Indian oil

MINOR PROJECTON

INDIAN OIL CORPORATION (IOC) INFERNO, JAIPUR

Submitted in the partial fulfilment for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

Submitted to: Mrs. Sangeeta Joshi Submitted by:

AADITYA

BBA III SEM (A)

07819201712

A SESSION: 2013 – 2014

Lingaya’s Lalita devi institute of management & Science

Mandi, Delhi-110047

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DECLARATION

I do hereby declare that the case study titled “INDIAN OIL CORPORATION (IOC) INFERNO JAIPUR” submitted by me in the partial fulfilment of the requirement of the degree from LLDIMS affiliated to GGS INDRAPRASTHA UNIVERSITY, DELHI is exclusively prepared and conceptualized by me and is not submitted to any other institution or university or published anywhere before for the reward of any Degree/Diploma certificate. It is original work of mine and has not been obtained from any other part.

All sources of information and help are authentic and have been acknowledge in the report.

Date:

Place: Delhi

Mrs. SANGEETA JOSHI AADITYA (Signature of faculty guide) (Signature of Student)

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ACKNOWLEDGEMENT

Nothing concrete can be achieved without an optional combination of inspiration and perspiration. No work can be accomplished without taking the guidance of experts. It is only the critics from ingenious intellectual that helped transform a product into a quality.

Finally, I gratefully acknowledge and express my deep gratitude to Mrs. Sangeeta Joshi my faculty guides who always helped and provides guidance during the course of my project. I would like to extend my earnest thanks for her assistance in the course of my project.

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AADITYA

TABLE OF CONTENT

Pg. no.

1. Introduction 62. Company History 73. Company Profile

124. Joint Venture 185. Objective and Obligation 22 6. Case Study 337. Assessment 348. Causes 369. Impact 36

10. Steps taken by Government 37 11. Findings 37 12. Suggestion 38 13. Bibliography 39

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Introduction

Indian Oil Corporation - a Government of India enterprise, an India based Oil and Natural gas produce and marketing company.

IOC (Indian Oil Corporation) was formed in 1964 as the result of merger of Indian Oil Company Ltd.(Estd. 1959) and Indian Refineries Ltd. (Estd. 1958). Indian Oil Corporation is the 21st largest petroleum company in the world and the ace petroleum trading company among the National Oil Companies in the Asia-Pacific region. Indian Oil Corporation group of companies includes Lanka IOC Limited, Indian Oil (Mauritius) Ltd., IBP Co.Ltd., CPCL, BRPL and Indian Oil Technologies Ltd. Indian Oil Corporation has 59 innovation patents to its name and many corresponding International Patents in major countries.

IOC is a Fortune 500 company; current rank 153 (2006).

Indian Oil Corporation has to its name a number of Awards and Accreditations like -

• Golden Peacock Eco Innovation Award-2006. • National Rural Development Corporation Award for IndeTreat IndeSweet, High

Performance additives, Nutan Wick Stove - 2005, 2002, 1981.

• SESI-Biodiesel initiatives - 2005.

• Rajiv Gandhi National Quality Award - 2005 and 1997.

• DSIR Awards for I Max FCC Catalyst Additive & INDMAX, Rail road oils, Energy Conserving Lubricants -2003-04, 2002, 1993.

• Institute of Petroleum, UK for Oilivorous-S - 2003.

• DST for INDMAX - 2003.

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• Membership of Russian Academy of Natural Sciences - 1999 Indian Chemical Manufacturers Association Citation - 1996.

• United Nations WIPO Silver Medal -1996.

• United Nations World Intellectual Property Organizations Gold Medal - 1983.

ActivitiesIOC offers Services in areas like –

• Refineries. • Pipelines.

• Marketing.

• R&D.

• Petrochemicals.

• Gas.

• E&P.

Performance

Indian Oil Corporation has registered a turnover of Rs 1,84,460.70 crore for the year ended 31st March 2007.

Company History

The Indian Oil Corporation Ltd. operates as the largest company in India in terms of turnover and is the only Indian company to rank in the Fortune "Global 500" listing. The oil concern is administratively controlled by India's Ministry of Petroleum and Natural Gas, a government entity that owns just over 90 percent of the firm. Since 1959, this refining, marketing, and international trading company served the Indian state with the important task of reducing India's dependence on foreign oil and thus conserving valuable foreign exchange. That changed in April 2002, however, when the Indian government deregulated its petroleum industry and ended Indian Oil's monopoly on crude oil imports. The firm owns and operates seven of the 17 refineries in India, controlling nearly 40 percent of the country's refining capacity.

Origins

Indian Oil owes its origins to the Indian government's conflicts with foreign-owned oil companies in the period immediately following India's independence in 1947. The leaders of the newly independent state found that much of the country's oil industry was effectively in the hands of a private monopoly led by a combination of British-owned oil companies Burmah and Shell and U.S. companies Standard-Vacuum and Caltex.

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An indigenous Indian industry barely existed. During the 1930s, a small number of Indian oil traders had managed to trade outside the international cartel. They imported motor spirit, diesel, and kerosene, mainly from the Soviet Union, at less than world market prices. Supplies were irregular, and they lacked marketing networks that could effectively compete with the multinationals.

Burmah-Shell entered into price wars against these independents, causing protests in the national press, which demanded government-set minimum and maximum prices for kerosene--a basic cooking and lighting requirement for India's people--and motor spirit. No action was taken, but some of the independents managed to survive until World War II, when they were taken over by the colonial government for wartime purposes.

During the war, the supply of petroleum products in India was regulated by a committee in London. Within India, a committee under the chairmanship of the general manager of Burmah-Shell and composed of oil company representatives pooled the supply and worked out a set price. Prices were regulated by the government, and the government coordinated the supply of oil in accordance with defence policy.

The Indian Oil Industry Evolves: Late 1940s-60s

Wartime rationing lasted until 1950, and a shortage of oil products continued until well after independence. The government's 1948 Industrial Policy Resolution declared the oil industry to be an area of the economy that should be reserved for state ownership and control, stipulating that all new units should be government-owned unless specifically authorized. India remained effectively tied to a colonial supply system, however. Oil could only be afforded if imported from a country in the sterling area rather than from countries where it had to be paid for in dollars. In 1949, India asked the oil companies of Britain and the United States to offer advice on a refinery project to make the country more self-sufficient in oil. The joint technical committee advised against the project and said it could only be run at a considerable loss.

The oil companies were prepared to consider building two refineries, but only if these refineries were allowed to sell products at a price ten percent above world parity price. The government refused, but within two years an event in the Persian Gulf caused the companies to change their minds and build the refineries. The companies had lost their huge refinery at Abadan in Iran to Prime Minister Mussadegh's nationalization decree and were unable to supply India's petroleum needs from a sterling-area country. With the severe foreign exchange problems created, the foreign companies feared new Iranian competition within India. Even more important, the government began to discuss setting up a refinery by itself.

Between 1954 and 1957, two refineries were built by Burmah-Shell and Standard-Vacuum at Bombay, and another was built at Visakhapatnam by Caltex. During the same period the companies found themselves in increasing conflict with the government.

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The government came into disagreement with Burmah Oil over the Nahorkatiya oil field shortly after its discovery in 1953. It refused Burmah the right to refine or market this oil and insisted on joint ownership in crude production. Burmah then temporarily suspended all exploration activities in India.

Shortly afterward, the government accused the companies of charging excessive prices for importing oil. The companies also refused to refine Soviet oil that the government had secured on very favorable terms. The government was impatient with the companies' reluctance to expand refining capacity or train sufficient Indian personnel. In 1958, the government formed its own refinery company, Indian Refineries Ltd. With Soviet and Romanian assistance, the company was able to build its own refineries at Noonmati, Barauni, and Koyali. Foreign companies were told that they would not be allowed to build any new refineries unless they agreed to a majority shareholding by the Indian government.

In 1959, the Indian Oil Company was founded as a statutory body. At first, its objective was to supply oil products to Indian state enterprise. Then it was made responsible for the sale of the products of state refineries. After a 1961 price war with the foreign companies, it emerged as the nation's major marketing body for the export and import of oil and gas.

