis by the location.

H. Local dues:

All dues such as taxes, duty, octroi, tank wagon siding / shunting charges etc. on product ofAssisted Company shall be paid by Assisting Company on deposit basis. Assisted Companyto make the payment to Assisting Company as per the payment terms agreed in BilateralAgreement of product sale and purchase. Assisted Company shall follow up for refund, ifany, from statutory authorities.

I. General:

i) Both parties shall abide by Oil Industry product handling and operating manuals.ii) Assisting Company shall ensure that bank remittance are promptly lodged in the

Bank nominated by Assisted Company.iii) Assisting Company's laid down operating and accounting procedures shall be

followed.iv) Assisted Company shall be responsible for the quality of product to be delivered to

the Assisting Company at destination as per Industry Quality Control Manuals forAviation and Non-Aviation products, and the Industry Manual on Acceptance ofProducts by Marketing Companies and Related Issues. Assisting Company shall notunload any off-spec product, responsibility for disposal of which shall be of AssistedCompany.

v) Assisting Company shall maintain quality of products during receipt, storage anddelivery as per Industry Quality Control Manuals for Aviation and Non-Aviation

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products and Industry Manual on Acceptance of Products and Marketing Companies& Related Issues.

vi) Dispatches of products by tank lorry shall be guided by Industry Guidelines onTransport Discipline.

vii) Demurrage, if any, on tank wagons paid by Assisting Company for any reason shallbe shared between Assisting Company and Assisted Company in proportion to theirnumber of tank wagons in the rake.

viii) All deposits maintained by Assisted Company with Assisting Company shall be ascovered in Bilateral Agreement for Product Sale and Purchase dated 31.3.2004.

ix) Assisting Company shall be responsible for safe custody of Assisted Company'sproducts.

x) Assisting Company shall be responsible for safe and proper storage of records ofAssisted Company.

xi) Assisted Company shall provide required printed stationery, details of instructions,procedures and guidelines to Assisting Company from time to time.

xii) Assisted Company shall obtain necessary insurance coverage for their product storedin Assisting Company's tanks.

Page 4 of8

OPERATING MODALITIES FOR SAFEKEEPING ASSISTANCEBETWEEN IOC & HPC

Safekeeping Assistance envisages extending storage assistance by the company owning thefacilities to another company who mayor may not have storage facilities at that location. Theparty extending the assistance is referred to as "Assisting Company" and party availing of theassistance is referred to as "Assisted Company". This arrangement shall be at various coastallocations depending upon requirement of Assisted Company and availability of ullage and otherfacilities of Assisting Company at that coastal location.

A. Arrangement:

i) Extending assistance at coastal locations of Assisting Company for handling productof Assisted Company so as to avoid detention of ocean tankers of Assisted Companyand resulting demurrage.

ii) Before every receipt of product on safekeeping account, Assisted Company shallobtain prior clearance from Assisting Company.

iii) Delivery of product shall be by tank lorry/tank wagon/local pipeline transfer/oceantanker as mutually agreed.

iv) Assisted Company shall carry out co-ordination with pori authorities and complete allformalities for discharge of tanker.

v) Assisting Company shall carry out operations and documentation with respect toreceipt and storage.

vi) Assisted Company shall carry out documentation (invoicing) etc., as may be requiredfor deliveries.

vii) If Assisted Company desires to engage Surveyor for gauging of storage tanks ofAssisting Company, before and after receipt of product from ocean tankers, AssistingCompany may do so at their own cost and risk.

B. Receipt Formalities:

i) Assisted Company shall be registered with local Sales Tax for receiving product fromthe source of supply.

ii) Assisted Company shall make arrangements for discharge of product viz. co-ordination with port and Excise/Customs authorities, payment of port dues,engagement of surveyor etc.

iii) In case of bonded receipts, both Assisting Company and Assisted Company shallcomplete all Excise/Customs documentation formalities as per prevailing law.

C. Determination of Receipt Quantity:

Quantity shall be based on receiving tank dip as determined by joint gauging before and afterreceipt and accounted at 15°CIMT.

D. Determination of Delivered Quantity:

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Quantity shall be determined at lSoCIMT as under-

• Local pipeline/tankerlbunkering - Issuing tank dips as determined by jointgauging/flowmeter as may be applicable, before and after delivery.

• Tank wagon - Applicable CTCC chart quantity / flow meter as the case may be.

• Tank Lorry - Valid calibration chart of the tank lorrylflow meter as the case may be.

