Indian Oil Corporation Ltd. (IndianOil) is the largest commercial enterprise in India, and the only Indian presence in the Fortune magazine’s “global 500” listing of the world’s largest corporations, with a ranking of 226 for fiscal 2001. In the ‘Forbes International 500’ list of the largest companies outside US, IndianOil is ranked 112 and tops the four Indian companies in the listing. In addition to being the largest national oil company in the Asia Pacific region, IndianOil has also been ranked ‘First’ in Petroleum Trading among the 15 national oil companies in the region in the 2001 Industry Perception Survey conducted by Applied Trading Systems, Singapore. Indian Refineries Ltd. And Indian Oil Company Ltd. were set up in 1958 and 1959 respectively, to build national competence in the oil refining and marketing business. On 1st September 1964, these two companies were merged to form Indian Oil Corporation Ltd. IndianOil owns and operates seven of the country’s 18 refineries, at Digboi, Panipat, with a combined capacity of 38.15 million metric tones per annum (MMTPA). A new MMTPA grassroots refinery is being set up at Paradip in Orissa. In addition, IndianOil has two subsidiary companies, Chennai Petroleum Corporation Ltd. And Bongaigaon Refinery and Petrochemicals Ltd., with a combined refining capacity of 9.35 MMTPA, thereby raising its total refining capacity to 47.50 MMTPA, the highest in the country today. IndianOil has the country’s largest network to crude and product pipelines, with a combined length of 6,523 km and a capacity of 43.45 MMTPA. With sales of 47.17 million metric tones in 2001-02, IndianOil holds over 53% of the petroleum products market share in India. Its extensive network of over 22,000 sales points is backed for supplies by 182 bulk storage points and 78 Indane bottling plants. 92 Aviation Fuel Stations cater to the Aviation Industry, defence as well as civil.

IBP Co. Limited, a stand-alone marketing company and a subsidiary of IndianOil, has a nationwide network of over 1,550 retail outlets.

IndianOil’s Research and Development Centre has been engaged in world-class research in tribology (lubricants formulation), refinery processes and pipeline transportation. The Centre has developed over 2000 lubricant and grease formulations, and obtained approvals of original equipment manufactures in India and abroad.

A wholly owned subsidiary, Indian Oil blending Ltd., manufactures over 450 grades of the country’s leading R brand of lubricants and greases. In pursuit of its Vision of becoming ‘ a major, diversified, transnational, integrated energy company, with national leadership and a strong environment conscience, playing a national role in oil security and public distribution’, IndianOil is proactively identifying and developing business opportunities in Exploration & Production (E&P), Gas and Gas-to-Liquid, Petrochemicals, Power, Information Technology & Communications, Collaborative R&D, Exports, Shipping, Training & Consultancy, Engineering & Construction, and Transnational Operations. Twelve joint Ventures are now operational in partnership with some of the leading international and Indian companies;
 

• Avi-Oil (India) Pvt. Ltd. With NYCOSA, France, and Balmer Lawrie & Co. for manufacturing and marketing Defence and civil aviation lubricants and specialties.
• The cover depicts a bird, symbolizing IndianOil, breaking through barriers to seek new horizons.
• It is a quest marked by immense possibilities a quest for progress through pursuit of new opportunities.
• The colour blue signifies the vast expanse of a new world, and is a tangible expression of widening horizons.
• Indian Oiltanking Ltd., with Oiltanking (India) GmbH, Germany, for infrastructure development and terminalling services.
• Petronet India Ltd. (PIL), a consortium of oil companies and financial institutions, for petroleum product pipeline projects.
• Petronet Vadinar-Kandla Ltd., as a subsidiary of PIL, for Vadinar-Kandla product pipeline.
• Petronet Chennai-Trichy-Madurai Ltd., also as a subsidiary of PIL, for Chennai-Trichy-Madurai product pipeline.

IndianOil is marketing diesel fuel additives for automobiles in collaboration with Elf Antar, France. 
IndianOil Air BP are collaborating in aviation fueling business.