Growing Soviet imports led the foreign companies to respond with a price war in August 1961. At this time, Indian Oil had no retail outlets and could sell only to bulk consumers. The oil companies undercut Indian Oil's prices and left it with storage problems. Indian Oil then offered even lower prices. The foreign companies were the ultimate losers because the government was persuaded that a policy of allowing Indian Oil dominance in the market was correct. This policy allowed Indian Oil the market share of the output of all refineries that were partly or wholly owned by the government. Foreign oil companies would only be allowed such market share as equaled their share of refinery capacity.

Indian Oil Corporation: 1964 to the 1990s

In September 1964, Indian Refineries Ltd. and the Indian Oil Company were merged to form the Indian Oil Corporation. The government announced that all future refinery partnerships would be required to sell their products through Indian Oil.

It was widely expected that Indian Oil and India's Oil and Natural Gas Commission (ONGC) would eventually be merged into a single state monopoly company. Both companies grew vastly in size and sales volume but, despite close links, they remained separate. ONGC retained control of most of the country's exploration and production capacity. Indian Oil remained responsible for refining and marketing.

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During this same decade, India found that rapid industrialization meant a large fuel bill, which was a steady drain on foreign exchange. To meet the crisis, the government prohibited imported petroleum and petroleum product imports by private companies. In effect, Indian Oil was given a monopoly on oil imports.

A policy of state control was reinforced by India's closer economic and political links with the Soviet Union and its isolation from the mainstream of western multinational capitalism. Although India identified its international political stance as non-aligned, the government became increasingly friendly with the Soviet Bloc, because the United States and China were seen as too closely linked to India's major rival, Pakistan. India and the USSR entered into a number of trade deals. One of the most important of these trade pacts allowed Indian Oil to import oil from the USSR and Romania at prices lower than those prevailing in world markets and to pay in local currency, rather than dollars or other convertible currencies.

For a time, no more foreign refineries were allowed. By the mid-1960s, government policy was modified to allow expansions of foreign-owned refinery capacity. The Indian Oil Corporation worked out barter agreements with major oil companies in order to facilitate distribution of refinery products.

In the 1970s, the Oil and Natural Gas Commission of India, with the help of Soviet and other foreign companies, made several important new finds off the west coast of India, but this increased domestic supply was unable to keep up with demand. When international prices rose steeply after the 1973 Arab oil boycott, India's foreign exchange problems mounted. Indian Oil's role as the country's monopoly buyer gave the company an increasingly important role in the economy. While the Soviet Union continued to be an important supplier, Indian Oil also bought Saudi, Iraqi, Kuwaiti, and United Arab Emirate oil. India became the largest single purchaser of crude on the Dubai spot market.

The government decided to nationalize the country's remaining refineries. The Burmah-Shell refinery at Bombay and the Caltex refinery at Visakhapatnam were taken over in 1976. The Burmah-Shell refinery became the main asset of a new state company, Bharat Petroleum Ltd. Caltex Oil Refining (India) Ltd. was amalgamated with another state company, Hindustan Petroleum Corporation Ltd., in March 1978. Hindustan had become fully Indian-owned on October 1, 1976, when Esso's 26 percent share was bought out. On October 14, 1981, Burmah Oil's remaining interests in the Assam Oil Company were nationalized, and Indian Oil took over its refining and marketing activities. Half of India's 12 refineries belonged to Indian Oil. The other half belonged to other state-owned companies.

By the end of the 1980s, India's oil consumption continued to grow at eight percent per year, and Indian Oil expanded its capacity to about 150 million barrels of crude per annum. In 1989, Indian Oil announced plans to build a new refinery at Pradip and modernize the Digboi refinery, India's oldest. However, the government's Public Investment Board refused to approve a 120,000 barrels-per-day refinery at Daitari in Orissa because it feared future over-capacity.

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By the early 1990s, Indian Oil refined, produced, and transported petroleum products throughout India. Indian Oil produced crude oil, base oil, formula products, lubricants, greases, and other petroleum products. It was organized into three divisions. The refineries and pipelines division had six refineries, located at Gwahati, Barauni, Gujarat, Haldia, Mathura, and Digboi. Together, the six represented 45 percent of the country's refining capacity. The division also laid and managed oil pipelines. The marketing division was responsible for storage and distribution and controlled about 60 percent of the total oil industry sales. The Assam Oil division controlled the marketing and distribution activities of the formerly British-owned company.

Indian Oil also established its own research center at Faridabad near New Delhi for testing lubricants and other petroleum products. It developed lubricants under the brand names Servo and Servoprime. The center also designed fuel-efficient equipment.

Changes in the Oil Industry: Late 1990s and Beyond

The oil industry in India changed dramatically throughout the 1990s and into the new millennium. Reform in the downstream hydrocarbon sector--the sector in which Indian Oil was the market leader--began as early in 1991 and continued throughout the decade. In 1997, the government announced that the Administered Pricing Mechanism (APM) would be dismantled by 2002.

To prepare for the increased competition that deregulation would bring, Indian Oil added a seventh refinery to its holdings in 1998 when the Panipat facility was commissioned. The company also looked to strengthen its industry position by forming joint ventures. In 1993, the firm teamed up with Balmer Lawrie & Co. and NYCO SA of France to create Avi-Oil India Ltd., a manufacturer of oil products used by defense and civil aviation firms. One year later, Indo Mobil Ltd. was formed in a 50-50 joint venture with Exxon Mobil. The new company imported and blended Mobil brand lubricants for marketing in India, Nepal, and Bhutan. In addition, Indian Oil was involved in the formation of ten major ventures from 1996 through 2000.

Indian Oil also entered the public arena as the government divested nearly 10 percent of the company. In 2000, Indian Oil and ONGC traded a 10 percent equity stake in each other in a strategic alliance that would better position the two after the APM dismantling, which was scheduled for 2002. According to a 1999 Hindu article, Indian Oil Corporation's strategy at this time was "to become a diversified, integrated global energy corporation." The article went on to claim that "while maintaining its leadership in oil refining, marketing and pipeline transportation, it aims for higher growth through integration and diversification. For this, it is harnessing new business opportunities in petrochemicals, power, lube marketing, exploration and production ... and fuel management in this country and abroad."

In early 2002, Indian Oil acquired IBP, a state-owned petroleum marketing company. The firm also purchased a 26 percent stake in financially troubled Haldia Petrochemicals Ltd. In April of that year, Indian Oil's monopoly over crude imports ended as

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deregulation of the petroleum industry went into effect. As a result, the company faced increased competition from large international firms as well as new domestic entrants to the market. During the first 45 days of deregulation, Indian Oil lost Rs7.25 billion, a signal that the India's largest oil refiner would indeed face challenges as a result of the changes.

Nevertheless, Indian Oil management believed that the deregulation would bring lucrative opportunities to the company and would eventually allow it to become one of the top 100 companies on the Fortune 500--in 2001 the company was ranked 209. With demand for petroleum products in India projected to grow from 148 million metric tons in 2006 to 368 million metric tons by 2025, Indian Oil believed it was well positioned for future growth and prosperity.

Principal Subsidiaries: Indo Mobil Ltd. (50%); Avi-Oil Ltd. (25%); Indian Oiltanking Ltd. (25%); Petronet India Ltd. (16%); Petronet VK Ltd. (26%); Petronet CTM Ltd. (26%); Petronet CIPL Ltd. (12.5%); Indian Oil Petronas Ltd. (50%); Indian Oil Panipat Power Consortium Ltd. (26%); Indian Oil TCG Petrochem Ltd. (50%); Librizol India Pvt. Ltd. (50%).

Company Profile12

India’s flagship national oil company and downstream petroleum major, Indian Oil Corporation Ltd. (Indian Oil) is celebrating its Golden Jubilee in 2009. It is India's largest commercial enterprise, with a sales turnover of Rs. 2, 85,337 crore – the highest-ever for an Indian company – and a net profit of Rs. 2, 950 crore for the year 2008-09. Indian Oil is also the highest ranked Indian company in the prestigious Fortune 'Global 500' listing, having moved up 11 places to the 105th position in 2009.

