Indian Oil Corporation Ltd.

Kanpur Divisional Office

PRAKHAR MISHRA MBA-2010-2012 A7001910061

Masters in Business Administration, AMITY UNIVERSITY, LUCKNOW

Marketing and Promotion of XtraPower Fleet Card Loyalty Program

Submitted By Prakhar Mishra Enrollment No: A7001910061 Session: 2010-2012

Under the guidance of

Shri. Vishram Singh Manager Of fleetcard At Indian Oil Corporation Limited. (Kanpur Divisional)

Amity University Lucknow campus

ACKNOWLEDGEMENTS

Completing a task is never a solo effort. It is often the result of invaluable contributions by a number of individuals in a direct or indirect manner, which helps in the shaping and achievement of success. Firstly, I would like to express my sincere gratitude to Mr.K.RAGHU,Deputy Manager of Sales for granting me the opportunity to undertake an internship at the Indian Oil Corporation Ltd. (Marketing Division, KANPUR). I am extremely grateful to my project guide, Mr. ViSHRAM SINGH, Manager Fleetcard for his encouragement and patience throughout the duration of this project. Without his vision, guidance and support this report would not have materialized. I would also like to deeply thank the various people at IndianOil who, during the period of my internship, provided me with useful and helpful assistance. Without their care and consideration this report would not have been completed. I am thankful to the Internship Coordinators at Amity University, Mr.Nimish Gupta for their invaluable support and guidance during the internship period. Last but not the least, I would like to thank my parents for their inestimable love, support and encouragement which gave me the confidence and determination to carry out this project.

PREFACE

In the broader sense training is necessary to make the students of professional institutions familiar with industrial environment .This not only helps professionals to speedily accommodate themselves in industries but also to have better usage of their studies. To be dynamic, strategic and work aggressively they need to know the policies , procedures and trends going in the present industrial environment apart from their studies The training fulfils all these needs . Whether it is the question of demonstrating a modernized procedure, step by step to an old production hand or guiding a new division head through the intricacies of preparing his own budget, the responsible supervisor or manager must make the trainee learn and communicate. The purpose and objective of the study is to analyze the different aspect of financial and marketing position of the organization and list out the suggestions, recommendations based on the studies. The main source of study is primary and secondary data collected from the annual end and other public reports and other information received from Barauni Refinery and Indian Oil Corporation Limited and market survey. The various modern and standard tools to achieve the objectives of the study carry out the analysis of the data.

EXECUTIVE SUMMARY

The deregulation of the Indian Petroleum sector in 1999 brought about a major change in the way Petroleum companies conduct their business. This sector has been exposed to new market forces and competition has grown enormously. With the entry of private players, the consumers demands have increased. The existing players have thus come to recognize the need to evolve at a quick pace and to be market driven, service driven and most importantly relationship driven. Loyalty programs is the new trend which is catching up at a relatively fast pace in India. Indian Oil Corporation Limited (IOCL) is running its own loyalty based fleet card program known as the XTRAPOWER Fleet Card Program. Launched in March 2004, this program has emerged as the largest and most wide-ranging fleet card program in the country and has crossed the mark of one million customers. In spite of this programs huge success and active promotional schemes being undertaken by IOCL, the current customers are not using the cards to the full extent. The main objective of my project at IOCL was to, thus, study the XTRAPOWER Fleet Card Program Proposition and to recommend steps to be taken to enhance card usage. This project report includes the methodology of the research undertaken, findings and solutions to the current problems being faced by customers.

About Xtrapower Fleetcard

What is Xtrapower fleetcard?

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

Program Details Important Instructions

Fleet Card Each one of your Fleet Cards is a smart card, which can be used by the card holder (driver of the vehicle) to make purchases of fuel/ lubricants at designated retail outlets of IndianOil. Activation Before using the feet card (s) to make any purchases, you need to activate your card(s). To activate your card, please visit the nearest designated retail outlet of IndianOil and present your card for changing the default PIN (0000) to a new PIN (any 4-digit number). For your safety Do not disclose the PIN to any unauthorized person. Do not write your PIN on the Fleet Card or on the pouch holding the card. We recommend that the PIN be memorized or written down in a safe place. Fleet Control Card This is a card to which all your fleet cards are linked. This card is not meant to be inserted in the smart card terminal for any transaction. However, the Fleet Control Card Number can be used for the following transactions: CCMS Recharge Use your Fleet Control Card Number & Control PIN to recharge your CCMS Account by making a lump sum cash deposit at a any designated retail outlet. Thereafter money available in the CCMS A/c can be used for reloading multiple fleet cards through CCMS Reload, at any of the designated retail entries Accumulate XTRA Points: All transactions on your vehicle-specific fleet cards are linked to the Fleet Control Card; therefore, all XTRA Points earned by each of your fleet cards accumulate against this card. XTRA Points' Redemption at a Retail Outlet Use your Control Card Number & Control PIN on a smart card terminal at a designated Retail Outlet of IndianOil for instant redemption of XTRA Points for fuel and

lubes. You can also submit your request for redemption of any other reward item from the rewards Catalogue on the smart card terminal. N.B. Redemption requests can also be submitted by filling a redemption form or there an online request on XTAPOWER website. Web User ID and Password The web User ID and Password will allow you to access web-based services of XTRAPOWER such as viewing transactions on your fleet cards, vehicle tracking, CCMS & card wise balance, XTRA Points' balance, redemption of XTRA Points etc. Note: In case of credit variant of XTRAPOWER card, the prepaid pouch of the card must have the required amount so as to avail of online tracking facility. XTRAPOWER FLEET CARD PROGRAM XTRAPOWER is one-of-a-kind fleet card program of IndianOil, which gives you XTRA convenience, XTRA security and XTRA opportunity to earn truckloads of rewards. It is a tailor-made program for Fleet Owners, Operators & Corporates as well.

Welcome to the World of XTRAPOWER!

With XTRAPOWER Fleet Card you now have an easy, convenient and rewarding way to drive, monitor and control your entire fleet. It facilitates cashless fuel purchase and gives you systematic record of transactions through the card. It is a powerful and unique fleet management tool for an efficient and costconscious fleet owner like you. Based on the smart card technology, the XTRAPOWER card gives you: Payment convenience-both prepaid and credit options. Detailed fleet management reports. Facility to track each vehicles Personal Accident Insurance Cover and Medi-claim for fleet owner, driver, co-driver and helper. Attractive rewards on purchase of fuel & lubricants through the Card Opportunity for earning additional rewards on purchase of J.K. Tyre and Exide Battery* * To be made available shortly. NB Conditions Apply. All about the XTRAPOWER Program Your Own XTRAPOWER! Once enrolled, the fleet owner is assigned a Fleet Control Card with Control PIN and "XTRAPOWER" smart card for every vehicle enrolled under the program.

