Indian Oil Corporation Ltd.

Kanpur Divisional Office

PRAKHAR MISHRA

MBA-2010-2012

A7001910061

Master’s in Business Administration,

AMITY UNIVERSITY, LUCKNOW

“Marketing and Promotion of XtraPower Fleet Card Loyalty Program”

Submitted By

Prakhar Mishra

Enrollment No: A7001910061

Session: 2010-2012

Under the guidance of

Shri. Vishram Singh

Manager Of fleetcard

At

Indian Oil Corporation Limited.

(Kanpur Divisional)

Amity UniversityLucknow campus

ACKNOWLEDGEMENTS

Completing a task is never a solo effort. It is often the result of invaluable contributions by a number of

individuals in a direct or indirect manner, which helps in the shaping and achievement of success.

Firstly, I would like to express my sincere gratitude to Mr.K.RAGHU,Deputy Manager of Sales for granting

me the opportunity to undertake an internship at the Indian Oil Corporation Ltd. (Marketing Division,

KANPUR).

I am extremely grateful to my project guide, Mr. ViSHRAM SINGH, Manager Fleetcard for his

encouragement and patience throughout the duration of this project. Without his vision, guidance and

support this report would not have materialized.

I would also like to deeply thank the various people at IndianOil who, during the period of my internship,

provided me with useful and helpful assistance. Without their care and consideration this report would not

have been completed.

I am thankful to the Internship Coordinators at Amity University, Mr.Nimish Gupta for their invaluable

support and guidance during the internship period.

Last but not the least, I would like to thank my parents for their inestimable love, support and

encouragement which gave me the confidence and determination to carry out this project.

PREFACE

In the broader sense training is necessary to make the students of professional institutions familiar with

industrial environment .This not only helps professionals to speedily accommodate themselves in

industries but also to have better usage of their studies.

To be dynamic, strategic and work aggressively they need to know the policies , procedures and trends

going in the present industrial environment apart from their studies The training fulfils all these needs .

Whether it is the question of demonstrating a modernized procedure, step by step to an old production

hand or guiding a new division head through the intricacies of preparing his own budget, the responsible

supervisor or manager must make the trainee learn and communicate.

The purpose and objective of the study is to analyze the different aspect of financial and marketing

position of the organization and list out the suggestions, recommendations based on the studies.

The main source of study is primary and secondary data collected from the annual end and other

public reports and other information received from Barauni Refinery and Indian Oil Corporation Limited

and market survey.

The various modern and standard tools to achieve the objectives of the study carry out the analysis of the data.

EXECUTIVE SUMMARY

The deregulation of the Indian Petroleum sector in 1999 brought about a major change in the way

Petroleum companies conduct their business. This sector has been exposed to new market forces and

competition has grown enormously. With the entry of private players, the consumers’ demands have

increased. The existing players have thus come to recognize the need to evolve at a quick pace and to be

market driven, service driven and most importantly relationship driven. Loyalty programs is the new trend

which is catching up at a relatively fast pace in India.

Indian Oil Corporation Limited (IOCL) is running its own loyalty based fleet card program known as the

XTRAPOWER Fleet Card Program. Launched in March 2004, this program has emerged as the largest

and most wide-ranging fleet card program in the country and has crossed the mark of one million

customers.

In spite of this program’s huge success and active promotional schemes being undertaken by IOCL, the

current customers are not using the cards to the full extent.

The main objective of my project at IOCL was to, thus, study the XTRAPOWER Fleet Card Program

Proposition and to recommend steps to be taken to enhance card usage.

This project report includes the methodology of the research undertaken, findings and solutions to the

current problems being faced by customers.

About Xtrapower Fleetcard

What is Xtrapower fleetcard?

A complete fleet management solution for Fleet Owners / Operators and Corporate. XTRAPOWER is a Smart Card based Fleet Card Program, which facilitates cashless purchase of fuel & lubes from designated retail outlets of IndianOil thru' flexible prepaid and credit* facilities. The fleet card program also offers an exciting Rewards Program and unique benefits like personal accident insurance cover and vehicle tracking facilities*. Every time you fill your fleet with fuel & lubes using your XTRAPOWER fleet cards at designated retail outlets of IndianOil, you earn XTRA Points. You can exchange your accumulated XTRA Points for attractive gifts from XTRAPOWER Rewards Catalogue including free fuel & lubes. In short, the XTRAPOWER Fleet Card Program offers you, not just amazing convenience & security but also an opportunity to translate all your dreams into a reality.

Best Wishes in this drive for XTRAPOWER and Extra Value. Looking forward to be a partner in your journey towards a great future!

Program Details Important Instructions

Fleet Card Each one of your Fleet Cards is a smart card, which can be used by the card holder (driver of the vehicle) to make purchases of fuel/ lubricants at designated retail outlets of IndianOil.

Activation Before using the feet card (s) to make any purchases, you need to activate your card(s). To activate your card, please visit the nearest designated retail outlet of IndianOil and present your card for changing the default PIN (0000) to a new PIN (any 4-digit number).

For your safety Do not disclose the PIN to any unauthorized person. Do not write your PIN on the Fleet Card or on the pouch holding the card. We recommend that the PIN be memorized or written down in a safe place.

Fleet Control Card This is a card to which all your fleet cards are linked. This card is not meant to be inserted in the smart card terminal for any transaction. However, the Fleet Control Card Number can be used for the following transactions:

CCMS Recharge Use your Fleet Control Card Number & Control PIN to recharge your CCMS Account by making a lump sum cash deposit at a any designated retail outlet. Thereafter money available in the CCMS A/c can be used for reloading multiple fleet cards through CCMS Reload, at any of the designated retail entries Accumulate XTRA Points: All transactions on your vehicle-specific fleet cards are linked to the Fleet Control Card; therefore, all XTRA Points earned by each of your fleet cards accumulate against this card.

XTRA Points' Redemption at a Retail Outlet Use your Control Card Number & Control PIN on a smart card terminal at a designated Retail Outlet of IndianOil for instant redemption of XTRA Points for fuel and lubes. You can also submit your request for redemption of any other reward item from the rewards Catalogue on the smart card terminal.

N.B. Redemption requests can also be submitted by filling a redemption form or there an online request on XTAPOWER website.

Web User ID and Password The web User ID and Password will allow you to access web-based services of XTRAPOWER such as viewing transactions on your fleet cards, vehicle tracking, CCMS & card wise balance, XTRA Points' balance, redemption of XTRA Points etc.

Note: In case of credit variant of XTRAPOWER card, the prepaid pouch of the card must have the required amount so as to avail of online tracking facility. XTRAPOWER FLEET CARD PROGRAM

XTRAPOWER is one-of-a-kind fleet card program of IndianOil, which gives you XTRA convenience, XTRA security and XTRA opportunity to earn truckloads of rewards. It is a tailor-made program for Fleet Owners, Operators & Corporates as well.

Welcome to the World of XTRAPOWER!

With XTRAPOWER Fleet Card you now have an easy, convenient and rewarding way to drive, monitor and control your entire fleet. It facilitates cashless fuel purchase and gives you systematic record of transactions through the card. It is a powerful and unique fleet management tool for an efficient and cost-conscious fleet owner like you.

Based on the smart card technology, the XTRAPOWER card gives you:

Payment convenience-both prepaid and credit options.

Detailed fleet management reports.

Facility to track each vehicles

Personal Accident Insurance Cover and Medi-claim for fleet owner, driver, co-driver and helper.

Attractive rewards on purchase of fuel & lubricants through the Card

Opportunity for earning additional rewards on purchase of J.K. Tyre and Exide Battery*

* To be made available shortly. NB Conditions Apply. All about the XTRAPOWER Program Your Own XTRAPOWER!

Once enrolled, the fleet owner is assigned a Fleet Control Card with Control PIN and "XTRAPOWER" smart card for every vehicle enrolled under the program.

Web login User ID and Password would also be assigned to enable you to log on to our dedicated website www.iocxtrapower.com.

The XTRAPOWER smart card is personalized with details like Card Number, Card Member's Name, Customer ID, Vehicle Number and Expiry Date printed on the card.

Convenience !

There are two variants of XTRAPOWER fleet card Prepaid & Credit. On prepaid cards, pre-load as much money as you require. Within prescribed limit the pre-loading facility has been made available at designated Retail Outlets of Indian Oil. You can also deposit the desired amount in Central Cash Management System (CCMS) through designated of HDFC bank.*

On the credit variant, cards are sent with credit limit as approved by the credit partner Sundaram Finance Limited (Shortly to be made available through other banks).

Freedom !

The XTRAPOWER fleet cards are accepted at designated Retail Outlets of IndianOil, where "Quality & Quantity" of fuels is assured. Every time you need to tank up fuel, drive into one of these IndianOil Retail Outlets and use the fleet card to purchase Auto fuel and lubricants.

Control !

XTRAPOWER gives you full control on the amount you load on your prepaid cards from wherever you are. For example, you can make payments in Mumbai and reload your Fleet Cards in Chennai. In case of credit variant, there is a pre-approved daily limit on the card.

For every transaction, charge slip would be printed (shown alongside) for your records. This slip will indicate the date, time and location of the transaction, card number, product purchased, value of purchase, card balance after transaction and odometer reading of the vehicle (if provided by the driver) etc. One copy of the transaction slip is given to the driver of the vehicle. With the help of these slips you can keep track of your auto fuel/ lubes expenses and routes traveled by each of your fleet vehicles.

Keep Track !

You can keep track of your fleet by logging on to our website www.iocxtrapower.com. As XTRAPOWER member you can view the tracking report for your vehicles as well as transactions made on each of your fleet cards for any period.

Xtra Points !

You earn XTRA Points every time you use your XTRAPOWER fleet card(s) for making purchases of auto fuels & lubricants, which on accumulation, can be redeemed for fuel, lubricants and many more exciting gifts.