Mr. Sarthak Behuria

Chairman, Indian Oil Corporation Limited

Mr. Sarthak Behuria is Chairman, Indian Oil Corporation Limited, India’s largest commercial enterprise with US$62.03 billion turnover for the year 2008-2009, since 2005. He is also Chairman (part-time) of group company Chennai Petroleum Corporation Ltd., besides heading IOT Infrastructure & Energy Services Ltd., a joint venture for building and operating terminalling services for petroleum products.

Under Mr. Behuria’s stewardship, Indian Oil is transforming into a major, diversified, transnational integrated energy company. Besides consolidation in the core areas of refining and marketing, the Corporation is vigorously pursuing a string of strategic initiatives across the hydrocarbon value chain for upstream integration into exploration & production of oil, downstream integration into petro- chemicals and diversification into natural gas marketing and alternative fuels, besides globalization of downstream operations.

An alumnus of St. Stephen’s College, Delhi, and the Indian Institute of Management (IIM), Ahmedabad, Mr. Behuria joined Burmah Shell in 1973 before being absorbed in Bharat Petroleum Corporation Ltd., where he rose to the top position of Chairman & Managing Director. He also served the erstwhile Oil Coordination Committee of the Ministry of Petroleum & Natural Gas, Govt. of India.

MMr. Behuria is President of the World LPGas Association (WLPGA) since September 2008, being the first Indian to head the global body. He presided over the 22nd General Assembly of World LP Gas As- sociation (WLPGA) held at Rio-de-Janeiro, Brazil, in October 2009. Earlier, during 2006-08, he was First Vice-President of WLPGA representing the LPG industry of Asia.

Mr. Behuria has been conferred the Honorary Fellowship of the Energy Institute, UK, which is the highest-level of professional recognition reserved for those who have made a notable and distinguished contribution to the energy industry. His expertise in India’s

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oil & gas sector has been sought at many national and international forums, where he chaired sessions and presented papers.

Known to be a strong “people’s man”, Mr. Behuria practices a management style that is both open and transparent. He is also a keen golf and bridge player.

Honorary Positions

Chairman of Petroleum Federation of India (Petro Fed), representing Indian and international

companies and organizations associated with the Indian hydrocarbon sector (August 2003 till date). Chairman of Council of Indian Employers (CIE), an apex body of employers in India.

Accolades

Named among the top 10 most influential oilmen in India by Upstream, the internationally acclaimed oil & gas journal.

Conferred the prestigious ‘SCOPE Award for Excellence and Outstanding Contribution to Public Sector Management – Individual Category’ for the year 2006-07.

Conferred the ‘Udyog Ratna’ award by the PHDCCI in 2006.

Participation in International Forums Delivered a special address at the Asia-Pacific Business Forum at UNESCAP held at Bangkok in April ‘08.

Chaired the session on ‘Natural Gas as Transportation Fuel’ at the 19th World Petroleum

Congress at Madrid in June ‘08.

Represented India at the 4th OPEC International Seminar at Vienna in March ’09.

Attended the 95th session of International Labour Conference at Geneva in June ‘09, and

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spoke on behalf of India on matters of policy related to the oil & gas sector.

Incorporated as Indian Oil Company Ltd. on 30th June, 1959, it was renamed as Indian Oil Corporation Ltd. on 1st September, 1964 following the merger of Indian Refineries Ltd. (established 1958) with it. Indian Oil and its subsidiaries account for approximately 48% petroleum products market share, 34% national refining capacity and 71% downstream sector pipelines capacity in India.

For the year 2008-09, the Indian Oil group sold 62.6 million tonnes of petroleum products, including 1.7 million tonnes of natural gas, and exported 3.64 million tonnes of petroleum products.

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.

The Corporation's cross-country network of crude oil and product pipelines, spanning over 10,000 km and the largest in the country, meets the vital energy needs of the consumers in an efficient, economical and environment-friendly manner.

Indian Oil is investing Rs. 43,400 crore (US $10.8 billion) during the period 2007-12 in augmentation of refining and pipeline capacities, expansion of marketing infrastructure and product quality upgradation as well as in integration and diversification projects.

Technology Solutions Provider

Indian Oil's world-class R&D Centre is perhaps Asia's finest. Besides pioneering work in lubricants formulation, refinery processes, pipeline transportation and alternative fuels, the Centre is also the nodal agency of the Indian hydrocarbon sector for ushering in Hydrogen fuel economy in the country. It has set up a commercial Hydrogen-CNG station at an Indian Oil retail outlet in New Delhi this year. The Centre holds 214 active patents, including 113 international patents.

Customer First

At Indian Oil, customers always get the first priority. New initiatives are launched round-the-year for the convenience of the various customer segments.Exclusive XTRACARE petrol & diesel stations unveiled in select urban and semi-urban markets offer a range of value-added services to enhance customer delight and loyalty. Large format Swagat brand outlets cater to highway motorists, with multiple facilities such as food courts, first aid, rest rooms and dormitories, spare parts shops, etc. Specially formatted Kisan Seva Kendra outlets meet the diverse needs of the rural populace, offering a variety of products and services such as seeds, fertilisers, pesticides, farm equipment,

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medicines, spare parts for trucks and tractors, tractor engine oils and pump set oils, besides auto fuels and kerosene. SERVOXpress has been launched recently as a one-stop shop for auto care services.

To safeguard the interest of the valuable customers, interventions like retail automation, vehicle tracking and marker systems have been introduced to ensure quality and quantity of petroleum products. Indian Oil has joined the league of global technology providers last year with the selection of its in-house developed INDMAX technology (for maximising LPGas yield) for the 4 MMTPA Fluidised Catalytic Cracking (FCC) unit at the Corporation's upcoming 15 MMTPA grass roots refinery at Paradip in Orissa, as well as for the FCC unit coming up at BRPL.

A wholly-owned subsidiary, Indian Oil Technologies Ltd., is engaged in commercialising the innovations and technologies developed by Indian Oil's R&D Centre.

At IndianOil, corporate social responsibility (CSR) has been the cornerstone of success right from inception in the year 1964. The Corporation’s objectives in this key performance area are enshrined in its Mission statement: "…to help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience."

As a constructive partner in the communities in which it operates, IndianOil has been taking concrete action to realise its social responsibility objectives, thereby building value for its shareholders and customers. The Corporation respects human rights, values its employees, and invests in innovative technologies and solutions for sustainable energy flow and economic growth.

In the past four decades, IndianOil has supported innumerable social and community initiatives in India. Touching the lives of millions of people positively by supporting environmental and health-care projects and social, cultural and educational programmes. As part of IndianOil's social responsibility programme, there is an IndianOil Scholarship scheme, which provides for attractive scholarships to bright students selected on 'merit-cum-means' basis. As part of the scheme, special encouragement is being given to girl students, physically challenged students, and students from J & K as well as the Northeast States.

Besides focussing primarily on the welfare of economically and socially deprived sections of society, IndianOil also aims at developing techno-economically viable and environment-friendly products & services for the benefit of millions of its consumers, while at the same time ensuring the highest standards of safety and environment protection in its operations.

IndianOil has always been in the forefront in times of national emergencies. IndianOilPeople have time and again rallied to help victims of natural calamities, maintaining uninterrupted supply of petroleum products and contributing to relief and rehabilitation measures in cash and kind.

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IndianOil has also set up the IndianOil Foundation (IOF) as a non-profit trust to protect, preserve and promote national heritage monuments.

As part of its environment-protection initiatives, IndianOil has invested close to Rs. 7,000 crore in state-of-the-art technologies at its refineries for production of green fuels meeting global standards.

With safety, health and environment protection high on its corporate agenda, IndianOil is committed to conducting business with a strong environment conscience, so as to ensure sustainable development, safe work places and enrichment of the quality of life of its employees, customers and the community.

IndianOil is also committed to the Global Compact Programme of the United Nations and endeavours to abide by the 10 principles of the programme, some of which are already part of the Corporation’s Vision and Mission statements.

It is the firm resolves of IndianOilpeople to move beyond business, touch every heart and fuel a billion dreams.

Global Compact Initiative

Indian Oil’s present business practices and vision for the future are synergized with sustainability. We take pride that our corporate strategy is aligned to national priorities and envision a greater societal role in future to accomplish the cherished goal of a truly developed India, where all sections of citizens live with dignity.