IndianOil’s investments in creation of assets will exceed Rs. 40,000/- Crore over the decade beginning 1997. These investments, substantially funded from internal resources, will result in expansion and modernisation of existing capacities, as well as creation of state-of-the-art facilities.

IndianOil is an “academy” company with 18training centers. The IndianOil Institute of Petroleum Management (IIPM), Gurgaon, serves as an apex training and consultancy institute and conducts management development programmes in association with reputed national and international institutes.

IndianOil Management Centre for Learning (IMCL) recently set up in Mumbai will facilitate in upgrading the functional knowledge and skills of the employees and also impart behavioural training.

For the past two decades, IndianOil has been lending its expertise to several countries in areas of refining, marketing, transportation, training and R&D. These include Sri Lanka, Kuwait, Bahrain, Iraq, AbuDhabi, Tanzania, Ethiopias, Algeria, Nigeria, Nepal, Bhutan, Maldives, Malaysia and Zambia.

IndianOil’s commitment to quality, safety, health and environment is reflected in the series of national and international certifications and awards earned over the years.

The 17th largest petroleum company in the world, IndianOil, is now emerging as a transnational energy conglomerate. From the icy slopes of Leh in the Himalayas to Kanyakumari where the Bays of Bengal and the Arabian Sea join the Indian Ocean, and from the Single Buoy Mooring at Salaya in the West to the Monasteries at Tawang in the East, IndianOil lives in every heart and in every part of India.

GLOBAL RANKING

Indian Oil Corporation maintained its position as the sole Indian presence in the Fortune ‘Global 500’ listing of the world’s largest corporations for the eighth year in succession. In the latest ranking released by the Fortune magazine for the year 2001, Indian Oil Corporation is ranked 226 against the ranking of 209 last year. The lower ranking is mainly due to the diminished value of Rupee as compared to the US $ by 5.65% for the period under review. As per the Fortune listing, amongst the 269 largest petroleum-refining companies in the world, IndianOil is ranked 17, a step above last year’s position of 18.

In the list of “Forbes International 500 Companies’ outside the US, IndianOil retains its last year ranking of 112, and tops the list among the four Indian corporates appearing in the listing.

In addition to the Fortune and Forbes rankings, Indian Oil Corporation has been ranked ‘First’ in Petroleum Trading among the 15 National Oil Companies in the Asia Pacific Region in the 2001 Industry Perception Survey conducted by Applied Trading Systems, Singapore.

TURNOVER

The turnover of Indian Oil Corporation for the year ended 31.03.2002 was Rs. 114,864 Crore as compared to Rs. 117,371 Crore in the previous year. The reduction in turnover is mainly on account of reduced sale of crude and product to other Oil Marketing Companies. Further, the inland sales volume reduced by 0.63 million metric tones, from 47.80 million metric tones in 2000-01 to 47.17 million metric tones during 2001-02, registering a decline of 1.32%. The reduction in sales is mainly due to lower off-take of HSD, SKO and Naptha consequent to slow down of economy.

PROFIT BEFORE TAX

The Corporation recorded the highest ever Profit Before Tax of Rs. 4,599 Crore during the current year as against Rs. 2,962 Crore in 2000-01, registering a growth of 55%. The increase in Profit Before Tax is mainly on account of settlement of Pool claims pertaining to previous year.

PROVISION FOR TAXATION
a) Current Tax

An amount of Rs. 977 Crore has been provided towards Current Tax considering the applicable Income Tax rates, as against Rs. 242 Crore provided during 2000-01. The effective tax rate for the current financial year works out to 21.68% as against 8.18% in 2000-01. The increase in effective tax rate is due to provision of tax during the current year at normal rates of tax due to higher profits as compared to provision at MAT (Minimum Alternative Tax) rate in the previous year.

b) Deferred Tax

In compliance of Accounting Standard-22 on “Accounting for Taxes on Income” issued by The Institute of Chartered Accountants of India, the Corporation has

(i) Provided accumulated Deferred Tax Liability as on 01.04.2001 amounting to Rs. 2,688 Crore with a corresponding charge to General Reserve having no impact on current year profits.
(ii) Provided Deferred Tax Liability for financial year ended 31.03.2002 amounting to Rs. 717 Crore and accordingly Profit has been reduced by the same amount.