Xtra Protection !

Now enjoy XTRA Protection through XTRAPOWER insurance cover for Personal Accident, Medi-claim and Lost card liability.The Insurance Cover is provided to the Card member as well as to the vehicle crew.

The lost card liability insurance protects you from any liability as a result of card loss or card theft.

Xtra Benefits !

In addition to the key benefits, XTRAPOWER provides you with value-added benefit of discounts on fleet-related products e.g. Tyres, spares, services etc. through alliance partnerships developed with various manufacturers. (Currently available on JK Tyres only)

Wherever You Go !

XTRAPOWER program offers card-insert based basic truck tracking at no extra cost. It also offers "Online Tracking" facility (at nominal cost), which would vastly improve fleet utilization.

XTRAPOWER card members will enjoy the power of IndianOil's nation-wide network of retail sales points, supported by IndianOil's team of Sales Officers and Fleet Managers.

Consolidated Reports !

The members would receive consolidated monthly statement detailing fuel/lubes purchases by each vehicle, XTRA Points earned etc. If the driver has provided the odometer reading of the vehicle at the time of transaction, the Card member can also ascertain the mileage performance of the vehicle.

So sit back and enjoy the XTRAPOWER's XTRA Control

OBJECTIVES OF THE PROJECT

The major objectives of the project are:

1. To study the iocl loyalty program in kanpur and nearby regions.

2. To study the loyalty between the local customers and the company.

3. To study the benefits provided by iocl to the local customers.

4. To study how iocl tap local alliance partners for Xtra Power Fleet Card program.

5. To obtain customer opinions and suggestions at IOC retail outlets and give recommendations to

IOC to improve the implementation of Xtra POWER loyalty program.

6. To study the comparative analysis between the loyalty card benefits of other marketing company. 7. To become known to real market.

8. TO gain real experience of market that how corporate persons work. How we have to behave, how

to present yourself, how to make deals with clients etc.

9. To check our theoretical knowledge with comparison to the practical market demands.

10. It gives us an opportunity to apply our thinking, idea, knowledge in real market

11. To enhance our skill and gain experience to be a true professional.

12. To check our interpersonal skills.

13. To learn necessary managerial skills and positive attitude towards your work.

14. To get a flavor of Teamwork, Organizational culture, Team dynamics, result orientation,

organizational pressure, complexities in achieving desire result.

15. To understand the day to day functioning of an department within the organization

16. And at last but not the least fir sharpen our career goals for a bright career.

RESEARCH METHODOLOGY

DATA COLLECTION METHOD

Types of Data and Data Collection:

Data that I have received for making the project is a combination of both primary and secondary data.

Primary Data

The data collected through questionnaire based survey from the retailers and customers of kanpur and

nearby region. The name of the retail outlets of Indian oil from where these data are collected are

Das Brother (Vijay Nagar,kanpur)

Stanam Motors(Panki,kanpur)

Laxmi Automobiles(Govind Nagar,kanpur )

Malik Petroleum (Dada Nagar,kanpur)

Swagat Retail Outlet (unnao)

Secondary Data

Company’s annual reports

Company’s journal and magazines

Company’s website

Company’s leaflets

Company’s pamphlets

Products and sales report

Sampling plan

The sample size for retailer is 8 and that of customers is 200 of Kanpur and nearby region. The

respondents are chosen through cluster sampling universe elements are chosen in group rather than

individually. Whereas convenience sampling is based on opportunism.

FAQ

1:What is XTRAPOWER?

XTRAPOWER is Smart Card-based Fleet Management Program of IndianOil for Commercial Vehicle Owners / Operators & Corporates. XTRAPOWER offers its customers a combination of convenience of cashless transactions, security, credit, MIS and rewards.

2:Who can become a member?

Any Fleet Owner/ Operator, Corporate or any other business entity that own or control vehicles for commercial use can become a member of XTRAPOWER fleet card program.

3:How can one become a member?

Contact the Fleet Marketing Officer of IndianOil in your area and ask for the application form or ask for his representative to meet you. The contact number of our Fleet Marketing officer can be obtained from our 24 x 7 help-line no 1800 425 55 99.

You can also register your request for enrolment on our Toll free number (1800-425-5599) or online through our website www.iocxtrapower.com.

For enrolment the customer has to fill up the application form completely and clearly in English, attach all the necessary documents e.g. copy of RC Book and proof of address etc., as indicated in the Application Form and submit the completed Application form along with the enrolment fees to our Divisional/State Fleet Marketing Officer or his representative.

You will receive your XTRAPOWER cards in a Welcome Pack within 21 working days of application.

4:What is the Enrolment Fee?

For becoming a XTRAPOWER member, you have to pay an enrolment fee of Rs. 100/- per vehicle. This payment should be made thru' a Cheque or DD drawn in favour of 'Indian Oil Corporation Limited'. The payment must accompany the application for enrolment under XTRAPOWER fleet card program.

5:What is the Renewal Fee?

Renewal fee for XTRAPOWER membership is Rs 100/- per card. The renewal fee will be billed in the monthly statement sent to the card member. The payment should be made thru' a Cheque or DD drawn in favour of 'Indian Oil Corporation Limited'. The payments must be made to IndianOil by the due date. Non-payment by due date will result in deactivation of your card.You can also advise adjustment of Renewal Fee against your earned XTRA Points or against you CCMS Account Balance. Your advise for such adjustment should be sent to :-

Retail Sales - XTRAPOWER Fleet Card Sales,

3rd Floor- Indian Oil Bhawan, G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai- 400 051.

6:Is one supposed to enroll vehicles only if one owns it?

No, you can also enroll vehicles in your fleet, which are controlled by you and not owned by you e.g. - if you have three vehicles in your fleet wherein two are owned by you and one is hired and controlled by you, then all the three vehicles can be enrolled for the membership.

However, such request must be accompanied by proof of Control of such vehicles.

7:How to add vehicles on to the program?

You can add vehicles under the program by filling up the Additional Card Request form provided in your welcome pack, and send it to the Fleet Manager in your state along with the enrolment fee of Rs.100/- for each vehicle added. However, please note that the membership period would be considered from the date of enrolment of the first vehicle in the program.

8:How to withdraw vehicles from the program?

To withdraw vehicles from XTRAPOWER program, please write to the XTRAPOWER Customer Service Center quoting your Customer ID and Card Nos. On settlement of all dues in respect of those vehicles, the respective cards would be deactivated for any future use.

9:Is there any maximum and minimum limit for number of vehicles enrolled in the program?

No, there is no limit on the number of vehicles for enrolment.

         

10:For how long is the membership valid?

The membership to the XTRAPOWER program is valid for 1 year from the date of issue, after which it can be renewed on payment of annual fee @ Rs 100/- per card.

11:How can I discontinue my membership?

To discontinue the XTRAPOWER membership, please write to the XTRAPOWER Customer Service Center quoting your membership number. On settlement of all dues your membership would be closed.

12:What are the benefits of becoming member of the XTRA POWER?

There are several benefits of becoming a XTRAPOWER member. XTRAPOWER offers you convenience, control, cost- savings, credit, personal accident insurance, reports, and rewards.

13:How to lodge complaints and get help in case of any problem?

Our Customer Service Helpline works 24 hours a day and 7 days a week. In case of any problem, one can call the toll free Helpline number 1800-425-5599 or 044 65514983 (STD call) and register their problem/complaint. For any written request or query they should write to -

Customer Service CenterXTRAPOWER Fleet Card ProgramC/O Royal Images Direct Marketing Private LimitedL. M. Krishna Building, No. 5, Balavinayagar Nagar,Main Road, Arumbakkam, Chennai - 600 106Phone : 044 65514977 / 65514983, Fax : 044-2475 6648

14:What reports would an XTRAPOWER card member receive?

XTRAPOWER membership entitles you to receive a monthly statement of fleet card transactions. the statement has three parts i.e. vehicle-wise Summary of transactions, CCMS account balance and vehicle-wise, date-wise details of transactions.

15:What would be frequency of such report?

These statements will be generated on a monthly basis. However the card member can visit the XTRAPOWER website anytime to view and download transactions on any of his card for any period.

16:How is it better than other fleet card programs?

The XTRAPOWER differentiators vis-à-vis other fleet-card programs are as under:

Better credit proposition Higher value of reward points

Attractive rewards program

Personal accident insurance and medi-claim cover for the card member, drivers, co-drivers & helpers.

Lost card liability cover

Online PIN unblocking

Flexible cash loading options - Manual Reload & CCMS Reload (Remote loading of cards by depositing lump sum cash at one place) or CCMS reload thru' cheque payment at select HDFC branch.

Card-insert based vehicle-tracking facility thru' website (Offline tracking free, Online tracking at a nominal charge of Rs.2/-).The online tracking details are immediately made available to the card members on XTRAPOWER website.

Special discounts from our alliance partners (currently available on JK Tyres only)

Round the clock Customer Helpline Number 1800 425 55 99 (Toll Free) or STD no. 044-65514983

THE OIL & GAS INDUSTRY IN INDIA

India is the sixth largest consumer of oil. There exists a huge gap between the demand and supply of oil

and gas in India. The country imports more than 70% of its crude oil requirements. In the year 2005, oil

and gas accounted for 38% of primary energy consumption in India, followed by coal at 55%. The oil and

gas industry is broadly classified into Upstream, Midstream and Downstream segments. Midstream

operations are usually included in the downstream category. The Indian Oil Industry comprises of 18

refineries with a total refining capacity of 132.47 MMTPA as of April 1, 2006. During the same year, the

consumption of crude oil and that of natural gas was estimated at 130.11 MMT and 31.02 BCM

respectively. The production and consumption of petroleum products was estimated at 119.75 MMTPA

and 111.92 MMT respectively. India has recently emerged as net exporter of petroleum products.