E. Delivery Formalities:

i)

v)

ii)

In case of delivery of ocean tanker, Assisted Company shall make all arrangements,viz. co-ordination with port & Excise / Customs authorities, payment of port dues,engagement of surveyor etc.Assisting company shall make duty payment in case of deliveries from bonded stockson deposit basis.In case of bonded deliveries, both Assisting Company and Assisted Company shallcomplete an Excise/customs documentation formalities as per prevailing law.If co-user siding facility is available, Assisted Company shall complete all tankwagon booking formalities including freight payment directly with Railways.Otherwise, Assisting Company shall complete all booking formalities includingfreight payment on behalf of Assisted Company on deposit basis.In case of deliveries through tank lorries, Assisted Company shall make allarrangement for positioning of fit tank lorries as per Petroleum Rules, 1976 andMotor Vehicles Act, 1988 for loading.Company owned tank lorries of both parties shall be given priority in filling ascompared to contractor tank lorries of both parties.Assisting Company shall endeavour to meet prorate requirements of both partiesduring the day.

iii)

iv)

vi)

vii)

F. Documentation:

Assisted Company shall carry out documentation (invoicing) etc. a may be required fordeliveries.

G. Product Loss Norm:

i) Product loss norm shall be as under:

Class 'A' products (e.g. MS, Naphtha) - 0.05% at Natural TemperatureClass 'E' & Class 'C' products (e.g. SKO, HSD, ATF, LDO, FO) - 0.02% at NaturalTemperature.

The quantity worked out for the above percentages on the volume handled at naturaltemperature (opening stock + receipt) during the calendar month shall be debited toAssisted Company.

Page 60fa

ii) Product loss norm is towards storage and handling.

iii) In addition, penalty for receipt losses above excise condonable limit shall be borne byAssisted Company.

iv) Assisting Company shall deal with any dispute with ExciselCustoms with the supportfrom Assisted Company.

H. Charges:

i) Charges for services rendered for Safekeeping Assistance and settlement of the sameshall be as covered in MOUfBilateral Agreement for Product Sale and Purchasebetween laC & HPC effective dated 01104/2004 as applicable for rail 1 roaddespatches.

ii) If the quantity received is not evacuated within 30 days, then additional charges at thesame rate as Hi" above shall be recovered on the entire balance quantity for a cycleperiod of 30 days or part thereof unless it is established that the delay in theevacuation to Assisting Company.

iii) The recovery of the charge shall be based on the jointly certified MonthlySafekeeping statement and other expense statement.

I. Localdues:

All local dues such as octroi, port dues, survey fees etc. shall be paid directly by AssistedCompany.

J. General:

i) Assisting Company shall adhere to Assisting Company's operating and accountingprocedures.

ii) Assisted Company shall be responsible for the quality of product to be delivered tothe Assisting Company at destination as per Industry Quality Control Manuals forAviation and Non-Aviation Products and the Manual on Acceptance of products byMarketing Companies and Related Issues. Assisting Company shall not unload off-spec product, responsibility for disposal of which shall be of Assisted Company.

iii) Assisting Company shall maintain quality of products during receipt, storage anddelivery as per Industry Quality Control Manuals for Aviation and Non-AviationProducts, and Manual on Acceptance of products by Marketing companies andrelated issues.

iv) Despatches of products by tank lorry shall be guided by Industry Guidelines onTransport Discipline.

v) Demurrage on tanker due to failure on part of Assisted Company shall be on AssistedCompany's account, while due to failure on part of Assisting Company shall be onAssisting Company's account. However, demurrage for reasons beyond control ofAssisting Company such as power failure, constraints of pumping capacity, etc. shallbe on Assisted Company's account, which, in case of joint parcel, shall be sharedproportionately.

Pagg 70fg

vi) Assisting Company shall be responsible for safe custody of Assisted Company'sproducts.

vii) Assisted Company shall obtain necessary insurance coverage for their product storedin Assisting Company's tanks.

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Assistance with loeIOCto HPC

SrNo Product Assistance Hospitality Safekeeping1 Allahabad Silguri Paradeep2 Baurani Narimanam Visakh3 Mughalsarai Rangpo Kochi4 BRPL Mangalia kandla5 Maldah

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6 Siliguri Sagar

7 Namkum Jullandhar8 Chennai Lalkuan9 Narimanam Shankari10 Kappalur11 Shankari12 Trichi13 Dimapur14 Tinsukhia15 Betkutchi16 Haldia17 Rajbundh18 Mourigram19 Vasco20 Bangrod21 Kayali22 Lalkuan23 Roorkee24 Ambala25 Juliandhar26 Sangrur27 panipat28 Rewari29 Desur30 Bijapur31 Panki32 Jaisidh

HPCtolOCSr No Product Assistance Hospitality Safekeeping

1 Loni Ennore Hassan2 Pakni Loni Mundra

3 Vashi Vijayawada Jaipur4 Ghatkesar Sagar Salawas

5 Rajamundry Hazira Ajmer6 Suryapet Rewari7 Vijayawada Bahadurgarh8 Vizag Paradeep9 Ajmer Vizag

10 Bathinda

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