The past year was definitely another year of sustained growth in the face of stupendous odds for us at Indian Oil. In the backdrop of unprecedented high crude oil prices and liquidity constraints, we managed our operations and financials efficiently. As India's largest petroleum refining and marketing company, we bear the brunt of the burden of oil subsidy on sale of petrol, Diesel, Kerosene for public distribution system and LPG for domestic use, which constitute a major portion of our product offerings. The Government, in turn, has put in place a mechanism to compensate the oil marketing companies for the losses suffered by them.

Indian Oil Corporation Limited is committed to the Global Compact Programme of the United Nations and will endeavour to abide by all the ten principles of the programme, some of which are also a part of our Vision and Mission Statements. Therefore, the company continues to pledge support to the programme through its policies, processes, products, services and people.

In order to measure and communicate our progress in our journey towards sustainable development, we have decided to publish the third edition of our Sustainability Report for 2007-08 in accordance with the GRI-G3 guidelines for the first time and have aimed at application level A. We propose to build on this first report in future through a more formal materiality assessment process where decisions on corporate responsibilities and priorities

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will include inputs from other stakeholders, such as shareholders, employees etc.

IndianOil adopts Integrity Pact Indian Oil has entered into a Memorandum of Understanding (MoU) with Transparency International India (TII) in January 2008, for implementing an Integrity Pact Programme focussed on enhancing transparency in its business transactions, contracts and procurement processes. Indian Oil believes in total transparency, integrity and accountability in its functioning. It values its business relationships with its numerous domestic and international contractors and vendors of goods and services and is committed to dealing with them in a fair and transparent manner by maintaining the highest ethical standards in its transactions with them.

The MoU was signed by Mr. Sarthak Behuria, Chairman, Indian Oil, and Admiral (Retd.) R H Tahiliani, former Chief of Naval Staff and Chairman of TII. Under the MoU, Indian Oil is committed to implementing the Integrity Pact in all its major procurement and work contract activities. Four Independent External Monitors nominated by TII in consultation with the Central Vigilance Commission (CVC) shall monitor the activities. The Integrity Pact would strengthen established systems and procedures by creating trust and would have the full support of the Central Vigilance Commission.

Transparency International India, launched in 1997, is the Indian Chapter of Berlin-based Transparency International, which has presence in 93 countries. The Integrity Pact Programme was launched in the mid-90s by TI to create 'islands of Integrity' through a voluntary contract between the buyer and the seller to eliminate unfair practices. It establishes mutual contractual rights and obligations and brings transparency and enhances the credibility of the organizations.

Distinctions Date

IndianOil No.1 in BW 500 Ranking 27.10.2009

IndianOil leads India Inc. in Fortune's 'Global 500' listing for 2009

10.07.2009

IndianOil — the only PSU among India’s 25 best employers

16.04.2009

IndianOil frontrunner in Oil & Gas category in FE-500 listing of India's top corporates

31.03.2009

IndianOil tops Business Standard’s 'BS 1000' again

13.03.2009

IndianOil among India's 'Top 10' in Business India's Super 100 Listing

19.12.2008

Lanka IOC ranked No. 1 Company in Sri Lanka

12.12.2008

IndianOil tops 'ET 500' rankings once again 21.10.2008

IndianOil tops Businessworld's ‘BW Real 20.10.2008

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500’ rankings again

IndianOil third most valuable (company) brand in India: ET-brand finance survey

02.09.2008

IndianOil leads India Inc. in Fortune's 'Global 500' listing for 2008

11.07.2008

'The Most Trusted Brand' in ET's Brand Equity annual survey-2008

12.06.2008

IndianOil the 'Top Oil & Gas Company' in Financial Express's 'FE 500' listing

23.05.2008

IndianOil Tops Business Standard's 'BS 1000' listing

15.02.2008

'Top Ten' in Business India's Super 100 Listing

13.12.2007

IndianOil among India's 'Top Valuable Companies in BT 500 Listing'

30.11.2007

IndianOil ranked 2nd amongst India’s Top 50 Most Valuable Brands

31.07.2007

IndianOil gets a top slot in ET500 listing 22.03.2007

IndianOil tops 'BS 1000' companies in Sales again

03.01.2007

Joint Ventures

Name of JV Date of Incorporation

Promoters & Equity Area(s) of Operation

Avi-Oil India Limited 04.11.1993 IndianOil & Balmer Lawrie: 25% each Neden BV, Netherlands: 50%

To blend, manufacture and sell synthetic, semi synthetic and mineral based lubricating oils, greases and hydraulic fluids, related products and specialities for Defence and Civil Aviation uses.

IOT Infrastructure & Energy Services Ltd. (Formerly known as Indian Oiltanking Limited)

28.08.1996 IndianOil & Oiltanking GmbH, Germany: 50% each

To build and operate terminalling services for petroleum products.

IndianOil Petronas Private Limited

03.12.1998 IndianOil & Petronas,Malaysia: 50% each

To construct and import facilities for LPG import at Haldia and to engage in parallel marketing of LPG.

Lubrizol India Private Limited

01.04.2000 IndianOil & Lubrizol, USA: 50% each

To manufacture and market chemicals for use as additives in fuels, lubricants and greases.

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Petronet LNG Limited 02.04.1998 IndianOil, BPCL, GAIL & ONGC: 12.50% eachGaz de France International: 10% Asian Development Bank: 05%Public Issue:35%

Development of facilities for import and regasification of LNG at Dahej and Kochi.

Petronet India Limited 26.05.1997 IndianOil:18 % BPCL & HPCL:16% eachRPL, IL&FS, ICICI, SBI & EOL:10% each

To implement petroleum products, pipeline projects through Special Purpose Vehicles.

Petronet VK Limited 21.05.1998 IndianOil & Petronet India: 26% each RPL &EOL:13% eachSBI, GIIC, KPT & IL&FS: 05% each Canara Bank: 02% each

To construct and operate a pipeline for transportation of petroleum products from Vadinar to Kandla.

Petronet CI Limited 07.12.2000 IndianOil, Petronet India & RPL:26% each EOL & BPCL: 11% each

To construct and operate a pipeline for evacuation of petroleum products from RPL and EOL refineries at Jamnagar as well as from Gujarat Refinery at Koyali to feed the consumption zones at Central India.

Green Gas Ltd. 07.10.2005 IndianOil & GAIL: 25% IDFC& IL&FS: 20% each Others: 10%

City Gas Distribution in Lucknow and Agra.

Indo Cat Pvt. Limited 01.06.2006 IndianOil & Intercat, USA: 50% Manufacturing & marketing of FCC catalysts and additives.

IndianOil Sky Tanking Limited

21.08.2006 IndianOil, IOTL & Skytanking GmbH, Germany: 33.33% each

Design, finance, construct, operate & maintain aviation fuel facility projects.

IndianOil Power Consortium Limited

06.10.1999 IndianOil & Marubeni Corporation, Japan:50% each

To build and operate its own power generation plant at Panipat utilising petcoke from Panipat Refinery.

Suntera Nigeria 205 Limited

09.05.2006 IndianOil & Oil India: 25% each Suntera Resources Ltd., Cyprus: 50%

Investments in oil and gas industry especially in the upstream sector

IndianOil-CREDA Biofuels Limited

06.02.2009 IndianOil: 74% CREDA: 26% Farming, cultivating, manufacturing, production and selling biomass, bio-fuels and allied products & services

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Indian Oil Major Units Registered Office Registered Office IndianOil Bhavan,

G-9, Ali Yavar Jung Marg,Bandra (East), Mumbai -400 051

Corporate Office

Refineries Division

Head Office SCOPE Complex, Core-27, Institutional Area, Lodhi RoadNew Delhi -110003

Barauni Refinery P.O. Barauni Oil Refinery,Dist. Begusarai -861 114 (Bihar)

Gujarat Refinery P.O. Jawahar Nagar,Dist. Vadodara -391 320(Gujarat)

Guwahati Refinery P.O. Noonmati,Guwahati-781020 (Assam)

Haldia Refinery P.O. Haldia RefineryDist. Midnapur-721 606(West Bengal)

Mathura RefineryP.O. Mathura Refinery,Mathura -281 005

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(Uttar Pradesh)

Panipat Refinery P.O. Panipat Refinery,Panipat-132140(Haryana)