Profit After Tax has improved from Rs. 2,720 Crore in 2000-01 to Rs. 2,885 Crore during current financial year, registering a growth of 6%.

DEPRECIATION

Consequent to increased capitalization of fixed assets, deprecation for the year 2001-02 was Rs. 1,392 Crore as against Rs. 1,224 Crore for the year 2001-02.

INTEREST (NET)

Interest Expenditure (net) decreased from Rs. 1,174 Crore during 2000-01 to Rs. 882 Crore for the current year. The decrease is mainly due to reduction in short term loans and decrease in overall cost of borrowings. 

BORROWINGS

The borrowings of the Indian Oil Corporation have also reduced from Rs. 20,636 Crore as on 31.03.2001 to Rs. 19,070 Crore as on 31.03.2002. The Total Debt to Equity ratio as on 31.03.2002 works out to 1.25:1 as against 1.29:1 as on 31.03.2001 and long Term Debt to Equity ratio stands at 0048:1 as on 31.03.2002 as against.0.40:1 as on 31.03.2001.

During the year, Indian Oil Corporation earned Rs. 2,078 Crore through experts as against Rs. 2,206 Crore in 2000-01. The exports include exports of R lubricants to Nepal, Sri Lanka, Indonesia, Bangladesh, Bahrain and Mauritius, and sale of ATF to international airlines.

Indian Oil Corporation owns and operates the largest network of crude and product pipelines in the country with a total length of 6,523 km and overall capacity 43.45 MMT. The pipeline network transported 40.36 MMT of crude and petroleum products during 2001-02 against the previous year’s throughput of 39.44 MMT.

During the year, IndianOil’s Marketing Division performed well in all key areas despite increased competition and unpredictable market conditions. New initiatives in the form of products and services were taken to achieve ‘Customer Delight’.

SALES

During 2001-02, IndianOil Corporation sold 47.17 MMT of petroleum products as compared to 47.80 MMT in the previous year. The actual demand for petroleum products in the country during the year was much below the projections. This had an adverse impact on Indian Oil Corporation’s sales. Despite the sluggish demand and severe competitions, IOCL increased its market share in products like MS(Retail) and HSD (Retail). Indian Oil Corporation commissioned 350 Retail Outlets and 19 SKO / LDO Dealerships during the year, raising their total number to 7,870 and 3,455 respectively. This includes 80 jubilee Retail Outlets.

CUSTOMER SERVICE

In Indian Oil Corporation’s pursuit to provide better services, IVSR based complaint tracking and redressal system for customers was launched in 33 Indane Area Offices. Further, in order to provide value added services to monitoring public, Indian Oil Corporation, in association with State Bank of India, launched the SBI-Indian Oil Co-branded pre-paid card called “Smart Gold” for customers to avail of products and services at IndianOil retail outlets. Indian Oil Corporation introduced 35 ATMs at retail outlets during the year in various parts of the country, thereby bringing the total number of ATM’s installed to 57. The IndianOil-Citibank co-branded credit card has reached a membership of 1.48 lakh as on 31.03.2002. 

Indian Oil Corporation, in association with Chennai based Sundaram Finance ltd., also launched “Power Plus Fleet Card” for transport fleet operators.

INDANE COOKING GAS

During the year, Indian Oil Corporation enrolled 26 lakh Indane customers, and the cumulative Indane consumer population reached 322 lakh. The number of Indane distributorships commissioned during the year was 457 raising the total number of distributors to 3,881. During the year, seven new Indane Bottling Plants were commissioned, thus raising the total number of Indane Bottling Plants to 78 and the total bottling capacity to 32.21 metric tones per annum.