UPSTREAM SECTOR:

The upstream sector, also known as the exploration and production (E & P) sector, is concerned

with the search for potential underground or underwater oil and gas fields, the drilling of exploratory

wells, and subsequently operating in the wells that recover and bring the crude oil and/or raw

natural gas to the surface.

MIDSTREAM SECTOR:

The midstream sector processes, stores, markets and transports commodities such as crude oil,

natural gas and natural gas liquids (NGLs) such as ethane, propane and butane.

DOWNSTREAM SECTOR:

Indian Oil Corporation is an Indian public-sector petroleum company. It is the highest ranked Indian company in the latest Fortune ‘Global 500’ listings, ranked at the 125th position. It began operation in 1959 as Indian Oil Company Ltd. The Indian Oil Corporation was formed in 1964, with the merger of Indian Refineries Ltd. Indian Oil and its subsidiaries account for a 48% share in the petroleum products market, 34% share in refining capacity and 71% downstream sector pipelines capacity in India. The Indian Oil Group of companies owns and operates 10 of India's 20 refineries with a combined refining capacity of 60.2 million metric tonnes per annum (MMTPA, .i.e. 1.2 million barrels per day). These include two refineries of subsidiary Chennai Petroleum Corporation Ltd. (CPCL) and one of Bongaigaon Refinery and Petrochemicals Limited (BRPL).

As the flagship national oil company in the downstream sector, Indian Oil reaches precious petroleum products to millions of people every day through a countrywide network of about 35,600 sales points. They are backed for supplies by 167 bulk storage terminals and depots, 101 aviation fuel stations and 89 Indane (LPGas) bottling plants. About 7,593 bulk consumer pumps are also in operation for the convenience of large consumers, ensuring products and inventory at their doorstep.

Indian Oil operates the largest and the widest network of petrol & diesel stations in the country, numbering over 18,643. It reaches Indane cooking gas to the doorsteps of over 50 million households in nearly 2,764 markets through a network of about 5,095 Indane distributors.

At Indian Oil, customers always get the first priority. New initiatives are launched round-the- year for the convenience of the various customer segments

It is India's largest company by sales with a turnover of Rs. 271,074 crore and profit of Rs. 10,221 crore for the year 2009-10.

As a leading public sector enterprise of India, Indian Oil has successfully combined its corporate social responsibility agenda with its business offerings, meeting the energy needs of millions of people everyday across the length and breadth of the country, traversing a diversity of cultures, difficult terrains and harsh climatic conditions. The Corporation takes pride in its continuous investments in innovative technologies and solutions for sustainable energy flow and economic growth and in developing techno-economically viable and environment-friendly products & services for the benefit of its consumers.

OIL & GAS INDUSTRY STRUCTURE IN INDIA

Oil and Natural Gas Corporation Ltd. (ONGC)

UPSTREAM

Oil India Ltd.

Indian Oil Corporation Ltd. (IOCL)

Reliance Industries Ltd. (RIL)

DOWNSTREAM Bharat Petroleum Corporation Ltd. (BPCL)

Hindustan Petroleum Corporation Ltd. (HPCL)

Mangalore Refinery & Petrochemicals Ltd. (MRPL)

GAS TRANSPORT

& DISTRIBUTION Gas Authority of India Ltd. (GAIL)

INDIAN OIL CORPORATION LTD.

Company profile:

Formed in 1964 through the merger of Indian Oil Company Ltd. (Estd. 1959) and Indian Refineries Ltd.

(Estd. 1958), Indian Oil Corporation Ltd. (IndianOil) is presently India’s largest commercial enterprise with

a sales turnover of Rs. 1,83,204 crore (US$ 41 billion) and profits of Rs. 4,915 crore (US$ 1.10 billion) in

the fiscal year 2005.

IndianOil also enjoys the status of being the highest ranked Indian company in the prestigious Fortune

‘Global 500’ listing, having moved up 17 places to the 153rd position this year based on the performance

of the fiscal year 2005. In addition to being the 21st largest petroleum company in the world, it also tops

the list of the petroleum trading companies among the National Oil Companies in the Asia-Pacific region.

IndianOil, along with its subsidiaries, accounts for a market share of 47% in petroleum products, 41%

refining capacity and a petroleum product capacity of 51% in India.

In the year 2005-06, the IndianOil Group sold 54.6 million tonnes through exports. The IndianOil Group of

companies presently owns and operates 10 out of 18 refineries with a combined refining capacity of 54.20

million tonnes per annum (1.1 million barrels per day). These include two refineries of the subsidiary

Chennai Petroleum Corporation Ltd. (CPCL) and one of the Bongaigaon Refinery & Petrochemicals Ltd.

(BRPL). The Corporation’s cross-country crude oil and product pipeline network spanning over 9,000 km

meets the vital energy needs of the country.

VISION, MISSION & VALUES

Vision

“A major diversified, transnational, integrated energy company, with national leadership and a strong

environment conscience, playing a national role in oil security& public distribution”.

Mission

To achieve international standards of excellence in all aspects of energy and diversified business

with focus on customer delight through value of products and services, and cost reduction.

To maximize creation of wealth, value and satisfaction for the stakeholders.

To attain leadership in developing, adopting and assimilating state-of- the-art technology for

competitive advantage.

To provide technology and services through sustained Research and Development.

To foster a culture of participation and innovation for employee growth and contribution.

To cultivate high standards of business ethics and Total Quality Management for a strong

corporate identity and brand equity.

To help enrich the quality of life of the community and preserve ecological balance and heritage

through a strong environment conscience.

Values

IndianOil nurture a set of core values, which are:

Care

Innovation

Passion

Trust

ORGANIZATION STRUCTURE

The organization structure of the Indian Oil Corporation Ltd. is divided on the basis of the company’s

functions comprising of pipelines, refineries, research & development, marketing, human resource,

finance, and planning and business.

Each division is headed by a director with general managers and executive directors working under him.

On the basis of my observations, I can state that the organization structure of IndianOil is fairly flat with

few levels of intervening management between staff and managers. Rather than being closely supervised

by many layers of management, workers are more directly involved in the decision making process

concerned with the company. There are many individual units within the organization which enables the

existence of a horizontal organization structure. Employee involvement is thus encouraged through a

decentralized decision making process.

PEST Analysis

Economic environment:

The gradual reduction of tariff protection has ensured that prices of most goods in countries like India are

closer to global levels or even much lower. The lower prices are much more extensive in the services

sector, which accounted for 52.4% of the Indian economy in 2004- 05.The use of GDP based on

purchasing power parity in the calculation of oil intensity is also validated by the fact that the figures on oil

consumption are measured in terms of volumes of input (million tons of oil equivalent-mtoe) while the

GDP estimated on the market exchange rate gives only the value of output and not the actual volumes. It

is only the GDP estimated on a purchasing power parity basis which gives some indicator so the volume

of output which should form the basis of cross country comparisons of output and estimation of oil

intensity therein. However, though the oil intensity in India is comparatively much lower than in most other

developed and developing countries the negative impact of high oil prices on the economy is accentuated

by the distorted pattern of oil consumption in India.

Social Cultural Environment

Social cultural variation in the Indian context, is very important for any company to work in it. The India is basically can be divided into four major regions on the basis of language.demography and also the income states. These are the south, north, east and west. The IOCL as a company also operates differently in different regions and also use different languages to attract people towards them. This is also, a reason for which the company have three refineries in the south region out of eleven in total. And that also because of the merger with MRPL a local regional company.

Natural Environment

The company IOCL is very much concern about the environmental polices of it and also very strictly follow every small norms of it. The mission of the company is very clear; “To develop techno-economically

viable and environment-friendly products”. All because of it that the company wins SCOPE Meritorious Awards for Environmental Excellence & Sustainable Development and Good Corporate Governance.

Technological Environment

In today's dynamic business environment, innovation through a sustained process of Research & Development (R&D) is the only cutting edge tool for organisations to thrive. Indian Oil has, till date, invested close to Rs. 1,000 crore in setting up world-class facilities at its R&D Centre and it plans to invest about Rs. 500 crore during the period 2007-12 to maintain its leadership in downstream R&D activities in the hydrocarbon sector. This the reason , thats why IOCL have the India's first experimental H-CNG (Hydrogen-Compressed Natural Gas) dispensing unit at the R&D Centre campus at Faridabad and has been in the forefront of technology development for Bio-diesel production from various edible and non-edible oils and its application in vehicles. Pioneering studies by India Oil’s R&D Centre established that Bio-diesel produced from Jatropha seeds were at par with that produced from vegetable oils.

Political – Legal Environment

The political and legal environment for the whole oil industry is very essential. In India the entire oil

industry is been governed by OIL Ministry and OIDB a Govt body. This two institutes are responsible for

all the decision related to the price, quality specification etc. Beside this the international politics also

affect this international commodity “Oil” a lot and also its companies. Any company operated in India had

to work according to the norms and on the prices specified earlier by Govt bodies.

Evidence of Strategic formulation by IOCL

Porter’s Generic Strategies

Overall Cost Leadership:

As per the Government regulations, all the player in downstream petroleum sector have to maintain same

prices, infact subsidize the mail commodities like Motor spirit, High speed diesel, kerosene and LPG.For

the subsidized products, Government allots Oil bonds to Oil PSU’s in order to partially compensate for the

under-recoveries and to some extent by upstream Oil Companies (ONGC,OIL).In this way IOCL has

overall cost leadership vis-à- vis private players.

Differentiation:

IndianOil is the pioneer in launching state-of-the-art petrol stations with digital dispensers, modern

canopies, standardized signage and efficient lighting systems way back in the mid- 1990s. The new retail-

branding template introduced by Indian Oil set in motion a revolution in the petroleum retail business in

the country. Following are the evidence of differentiation by IOCL.