Bongaigaon Refinery P.O. Dhaligaon,Dist. Chirang, Assam - 783 385

Marketing Division

Head Office G-9, Ali Yavar Jung Marg,Bandra (East), Mumbai -400 051

Northern Region IndianOil Bhavan,1, Aurobindo Marg, Yusuf SaraiNew Delhi -110016

Eastern Region IndianOil Bhavan,2, Gariahat Road, South (Dhakuria)Kolkata -700 068

Western Region 254-C, Dr. Annie Besant Road,Worli Colony, Mumbai -400 025

Southern Region IndianOil Bhavan139, Nungambakkam High Road

R&D Centre

R&D Centre Sector 13 Faridabad -121 007(Haryana)

Pipelines Division

Head Office A-1 Udyog Marg,Sector-1, Noida-201301

Northern Region P.O. Panipat RefineryPanipat -132 140 (Haryana)

Western Region P.O. Box 1007,Bedipara,Morvi Road,Gauridad,Rajkot-360 003

Southern Region 139, Nungambakkam High RoadChennai - 600034

Assam Oil Division

Assam Oil Division P.O. Digboi -768 171(Assam)

IBP Division

IBP Division 34-A, Nirmal Chandra Street,Kolkata - 700 013

Business Group(Cryogenics) Sewri Terminal II,Sewri (East),Mumbai - 400 015

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Business Group(Cryogenics),A-4, MIDC, Ambad,Nashik - 422 010

Group Companies

Chennai Petroleum Corporation Ltd. 536, Anna Salai,Teynampet, Chennai - 600 018

IndianOil Technologies Ltd SCOPE Complex, Core-27, Institutional Area,Lodhi Road,New Delhi-110003

IndianOil (Mauritius) Ltd. Mer RougePort Louis Maruritius

IOC Middle East FZE LOB 14209, Jebel Ali Free Zone,P.O.Box: 261338

Lanka IOC PLC Lanka IOC Head OfficeLevel 20, West Tower,World Trade Center, Echelon Square, Colombo - 01, Sri Lanka.

OBJECTIVES• To serve the national interests in oil and related sectors in accordance and consistent

with Government policies.

• To ensure maintenance of continuous and smooth supplies of petroleum products by way of crude oil refining, transportation and marketing activities and to provide appropriate assistance to consumers to conserve and use petroleum products efficiently.

• To enhance the country's self-sufficiency in crude oil refining and build expertise in laying of crude oil and petroleum product pipelines.

• To further enhance marketing infrastructure and reseller network for providing

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assured service to customers throughout the country.

• To create a strong research & development base in refinery processes, product formulations, pipeline transportation and alternative fuels with a view to minimizing/eliminating imports and to have next generation products.

• To optimise utilisation of refining capacity and maximize distillate yield and gross refining margin.

• To maximise utilisation of the existing facilities for improving efficiency and increasing productivity.

• To minimise fuel consumption and hydrocarbon loss in refineries and stock loss in marketing operations to effect energy conservation.

• To earn a reasonable rate of return on investment.

• To avail of all viable opportunities, both national and global, arising out of the Government of India’s policy of liberalisation and reforms.

• To achieve higher growth through mergers, acquisitions, integration and diversification by harnessing new business opportunities in oil exploration & production, petrochemicals, natural gas and downstream opportunities overseas.

• To inculcate strong ‘core values’ among the employees and continuously update skill sets for full exploitation of the new business opportunities.

• To develop operational synergies with subsidiaries and joint ventures and continuously engage across the hydrocarbon value chain for the benefit of society at large.

Financial Objectives:

• To ensure adequate return on the capital employed and maintain a reasonable annual dividend on equity capital.

• To ensure maximum economy in expenditure.

• To manage and operate all facilities in an efficient manner so as to generate adequate internal resources to meet revenue cost and requirements for project investment, without budgetary support.

• To develop long-term corporate plans to provide for adequate growth of the Corporation’s business.

• To reduce the cost of production of petroleum products by means of systematic cost control measures and thereby sustain market leadership through cost competitiveness.

• To complete all planned projects within the scheduled time and approved cost.

Obligations24

• Towards customers and dealers:- To provide prompt, courteous and efficient service and quality products at competitive prices.

• Towards suppliers:- To ensure prompt dealings with integrity, impartiality and courtesy and help promote ancillary industries.

• Towards employees:- To develop their capabilities and facilitate their advancement through appropriate training and career planning. To have fair dealings with recognised representatives of employees in pursuance of healthy industrial relations practices and sound personnel policies.

• Towards community: - To develop techno-economically viable and environment-friendly products. To maintain the highest standards in respect of safety, environment protection and occupational health at all production units.

• Towards Defence Services:- To maintain adequate supplies to Defence and other para-military services during normal as well as emergency situations.

Burgeoning IOC (Indian Oil Corporation)

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.

Widening Horizons

To achieve the next level of growth, Indian Oil is currently forging ahead on a well laid-out road map through vertical integration— upstream into oil exploration & production (E&P) and downstream into petrochemicals – and diversification into natural gas marketing, bio fuels, wind power projects, besides globalisation of its downstream operations.

Expanding Horizons

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IndianOil is currently metamorphosing from a pure sectoral company with dominance in downstream in India to a vertically integrated, transnational energy behemoth. The Corporation is already on the way to becoming a major player in petrochemicals by integrating its core refining business with petrochemical activities, besides making large investments in E&P and import/marketing ventures for oil&gas in India and abroad.

With a vision to evolve into a major technology provider through excellence in management of knowledge and innovation, IndianOil has launched IndianOil Technology Ltd. to market the intellectual properties developed by IndianOil's R&D Centre.

PetrochemicalsIn petrochemicals, Indian Oil is envisaging an investment of Rs. 20,000 crore (US$ 4 billion) by the year 2011-12. Through the world’s largest single-train Linear Alkyl Benzene (LAB) plant with an annual capacity of 1,20, 000 tonnes set up at its Gujarat Refinery, the Corporation has already captured a significant market share of LAB in India, besides exporting the product to Indonesia, Turkey, Thailand, Vietnam, Norway and Oman.

Oil Exploration & Production

In E&P, Indian Oil has non-operator participating interest in seven oil & gas blocks awarded under various NELP (New Exploration Licensing Policy) rounds and two Coal Bed Methane blocks in India, in consortium with other companies. In addition, IndianOil has two onshore type ‘S’ NELP blocks, with 100% participating interest (PI) and sole operatorship. It also has participating interest in an onshore block in Assam and Arunachal Pradesh through a farm-in.

GasIn natural gas business, Indian Oil sold 1.849 million tonnes of the product in 2008-09. A technology innovation has been initiated to reach LNG (Liquefied Natural Gas) directly to the doorstep of bulk consumers in cryogenic containers for industrial as well as captive power applications. To consolidate its city gas distribution (CGD) business, Indian Oil has tied up with several players such as Adani Energy, Reliance Gas Corporation, OIL and ONGC, etc., to set up joint ventures in various cities of India. The Corporation has also entered into franchise agreements with CGD players such as Indraprastha Gas Ltd., Mahanagar Gas Ltd., Adani Energy Limited, GEECL, SITI Energy and GSPC Gas Ltd. to market CNG through its retail outlets

Bio-fuelsTo straddle the complete bio-fuel value chain, Indian Oil formed a joint venture with the

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Chhattisgarh Renewable Development Authority (CREDA) with an equity holding of 74% and 26% respectively. Indian Oil CREDA Biofuels Ltd. has been formed for carrying out farming, cultivating, manufacturing, production and sale of biomass, bio-fuels and allied products and services.

Indian Oil has signed an MoU with M/s Ruchi Soya Industries Ltd. to take up contract farming on one lakh hectare of private and panchayat wasteland in the state of Uttar Pradesh.

Other than the regular petroleum products like light distillates, middle distillates, heavier products like Furnace Oil, Bitumen, etc., IndianOil refineries also manufacture petroleum products for specific applications. These specific applications could be feed stock for chemical industry, raw material for specific industries and solid fuels. The petroleum products, produced for specific applications are called, 'Petrochemicals and Specialties (P&S) Products'.