AVIATION

Indian Oil Corporation continued to be market leader in Aviation Fuel supply business with a market share of 67.9%. The entire Aviation Fuel requirements of Indian Navy and Indian Army, and over 87% requirement of Indian Air Force was met by IOCL. The major requirements of other market segments like Indian Airlines were catered to by Indian Oil Corporation. IOCL commissioned a state-of-the-art Hydrant Refuelling System at Netaji Subhas Chandra Bose Airport in Kolkata during the year for use of Industry. As part of customer service initiatives Indian Oil Corporation has developed a user-friendly IndianOil Aviation web page on Internet, providing information on ruling prices, service network, aviation highlights, and information on products available location-wise.

Indian Oil Corporation organized the 11th International Aviation Conference at Hyderabad, which was attended by representative of major international airlines, IATA, aviation equipment manufactures and Government. 

LUBRICANTS

Indian Oil Corporation produced 3.96 lakh metric tones of lubes and 0.13 lakh tonne of grease during the year. In spite of depressed market conditions, Indian Oil Corporation improved its market share in finished lubricants. 36 R bazaar-on-wheels were added to penetrate the bazaar trade. 24 R stockists (auto) and 11 R stockists (industrial) were commissioned during the year to give a thrust to lubricant sales. During the year, R lubricants were launched in Bangladesh and Sri Lanka.

SPECIALITIES

Indian Oil Corporation introduced four new products, viz., Needle Coke (Guwahati Refinery), Microcrystalline Wax (Haldia Refinery), and Polymer Grade Hexane and Butene-2 (Gujarat Refinery) in the market as import substitutes.

SHIPPING

149 product import tankers, 11 product tankers and 444 crude import tankers were handled during the year.

QUALITY ASSURANCE

IOCL consistently accorded top priority on Quality Assurance for its products and services. IndianOil continues to be the market leader for testing petroleums products by providing the largest network of testing facilities. More than 2 lakh samples were tested in its 37 laboratories located across the country. During the year, a mobile laboratory was added at Patna, taking the number of mobile laboratories to 23. Laboratory Information Management System was successfully commissioned in a few IndianOil laboratories with the Laboratory Documentation and Management System software developed by the Quality Control Department of Marketing Division.

Indian Oil Corporation arranged import of crude oil, petroleum products and lubricants for meeting the country’s requirements through a carefully selected diversified mix of supply sources and also exported petroleum products during 2001-02 as detailed hereunder:
 

During 2001-02, Indian Oil Corporation’s R&D Centre focused on commercialization’s of already developed technologies, development of innovative and cost-effective technologies with reduced gestation period, and specialized technical services to operating divisions of the Corporation. During 2001-02, IndianOil’s R&D Centre developed 80 formulations, which include 42 new product formulations: 32 product formulations got approval from various national and international original equipment manufacturers and 14 products got American Petroleum Institute (API) certification while field trials on 12 new products were conducted. Intellectual Property Rights activities of the R&D Centre led to grant of 19 patents, including 10 Indian, seven US, One Canadian and one European. 11 new patents were field, which include four in India, three in US and one each in Europe, China and Brazil. The efforts of the R&D Centre in proprietary additive development resulted in the synthesis of an EP Additive and Friction Modifier and its production on commercial scale at Taloja Additive Complex in Maharashtra. The Oilivorous-S Technology developed jointly with Tata Energy Research Institute for safe disposal of oil sludge has been put on field trial at Barauni and Mathura refineries. A multi-functional additive for MS was developed for improving the quality of fuel. Another breakthrough was the development of a process to improve deodorisation and dry point of MTO at Panipat Refinery. As further advancement in Bitumen technology, a high performance binder known as Crumb Rubber Modified Bitumen was developed and commercialized.

In refining technology, technologies developed earlier have moved up on the commercialization process chain during the year. These include INDALIN Process for conversion of olefinic petroleum fractions into LPG and aromatics, LOTUS-24, which is under field trial at Mathura Refinery, and IMAX Additive for maximization of LPG yield, plant trial for which has been completed at Gujarat Refinery. Other breakthroughs include development of LPG-MAX, a new process for LPG maximization and continuous film contractor based process for removal of Mercaptan from LPG.