Xtra Care

IndianOil's XTRAcare E branded full service petrol stations is a result of a series of processes in retail

design, product and service up gradation, capability training, automation, loyalty programs, retail site

management techniques all benchmarked to global standards. Today XTRAcare petrol stations are

synonymous in India with world-class petroleum retailing.

While the industry standard is to take samples on a quarterly basis, Indian Oil has moved several

steps ahead by introducing fortnightly random sampling with specific importance given to RON (Research

Octane Number) sampling which is truly the definitive test for quality and quantity. The surveillance audits

by BV are being done on a more comprehensive basis. The scale and spread of XTRAcare pumps is also

an industry record.

Another vital differentiator in the Indian Oil XTRAcare is the importance given to the

frontline customer attendants. They are trained at three levels of competencies-- customer service,

personal hygiene/grooming and customer complaint redressals. XTRAcare dealers also undergo

extensive training on 'Retail Site Business Management’.

Kisan Seva Kendra

Kisan Seva Kendra is a unique award-winning retail outlet model pioneered by IndianOil to cater to the needs of the customers' in the rural segment. Today IndianOil's KSKs have merged as a dominant player in the rural markets, riding on the rapid growth of upcoming second and third tier roads in the rural areas. The KSKs come with a fresh perspective enabling dealers to tap the huge demand driven in by consumers there.

Swagat

The Swagat retail network are large format sites designed exclusively to cater to travelers on

the highways.With spacious parking lots, dhabas, eateries, retail stores and restroom,

theSwagat outlets provide customized services to owners of both light motor vehicles as well

as heavy motor vehicles.

• Focus

IOCL plans to prune its retail outlets in the current year(2009),owing to the fact that it plans to improve the

efficiency of current 15000 outlets.Its plans to improve by its differentiating factors like Xtra care,swagat

and seva Kendra.

IOCL to use its Indian surplus funds to expand operations in Sri Lanka ,where it is operating as Lanka

IOC Plc.,.It is planning to establish 300 retail outlets which require investment to the tune of 6 billion Sri

lankan rupess ( INR 260 crore),each outlet requiring about Srilankan rupee 2 Crore.Srilankan market has

a demand of 3.5 MTPA with current capacity of 2.2 MTPA

Strategic Alliances

• Product or Service Alliance

Focus is on having captive oil blocks by entering into consortium with foreign players and Oil India Limited to acquire foreign Oil blocks,so as to ensure energy security of India. IOCL signs Memorondum of Understanding with Adani Energy for City Gas Distribution in select districts of Haryana,Punjab ,Rajasthan and Uttar Pradesh.

• Promotional Alliance

IOCL has formed a promotional alliance with kisan seva Kendra’s for promotion in rural areas.IOCL

presents sports scholarship awards to nurture talented young sportspersons across all the

streams.IndianOil has also set up the IndianOil Foundation (IOF) as a non-profit trust to protect, preserve

and promote national heritage monuments.

IOCL provides ‘merit-cum-means’ scholarships to bright students selected on 'merit-cum- means' basis.

For each academic year, 450 scholarships covering the first year students of 10+ / ITI, Engineering,

MBBS and MBA

• Logistics Alliance

IOCL has formed a logistics alliance with Mundra Port for strategic storage of Crude Oil.Indian Oil

Tanking Ltd formed as an alliance between Indian Oil and Oil tanking US for storage of Crude Oil and

products.

• Pricing Collaboration

IOCL collaborates with other PSU players for exchange of surplus products ,like , IOCL might offer

Gasoline or Naptha at Guwhati to HPCL inexchange of the same products at Vizag.(Usually termed as

‘Hospitality’ in common Oil Industry parlance)

Competitive Scenario

Market Structure:-

The Indian petroleum industry can be traced back to 19th century when petroleum was discovered in Assam. In starting, industry open for international players and global oil majors such as Caltex,Esso&

Burmah-shell were operating in country but after oil crisis of 1970 the government nationalized the Indian divisions of the international company and also nationalized refining, marketing sector. government established Oil Coordination Committee for regulatory control on production, import, distribution & pricing& they are usingA PM(administered price mechanism) due to government hold on oil company’s there is no private player &market isoligopoly market where 2-3 government under taking company are major player.Major player are IOC,BPCL& HPCL are dominating players in downstream sector. In upstream ONGC &OIL claiming 84% shear of the total market. After liberalization in 1990 government change it’s policy& policy maker realized that APM no longer work as it had in the past so they opened this sector. Thus the government initiated the deregulation process in 1995 wherein the APM was replaced with market determined pricingmechanism. Due to this change some private player come in this industry like Reliance Petroleum Limited, Essaroil etc.Indian government provide oil bond to oil company’s to over come losses that’s why oil company’s are protected that is evident by recent oil price hike.

The trend in the deregulated markets that is being followed by the players is to move towards integration

of refining and marketing activities on a greater scale. Moreover, the oil PSUs are also venturing into oil

exploration and production activities. Bearing testimony to this are the entries of downstream players like

Reliance, IOC and Essar Oil into the oil exploration field, while the exploration major ONGC is moving into

refining operations, albeit in a small way in the form of commissioning a 0.1 MT mini refinery in Andhra

Pradesh. However, by establishing a 71.59% stake in MRPL, the company has signaled its entry into this

sector in a big way.

A presence in all the activities will help the players to hedge to a certain extent any volatility in the raw

material prices. Moreover, a presence in the marketing activities will help the company to take benefit of

the improved marketing margins that are expected in the post APM period. In the long-term, the industry

is likely to witness the global trend of formation of integrated oil companies, having interest in exploration,

refining, retail marketing and petrochemicals business. Some of the major players in this industry have

been discussed in brief below.

Oil advertising :

At present, there are four PSUs namely, IOC, HPC, BPC and IBP (subsidiary of IOC) marketing oil

products in the country. In addition, certain private players like Reliance, Essar and Shell have also in

marketing rights for transportation fuels. Their marketing presence today, however, is not significant and

is limited to about 1370 outlets out of total retail outlet strength of about 29,380 . Some additional players

like ONGC, who have also been granted marketing rights for transportation fuels, are in the process of

setting up retail outlets to integrate across the entire hydrocarbon value chain.

It is evident that the share of the private sector in meeting total consumption of refined petroleum products

presently stands at around 15%. This proportion is however, expected to grow significantly in the coming

years.

Brief Profile of other players

Hindustan Petroleum Corporation (HPCL)

HPCL is a Fortune 500 company, with an annual turnover of over Rs 1,03,837 Crores ($ 25,142 Millions) during FY 2007-08, 16% Refining & Marketing share in India and a strong market infrastructure. Corresponding figures for FY 2006-07 are: Rs 91,448 crores ($20,892Million).

The Corporation operates 2 major refineries producing a wide variety of petroleum fuels & specialties, one

inMumbai (West Coast) of 5.5 MMTPA capacity and the other inVishakapatnam, (East Coast) with a

capacity of 7.5 MMTPA. HPCL holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals

Limited, a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. In addition, HPCL is

progressing towards setting up of a refinery in the state of Punjab in the Joint sector.

HPCL also owns and operates the largest Lube Refinery in the country producing Lube Base Oils of

international standards. With a capacity of 335 TMT. This Lube Refinery accounts for over4 0% of the

India's total Lube Base Oil production.

The vast marketing network of the Corporation consists of Zonal offices in major cities and over 91

Regional offices facilitated by a Supply & Distribution infrastructure comprising Terminals, Aviation

Service Stations, LPG Bottling Plants, and Inland Relay Depots & Retail Outlets. The Corporation over

the years has moved from strength to strength on all fronts. The refining capacity steadily increased from

5.5 million tonnes in 1984/85 to 13.70 million metric tonnes (MMT) presently. On the financial front, the

turnover grew from Rs. 2687 crores in 1984-85 to an impressive Rs 1,03,837 Crores in FY 2007-08.

Bharat Petroleum Corporation (BPCL)

BPCL was incorporated in 1952 when the Government entered into a joint venture with Burma Oil and

Shell Petroleum. Subsequently, the company was nationalized by way of acquiring a 100% equity stake in

1976, but subsequently the Government has let go a part of its holding to financial institutions, mutual

funds, etc. Today, BPCL is the second largest refining and marketing company in India, and has now

three refineries, including KRL and NRL, and another target for disinvestment, that has been stuck up in

the middle of the process along with HPCL. Some of the key features of BPCL are-

BPCL is the second largest refining and marketing company in India. The company along with its subsidiaries owns 15% of the refining capacity and 9% of the product pipelines. It has a 19% market share in the country in terms of sales, and a retail market share of 32.2% in MS, and 24% in HSD.

The company has the third largest retail outlet and LPG distributor network in the country.

The company has also adopted innovative marketing strategies such as introducing value added highway retailing among others, in order to improve its retail sales.

In line with the other oil refining and marketing companies Bharat Petroleum (BPCL) also ended up in red

for the quarter ended Dec 05. Government’s decision not to revise petrol and diesel prices in line with

rising crude prices internationally had an adverse impact as the company recorded net losses for a third

consecutive quarter. Company’s operating margins turned negative and the company made operating

losses.

Mangalore Refinery & Petrochemicals (MRPL) - ONGC

Set up as a joint venture between HPCL and the Aditya Birla group in 1988 as a standalone refinery,

MRPL is now a subsidiary of ONGC, which has a 71% holding in it, and is also planning to buy out the

balance HPCL stake. ONGC is expanding the scope of its operations to become an integrated player.