Web login User ID and Password would also be assigned to enable you to log on to our dedicated website www.iocxtrapower.com. The XTRAPOWER smart card is personalized with details like Card Number, Card Member's Name, Customer ID, Vehicle Number and Expiry Date printed on the card.

Convenience !

There are two variants of XTRAPOWER fleet card Prepaid & Credit. On prepaid cards, pre-load as much money as you require. Within prescribed limit the pre-loading facility has been made available at designated Retail Outlets of Indian Oil. You can also deposit the desired amount in Central Cash Management System (CCMS) through designated of HDFC bank.* On the credit variant, cards are sent with credit limit as approved by the credit partner Sundaram Finance Limited (Shortly to be made available through other banks).

Freedom !

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

Control !

XTRAPOWER gives you full control on the amount you load on your prepaid cards from wherever you are. For example, you can make payments in Mumbai and reload your Fleet Cards in Chennai. In case of credit variant, there is a pre-approved daily limit on the card. For every transaction, charge slip would be printed (shown alongside) for your records. This slip will indicate the date, time and location of the transaction, card number, product purchased, value of purchase, card balance after transaction and odometer reading of the vehicle (if provided by the driver) etc. One copy of the transaction slip is given to the driver of the vehicle. With the help of these slips you can keep track of your auto fuel/ lubes expenses and routes traveled by each of your fleet vehicles.

Keep Track !

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

Xtra Points !

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

Xtra Protection !

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

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

Xtra Benefits !

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

Wherever You Go !

XTRAPOWER program offers card-insert based basic truck tracking at no extra cost. It also offers "Online Tracking" facility (at nominal cost), which would vastly improve fleet utilization. XTRAPOWER card members will enjoy the power of IndianOil's nation-wide network of retail sales points, supported by IndianOil's team of Sales Officers and Fleet Managers.

Consolidated Reports !

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

OBJECTIVES OF THE PROJECT

The major objectives of the project are:

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

2. To study the loyalty between the local customers and the company. 3. To study the benefits provided by iocl to the local customers. 4. To study how iocl tap local alliance partners for Xtra Power Fleet Card program. 5. To obtain customer opinions and suggestions at IOC retail outlets and give recommendations to IOC to improve the implementation of Xtra POWER loyalty program. 6. To study the comparative analysis between the loyalty card benefits of other marketing company. 7. To become known to real market. 8. TO gain real experience of market that how corporate persons work. How we have to behave, how to present yourself, how to make deals with clients etc. 9. To check our theoretical knowledge with comparison to the practical market demands. 10. It gives us an opportunity to apply our thinking, idea, knowledge in real market 11. To enhance our skill and gain experience to be a true professional. 12. To check our interpersonal skills. 13. To learn necessary managerial skills and positive attitude towards your work. 14. To get a flavor of Teamwork, Organizational culture, Team dynamics, result orientation, organizational pressure, complexities in achieving desire result. 15. To understand the day to day functioning of an department within the organization 16. And at last but not the least fir sharpen our career goals for a bright career.

RESEARCH METHODOLOGY

DATA COLLECTION METHOD Types of Data and Data Collection: Data that I have received for making the project is a combination of both primary and secondary data. Primary Data

The data collected through questionnaire based survey from the retailers and customers of kanpur and nearby region. The name of the retail outlets of Indian oil from where these data are collected are

Das Brother (Vijay Nagar,kanpur) Stanam Motors(Panki,kanpur) Laxmi Automobiles(Govind Nagar,kanpur ) Malik Petroleum (Dada Nagar,kanpur) Swagat Retail Outlet (unnao)

Secondary Data Companys annual reports Companys journal and magazines Companys website Companys leaflets Companys pamphlets Products and sales report

Sampling plan

The sample size for retailer is 8 and that of customers is 200 of Kanpur and nearby region. The respondents are chosen through cluster sampling universe elements are chosen in group rather than individually. Whereas convenience sampling is based on opportunism.

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

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

3:How can one become a member? Contact the Fleet Marketing Officer of IndianOil in your area and ask for the application form or ask for his representative to meet you. The contact number of our Fleet Marketing officer can be obtained from our 24 x 7 help-line no 1800 425 55 99. You can also register your request for enrolment on our Toll free number (1800-425-5599) or online through our website www.iocxtrapower.com. For enrolment the customer has to fill up the application form completely and clearly in English, attach all the necessary documents e.g. copy of RC Book and proof of address etc., as indicated in the Application Form and submit the completed Application form along with the enrolment fees to our Divisional/State Fleet Marketing Officer or his representative. You will receive your XTRAPOWER cards in a Welcome Pack within 21 working days of application.

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

5:What is the Renewal Fee? Renewal fee for XTRAPOWER membership is Rs 100/- per card. The renewal fee will be billed in the monthly statement sent to the card member. The payment should be made thru' a Cheque or DD drawn

in favour of 'Indian Oil Corporation Limited'. The payments must be made to IndianOil by the due date. Non-payment by due date will result in deactivation of your card. You can also advise adjustment of Renewal Fee against your earned XTRA Points or against you CCMS Account Balance. Your advise for such adjustment should be sent to :Retail Sales - XTRAPOWER Fleet Card Sales, 3rd Floor- Indian Oil Bhawan, G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai- 400 051.

6:Is one supposed to enroll vehicles only if one owns it? No, you can also enroll vehicles in your fleet, which are controlled by you and not owned by you e.g. - if you have three vehicles in your fleet wherein two are owned by you and one is hired and controlled by you, then all the three vehicles can be enrolled for the membership. However, such request must be accompanied by proof of Control of such vehicles.

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

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

9:Is there any maximum and minimum limit for number of vehicles enrolled in the program? No, there is no limit on the number of vehicles for enrolment.

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

11:How can I discontinue my membership?

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

12:What are the benefits of becoming member of the XTRA POWER? There are several benefits of becoming a XTRAPOWER member. XTRAPOWER offers you convenience, control, cost- savings, credit, personal accident insurance, reports, and rewards.

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

Customer Service Center XTRAPOWER Fleet Card Program C/O Royal Images Direct Marketing Private Limited L. M. Krishna Building, No. 5, Balavinayagar Nagar, Main Road, Arumbakkam, Chennai - 600 106 Phone : 044 65514977 / 65514983, Fax : 044-2475 6648

14:What reports would an XTRAPOWER card member receive? XTRAPOWER membership entitles you to receive a monthly statement of fleet card transactions. the statement has three parts i.e. vehicle-wise Summary of transactions, CCMS account balance and vehiclewise, date-wise details of transactions.