The Instrumented Pig developed jointly by R&D Centre and Bhaba Atomic Research Centre, Mumbai, has completed field trials and is ready for commercialization.

INFORMATION SYSTEMS

Indian Oil Corporation aims at maintaining its leadership in the Indian hydrocarbon industry by assimilation of emerging Information Technology and web-enabled business solutions for integrating and optimizing the Corporation’s hydrocarbon supply chain. Indian Oil Corporation is focusing on total customer delight through value-added IT solutions, with emphasis on centralized control and decentralized response.

PROJECT MANTHAN

As part of the on-going ERP (Enterprise Resource Planning) implementation across the corporation under Project Manthan, 12 units have gone live on the latest, state-of-the-art SAP r/3 software system on New Year Day (01.01.2002) and three more on 01.07.2002, without any disruption in operations at any of the units. Earlier, Indian Oil Corporation’s R&D Centre at Faridabad became the maiden unit to Golive on SAP in August 2001, followed by IndianOil Institute of Petroleum Management (IIPM) at Gurgaon in October 2001. The laboratory Information Management System package was also implemented at Panipat Refinery in March 2001 and at R&D Centre in August 2001. A-30 A-31 Construction of the Data Communication Centre, the electronic and communication hub of the project, at IIPM campus is in progress. It will not only host SAP Production System (including Database Servers, Application Servers and Storage Libraries) but also form the nucleus of a wide Area Network linking all locations of Indian Oil Corporation through an extensive and robust communication network using V-SATs, leased lines, ISDN / PSTN dial-up lines, radio / wireless links and the Optical Fibre Cable communication system of Pipelines Division. Project Manthan is also in an advanced stage of customizing Add-On software packages in core business areas like demand forecasting; crude allocation to refineries, distribution planning for finished products; transportation scheduling; optimizing refinery operations and product mix solutions; and planning; optimizing and scheduling of the Corporation’s profitable lubricants business.

EMPLOYEE PROFILE

The human resources in Indian Oil Corporation was 31,675 strong as on 31.03.2002, of which 9,728 are in the Officers cadre and 21,947 are in the Staff cadre. There are 5,672 employees from SC category and 2,097 from ST category. The SC and ST employees constitute 24.53% of the total employees’ strength. There are 2,387 women employees, out of whom 692 are in the Officers carde and 1,695 in Staff cadre. The women employees constitute 7.54% of total employees’ strength.

WELFARE OF EMPLOYEES

IndianOil Corporation continued its endeavour to upgrade facilities and promote the welfare of employees. With a view to promote employees’ welfare, Indian Oil Corporation brought about improvements in policies concerning medical facilities, allowances at remote locations, Productivity Incentive Scheme and post-retirement medical facilities.

WELFARE OF WEAKER SECTIONS

Indian Oil Corporation has been diligently following the Presidential Directives and various instructions / guidelines issued by the Government of India regarding reservation in Services for SCs / STs/ OBCs/ Physically Handicapped/ Ex-servicemen, etc. Sincere efforts have been made to recruit reserved category candidates as per the Government’s instructions. It has been the endeavour of your Corporation to utilise 25% of Community Development Funds towards Special Component Plan (SCP) and Tribal Sub Plan (TSP) for meeting the needs of weaker sections. Status on Implementation of Disabilities Act, 1995 Before the enactment of the Act, Indian Oil Corporation had been extending reservation for physically handicapped persons in recruitment to the posts in Group ‘C’ & ‘D’. With the enactment of the act, w.e.f. 07.02.1996, the reservation for physically handicapped persons has been extended to the posts in Group ‘A’ & ‘B’ as well. Indian Oil Corporation has been implementing the provision of 3% reservations for physically handicapped and disabled persons in letter and spirit. Besides, various concessions and relaxataions are being extended to physically handicapped persons in recruitment. Presidential Directives regarding Representation of SC’s and ST’s Officials dealing with the subject are given training as required so as to enable them to update their knowledge on the subject and perform their job effectively. Liaison Officers have been appointed at various locations/ units/ installations all over the country to ensure implementation of Government Directives. In accordance with para-29 of the Draft Presidential Directives, a note about the Corporation’s activities having direct relevance to advancement of SC / ST category of employees along with statistics relating to presentation of SCs / STs, in the prescribed proformae – Appendices VII(A) and VII(B) – is placed as Annexure-2. In accordance with the revised instructions of the Government of India.