The acquisition of MRPL was in order to facilitate its entry in the downstream industry. Apart from MRPL,

ONGC is also having a mini plant, with a capacity of 0.13 lakh tonnes. Moreover, the company also is

working on plans to enter the marketing and retailing businesses. The company hopes to put in place a

retail network of 1700 outlets in place over the next 3-4 years. The company is anticipated to take

advantage of its real estate throughout the country for this purpose.

Reliance Industries Limited (RIL)

Reliance Petroleum was incorporated in 1991as Reliance Refineries, but changed its name to the former

in 1993, and has since merged with its parent company RIL. Its refinery is a standalone, and is at

Jamnagar, on the country’s western coast. The refinery was commissioned in July 1999, and it

commenced its operations in 2000-01. It is India’s largest standalone refinery, and constitutes 24% of the

country’s refining capacity. Additionally, the Jamnagar refinery is also the world’s fifth largest refinery at a

single place. RIL also owns 23% of the product pipelines in the country.

RIL is a private integrated player in India, and has established a retail network of more than 1300 units.

Earlier, RIL had marketing agreements with the oil PSUs till March 2004 to market about 14 million tonnes

of its petroleum products. Now RIL has plans to set up about 4300 more outlets throughout the country

subsequently. Its foray into marketing is expected to improve its marketing margins, and complete its

attempt at downstream integration.

Reliance Industries (RIL), the largest private Sector Company in India came out with disappointing results

for the quarter ended Dec 05. The company posted just 2% rise in revenues and a 15% fall in reported

PAT after the operating margins slipped 210 basis points. For the quarter ended Dec 05, RIL’s sales

moved up just 2% to Rs. 18168 crore. The operating margins slipped by 210 basis points to 16.4%, which

pulled the operating profits down by 10% to Rs. 2976 crore. Small reductions in interest, depreciation and

tax provisions could not bring any respite for the company. The refining margins continued to suffer as the

company recorded a 46% plunge in the PBIT from refining .

Competitive Force Analysis

Threat of Intense segment rivalry –

It is witnessed in the holistic service offered by the retail outlet majors (IOCL,HPCL ,BPCL) .If IOCL has Swagat outlets ,HPCL and BPCL has Club HP and Pure for Sure outlets.It is noted that most of these outlets have same facilities like Quality verification checks,Truck driver amenities etc,leading to intense segment rivalry.However IOCL has the edge in terms of vast refinining and distribution network ,hence is the market leader. Threat of new entrants –

In the current Indian scenario,entry and exit barriers are high and profit potential is high ,but firms face more risk because poorer-performing firms stay in and fight it out.Like,IBP was facing bleak prospects till the time Indian Oil purchased it with a premium of over sixty percent.Till the recent crude oil spike,Reliance Retail petroleum,Essar Oil and Shell gave a head-on clash (frontal attack in select locations) with Oil PSU’s.Adding to it newer plants come with better crude handling capacities(like better Nelson’s index) and therefore refinery margins are good,thus reflected in the net margins.

Threat of Substitute Products –

It is from cleaner and efficient fuels like Compressed Natural Gas (CNG),where it was implemented on a war-footing in Delhi to control emissions.Also the increased awareness on Jatropha and Pongamia ,Central Government’s encouragement in the form of Bio-fuel purchase policy for 5% bio-fuel blended Diesel fuel. Electric car – Reva also poses a challenge to the existing players.

Threat of buyer’s growing bargaining power –

‘Consumer is always the king ‘ – is apt in the case of petroleum products in India.Consumer’s interest’ are protected by the Government by not raising the fuel prices beyond a limit and indirectly consumer is exercising his bargaining power.Also all the Oil PSU’s are offered varied services to the consumer including intangible ones like frequent quality checks and tangible ones like amenities ,ATM ,car care etc ,which was not even a moot concept in the past.Hence the buyer’s bargaining power has increased.

Threat of Supplier’s growing bargaining power –

Petroleum is synonomus with OPEC- cartel.Big-wigs like Exxon-Mobil,Total,Occidental Petroleum ,IOCL,BPCL are not shielded from the vagaries of OPEC.

Though OPEC claims that it’s the tax structure in the respective countries which makes petroleum

products expensive, crude oil price varies in NYMEX or in UK or in Singapore in accordance with

production levels of OPEC.Today due to Global meltdown, Crude Oil prices are declining but OPEC has

already initiated significant production cuts whose effect might be felt in the forthcoming months.

5. SWOT Analysis for IOCL

External environment

Opportunity: -

The IOCL has much opportunity in the present market conditions. This is because the petroleum products are become a need for everyone and still contains a lot of scope for customization. The various opportunities are listed below.

Since the company has the maximum no. Of out lets and also the maximum no. Of refineries in

India, it can very easily go for extension at any point of time, and can introduce any new products,

which will get support from its huge market network.

The company can make the buying process more easy for the customers, by implying many more schemes in the range of XTRAPOWER AND XTRAREWARD.

The company can think over the issue to build its own pipelines, so that it will be a independent player and it will also support its aviation fuel supply.

Company have a great scope in E&P. It is already involves in E&P but only in a very limited scale.

Threats: -

since the company is the market leader in the field , so have maximum threats from the other players and many other issues. The lists of threats are given below.

The foreign players with more advanced technology are the biggest treat for the company.

The crude oil supply is also a big issue in front of the company, because

the company cannot fix its price and so, some time had operate in loss

also. it is the biggest problem because the maximum part of their crude is

been imported.

In future the market will welcome more private players, which will eat up

its market share.

If the Govt. Policies allow the private players to set their own price, the the private player can seriously harm the market share of IOCL.

InternalEnviroment

Strength.

IOC controls 10 refineries, by virtue of which it has a total share of around 40% of India’s overall

refining capacity. IOC has also acquired equity stakes in CPCL and BRPL, and in 2001, these refineries

became subsidiaries of IOC.

• 58% of IOC’s refining capacity is located in the Northern and Western regions, which are high demand and high growth areas.

• Although its refineries are located the interior of the country, and not near the major ports IOC has a very strong distribution network by virtue of having a share of 48% in the country’s product pipelines. The total capacity of these product pipelines is 49.79 MMT.

• IOC also acquired management control of the marketing company IBP, thereby strengthening its position in these activities. It also has a dominant share in all segments in terms marketing infrastructure. Its network includes 19830 retail outlets, 8000 LPG distributors, and 6492 kerosene/LDO dealers.

•By virtue of entering into extensive joint venture agreements, and of its own initiative as well, the company has a presence in various other related activities such as petroleum storage, pipelines, lube additives, exploration, petrochemicals, gas, training and consultancy, etc.

• The company has already entered overseas markets such as Sri Lanka, Maldives, and Oman and is presently considering entering Turkey through a JV. The company is in talks with Caliak of Turkey to set up a 10 million TPA grassroot refinery with an investment of $2 billion and establish retail business. IOC is also weighing the possibility of entering Indonesia.

IOC has also started exploring the overseas markets for increasing its scope of operations. Its interests

include downstream activities in Sri Lanka, Maldives, Oman, and Nepal; interest in the lubes business in

Maldives, Dubai, Bangladesh, Sri Lanka, etc; among others.

Weakness:-

The company is the market leader in the industry, but still it had many weakness. The list is given below.

• The major weakness for the company is the R&D. The company starts working on it.

• The petrochemical product development technology is another weakness for the company.

• The technological drawback, as compared to some major foreign player is another weakness for the company.

BUSINESS OF INDIANOIL

Refining

Pipelines

Marketing

Research & Development

Petrochemicals

Gas

Exploration & Production

Refineries:

IndianOil presently owns and operates 10 out of India’s 18 refineries with a current combined capacity of

54.20 million tonnes per annum (1.1 million tonnes per day). During the year 2005-06 IndianOil refineries

recorded a crude oil throughput of 38.52 million tonnes. The seven refineries together achieved a capacity

utilization of 93.1%, higher than the Asia-Pacific average of 91.5% which also happens to be the highest

in the last six years. The fiscal year 2005 also witnessed IndianOil becoming the first public sector

organization in the country to have its own ship Chartering Cell, which is functioning under the Refineries

Division.

All refinery units are accredited with ISO 9002 and ISO 14001 certifications. The refineries are as follows:

Guwahati Refinery (Assam)

Digboi Refinery (Upper Assam)

Barauni Refinery (Near Patna, Bihar)

Haldia Refinery (Near Kolkata, West Bengal)

Mathura Refinery (Near Delhi)

Panipat Refinery (Near Delhi)

Koyali Refinery

BRPL (Bongaigaon Refinery & Petrochemicals Ltd.)

CPCL (Chennai Petroleum Corporation Ltd.)

Pipelines:

IndianOil owns and operates a pipeline network of 9,024 km, the largest network of crude oil and product

pipelines in India. This widespread network of pipelines achieved the highest ever throughput of 45.35

million metric tonnes during the year 2005-06.

The major pipelines of IndianOil are:

Salaya Mathura Pipeline

Kandla-Bhatinda Pipeline

Mathura-Jalandhar Pipeline

Guwahati-Siliguri Pipeline

Barauni-Kanpur Pipeline

Haldia-Barauni Pipeline

Koyali-Roorkee Pipeline

Marketing:

IndianOil has a wide spread marketing network with over 23,000 sales points. These include petrol/diesel

stations, consumer outlets, lube distributors, SERVO shops, SKO/LDO dealers, LPG distributors. The

regional offices are in charge of the North, East, West and Southern Regions of India, and Assam

Division supplements operations in the North-East. State level, Divisional and Indane Area offices have

also been set up in each region. IndianOil commands a dominant market share in the petroleum retail

segment in India and has over 10,144 petrol and diesel stations spread throughout the country along with

an additional 3,272 of the subsidiary company, IBP Co. Ltd.