15:What would be frequency of such report? These statements will be generated on a monthly basis. However the card member can visit the XTRAPOWER website anytime to view and download transactions on any of his card for any period.

16:How is it better than other fleet card programs? The XTRAPOWER differentiators vis--vis other fleet-card programs are as under: Better credit proposition Higher value of reward points Attractive rewards program Personal accident insurance and medi-claim cover for the card member, drivers, co-drivers & helpers. Lost card liability cover

Online PIN unblocking Flexible cash loading options - Manual Reload & CCMS Reload (Remote loading of cards by depositing lump sum cash at one place) or CCMS reload thru' cheque payment at select HDFC branch. Card-insert based vehicle-tracking facility thru' website (Offline tracking free, Online tracking at a nominal charge of Rs.2/-).The online tracking details are immediately made available to the card members on XTRAPOWER website. Special discounts from our alliance partners (currently available on JK Tyres only)

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

THE OIL & GAS INDUSTRY IN INDIA

India is the sixth largest consumer of oil. There exists a huge gap between the demand and supply of oil and gas in India. The country imports more than 70% of its crude oil requirements. In the year 2005, oil and gas accounted for 38% of primary energy consumption in India, followed by coal at 55%. The oil and gas industry is broadly classified into Upstream, Midstream and Downstream segments. Midstream operations are usually included in the downstream category. The Indian Oil Industry comprises of 18 refineries with a total refining capacity of 132.47 MMTPA as of April 1, 2006. During the same year, the consumption of crude oil and that of natural gas was estimated at 130.11 MMT and 31.02 BCM respectively. The production and consumption of petroleum products was estimated at 119.75 MMTPA and 111.92 MMT respectively. India has recently emerged as net exporter of petroleum products.

UPSTREAM SECTOR: The upstream sector, also known as the exploration and production (E & P) sector, is concerned with the search for potential underground or underwater oil and gas fields, the drilling of exploratory wells, and subsequently operating in the wells that recover and bring the crude oil and/or raw natural gas to the surface.

MIDSTREAM SECTOR:

The midstream sector processes, stores, markets and transports commodities such as crude oil, natural gas and natural gas liquids (NGLs) such as ethane, propane and butane.

DOWNSTREAM SECTOR:

Indian Oil Corporation is an Indian public-sector petroleum company. It is the highest ranked Indian company in the latest Fortune Global 500 listings, ranked at the 125th position. It began operation in 1959 as Indian Oil Company Ltd. The Indian Oil Corporation was formed in 1964, with the merger of Indian Refineries Ltd. Indian Oil and its subsidiaries account for a 48% share in the petroleum products market, 34% share in refining capacity and 71% downstream sector pipelines capacity in India. The Indian Oil Group of companies owns and operates 10 of India's 20 refineries with a combined refining capacity of 60.2 million metric tonnes per annum (MMTPA, .i.e. 1.2 million barrels per day). These include two refineries of subsidiary Chennai Petroleum Corporation Ltd. (CPCL) and one of Bongaigaon Refinery and Petrochemicals Limited (BRPL). As the flagship national oil company in the downstream sector, Indian Oil reaches precious petroleum products to millions of people every day through a countrywide network of about 35,600 sales points. They are backed for supplies by 167 bulk storage terminals and depots, 101 aviation fuel stations and 89 Indane (LPGas) bottling plants. About 7,593 bulk consumer pumps are also in operation for the convenience of large consumers, ensuring products and inventory at their doorstep. Indian Oil operates the largest and the widest network of petrol & diesel stations in the country, numbering over 18,643. It reaches Indane cooking gas to the doorsteps of over 50 million households in nearly 2,764 markets through a network of about 5,095 Indane distributors. At Indian Oil, customers always get the first priority. New initiatives are launched round-theyear for the convenience of the various customer segments It is India's largest company by sales with a turnover of Rs. 271,074 crore and profit of Rs. 10,221 crore for the year 2009-10. As a leading public sector enterprise of India, Indian Oil has successfully combined its corporate social responsibility agenda with its business offerings, meeting the energy needs of millions of people everyday across the length and breadth of the country, traversing a diversity of cultures, difficult terrains and harsh climatic conditions. The Corporation takes pride in its continuous investments in innovative technologies and solutions for sustainable energy flow and economic growth and in developing techno-economically viable and environment-friendly products & services for the benefit of its consumers.

OIL & GAS INDUSTRY STRUCTURE IN INDIA

Oil and Natural Gas Corporation Ltd. (ONGC) UPSTREAM Oil India Ltd.

Indian Oil Corporation Ltd. (IOCL)

Reliance Industries Ltd. (RIL)

DOWNSTREAM Bharat Petroleum Corporation Ltd. (BPCL)

Hindustan Petroleum Corporation Ltd. (HPCL)

Mangalore Refinery & Petrochemicals Ltd. (MRPL)

GAS TRANSPORT & DISTRIBUTION Gas Authority of India Ltd. (GAIL)

INDIAN OIL CORPORATION LTD.

Company profile: Formed in 1964 through the merger of Indian Oil Company Ltd. (Estd. 1959) and Indian Refineries Ltd. (Estd. 1958), Indian Oil Corporation Ltd. (IndianOil) is presently Indias largest commercial enterprise with a sales turnover of Rs. 1,83,204 crore (US$ 41 billion) and profits of Rs. 4,915 crore (US$ 1.10 billion) in the fiscal year 2005.

IndianOil also enjoys the status of being the highest ranked Indian company in the prestigious Fortune Global 500 listing, having moved up 17 places to the 153rd position this year based on the performance of the fiscal year 2005. In addition to being the 21st largest petroleum company in the world, it also tops the list of the petroleum trading companies among the National Oil Companies in the Asia-Pacific region.

IndianOil, along with its subsidiaries, accounts for a market share of 47% in petroleum products, 41% refining capacity and a petroleum product capacity of 51% in India.

In the year 2005-06, the IndianOil Group sold 54.6 million tonnes through exports. The IndianOil Group of companies presently owns and operates 10 out of 18 refineries with a combined refining capacity of 54.20 million tonnes per annum (1.1 million barrels per day). These include two refineries of the subsidiary Chennai Petroleum Corporation Ltd. (CPCL) and one of the Bongaigaon Refinery & Petrochemicals Ltd. (BRPL). The Corporations cross-country crude oil and product pipeline network spanning over 9,000 km meets the vital energy needs of the country.

VISION, MISSION & VALUES

Vision A major diversified, transnational, integrated energy company, with national leadership and a strong environment conscience, playing a national role in oil security& public distribution.

Mission

To achieve international standards of excellence in all aspects of energy and diversified business with focus on customer delight through value of products and services, and cost reduction. To maximize creation of wealth, value and satisfaction for the stakeholders.