Every petroleum refinery is not designed to produce P&S products but IndianOil's refineries have been planned to make a large portfolio of P&S products. The indicative list of products from IndianOil's various refineries is as follows:

Refinery P&S Products

Barauni Carbon Black Feedstock (CBFS), Raw Petroleum Coke (RPC), Sulphur

Digboi Paraffin Wax

Guwahati Raw Petroleum Coke (RPC)

HaldiaCBFS, Jute Batching Oil (JBO), Micro Crystalline Wax (MCW), Mineral Turpentine Oil (MTO), Sulphur

Koyali LABFS, Mineral Turpentine Oil (MTO), Sulphur, Toluene

Mathura Propylene, Sulphur

Panipat Benzene, Mineral Turpentine Oil (MTO), Petcoke, Sulphur

Basic end uses:Benzene: Chemical industryCBFS: Carbon black manufacturersJBO: Jute industryLABFS: LAB manufacturersMicro Crystalline Wax (MCW): Pharmaceutical industryMTO: Paint industryParaffin wax: Candle manufactures

Petcoke: Cement industry

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Propylene: Chemical industryRPC: CPC manufacturersSulphur: Sulphuric Acid manufacturers and sugar industryToluene: Explosives manufacturers

SERVICES

Refining Born from the vision of achieving self-reliance in oil refining and marketing for the nation, IndianOil has gathered a luminous legacy of more than 100 years of accumulated experiences in all areas of petroleum refining by taking into its fold, the Digboi Refinery commissioned in 1901.

At present, IndianOil controls 10 of India’s 20 refineries.

The strength of IndianOil springs from its experience of operating the largest number of refineries in India and adapting to a variety of refining processes along the way.

Having absorbed state-of-the-art technologies of leading process licensors like UOP, Chevron, IFP, Stone & Webster, Mobil, Haldor Topsoe, KTI/Technip, Linde, CD-Tech, Stork Comprimo, etc., IndianOil in an excellent position to offer O&M services for latest technologies such as distillate FCCUs, Resid FCCUs, hydrocrackers, reformers (both semi-regenerative and continuous catalytic regeneration types), lube processing units, catalytic de-waxing units, cokers, coke calciners, visbreakers, merox, hydro-treaters for kero and gasoil streams, etc. IndianOil refineries also have units for producing specialty products such as bitumen, LPG, MTBE, Butene-1, Propylene, Xylenes, Di-Methyl Terephthalate (DMT), polyester staple fibre (PSF) and other petrochemicals like Linear Alkyl Benzene, Paraxylene (PX), Purified Terepthalic Acid (PTA), etc.

The Corporation has commissioned several grassroot refineries and modern process units. Procedures for commissioning and start-up of individual units and the refinery have been well laid-out and enshrined in various customised operating manuals, which are continually updated. IndianOil also offers the specialised services of its experts for commissioning/start-up assistance depending on the client’s need. Its team is also well-equipped to prepare operation manuals with clear instructions for plant start-up, operation, shutdown, emergency handling, etc.

On the environment front, all IndianOil refineries fully comply with the statutory requirements. Several Clean Development Mechanism projects have also been initiated.

With its vast experience in successfully implementing SH&E policy and practices at

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various units, IndianOil offers its services in ensuring that the clients’ work environment is safe, healthy and clean.

IndianOil also offers faculty assistance for ‘tailor-made’ training programmes that suit the requirement of refinery or pipelines personnel or a selection of programmes from the clients’ training calendar.

Innovative strategies and knowledge-sharing are the tools available for converting challenges into opportunities for sustained organisational growth.

IndianOil’s Refineries team have a deep understanding of the complexities of all the process units of modern refineries and can offer comprehensive services of a highly professional nature on different facets given in details in this segment.

With strategies and plans for several value-added projects in place, IndianOil refineries will continue to play a leading role in the downstream hydrocarbon sector for meeting the rising energy needs of our country.

Research & Development IndianOil's worldclass R&D Centre, established in 1972, has state-of –the art facilities and has delivered pioneering results in lubricants technology, refining process, pipeline transportation, bio-fuels and fuel-efficient appliances.

Over the past three decades, IndianOil R&D Centre has developed over thousands of formulations of lubricating oils and greases responding to the needs of Indian industry and consuming sectors like Defence, Railways, Public Utilities and Transportation. The Centre has also developed and introduced many new lubricant products to the Indian market like multigrade railroad oils.

Focussed research in the areas of lubricants and grease formulations, fuels, refining processes, biotechnology, additives, pipeline transportations, engine evaluation, tribiological and emission studies, and applied metallurgy has won several awards. The R&D Centre's activities in refining technology are targeted in the areas of fluid catalytic cracking (FCC), hydroprocessing, catalysis, resid upgradation, distillation simulation and modeling, lube processing, crude evaluation, process optimization, material failure analysis and remaining life assessment and technical services to operating units.

In FCC, apart from process optimization and catalyst evaluation the accent is on the development of novel technologies aimed at value addition to various refinery streams. IndianOil's R&D Centre is fully equipped to provide technical support to commercial hydrocracker units in the evaluation of feedstocks and catalysts, optimization of operating parameters, evaluation of licensors' process technologies, development of novel processes and simulation models.

Material failure analysis and remaining life assessment of refinery equipment and installations

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is a highly specialized service being provided by the R&D Centre to the refineries of IndianOil as well as other companies.

With a vision of evolving into a leader as technology provider through excellence in management of knowledge, technology and innovation, IndianOil has launched IndianOil Technology Ltd. The new subsidiary markets the intellectual properties developed by IndianOil R&D Centre.

In a befitting acknowledgement of its ever-improving performance, and a crowning glory in its Golden Jubilee Year (1959-2009), IndianOil has moved up 11 places, in the just-released Fortune 'Global 500' list of world's largest companies by sales for the year 2009. Placed at 105, IndianOil leads the pack of seven Indian companies appearing in the list that is based on the performance in of the year 2008.

IndianOil has been consistently improving its position in the elite list published annually by the CNN-Time Warner group magazine, Fortune. In the ‘Global 500' club, IndianOil has steadfastly climbed from 226 in the year 2002 to 191 in 2003, 189 in 2004 to 170 in 2005, 153 in 2006, 135 in 2007, 116 in 2008 and now 105 in 2009.

IndianOil has also maintained its leadership status as India's numero uno corporate in the prestigious listing, followed by Tata Steel (258), Reliance Industries (264), Bharat Petroleum (289), Hindustan Petroleum (311), State Bank of India (363) and Oil & Natural Gas Corporation (402).

Battling odds in a challenging business environment, India's No.1 commercial enterprise and flagship oil major, IndianOil notched up another year of sterling performance for fiscal 2008-2009. IndianOil’s gross turnover (inclusive of excise duty) for the year 2008-09 reached a new high of Rs. 2,85,337 crore up by 15.3% as compared to Rs. 2,47,457 crore in the previous year. The Profit after Tax was Rs. 2,950 crore. The Corporation's refineries surpassed 100% capacity utilisation and clocked the highest ever throughput of 51.4 million tonnes. The Corporation also achieved a record sales of 62.6 million tonnes (including 1.7 million tonnes of Gas). Breaching the 10,000 km mark in length, the pipelines network registered the highest-ever operational throughput of 59.5 million tonnes of crude oil and petroleum products.

Code of conduct

1. Introduction • This Code of Conduct (hereinafter referred to as the “Code”) shall be called “The

Code of Conduct for Board Members and Senior Management Personnel” of Indian Oil Corporation Limited (hereinafter referred to as the “Company”).

• This Code envisages that the Board of Directors of the Company (“Board”) and Senior Management Personnel (as hereinafter defined) (collectively referred to as “Officers”) must act within the bounds of the authority conferred upon them and with

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a duty to comply with the requirements of applicable law.

• The purpose of this Code is to enhance ethical and transparent process in managing the affairs of the Company, and thus to sustain the trust and confidence reposed in the Officers by the shareholders of the Company. Officers are expected to understand, adhere to, comply with and uphold the provisions of this Code and the standards laid down hereunder in their day-to-day functioning.

• The principles prescribed in this Code are general in nature and lay down broad standards of compliance and ethics, as required by Clause 49 of the Listing Agreement with The Stock Exchange of Mumbai and the National Stock Exchange (collectively referred to as “Stock Exchanges”). The Officers should also review other applicable policies and procedures of the Company for specific instructions and guidelines, which are to be read in conjunction with this Code.