Research & Development:

Operating the first R&D Centre to get ISO 9002 and 14001 Certifications, IndianOil boasts of having the

best Research & Development Centre in Asia which is also one of the finest in the world. It has been

involved in world-class petroleum research and is carrying out extensive work on refinery processes and

transportation of pipelines.

IndianOil’s R&D Centre developed 85 cost-effective formulations during the year, out of which 74 were

commercialized. Marking a new milestone in the march towards a Hydrogen-fuelled economy, the R&D

Centre commissioned IndianOil’s first Hydrogen-CNG (H-CNG) dispensing station in October 2005.

Petrochemicals:

IndianOil has been continuously striving for growth by incorporating its core business with opportunities

available in the petrochemicals sector. The company is currently executing a plan to achieve Rs. 30,000

crore (US$ 6.8 billion) investment by the year 2011-12. In order to implement this plan, a world-scale

Linear Alkyl benzene (LAB) plant at the Gujarat Refinery and an integrated Paraxylene/Purified

Terephthalic Acid (PX/PTA) plant at Panipat are already in operation. A Naphtha Cracker with

downstream polymer units, designed to produce 8,00,000 tonnes per annum of Ethylene and 6,00,000

tonnes per annum of Propylene is coming up at Panipat. In order to strengthen its presence in the

petrochemicals sector, IndianOil also plans to develop a refinery cum petrochemicals complex at Paradip

on the east coast of India.

Gas:

As a step towards expanding its business in the Natural Gas sector, IndianOil has signed an MOU with

Iran to implement the import of 1.75 million tonnes of LNG per annum starting from the year 2009

onwards. The corporation is already marketing 1.43 million tonnes per annum.

IndianOil has entered into a joint venture with GAIL (India) Ltd. called Green Gas Ltd. in 2005 to distribute

city gas. This project initially launched in Agra and Lucknow, is another emerging growth area for

IndianOil.

Entry in the shipping business is being actively pursued in order to implement the corporation’s strategy to

participate in the entire gas value chain.

IndianOil has also embarked on a pilot project to supply LNG through cryogenic road/rail tankers as the

limited gas pipeline infrastructure in the country presents good opportunities in this area.

Exploration & Production (E&P):

Having participated actively in the bidding rounds to increase the indigenous production of Oil, IndianOil,

under the New Exploration Licensing Policy (NELP) in consortium with other companies has bagged nine

blocks in the first three rounds.

The corporation has also obtained participating interest in on-shore blocks in Assam and Arunachal

Pradesh.

IndianOil has undertaken overseas ventures including two gas blocks in the Sirte basin of Libya, the Farsi

exploration block in Iran and onshore farm-in arrangements in Gabon.

Opportunities are being explored to acquire a suitable medium-sized E&P company in order to

consolidate its upstream portfolio.

INDIANOIL PRODUCTS

Indian Oil is not only the largest commercial enterprise in the country it is the flagship corporate of the Indian Nation. Besides having a dominant market share, Indian Oil is widely recognized as India‘s dominant energy brand and customers perceive Indian Oil as a reliable symbol for high quality products and services. Benchmarking Quality, Quantity and Service to world-class standards is a Philosophy that Indian Oil adheres to so as to ensure that customers get a truly global experience in India. Our continued emphasis is on providing fuel management solutions to customers who can then benefit from our expertise in efficient sourcing and least cost supplies keeping in mind their usage patterns and inventory management.

The Retail Brand template of IOC consists of Xtra Care (Urban),

Swagat (Highway) and Kissan Seva Kendra‘s (Rural). These brands are widely recognized as pioneering brands in the petroleum retail segment. Indian Oil‘s leadership extends to its energy brands - Indane LPG, SERVO Lubricants, Auto gas LPG, Xtra Premium Branded Petrol, Xtra Mile Branded Diesel, Xtra Power Fleet Card, Indian Oil Aviation and Xtra Rewards cash customer loyalty program me.

Indian Oil Corporation Limited has a number of products which are as follows:

1. Fuels & Feedstock

Naphtha

Light Diesel Oil

Furnace Oil/ LSHS/ HHS

2. Lubricants & Greases

Automotive Lubricating Oils

Automotive Specialty Oils

Railroad Oils

Industrial Lubricating Oils

Metal Working Oils

Agricultural Spray Oils

Automotive Greases

Railroad Greases

Industrial Greases

Marine Lubricating Oils

Defense Grade Lubes

Industrial Specialty Oils

3. Petrochemicals & Specialties

Benzene

Calcined Petroleum Coke

Hexane

Jute Batching Oil

Paraffin & Microcrystalline Waxes

4. Liquefied Petroleum Gas

5. Motor Spirit/ Gasoline

6. Superior Kerosene Oil/ KERO

7. High Speed Diesel/ Gas Oil

8. Aviation turbine fuel/ Jet Kero

INDIAN OIL BRANDS

1. SERVO

2. Indane LPGas

3. AutoGas

4. IndianOil Aviation Service

5. Premium Fuels-XtraPremium & XtraMile

6. XtraPower

7. XtraRewards

8. ‘Swagat’ Highway Flagship Retail Outlets

9. XtraCare

10. Kisan Sewa Kendras

1. SERVO:

SERVO LUBRICANT

IndianOil’s Global Brand, SERVO is also India’s largest selling lubricant brand.

The SERVO range of lubricants is available to customers at over 9,000 Retail

Outlets and a countrywide network of SERVO SSLs and SSAs Bazaar traders.

This range of lubricants is used in nearly all applications covering automotive,

industrial and marine sectors and is approved by major Original Equipment

Manufacturers (OEMs) including new generation cars. Having emerged as a

Superbrand, Servo has genuine oil tie ups with a wide range of companies

like Hyundai, Maruti, Bajaj and Lancer. It is also fast making its mark in

overseas markets such as the UAE, Malaysia, Mauritius, Bangladesh, Bahrain,

Sri Lanka, Nepal, Yemen, Kenya, Kuwait, Burkina Faso, Reunion Islands and

others.

Having been developed at IndianOil’s world-class R&D Centre at Faridabad,

SERVO enjoys a market share of 42% and is sold through over 8,100 IndianOil

petrol/diesel stations, over 1,300 SERVO shops and a nationwide network of

bazaar traders.

SERVO LUBRICANTS AND GREASES:

Indian Oil‘s SERVO is the brand leader among lubricants and greases in India and has been conferred the ―Consumer Super brand‖ status by the Super brands Council of India.

With over 500 commercial grades and 1,500 formulations encompassing literally

every conceivable application, SERVO serves as a one-stop shop for complete

lubrication solutions in the automotive, industrial and marine segments.

Recognized for cutting- edge technology and high-quality products, SERVO is

backed by Indian Oil‘s world-class R&D and an extensive blending and

distribution network. In the retailing segment, besides Indian Oil petrol stations,

SERVO range of lubricants is available through a network of SERVOXPRESS

stations, bazaar outlets and thousands of auto spare parts shops across the

country.

MARINE FUELS AND LUBRICANTS:

Indian Oil caters to all types of bunker fuels and lubricants required by various types of vessels operating throughout the world in the shipping industry. Bunker supplies are made at all major ports of India; Mumbai, Kandla, Vasco, Chennai, Tuticorin, Vizag, Cochin, New Mangalore, Kolkata, Paradeep, JNPT, Port Blair and Haldia. Apart

from Indian Navy, whose 100% bunker requirement is met by Indian Oil, it also supplies bunker fuels to all major shipping and dredging companies of India. Spot requirement of different vessels calling at Indian ports are met through nominations received from local shipping agents and international bunker traders/brokers

5. Indian Liquefied Petroleum Gas

IndianOil’s Indane LPGas, with a market share of 48% and a network of 4,350

Indane distributors, is widely used in commercial sectors like industries,

hotels & restaurants,

medical labs, etc. It is used daily in over 40 million homes as cooking fuel.

Around 87 bottling plants are spread across the country with a combined

bottling capacity of 3.77 MMTPA. Presently, new and improved 5 kg Indane

LPGas cylinders are being introduced in rural and hilly regions to implement

wider usage by the economically weaker sections.

INDANE GAS:

Indane is today one of the largest packed-LPG brands in the world and has been conferred the coveted ‗Consumer Super brand‘ status by the Super brands Council of India. Having launched LPG marketing in the mid-60s, Indian Oil has been credited with bringing about a ‗kitchen revolution,‘ spreading warmth and cheer in millions of households with the introduction of the clean and efficient cooking fuel. It has led to a substantial improvement in the health of women, especially in rural areas by replacing smoky and unhealthy chulha.

Indane is today an ideal fuel for modern kitchens, synonymous with safety, reliability and

convenience. With the status of an exclusive business vertical within the Corporation, the Indane network

delivers 1.2 million cylinders a day to the doorsteps of over 53 million households, making Indian Oil the

second largest marketer of LPG globally, after SHV Gas of The Netherlands. Indane is available in

compact 5 kg cylinders for rural, hilly and inaccessible areas, 14.2 kg cylinders for domestic use, and 19

kg and 47.5 kg for commercial and industrial use.

3. AutoGas:

. AUTOGAS:

The fuel is marketed by Indian Oil under the brand name ‗Auto Gas‘ Indian Oil has setup 272

Auto LPG Dispensing Stations (ALDS) covering 149 cities across India. Auto Gas impacts greenhouse

emissions less than any other fossil fuel when measured through the total fuel cycle. Conversion of petrol

to Auto Gas helps substantially reduce air pollution caused by vehicular emissions. The saving on account

of conversion to Auto Gas in comparison to petrol is about 35-40%. Low filling times and the 35-40%

saving is a reason enough for a consumer to convert his vehicle to Auto Gas.

AutoGas is Liquefied Petroleum Gas (LPG) used as an alternative fuel for the

propulsion of road vehicles. It has an excellent safety record both in terms of

its storage, transportation and use. Extensive safety tests have led to the

conclusion that Autogas is substantially safer than petrol due to its more

robust fuel tank having a resistance to impact damage.