To attain leadership in developing, adopting and assimilating state-of- the-art technology for competitive advantage. To provide technology and services through sustained Research and Development. To foster a culture of participation and innovation for employee growth and contribution. To cultivate high standards of business ethics and Total Quality Management for a strong corporate identity and brand equity. To help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience.

Values IndianOil nurture a set of core values, which are: Care Innovation Passion Trust

ORGANIZATION STRUCTURE

The organization structure of the Indian Oil Corporation Ltd. is divided on the basis of the companys functions comprising of pipelines, refineries, research & development, marketing, human resource, finance, and planning and business. Each division is headed by a director with general managers and executive directors working under him. On the basis of my observations, I can state that the organization structure of IndianOil is fairly flat with few levels of intervening management between staff and managers. Rather than being closely supervised by many layers of management, workers are more directly involved in the decision making process

concerned with the company. There are many individual units within the organization which enables the existence of a horizontal organization structure. Employee involvement is thus encouraged through a decentralized decision making process.

PEST Analysis
Economic environment:

The gradual reduction of tariff protection has ensured that prices of most goods in countries like India are closer to global levels or even much lower. The lower prices are much more extensive in the services sector, which accounted for 52.4% of the Indian economy in 2004- 05.The use of GDP based on purchasing power parity in the calculation of oil intensity is also validated by the fact that the figures on oil consumption are measured in terms of volumes of input (million tons of oil equivalent-mtoe) while the GDP estimated on the market exchange rate gives only the value of output and not the actual volumes. It is only the GDP estimated on a purchasing power parity basis which gives some indicator so the volume of output which should form the basis of cross country comparisons of output and estimation of oil intensity therein. However, though the oil intensity in India is comparatively much lower than in most other developed and developing countries the negative impact of high oil prices on the economy is accentuated by the distorted pattern of oil consumption in India.

Social Cultural Environment Social cultural variation in the Indian context, is very important for any company to work in it. The India is basically can be divided into four major regions on the basis of language. demography and also the income states. These are the south, north, east and west. The IOCL as a company also operates differently in different regions and also use different languages to attract people towards them. This is also, a reason for which the company have three refineries in the south region out of eleven in total. And that also because of the merger with MRPL a local regional company. Natural Environment The company IOCL is very much concern about the environmental polices of it and also very strictly follow every small norms of it. The mission of the company is very clear; To develop techno-economically viable and environment-friendly products. All because of it that the company wins SCOPE Meritorious Awards for Environmental Excellence & Sustainable Development and Good Corporate Governance. Technological Environment

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

Political Legal Environment

The political and legal environment for the whole oil industry is very essential. In India the entire oil industry is been governed by OIL Ministry and OIDB a Govt body. This two institutes are responsible for all the decision related to the price, quality specification etc. Beside this the international politics also affect this international commodity Oil a lot and also its companies. Any company operated in India had to work according to the norms and on the prices specified earlier by Govt bodies.

Evidence of Strategic formulation by IOCL Porters Generic Strategies

Overall Cost Leadership:

As per the Government regulations, all the player in downstream petroleum sector have to maintain same prices, infact subsidize the mail commodities like Motor spirit, High speed diesel, kerosene and LPG.For the subsidized products, Government allots Oil bonds to Oil PSUs in order to partially compensate for the under-recoveries and to some extent by upstream Oil Companies (ONGC,OIL).In this way IOCL has overall cost leadership vis-- vis private players.

Differentiation:

IndianOil is the pioneer in launching state-of-the-art petrol stations with digital dispensers, modern canopies, standardized signage and efficient lighting systems way back in the mid- 1990s. The new retailbranding template introduced by Indian Oil set in motion a revolution in the petroleum retail business in the country. Following are the evidence of differentiation by IOCL.

Xtra Care

IndianOil's XTRAcare E branded full service petrol stations is a result of a series of processes in retail design, product and service up gradation, capability training, automation, loyalty programs, retail site management techniques all benchmarked to global standards. Today XTRAcare petrol stations are synonymous in India with world-class petroleum retailing.

While the industry standard is to take samples on a quarterly basis, Indian Oil has moved several steps ahead by introducing fortnightly random sampling with specific importance given to RON (Research Octane Number) sampling which is truly the definitive test for quality and quantity. The surveillance audits by BV are being done on a more comprehensive basis. The scale and spread of XTRAcare pumps is also an industry record.

Another vital differentiator in the Indian Oil XTRAcare is the importance given to the frontline customer attendants. They are trained at three levels of competencies-- customer service, personal hygiene/grooming and customer complaint redressals. XTRAcare dealers also undergo extensive training on 'Retail Site Business Management.

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

Swagat

The Swagat retail network are large format sites designed exclusively to cater to travelers on the highways.With spacious parking lots, dhabas, eateries, retail stores and restroom, theSwagat outlets provide customized services to owners of both light motor vehicles as well as heavy motor vehicles.

Focus

IOCL plans to prune its retail outlets in the current year(2009),owing to the fact that it plans to improve the efficiency of current 15000 outlets.Its plans to improve by its differentiating factors like Xtra care,swagat and seva Kendra.

IOCL to use its Indian surplus funds to expand operations in Sri Lanka ,where it is operating as Lanka IOC Plc.,.It is planning to establish 300 retail outlets which require investment to the tune of 6 billion Sri lankan rupess ( INR 260 crore),each outlet requiring about Srilankan rupee 2 Crore.Srilankan market has a demand of 3.5 MTPA with current capacity of 2.2 MTPA

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

Promotional Alliance

IOCL has formed a promotional alliance with kisan seva Kendras for promotion in rural areas.IOCL presents sports scholarship awards to nurture talented young sportspersons across all the streams.IndianOil has also set up the IndianOil Foundation (IOF) as a non-profit trust to protect, preserve and promote national heritage monuments.

IOCL provides merit-cum-means scholarships to bright students selected on 'merit-cum- means' basis. For each academic year, 450 scholarships covering the first year students of 10+ / ITI, Engineering, MBBS and MBA

Logistics Alliance

IOCL has formed a logistics alliance with Mundra Port for strategic storage of Crude Oil.Indian Oil Tanking Ltd formed as an alliance between Indian Oil and Oil tanking US for storage of Crude Oil and products.