• The Company currently has in place Conduct, Discipline & Appeal Rules, (the “CDA Rules”), which govern the conduct of all employees of the Company including Whole-time Directors but excluding Non Whole-time Directors. This Code has now been framed specifically in compliance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges. In respect of the Company’s Whole-time Directors and Senior Management Personnel this Code is to be read in conjunction with the CDA Rules.

• This Code shall come into force with effect from the 1st day of January 2006.

• All Officers should sign the acknowledgment form annexed as Appendix IV hereto and return the form to the Company Secretary indicating that they have received, read, understood and agree to comply with the Code. All Officers shall be required affirm compliance with this Code on an annual basis, within 30 days of close of every financial year to the Company Secretary, in the form annexed hereto as Appendix III.

2. Definitions & InterpretationIn these Code, unless repugnant to the meaning or context thereof, the following expressions, wherever used in this Code, shall have the meaning assigned to them below:

• "Board" shall mean the board of Directors of the Company. • "Board Members" shall mean the Directors on the board of Directors of the Company.

• "Company" shall mean the Indian Oil Corporation Limited.

• "Government" shall mean Govt. of India.

• "Officers" shall collectively refer to the Board Members and the Senior Management Personnel

• "Relative" shall have the same meaning assigned to the term in Sections 2(41) and 6 of the Companies Act, 1956, read with Schedule IA of the Companies Act, 1956, and as more specifically detailed in Appendix I.

• "Senior Management Personnel" shall mean personnel of the Company who are members of its core management team excluding the Board of Directors and would comprise of all members of management one level below the Whole Time Directors,

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including head of departments directly reporting to Whole Time Directors.

• "Whole Time Directors" shall mean the Board Members who are in the whole-time employment of the Company.

• "Non Whole Time Directors" shall mean the Board Members who are part-time Directors and not in the whole time employment of the Company.

In this Code words importing masculine shall include feminine and words importing singular shall include plural or vice versa.

3. ApplicabilityThis Code shall be applicable to the following persons:

• Board Members• Senior Management Personnel.

4. Ethical ConductEvery Officer shall act within the authority conferred upon him by the Company and under applicable law, keeping the best interests of the Company in view and shall:

• Act with professionalism, utmost care, skill, diligence, honesty, good faith and integrity as well as high moral and ethical standards;

• Fulfil their fiduciary obligations without allowing their independence of judgment to be compromised;

• Act fairly and transparently and not participate in any decision-making process on a subject matter in which a conflict of interest exists or is likely to exist such that an independent judgment of the Company’s best interest cannot be exercised;

• Avoid conducting business with (a) a relative or (b) a private limited company in which he or his relative is a member or a director (c) a public limited company in which he or his relative holds 2% or more shares or voting right and (d) with a firm in which the relative is a partner, except with the prior approval of the Board;

• Avoid having any personal and/or financial interest in any business dealings concerning the Company;

• Not engage in any business, relationship or activity with anyone who is a party to a transaction with the Company;

• Avoid any dealings with a contractor or supplier that compromises the ability to transact business on a professional, impartial and competitive basis or influences decisions to be made by the Company;

• Not hold any positions or jobs or engage in other businesses or interests that are prejudicial to the interests of the Company;

• Not exploit for his own personal gain, opportunities that are discovered through use of corporate property, information or position, unless the opportunity is disclosed fully in writing to the Board and the Board declines to pursue such opportunity;

• Not seek, accept, or offer or make, directly or indirectly, any gifts, illegal payments,

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remuneration, donations or comparable benefits which are intended to or perceived to obtain business or uncompetitive favours for the conduct of business save as otherwise provided under the CDA Rules;

• Not commit any offence involving moral turpitude or any act contrary to law or opposed to public policy.

5. Disclosures • Notwithstanding that any instances of conflict of interest exist due to any historical

reasons, adequate and full disclosure by the interested Officer should be made to the Company. It is also incumbent upon every Officer to make a full disclosure of any interest which the Officer or the Officer’s immediate family, which would include parents, spouse and children, may have in a company or firm which is a supplier, customer, distributor of or has other business dealings with the Company.

• With respect to related party disclosures, Board Members shall make disclosure to the Board and Senior Management Personnel shall make disclosure to the Chairman under the provisions of Accounting Standard 18 annexed hereto as Appendix II.

• If an Officer fails to make a disclosure as required herein, and the Company of its own accord becomes aware of an instance of conflict of interest that ought to have been disclosed by the Officer, the Company would take a serious view of the matter and consider suitable disciplinary action against the Officer.

6. Other Directorships • Unless specifically permitted by the Chairman of the Board, Officers shall not serve

as director of any other company or as partner of a firm that is engaged in a competing business with the Company. This clause is not applicable to Non-Whole Time Directors.

• Whole Time Directors shall not accept any appointment or post, whether advisory or administrative, in any firm or company, whether Indian or foreign, having competing interests with the Company within two years from the date of cessation of Directorship of the Company unless approved by the Government.

7. Insider Trading

Every Officer shall comply with the Code of Internal Procedures and Conduct in dealing with the securities of the Company.

8. Public Representation and Confidentiality of Information • The Company honours the information requirements of the public and its

stakeholders. In all its public appearance with respect to disclosing information in relation to the Company’s activities to public constituencies such as the media, the financial community, employees and shareholders, the Company shall be represented only by specifically authorised Officers.

• Any information concerning the Company’s business, its customers, suppliers, etc. to which the Officers have access or which is possessed by the Officers, must be considered privileged and confidential and should be held in confidence at all times, and should not be disclosed to any person, unless (i) authorised by the Board; or (ii) the same is part of the public domain at the time of disclosure; or (iii) is required to be

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disclosed in accordance with applicable laws.

9. Regulatory Compliance

Every Officer shall, in his business conduct, comply with all applicable laws, rules and regulations, both in letter and in spirit, in all the territories in which he operates. If the ethical and professional standards set out in the applicable laws and regulations are below that of the Code, then the standards of the Code shall prevail.

10. Health, Safety And Environment

The Company and the Officers shall strive to provide a safe and healthy working environment and comply, in the conduct of its business affairs, with all regulations regarding the preservation of the environment of the territory it operates in. The Officers shall be committed to prevent the wasteful use of natural resources and minimize any hazardous impact of the development, production, use and disposal of any of its products and services on the ecological environment.

11. Protection Of Assets

The Officers shall not misuse, for personal gain or otherwise, the assets of the Company, including tangible assets such as equipment and machinery, systems, facilities, materials, resources as well as intangible assets such as proprietary information, relationships with customers and suppliers, etc., and shall employ them for the purpose of conducting the business for which they are duly authorised.

12. Amendments To The Code

The provisions of this Code can be amended and modified by the Board of Directors of the Company from time to time and all such amendments and modifications shall take effect from the date stated therein. All Officers shall be duly informed of such amendments and modifications.

13. Placement Of The Code On Website

Pursuant to Clause 49 of the Listing Agreement, this Code and any amendments thereto shall be posted on the website of the Company.

14. Enforcement Of Code Of Conduct

Each Officer shall be accountable for fully complying with this Code.

15. Consequences Of Non-Compliance Of This Code • In case of breach of this Code by the Non Whole Time Directors, the same shall be

considered by the Board for initiating appropriate action, as deemed necessary.

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• In case of breach of this Code by the Whole Time Directors and Senior Management Personnel, the same shall be dealt with in accordance with the CDA Rules.

CASE STUDY

IOC (Jaipur) inferno

For all our love of the environment we in Delhi and elsewhere decided that this Diwali should be calm and pollution free. So there were less crackers, less noise and lesser pollution. But now Jaipur has undone all the good efforts. Black smoke coming out and fire spreading to other nearby units and having claimed lives and injuring so many, all efforts have gone in vain. The IOC oil depot is a Govt of India establishment.

Jaipur, Nov 3 (PTI) The Rajasthan High Court asked the state government to explain the rescue operation and other measures, it had undertaken during the IOC depot fire tragedy, which claimed 12 lives.