AutoGas has been introduced in Hyderabad, Bangalore and Mumbai through

a network of 48 stations out of an industry total of 103 Auto LPG Dispensing

Stations. This alternative fuel is a good long term business proposition, and

IndianOil intends to further expand its marketing in a big way.

4. IndianOil Aviation Service:

IndianOil’s Aviation Services, with a 68% market share and a network of 95

Aviation Fuel Stations (AFS), meets the fuel and lubricant needs of domestic

and international airlines, Defence Services and private aircraft operators.

IndianOil Aviation service is ISO 9002 certified and is not only the largest

aviation fuel marketer in the country but is also the most preferred supplier

of jet fuel for customers in India and abroad. Besides the domestic airlines,

IndianOil Aviation Service serves over 71 International airlines.

IndianOil Aviation Service caters to over 90% demand of the Indian Defence

Services as well as the sensitive requirements of WIP flights at all airports

and at remote helipads across the Indian subcontinent. It not only maintains

world-class standards in operations and safety but also conforms to the

severe global quality requirements of Aviation fuel storage and handling.

5. Premium Fuels-XtraPremium & XtraMile:

Launched on September 24, 2002, the premium fuels – XtraPremium and

XtraMile (originally IOC Oremium and Diesel Super respectively), mark a new

beginning for IndianOil and offer the benefits of convenience and enhanced

comfort to its customers.

XtraPremium:

India’s first 91 octane petrol, XtraPremium is reinforced with multifunctional

additives including ‘Friction Buster”. It is available at over 2,000 Retail

Outlets all over the country and has the following attributes:

o Super Mileage and Pick-up

o Enhances cleaning of engines

o Minimizes exhaust emissions

o Restores peak engine power and acceleration

o Reduces maintenance cost

o

XtraMile:

IndianOil’s new generation High Speed Diesel with world-class additives, XtraMile is

the leader in its market segment. Offered at over 4,400 Retail Outlets nationwide, it

has the following features:

o Extra mileage leading to a Greater Acceleration

o Faster pick up, resulting in lower Maintenance Costs

o Longer engine life, thus providing Enhanced Overall Performance

o Eliminates engine knockings

6. XtraPower:

XtraPower is a Smart Card based Fleet Card Program, which enables the

cashless purchase of fuel and lubes from designated retail outlets of IndianOil

through flexible prepaid and credit facilities. The fleet card program aimed at

solving the needs of fleet owners/operators offers many benefits which

includes an exciting rewards Program, Personal Accident Insurance Cover and

Vehicle Tracking Facilities.

Launched in March 2004, XtraPower, having crossed the one million mark,

has emerged as the largest fleet card program in the country. It has the

widest Retail Outlet coverage

with over 4,800 Retail Outlets in its network and has locked in about 22% of

the Fleet market share in the retail segment.

Any Fleet Owner/Operator, Corporate or Business Entity owning or operating

commercial vehicles can sign up for membership of the XtraPower Fleet Card

Program at an annual charge of Rs. 100/-. Each fleet owner is issued one

Fleet Control Card and Vehicle-Specific Fleet Cards for every vehicle enrolled

under the program.

Backed by IndianOil/s vast infrastructural network as well as service providers

through its dedicated site www.iocxtrapower.com, XtraPower provides many

facilities to its members through the numerous salient features such as

Flexible Pre-paid and Credit options, Card Limits for better control, Web-bases

allocation of funds on specific cards, Card-to-Card Fund Transfer, Attractive

Reward program, Option for Real Time tracking of vehicles at subsidized cost,

interest-free credit with an option for customers to choose from more than

one credit partners, discounts on purchase through reward points,

redemption of points not only for fuel/lubes but also for a wide range of

consumer goods and novelties and Free Personal Accident Insurance Cover

for fleet owners, Drivers, Co-drivers and Helpers.

The XtraPower Fleet Card Program is thus a solution to every Fleet

Owner/Operator’s Fleet management Problems.

7. XtraRewards:

The country’s first online loyalty card for cash customers, XtraRewards was

launched in Bangalore on the 26th of March 2007.

XtraRewards is a loyalty program for urban vehicle owners through which the

customers can add further value to their purchases by piling up loyalty

points. These loyalty points can also be accrued by customers paying through

credit and debit.

Having been launched in 60 outlets all over Bangalore, this program will be

unveiled later in Chennai followed by Hyderabad. In the first phase, 1,250

outlets of IndianOil and IBP will be automated by September at a cost of Rs.

169 crore to be followed by 1,178 outlets at Rs. 163 crore to be implemented

by the middle of 2008. IndianOil has launched this reward program with an

aim to leverage technology in its retail business in order to provide maximum

facilities and benefits to its customers and also to help the

dealers plan and manage inventory, monitor activities of their fore-court and

to maintain records for dealing with customer complaints and queries online.

The card is backed by Tata Indicom’s CDMA based PDSN technology which

will act as the communication backbone with HDFC Bank providing Point of

Sale Terminals (POST) at the designated IndianOil Retail Outlets.

8. ‘Swagat’ Highway Flagship Retail Outlets:

The ‘Swagat’ Retail Outlets have been launched by IndianOil to cater to the

high growth areas of National Highways forming a part of the golden

Quadrilateral and the North-South, East-West corridors. These Flagship retail

outlets are spread across the country and 45 out of the total 111 “Swagat’

retail outlets have already been commissioned with fuel and non-fuel

facilities. These retail outlets have been designed to provide customers with

fuel/lubes including XtraMile and XtraPremium as well as non-fuel facilities

such as food/rest, communication, healthcare, parking, vehicle care etc.

These retail outlets maintain high Q&Q standards through retail outlet site

and tank truck automation, third party certification through Bureau Veritas,

fortnight sampling through Quality Audit Officers and training through a

professional agency.

9. XtraCare:

IndianOil’s ‘XtraCare’ outlets are benchmarked against international

standards of Q&Q, housekeeping, maintenance and customer service as

certified by the global agency Bureau Veritas. The launch of XtraCare was a

result of a series of plans in retail design, product and service upgradation,

capability training, automation, loyalty programs and retail site management

techniques.

The non-fuel services are boosted in the IndiaOil XtraCare plan with a wide

range of loyalty programs- XtraPower, more recently XtraRewards and co-

branded cards like IndianOil-Citibank credit cards. XtraCare has the most

state-of-the-art automation with cutting edge technology including automatic

tank level gauges, temperature sensors, density measurement sensors, back-

office server with DU controls, automatic bill printing facility, customer

database, etc.

IndianOil had recently introduced the Platinum Circle and Gold Circle as a

precursor to the XtraCare launch. The Platinum Circle and Gold Circle are

exclusive, top of the line clubs for high selling retail outlet dealers and these

dealers have emerged as peer leaders and are an integral part of the

XtraCare dealer ‘sensitization’ strategy.

10. Kisan Sewa Kendras:

IndianOil launched ‘Kisan Sewa Kendras’ for the rural markets as a new

growth area in retail business. These outlets offer a variety of products and

services besides autofuels and kerosene, thus meeting the diverse needs of

the rural population. The Kendras mainly market petroleum fuels, SERVO

lubricants, fertilizers and agro inputs like seeds, pesticides, farming

equipment; vegetables, stationery and other items. Besides serving the

farming community through wide-ranging products, services and facilities,

this initiative is also expected to create employment avenues in rural India,

which is fast emerging as one of the largest consumer bases, thereby

providing attractive returns to the operators.

GROUP OF COMPANIES

The IndianOil Group of Companies comprises of:

1. Lanka IOC Limited (LIOC)

2. IndianOil (Mauritius) Limited.

3. IBP Co. Limited (IBP)

4. Chennai Petroleum Corporation Limited (CPCL)

5. Bongaigaon Refinery and Petrochemicals Limited (BRPL)

6. IndianOil Technologies Limited

1. Lanka IOC Limited (LIOC):

IndianOil’s subsidiary in Sri Lanka, Lanka IOC, is the only private oil company

other than the state owned Ceylon Petroleum Corporation (CPC) that

operates retail petrol/diesel stations within Sri Lanka.

IndianOil entered into Sri Lanka with a view to accomplish its objective of

becoming a transnational energy major. IndianOil’s vast experience in

downstream petroleum operations in India creates a healthy and competitive

petroleum industry in Sri Lanka which largely benefits the island nation.

Lanka IOC Limited has been incorporated mainly to carry out retail marketing

of petroleum products, bulk supply to industrial consumers, building and

operating storage facilities at the Trincomalee Tank farm, etc. Thus it not only

provides energy security and supply stability to Sri Lanka but also upgrades

the overall standards of service, particularly in the retail sector of the nation.

Having a market share of 22% and operating over 160 outlets, the company

occupies the NO. 2 position among the top 50 listed companies operating in

Sri Lanka. Its oil terminal at Trincomalee is Sri Lanka’s largest petroleum

storage facility.

In order to provide world class quality petroleum products and services at the

most competitive prices to the Sri Lankan customers, Lanka IOC is making

periodic investments to the tune of about INR 450 crore. The retail outlets are

being refurbished with state-of-the-art facilities and services at par with

international standards. Through its retail chain, the company is also making

available non-fuel facilities like convenience stores, 24-hour ATMs, automatic

carwash, food marts, etc.

These revamped stations of Lanka IOC have earned praises for the company

from all sections of the Sri Lankan society.