Pricing Collaboration

IOCL collaborates with other PSU players for exchange of surplus products ,like , IOCL might offer Gasoline or Naptha at Guwhati to HPCL inexchange of the same products at Vizag.(Usually termed as Hospitality in common Oil Industry parlance)

Competitive Scenario
Market Structure:The Indian petroleum industry can be traced back to 19th century when petroleum was discovered in Assam. In starting, industry open for international players and global oil majors such as Caltex,Esso& Burmah-shell were operating in country but after oil crisis of 1970 the government nationalized the Indian divisions of the international company and also nationalized refining, marketing sector. government established Oil Coordination Committee for regulatory control on production, import, distribution & pricing& they are usingA PM(administered price mechanism) due to government hold on oil companys there is no private player &market isoligopoly market where 2-3 government under taking company are

major player.Major player are IOC,BPCL& HPCL are dominating players in downstream sector. In upstream ONGC &OIL claiming 84% shear of the total market. After liberalization in 1990 government change its policy& policy maker realized that APM no longer work as it had in the past so they opened this sector. Thus the government initiated the deregulation process in 1995 wherein the APM was replaced with market determined pricingmechanism. Due to this change some private player come in this industry like Reliance Petroleum Limited, Essaroil etc.Indian government provide oil bond to oil companys to over come losses thats why oil companys are protected that is evident by recent oil price hike.

The trend in the deregulated markets that is being followed by the players is to move towards integration of refining and marketing activities on a greater scale. Moreover, the oil PSUs are also venturing into oil exploration and production activities. Bearing testimony to this are the entries of downstream players like Reliance, IOC and Essar Oil into the oil exploration field, while the exploration major ONGC is moving into refining operations, albeit in a small way in the form of commissioning a 0.1 MT mini refinery in Andhra Pradesh. However, by establishing a 71.59% stake in MRPL, the company has signaled its entry into this sector in a big way.

A presence in all the activities will help the players to hedge to a certain extent any volatility in the raw material prices. Moreover, a presence in the marketing activities will help the company to take benefit of the improved marketing margins that are expected in the post APM period. In the long-term, the industry is likely to witness the global trend of formation of integrated oil companies, having interest in exploration, refining, retail marketing and petrochemicals business. Some of the major players in this industry have been discussed in brief below.

Oil advertising :

At present, there are four PSUs namely, IOC, HPC, BPC and IBP (subsidiary of IOC) marketing oil products in the country. In addition, certain private players like Reliance, Essar and Shell have also in marketing rights for transportation fuels. Their marketing presence today, however, is not significant and is limited to about 1370 outlets out of total retail outlet strength of about 29,380 . Some additional players like ONGC, who have also been granted marketing rights for transportation fuels, are in the process of setting up retail outlets to integrate across the entire hydrocarbon value chain.

It is evident that the share of the private sector in meeting total consumption of refined petroleum products presently stands at around 15%. This proportion is however, expected to grow significantly in the coming years.

Brief Profile of other players Hindustan Petroleum Corporation (HPCL)

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

The Corporation operates 2 major refineries producing a wide variety of petroleum fuels & specialties, one inMumbai (West Coast) of 5.5 MMTPA capacity and the other inVishakapatnam, (East Coast) with a capacity of 7.5 MMTPA. HPCL holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals Limited, a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. In addition, HPCL is progressing towards setting up of a refinery in the state of Punjab in the Joint sector.

HPCL also owns and operates the largest Lube Refinery in the country producing Lube Base Oils of international standards. With a capacity of 335 TMT. This Lube Refinery accounts for over4 0% of the India's total Lube Base Oil production.

The vast marketing network of the Corporation consists of Zonal offices in major cities and over 91 Regional offices facilitated by a Supply & Distribution infrastructure comprising Terminals, Aviation Service Stations, LPG Bottling Plants, and Inland Relay Depots & Retail Outlets. The Corporation over the years has moved from strength to strength on all fronts. The refining capacity steadily increased from 5.5 million tonnes in 1984/85 to 13.70 million metric tonnes (MMT) presently. On the financial front, the turnover grew from Rs. 2687 crores in 1984-85 to an impressive Rs 1,03,837 Crores in FY 2007-08.

Bharat Petroleum Corporation (BPCL)

BPCL was incorporated in 1952 when the Government entered into a joint venture with Burma Oil and Shell Petroleum. Subsequently, the company was nationalized by way of acquiring a 100% equity stake in 1976, but subsequently the Government has let go a part of its holding to financial institutions, mutual funds, etc. Today, BPCL is the second largest refining and marketing company in India, and has now

three refineries, including KRL and NRL, and another target for disinvestment, that has been stuck up in the middle of the process along with HPCL. Some of the key features of BPCL are BPCL is the second largest refining and marketing company in India. The company along with its subsidiaries owns 15% of the refining capacity and 9% of the product pipelines. It has a 19% market share in the country in terms of sales, and a retail market share of 32.2% in MS, and 24% in HSD. The company has the third largest retail outlet and LPG distributor network in the country. The company has also adopted innovative marketing strategies such as introducing value added highway retailing among others, in order to improve its retail sales.

In line with the other oil refining and marketing companies Bharat Petroleum (BPCL) also ended up in red for the quarter ended Dec 05. Governments decision not to revise petrol and diesel prices in line with rising crude prices internationally had an adverse impact as the company recorded net losses for a third consecutive quarter. Companys operating margins turned negative and the company made operating losses.

Mangalore Refinery & Petrochemicals (MRPL) - ONGC

Set up as a joint venture between HPCL and the Aditya Birla group in 1988 as a standalone refinery, MRPL is now a subsidiary of ONGC, which has a 71% holding in it, and is also planning to buy out the balance HPCL stake. ONGC is expanding the scope of its operations to become an integrated player. The acquisition of MRPL was in order to facilitate its entry in the downstream industry. Apart from MRPL, ONGC is also having a mini plant, with a capacity of 0.13 lakh tonnes. Moreover, the company also is working on plans to enter the marketing and retailing businesses. The company hopes to put in place a retail network of 1700 outlets in place over the next 3-4 years. The company is anticipated to take advantage of its real estate throughout the country for this purpose.

Reliance Industries Limited (RIL)

Reliance Petroleum was incorporated in 1991as Reliance Refineries, but changed its name to the former in 1993, and has since merged with its parent company RIL. Its refinery is a standalone, and is at Jamnagar, on the countrys western coast. The refinery was commissioned in July 1999, and it commenced its operations in 2000-01. It is Indias largest standalone refinery, and constitutes 24% of the countrys refining capacity. Additionally, the Jamnagar refinery is also the worlds fifth largest refinery at a single place. RIL also owns 23% of the product pipelines in the country.

RIL is a private integrated player in India, and has established a retail network of more than 1300 units. Earlier, RIL had marketing agreements with the oil PSUs till March 2004 to market about 14 million tonnes of its petroleum products. Now RIL has plans to set up about 4300 more outlets throughout the country subsequently. Its foray into marketing is expected to improve its marketing margins, and complete its attempt at downstream integration.