On a PIL, a division bench of Chief Justice Jagdish Bhalla and Justice Manish Bhandari directed the state also to come up with steps it would take to avert such mishaps, which led to loss of life and public property.

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The court asked the advocate general to furnish it with details on various steps the government had taken up after the inferno by November 9.

The report should include measures taken for the rescue of injured during the October 29 fire, disbursement of compensation, rehabilitation of the homeless persons and prevention of the air pollution.

What had happened?

The casualty count in the Jaipur inferno has reached 10, since it started off on Thursday. Over 60 hours after the fire started at the Indian oil depot, it still rages on.

Two more bodies were recovered on Sunday.

The fire is now 10-20 feet - subsiding from its earlier height of 40 metres - but its heat is spreading horizontally.

The fire had also spread to an adjacent factory, but army and civilian authorities managed to douse it in time.

People within a radius of 3 kms of the site have been evacuated.

How it happened?

ON 29TH OCT

6:45 pm, Thursday: A leakage was detected in IOC depot in Jaipur. For next 40 minutes engineers tried to repair it.

7:30 pm, Thursday: The first containers exploded, causing a mild quake measuring 2.3 on the Richter scale

8:00 pm, Thursday: The fire became uncontrollable; 40-feet high flames in the night sky; buildings 1km away damaged

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9:00 pm, Thursday: Entire area evacuated; huge traffic jams on Jaipur-Kota highway, which passes through Sitapura

10:30pm, Thursday: All 11 containers exploded, each turning into an inferno.

11:30 pm, Thursday: Intensity of fire began to drop. Flames were as high as 20 feet high.

ON 30TH OCT

12:00 am, Friday: Fire raged all night, the strategy now was to let the fuel burn out.

7:30 am, Friday: Fire experts from Mumbai, Mathura arrive

8:00 am, Friday: Fire in smaller containers down by 30-40% of what it was last night.

My assessment about this case is this that the magnitude of the Jaipur Indian Oil

depot Inferno and the accidents clearly show lack of fire fighting arrangements and provisions even in such vantage places like a major oil depot. Govt. has shamelessly expressed its helplessness.

The government has still not learnt a lesson even after the great Bhopal tragedy decades ago. At such vantage points was it not the responsibility of the IOCL / govt. to have high class fire fighting equipments and infrastructure to control the fire in hours and minimise casualties? This again calls for an investigation and as usual the culprits will go scot free. Of course now sacked the depot chief, even as the huge fire still blazes on for 5th day. And the Oil Minister will now have a reason to jack up the petrol prices.

1000 crore of public property is not a joke. The responsibility should be fixed and heads should roll. The whole management should change.

It must have the built-in safety precautions for handling inflammable items and above all an emergency preparedness plan in case a fire erupts. The emergency plan must have measures to control the fire with water and foam and above all ensure that it does not spread to nearby units.

The Minister came but his helplessness in saying that he does not know the reason of fire and he has not seen a fire like this and he would allow the fuel to burn till tanks are empty and neighbourhood burnt to ashes, is a matter of shame.

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If helplessness is what we expect from the Minister it is better he resigns. This fire is clearly due to lack of fire safety measures at the depot and their periodic checking. Those responsible for the fire safety at site must be removed and charged with negligence.

With the amount of money that IOC has been charging its customers there cannot be lack of money for fire safety measures. This is the result of utter negligence of the fire safety authorities. The Government on its part has been quick to cover up its failure by announcing the compensation of Rs 10 lakhs for the dead.

This may give some relief to the family of victims but unless root cause is addressed such fires will take place again and elsewhere in the country. We have to get over this habit of doing the fire fighting operations and compensation when the fire is on.

A detailed fire fighting plan has to be in position at places which handle inflammable substances. The fact that this plan has miserably failed calls for its thorough review. In addition to the loss of lives and the fuel, the environmental pollution caused by this fire has been unprecedented.

This fire will pass but immediate root cause of this fire and review of fire fighting preparedness at other sites in the nation is called for including the safety from sabotage point of view.

CAUSES

1. The fire was caused due to the LEAKAGE of petrol.2. Due to the carelessness of the operators3. Due to the ineffectiveness of the Operators in stopping the leakage 4. Operators did not convey the problem to their boss5. Lack of supervisory 6. No rescue team on the spot7. Also shows the lack of inspection by the top management8. Due to lack of fire fighting arrangements and provisions even in such vantage

places like a major oil depot9. Lack of responsibility and accountability10. Due to Lack of fire safety measures at the depot and their periodic checking

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11. Lack of proper management and its working

IMPACT

ON PEOPLE

• Increased incidence of dry skin, asthma, suffocation, irritation in the eye• Problem of lungs which causes respiratory problems.• Can cause a cancer problem• Can also damage the eyes of people• It mainly has a negative effect on children and old people• Can also be dangerous for pregnant women

ON RESOURCES

• Causes a loss to property of Rs. 1000 crores (approx)• Loss of petrol and diesel• Loss of natural resources which is already in shortage• Wastage of money spent on the security and safety of these oil depots

• Vast stretches of agricultural fields 10 to 15 km around the IOC depot site have

reported the presence of black flakes which can threaten or even destroy soil fertility

ON ENVIRONMENT

• Produces a blanket of smoke of 250 kms in length and 4kms in width in the environment

• Blanket of smoke contains a harmful gas like carbon, carbon dioxide, sulphur, etc

• Also causes harm to plants and pollute the atmosphere• Increase the level of pollution in the environment

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• Can give rise to acid rain• Gaseous emissions of pollutants such as sulphur and nitric oxide are a cause for

concern as they can directly affect people’s health and the atmosphere• Reduction in oxygen levels in the environment• As fire dies down, environmental crisis looks large

STEPS TAKEN BY GOVERNMENT

1. Mobile team of doctors have been formed to provide door to door medical facilities

2. Area under 10 kms around IOC Depot was cleared by army 3. If any cough or any type of allergy immediately contact to doctor4. The Union Minister announced a compensation of Rs 5 to 10 lakhs to the victims

and their families.

5. Rs. 2 lakh to seriously injured and Rs. 1 lakh to those with minor injuries6. High court of Rajasthan has asked to inquire into the fire accident and suggest

remedial measures to prevent reoccurrence.

FINDINGS

1. 1000 crore of public property, which is not a joke, has been lost.

2. 13 people lost their lives and injured more than 150 people

3. A chief of Jaipur IOC depot has been suspended.

4. Can give rise to acid rain.

5. Nearby industries has been effected and damaged

6. Spread a number of diseases like skin problem, lungs problem etc

7. Can be very dangerous for pregnant women and children

8. Shows a lack of fire safety measures at the depot and their periodic checking

9. Carbon hails has fallen

10. This is one of the worst fire related incident in the history of Indian Oil Corporation

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11. IOC to pay Rs 50 crore to units affected by Jaipur fire accident

12. Hundreds of people are visiting hospitals with the complaints of breathing problem, sore throat, irritation in the eye, allergy and itching

13. The release of greenhouse gases such as carbon monoxide and carbon dioxide in the atmosphere will have long-term consequences on climate change

SUGGESTION

1. Operators should be given proper training and should have enough knowledge to operate on machines.

2. There should be a team of skilled operater and should have a proper leader3. Rescue team should be always present4. Superior should closely look into the matter and absorb the things personally5. Close- circuit cameras should be installed 6. A alarm should be ranged whenever there is a problem 7. Operators should immediately contact their boss in such situation8. The tanks in which petrol and diesel are stored in depot should be far away from

each other9. The tanks should be made up of some better material which do not catch fire

easily10. There should be emergency exits points for people to get away from during such

situation11. Get over the habit of having a planned fire fighting operations12. A detailed fire fighting plan and arrangements has to be in position at places

which handle inflammable substances13. Immediate root cause of this fire and review of fire fighting should be done14. Fire fighting preparedness at other sites in the nation should be made alert

15. Agricultural scientists should be immediately sent to the area to study the dangerous phenomenon and suggest methods for soil treatment to save this year’s rabi crops

DON’T REMAIN HAPPY IN IGNORANCE

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BIBLOBIGRAPHY

MEDIA

Television

Newspaper

ELECTRONIC MEDIA

Internet

www.google.com

www.iocl.com

www.iocjaipurfire.com

www.youtube.com

www.ioc.com

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