As part of the Corporate Mission ‘to help enrich the quality of life of the community and preserve ecological balance and heritage…’, Indian Oil Corporation has set up The IndianOil Foundation as a non-profit Trust to protect, preserve and promote our national heritage and culture, in collaboration with the Archaeological Survey of India and the National Culture Fund of the Ministry of Culture.

The Indian Oil Foundation will adopt at least one heritage site in every State and Union Territory. Archaeological works will be funded by the IndianOil Foundation to the Archaeological Survey of India through the National Culture Fund. Five prestigious sites have been identified, viz., Qutb Minar, Delhi; Khajuraho, Madhya Pradesh; Hampi, Karnataka; Kanheri Caves, Maharashtra; and Konarak, Orissa. The IndianOil Foundation will develop world-class facilities and conveniences for visitors. Indian Oil Corporation will provide refueling facilities for travelers and also undertake community development in the neighborhood.

As a responsible corporate citizen, Indian Oil Corporation has made substantive contribution during the year to national causes, social welfare and community development programmes throughout the country, particularly in the vicinity of its major units ‘to improve the quality of life of the people.’ Indian Oil Corporation constructed 800 temporary shelters for earthquake victims at Bachau Gujarat. Besides, IOCL contributed Rs. 23 Lakh during the year to Shri Vedic Mission Trust, Rajkot towards reconstruction of 100 houses at Kharoda village in Kutch district of Gujarat. The employees of Indian Oil Corporation also contributed Rs. 91 Lakh to the Gujarat Chief Minister’s Relief Fund for earthquake Victims.

Indian Oil Corporation continues to project a positive image to the media, the public and the stakeholders through various campaigns. During the year a number of press conferences were organized by IOCL in Delhi, Mumbai, Kolkata and Chennai. The R umbrella campaign on Television titled ‘Best Friends for Life’ was well received and adjudged the Most Recalled Advertising Commercial on Television, winning the Indian Express Award for Excellence. IndianOil Day was celebrated on 01.09.2001 by the employees of Indian Oil Corporation to reinforce the resolve of the Indian Oil People to strive for excellence.

The Annual Accounts and Directors’ Report of IndianOil Blending Ltd. (IOBL), a wholly owned subsidiary of the Corporation, are annexed. IOBL earned a Net Profit of Rs. 6.86 Crore and declared a Dividend of 30% for the year 2001-02. The production for the year 2001-02 was 226 TMT, attaining a capacity utilization of 95%.

The annual Accounts and Directors’ Report of Chennai Petroleum Corporation Ltd. (CPCL), a subsidiary of the Corporation, are annexed. CPCL earned a Net Profit of Rs. 63.71 Crore on a Turnover of Rs. 6,175 Crore and declared a Dividend of 20% for the year 2001-02.

The Annual Accounts and Inrectors’ Report of Bongaigaon Refinery & Petrochemicals Ltd. (BRPL), a subsidiary of the Corporation, are annexed. BRPL incurred a loss of Rs. 198.61 Crore on a Turnover of Rs. 1,195 Crore during the year 2001-02.

The Annual Accounts and Directors’ Report of IBP Co. Limited, a subsidiary of the Corporation, are annexured. IBP Co. Limited earned a Net Profit of Rs. 195.79 Crore on a turnover of Rs. 8,453 Crore and declared a Dividend of 100% for the year 2001-02.