Reliance Industries (RIL), the largest private Sector Company in India came out with disappointing results for the quarter ended Dec 05. The company posted just 2% rise in revenues and a 15% fall in reported PAT after the operating margins slipped 210 basis points. For the quarter ended Dec 05, RILs sales moved up just 2% to Rs. 18168 crore. The operating margins slipped by 210 basis points to 16.4%, which pulled the operating profits down by 10% to Rs. 2976 crore. Small reductions in interest, depreciation and tax provisions could not bring any respite for the company. The refining margins continued to suffer as the company recorded a 46% plunge in the PBIT from refining .

Competitive Force Analysis

Threat of Intense segment rivalry It is witnessed in the holistic service offered by the retail outlet majors (IOCL,HPCL ,BPCL) .If IOCL has Swagat outlets ,HPCL and BPCL has Club HP and Pure for Sure outlets.It is noted that most of these outlets have same facilities like Quality verification checks,Truck driver amenities etc,leading to intense segment rivalry.However IOCL has the edge in terms of vast refinining and distribution network ,hence is the market leader. Threat of new entrants In the current Indian scenario,entry and exit barriers are high and profit potential is high ,but firms face more risk because poorer-performing firms stay in and fight it out.Like,IBP was facing bleak prospects till the time Indian Oil purchased it with a premium of over sixty percent.Till the recent crude oil spike,Reliance Retail petroleum,Essar Oil and Shell gave a head-on clash (frontal attack in select

locations) with Oil PSUs.Adding to it newer plants come with better crude handling capacities(like better Nelsons index) and therefore refinery margins are good,thus reflected in the net margins. Threat of Substitute Products It is from cleaner and efficient fuels like Compressed Natural Gas (CNG),where it was implemented on a war-footing in Delhi to control emissions.Also the increased awareness on Jatropha and Pongamia ,Central Governments encouragement in the form of Bio-fuel purchase policy for 5% bio-fuel blended Diesel fuel. Electric car Reva also poses a challenge to the existing players. Threat of buyers growing bargaining power Consumer is always the king is apt in the case of petroleum products in India.Consumers interest are protected by the Government by not raising the fuel prices beyond a limit and indirectly consumer is exercising his bargaining power.Also all the Oil PSUs are offered varied services to the consumer including intangible ones like frequent quality checks and tangible ones like amenities ,ATM ,car care etc ,which was not even a moot concept in the past.Hence the buyers bargaining power has increased. Threat of Suppliers growing bargaining power Petroleum is synonomus with OPEC- cartel.Big-wigs like Exxon-Mobil,Total,Occidental Petroleum ,IOCL,BPCL are not shielded from the vagaries of OPEC.

Though OPEC claims that its the tax structure in the respective countries which makes petroleum products expensive, crude oil price varies in NYMEX or in UK or in Singapore in accordance with production levels of OPEC.Today due to Global meltdown, Crude Oil prices are declining but OPEC has already initiated significant production cuts whose effect might be felt in the forthcoming months.

5. SWOT Analysis for IOCL

External environment Opportunity: -

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

Since the company has the maximum no. Of out lets and also the maximum no. Of refineries in India, it can very easily go for extension at any point of time, and can introduce any new products, which will get support from its huge market network.

The company can make the buying process more easy for the customers, by implying many more schemes in the range of XTRAPOWER AND XTRAREWARD. The company can think over the issue to build its own pipelines, so that it will be a independent player and it will also support its aviation fuel supply. Company have a great scope in E&P. It is already involves in E&P but only in a very limited scale.

Threats: since the company is the market leader in the field , so have maximum threats from the other players and many other issues. The lists of threats are given below. The foreign players with more advanced technology are the biggest treat for the company.

The crude oil supply is also a big issue in front of the company, because the company cannot fix its price and so, some time had operate in loss also. it is the biggest problem because the maximum part of their crude is been imported.

In future the market will welcome more private players, which will eat up its market share. If the Govt. Policies allow the private players to set their own price, the the private player can seriously harm the market share of IOCL.

InternalEnviroment Strength.

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

Indias overall

refining capacity. IOC has also acquired equity stakes in CPCL and BRPL, and in 2001, these refineries became subsidiaries of IOC. 58% of IOCs refining capacity is located in the Northern and Western regions, which are high demand and high growth areas. Although its refineries are located the interior of the country, and not near the major ports IOC has a very strong distribution network by virtue of having a share of 48% in the countrys product pipelines. The total capacity of these product pipelines is 49.79 MMT. IOC also acquired management control of the marketing company IBP, thereby strengthening its position in these activities. It also has a dominant share in all segments in terms marketing infrastructure. Its network includes 19830 retail outlets, 8000 LPG distributors, and 6492 kerosene/LDO dealers. By virtue of entering into extensive joint venture agreements, and of its own initiative as well, the company has a presence in various other related activities such as petroleum storage, pipelines, lube additives, exploration, petrochemicals, gas, training and consultancy, etc. The company has already entered overseas markets such as Sri Lanka, Maldives, and Oman and is presently considering entering Turkey through a JV. The company is in talks with Caliak of Turkey to set up a 10 million TPA grassroot refinery with an investment of $2 billion and establish retail business. IOC is also weighing the possibility of entering Indonesia.

IOC has also started exploring the overseas markets for increasing its scope of operations. Its interests include downstream activities in Sri Lanka, Maldives, Oman, and Nepal; interest in the lubes business in Maldives, Dubai, Bangladesh, Sri Lanka, etc; among others.

Weakness:The company is the market leader in the industry, but still it had many weakness. The list is given below. The major weakness for the company is the R&D. The company starts working on it. The petrochemical product development technology is another weakness for the company. The technological drawback, as compared to some major foreign player is another weakness for the company.

BUSINESS OF INDIANOIL

Refining Pipelines

Marketing Research & Development Petrochemicals Gas Exploration & Production

Refineries:
IndianOil presently owns and operates 10 out of Indias 18 refineries with a current combined capacity of 54.20 million tonnes per annum (1.1 million tonnes per day). During the year 2005-06 IndianOil refineries recorded a crude oil throughput of 38.52 million tonnes. The seven refineries together achieved a capacity utilization of 93.1%, higher than the Asia-Pacific average of 91.5% which also happens to be the highest in the last six years. The fiscal year 2005 also witnessed IndianOil becoming the first public sector organization in the country to have its own ship Chartering Cell, which is functioning under the Refineries Division. All refinery units are accredited with ISO 9002 and ISO 14001 certifications. The refineries are as follows: Guwahati Refinery (Assam) Digboi Refinery (Upper Assam) Barauni Refinery (Near Patna, Bihar) Haldia Refinery (Near Kolkata, West Bengal) Mathura Refinery (Near Delhi) Panipat Refinery (Near Delhi) Koyali Refinery BRPL (Bongaigaon Refinery & Petrochemicals Ltd.) CPCL (Chennai Petroleum Corporation Ltd.)