2. IndianOil (Mauritius) Limited.

IndianOil is investing US$ 36 million to set up a range of marketing

infrastructure in Mauritius through its wholly owned subsidiary IndianOil

Mauritius Ltd. (IOML). A state-of-the-art petroleum storage terminal with a

capacity of 15,500 metric tonnes has already been commissioned at Mer

Rouge to serve as the supply base of petroleum products. This

microprocessor-controlled facility with automated product level monitoring,

truck loading and computerized access control is the first-of-its-kind in

Mauritius. As part of this project, separate import lines for Motor Gasoline

(petrol), Gas Oil (Diesel), Jet Fuel (Aviation Fuel) and Fuel Oil have also been

laid. IOML has also strengthened the bunkering facilities with new lines to

various quays in the port, which is fast emerging as the region’s busiest port.

IOML has undertaken means to set up a network of 25 world class petrol

stations in Mauritius in order to provide the Mauritian customers with auto

fuels and lubricants of international quality. These outlets will be equipped

with a range of value-added services including both fuel and non-fuel

facilities.

IOML has also joined a consortium of four existing oil companies to operate

aviation fuel storage, hydrant lines and aircraft fuelling facilities in Mauritius.

The consortium will soon build a new Aviation Fuel Terminal at Sir

Seewoosagar Ramgoolam International Airport.

IndianOil (Mauritius) Ltd. which has attained a 14% market share includes

aviation fuelling and bunkering business. Besides the expansion of the retail

network, a modern product-testing laboratory is also being set up in

Mauritius. It now occupies the 25th place among the top 100 companies in

Mauritius in less than 30 months after commencement of operations there.

3. IBP Co. Limited (IBP):

IBP Co. Limited, a subsidiary of IndianOil, is a stand-alone petroleum

marketing company with exclusive Business Groups for Petroleum, Explosives

and Cryogenics.

IBP’s marketing efforts are fully focused on improving its sales of petrol and

diesel. During the period April – Dec 2006 the company achieved a sales

volume of 798,559 KL of petrol and 2,959,018 KL of diesel which resulted in a

sales growth of 2.8% in petrol and 6.4% in diesel as compared to same period

last year. The revenue from the Business Group (Petroleum) witnessed an

increase of 16% during the fiscal year 2005-06.

A pioneer in introducing quality and quantity assurance of all products and

services at its retail outlets, IBP is constantly striving to keep up with industry

standards by implementing third party audits by reputed agencies. The

branding activities are further reinforced through an initiative called “Project

Horizon” in which IBP’s 422 select top of the line high-volume outlets are

specially branded with an upgraded retail visual identity. Independent

agencies are appointed to collect samples from these retail outlets in order to

test them on a monthly basis so as to guarantee that products available to

customers meet the specified standards.

As part of synergy with the parent company IndianOil, the Company has

begun marketing branded fuels, viz., ‘XTRAPREMIUM’ petrol and ‘XTRAMILE’

diesel at select retail outlets of the Company. IBP has also introduced Indian

Oil’s XtraCare Fleet Card Program in its network. This program is designed to

help transporters in efficient management of their fleets besides rewarding

them for their loyalty to the Company.

4. Chennai Petroleum Corporation Limited (CPCL):

A subsidiary of IndianOil, Chennai Petroleum Corporation Limited has two

refineries with a combined capacity of 10.5 Million Tonnes Per Annum

(MMTPA). The Manali Refinery, with a capacity of 9.5 MMTPA is one of the

most complex refineries in India with Fuel, Lube, Wax and Petrochemical

feedstock production facilities. CPCL’s second refinery is located at Cauvery

Basin at Nagapattinam with a capacity of 1.0 MMTPA.

The main products of the company are LPG, Motor Spirit, Superior Kerosene,

Aviation Turbine Fuel, High Speed Diesel, Naphtha, Bitumen, Lube Base

Stocks, Paraffin Wax, Fuel Oil, Hexane and Petrochemical feed stocks.

The crude throughput for the year 2005-06 was highest-ever at 10.36 Million

Metric Tonnes (MMT) against the Memorandum of Understanding (MoU)

target of 10.2 MMT. The crude processing was 16% higher than the previous

year crude throughput of 8.92 MMT. During the year, the Manali Refinery

processed 9.68 MMT and Cauvery Basin Refinery (CBR) processed 0.68 MMT.

CPCL’s MoU target for 2006-07 has been set at 10.4 MMT. The turnover for

the year 2005-06 was the highest-ever at Rs.25,409 Crore as against

Rs.16,270 Crore in the previous year registering an increase of about 56%.

The turnover was higher mainly due to increase in crude throughput and

higher prices for the products based on import-parity.

CPCL has commissioned many new facilities including a Zero Discharge Plant,

Additional 2.5 MGD Capacity Sewage Reclamation Plant and a 5.8 MGD

Desalination Project. The new project and initiatives being implemented are

Crude Oil Pipeline Project, Resid Upgradation Project, Propylene Recovery

Project, Windmill Power Project, Quality upgradation Projects to meet Euro-IV

Products and Refinery Capacity augmentation at Manali.

5. Bongaigaon Refinery and Petrochemicals Limited (BRPL):

Bongaigaon Refinery and Petrochemicals Limited (BRPL) has its registered

office and production units at Dhaligaon in the Bongaigaon District (now

under recently constituted Chirang District) of Assam. The company has its

Regional/Marketing offices at Guwahati, Kolkata, Mumbai and Delhi.

The core activities of BRPL are refining of crude oil and production of

petroleum products. The Company is also engaged in the production and

marketing of value-added petrochemical and PSF products. The Company has

a Refinery with a rated capacity of 2.35 million tonnes per annum of crude oil,

a petrochemicals complex comprising of a Xylene plant, a Dimethyl

Terephthalate (DMT) plant and a Polyester Staple Fibre (PSF) plant.

Commercial production of the refinery started in 1979 and other plants were

commissioned in stages. The Refinery, which normally processes crude oil

available in Assam, is presently processing crude from Ravva Oil Fields of

Krishna Godavari Basin also. The Petrochemicals units consume Naphtha as

its major raw material, which is supplied from the Refinery itself.

The major products from the refinery are LPG, Unleaded MS, Naphtha, ATF,

SKO, HSD, LDO, LSHS, LVFO, RPC & CPC. The major products of the

Petrochemicals and PSF units are DMT and PSF. The petroleum products

(except RPC & CPC) are marketed by Indian Oil Corporation Ltd. (IOCL). BRPL

markets RPC, CPC, Petrochemicals and PSF products through its own

marketing network.

6. IndianOil Technologies Limited (ITL):

A wholly owned subsidiary of IndianOil, IndianOil Technologies Limited (ITL) is

the technology-marketing arm for the entire range of technologies developed

at IndianOil’s R&D Centre at Faridabad. This centre, which was set up over

three decades ago, has developed several technologies and technical

expertise both in refining and the lubricant sector. The R&D activities in

refining technology are targeted in the areas of fluid catalytic cracking (FCC),

hydro processing, catalysis, residue upgradation, distillation, simulation and

modeling, lube processing, crude oil evaluation, process optimization,

material failure analysis, remaining life assessment and other technical

services.

ITL also offers state-of-the-art sludge disposal technology based on

biotechnology which is widely accepted in the hydrocarbon sector. ITL also

markets the R&D developed lubricants technology, which possesses USPs,

established through wide market acceptance. The company imparts training

in the areas of FCC, Hydroprocessing, Catalytic Reforming, Delayed coking,

Simulation and Modeling, Bio-remediation, Crude Assay, Material Failure

Analysis, Remaining Life Assessment, Analytical techniques, Lubricants &

grease etc. covering the basics, plant trouble shooting and technical

solutions. In the recent past ITL carried out such trainings in Kuwait, Iran etc.

IndianOil has adopted the approach of nurturing human talent as a means to

nurturing technology. This approach has worked well as the hydrocarbon

sector is both technology and knowledge intensive. As a result, the

Corporation is now in a position to offer a bouquet of technologies, products,

processes and solutions that are aimed at improving performance and

profitability.

FINANCIAL ANALYIS OF INDIANOIL

BALANCE SHEET

As on

31Mar06   31Mar05

  31Mar04

 

Assets Rs mn %BT Rs mn %BT Rs mn %BT

Gross Block

435588.10

50.71 397824.40

57.08 363413.60

56.86

Net Block 249193.90

29.01 233037.20

33.44 220018.10

34.42

Capital WIP 96453.00 11.23 87339.10 12.53 52865.70 8.27

Investments

145263.80

16.91 57049.20 8.19 55954.30 8.75

Inventory 242777.90

28.26 195048.20

27.98 149510.80

23.39

Receivables

66994.80 7.80 56898.70 8.16 39731.20 6.22

Other Current Assets

58329.70 6.79 67608.40 9.70 121088.60

18.94

Balance Sheet Total(BT)

859013.10

100.00

696980.80

100.00

639168.70

100.00

Liabilities Rs mn %BT Rs mn %BT Rs mn %BT

Equity Share Capital

11680.10 1.36 11680.10 1.68 11680.10 1.83

Reserves 279731.20

32.56 247061.90

35.45 217613.10

34.05

Total Debt 264037.20

30.74 173199.30

24.85 121776.10

19.05

Creditors and Acceptances

128307.40

14.94 112479.20

16.14 79699.60 12.47

Other current liab/prov.

175257.20

20.40 152560.30

21.89 208399.80

32.60

Balance Sheet Total(BT)

859013.10

100.00

696980.80

100.00

639168.70

100.00

RATIO ANALYSIS

CURRENT RATIO = 1.224

The current ratio being 1.224 implies that for every one rupee of current liabilities, current assets of 1.224 are available to meet them.

QUICK RATIO = 0.26

The quick ratio is a measure of the firm’s ability to service short term liabilities. A large part of the firm’s current assets are tied up in slow paying debts.

DEBT EQUITY RATIO = 0.903

Debt equity ratio is the related contribution of creditors and owners of the business in its financing. This ratio thus signifies that a portion of 0.903 of equity and debt of the company is being used to finance its assets.