Pipelines:

IndianOil owns and operates a pipeline network of 9,024 km, the largest network of crude oil and product pipelines in India. This widespread network of pipelines achieved the highest ever throughput of 45.35 million metric tonnes during the year 2005-06. The major pipelines of IndianOil are: Salaya Mathura Pipeline Kandla-Bhatinda Pipeline Mathura-Jalandhar Pipeline Guwahati-Siliguri Pipeline Barauni-Kanpur Pipeline Haldia-Barauni Pipeline Koyali-Roorkee Pipeline

Marketing:
IndianOil has a wide spread marketing network with over 23,000 sales points. These include petrol/diesel stations, consumer outlets, lube distributors, SERVO shops, SKO/LDO dealers, LPG distributors. The regional offices are in charge of the North, East, West and Southern Regions of India, and Assam Division supplements operations in the North-East. State level, Divisional and Indane Area offices have also been set up in each region. IndianOil commands a dominant market share in the petroleum retail segment in India and has over 10,144 petrol and diesel stations spread throughout the country along with an additional 3,272 of the subsidiary company, IBP Co. Ltd.

Research & Development:

Operating the first R&D Centre to get ISO 9002 and 14001 Certifications, IndianOil boasts of having the best Research & Development Centre in Asia which is also one of the finest in the world. It has been

involved in world-class petroleum research and is carrying out extensive work on refinery processes and transportation of pipelines. IndianOils R&D Centre developed 85 cost-effective formulations during the year, out of which 74 were commercialized. Marking a new milestone in the march towards a Hydrogen-fuelled economy, the R&D Centre commissioned IndianOils first Hydrogen-CNG (H-CNG) dispensing station in October 2005.

Petrochemicals:
IndianOil has been continuously striving for growth by incorporating its core business with opportunities available in the petrochemicals sector. The company is currently executing a plan to achieve Rs. 30,000 crore (US$ 6.8 billion) investment by the year 2011-12. In order to implement this plan, a world-scale Linear Alkyl benzene (LAB) plant at the Gujarat Refinery and an integrated Paraxylene/Purified Terephthalic Acid (PX/PTA) plant at Panipat are already in operation. A Naphtha Cracker with downstream polymer units, designed to produce 8,00,000 tonnes per annum of Ethylene and 6,00,000 tonnes per annum of Propylene is coming up at Panipat. In order to strengthen its presence in the petrochemicals sector, IndianOil also plans to develop a refinery cum petrochemicals complex at Paradip on the east coast of India.

Gas:
As a step towards expanding its business in the Natural Gas sector, IndianOil has signed an MOU with Iran to implement the import of 1.75 million tonnes of LNG per annum starting from the year 2009 onwards. The corporation is already marketing 1.43 million tonnes per annum. IndianOil has entered into a joint venture with GAIL (India) Ltd. called Green Gas Ltd. in 2005 to distribute city gas. This project initially launched in Agra and Lucknow, is another emerging growth area for IndianOil. Entry in the shipping business is being actively pursued in order to implement the corporations strategy to participate in the entire gas value chain. IndianOil has also embarked on a pilot project to supply LNG through cryogenic road/rail tankers as the limited gas pipeline infrastructure in the country presents good opportunities in this area.

Exploration & Production (E&P):

Having participated actively in the bidding rounds to increase the indigenous production of Oil, IndianOil, under the New Exploration Licensing Policy (NELP) in consortium with other companies has bagged nine blocks in the first three rounds.

The corporation has also obtained participating interest in on-shore blocks in Assam and Arunachal Pradesh. IndianOil has undertaken overseas ventures including two gas blocks in the Sirte basin of Libya, the Farsi exploration block in Iran and onshore farm-in arrangements in Gabon. Opportunities are being explored to acquire a suitable medium-sized E&P company in order to consolidate its upstream portfolio.

INDIANOIL PRODUCTS
Indian Oil is not only the largest commercial enterprise in the country it is the flagship corporate of the Indian Nation. Besides having a dominant market share, Indian Oil is widely recognized as Indias dominant energy brand and customers perceive Indian Oil as a reliable symbol for high quality products and services. Benchmarking Quality, Quantity and Service to world-class standards is a Philosophy that Indian Oil adheres to so as to ensure that customers get a truly global experience in India. Our continued emphasis is on providing fuel management solutions to customers who can then benefit from our expertise in efficient sourcing and least cost supplies keeping in mind their usage patterns and inventory management. The Retail Brand template of IOC consists of Xtra Care (Urban), Swagat (Highway) and Kissan Seva Kendras (Rural). These brands are widely recognized as pioneering brands in the petroleum retail segment. Indian Oils leadership extends to its energy brands - Indane LPG, SERVO Lubricants, Auto gas LPG, Xtra Premium Branded Petrol, Xtra Mile Branded Diesel, Xtra Power Fleet Card, Indian Oil Aviation and Xtra Rewards cash customer loyalty program me. Indian Oil Corporation Limited has a number of products which are as follows:

1. Fuels & Feedstock Naphtha Light Diesel Oil Furnace Oil/ LSHS/ HHS

2. Lubricants & Greases

Automotive Lubricating Oils Automotive Specialty Oils Railroad Oils Industrial Lubricating Oils Metal Working Oils Agricultural Spray Oils Automotive Greases Railroad Greases Industrial Greases Marine Lubricating Oils Defense Grade Lubes Industrial Specialty Oils

3. Petrochemicals & Specialties Benzene Calcined Petroleum Coke Hexane Jute Batching Oil Paraffin & Microcrystalline Waxes

4. Liquefied Petroleum Gas

5. Motor Spirit/ Gasoline

6. Superior Kerosene Oil/ KERO

7. High Speed Diesel/ Gas Oil

8. Aviation turbine fuel/ Jet Kero

INDIAN OIL BRANDS

1. SERVO 2. Indane LPGas 3. AutoGas 4. IndianOil Aviation Service 5. Premium Fuels-XtraPremium & XtraMile 6. XtraPower 7. XtraRewards 8. Swagat Highway Flagship Retail Outlets 9. XtraCare 10.Kisan Sewa Kendras

1. SERVO:

SERVO LUBRICANT

IndianOils Global Brand, SERVO is also Indias largest selling lubricant brand. The SERVO range of lubricants is available to customers at over 9,000 Retail Outlets and a countrywide network of SERVO SSLs and SSAs Bazaar traders. This range of lubricants is used in nearly all applications covering automotive, industrial and marine sectors and is approved by major Original Equipment Manufacturers (OEMs) including new generation cars. Having emerged as a Superbrand, Servo has genuine oil tie ups with a wide range of companies like Hyundai, Maruti, Bajaj and Lancer. It is also fast making its mark in overseas markets such as the UAE, Malaysia, Mauritius, Bangladesh, Bahrain, Sri Lanka, Nepal, Yemen, Kenya, Kuwait, Burkina Faso, Reunion Islands and others. Having been developed at IndianOils world-class R&D Centre at Faridabad, SERVO enjoys a market share of 42% and is sold through over 8,100 IndianOil petrol/diesel stations, over 1,300 SERVO shops and a nationwide network of bazaar traders.

SERVO LUBRICANTS AND GREASES:

Indian Oils SERVO is the brand leader among lubricants and greases in India and has been conferred the Consumer Super brand status by the Super brands Council of India. With over 500 commercial grades and 1,500 formulations encompassing literally every conceivable application, SERVO serves as a one-stop shop for complete lubrication solutions in the automotive, industrial and marine segments. Recognized for cutting- edge technology and high-quality products, SERVO is backed by Indian Oils world-class R&D and an extensive blending and distribution network. In the retailing segment, besides Indian Oil petrol stations, SERVO range of lubricants is available through a network of SERVOXPRESS stations, bazaar outlets and thousands of auto spare parts shops across the country.

MARINE FUELS AND LUBRICANTS:

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

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

5. Indian Liquefied Petroleum Gas

IndianOils Indane LPGas, with a market share of 48% and a network of 4,350 Indane distributors, is widely used in commercial sectors like industries, hotels & restaurants,

medical labs, etc. It is used daily in over 40 million homes as cooking fuel. Around 87 bottling plants are spread across the country with a combined bottling capacity of 3.77 MMTPA. Presently, new and improved 5 kg Indane LPGas cylinders are being introduced in rural and hilly regions to implement wider usage by the economically weaker sections.

INDANE GAS:
Indane is today one of the largest packed-LPG brands in the world and has been conferred the coveted Consumer Super brand status by the Super brands Council of India. Having launched LPG marketing in the mid-60s, Indian Oil has been credited with bringing about a kitchen revolution, spreading warmth and cheer in millions of households with the introduction of the clean and efficient cooking fuel. It has led to a substantial improvement in the health of women, especially in rural areas by replacing smoky and unhealthy chulha. Indane is today an ideal fuel for modern kitchens, synonymous with safety, reliability and convenience. With the status of an exclusive business vertical within the Corporation, the Indane network delivers 1.2 million cylinders a day to the doorsteps of over 53 million households, making Indian Oil the second largest marketer of LPG globally, after SHV Gas of The Netherlands. Indane is available in compact 5 kg cylinders for rural, hilly and inaccessible areas, 14.2 kg cylinders for domestic use, and 19 kg and 47.5 kg for commercial and industrial use.

3. AutoGas:

AUTOGAS:

The fuel is marketed by Indian Oil under the brand name Auto Gas Indian Oil has setup 272 Auto LPG Dispensing Stations (ALDS) covering 149 cities across India. Auto Gas impacts greenhouse emissions less than any other fossil fuel when measured through the total fuel cycle. Conversion of petrol to Auto Gas helps substantially reduce air pollution caused by vehicular emissions. The saving on account of conversion to Auto Gas in comparison to petrol is about 35-40%. Low filling times and the 35-40% saving is a reason enough for a consumer to convert his vehicle to Auto Gas.

AutoGas is Liquefied Petroleum Gas (LPG) used as an alternative fuel for the propulsion of road vehicles. It has an excellent safety record both in terms of its storage, transportation and use. Extensive safety tests have led to the conclusion that Autogas is substantially safer than petrol due to its more robust fuel tank having a resistance to impact damage. AutoGas has been introduced in Hyderabad, Bangalore and Mumbai through a network of 48 stations out of an industry total of 103 Auto LPG Dispensing Stations. This alternative fuel is a good long term business proposition, and IndianOil intends to further expand its marketing in a big way.

4. IndianOil Aviation Service:

IndianOils Aviation Services, with a 68% market share and a network of 95 Aviation Fuel Stations (AFS), meets the fuel and lubricant needs of domestic and international airlines, Defence Services and private aircraft operators.

IndianOil Aviation service is ISO 9002 certified and is not only the largest aviation fuel marketer in the country but is also the most preferred supplier of jet fuel for customers in India and abroad. Besides the domestic airlines, IndianOil Aviation Service serves over 71 International airlines. IndianOil Aviation Service caters to over 90% demand of the Indian Defence Services as well as the sensitive requirements of WIP flights at all airports and at remote helipads across the Indian subcontinent. It not only maintains world-class standards in operations and safety but also conforms to the severe global quality requirements of Aviation fuel storage and handling.

5. Premium Fuels-XtraPremium & XtraMile:

Launched on September 24, 2002, the premium fuels XtraPremium and XtraMile (originally IOC Oremium and Diesel Super respectively), mark a new

beginning for IndianOil and offer the benefits of convenience and enhanced comfort to its customers.

XtraPremium:

Indias first 91 octane petrol, XtraPremium is reinforced with multifunctional additives including Friction Buster. It is available at over 2,000 Retail Outlets all over the country and has the following attributes:

o o o o o o

Super Mileage and Pick-up Enhances cleaning of engines Minimizes exhaust emissions Restores peak engine power and acceleration Reduces maintenance cost

XtraMile:

IndianOils new generation High Speed Diesel with world-class additives, XtraMile is the leader in its market segment. Offered at over 4,400 Retail Outlets nationwide, it has the following features:

o o o o

Extra mileage leading to a Greater Acceleration Faster pick up, resulting in lower Maintenance Costs Longer engine life, thus providing Enhanced Overall Performance Eliminates engine knockings

6. XtraPower:
XtraPower is a Smart Card based Fleet Card Program, which enables the cashless purchase of fuel and lubes from designated retail outlets of IndianOil through flexible prepaid and credit facilities. The fleet card program aimed at solving the needs of fleet owners/operators offers many benefits which includes an exciting rewards Program, Personal Accident Insurance Cover and Vehicle Tracking Facilities. Launched in March 2004, XtraPower, having crossed the one million mark, has emerged as the largest fleet card program in the country. It has the widest Retail Outlet coverage with over 4,800 Retail Outlets in its network and has locked in about 22% of the Fleet market share in the retail segment. Any Fleet Owner/Operator, Corporate or Business Entity owning or operating commercial vehicles can sign up for membership of the XtraPower Fleet Card Program at an annual charge of Rs. 100/-. Each fleet owner is issued one Fleet Control Card and Vehicle-Specific Fleet Cards for every vehicle enrolled under the program. Backed by IndianOil/s vast infrastructural network as well as service providers through its dedicated site www.iocxtrapower.com, XtraPower provides many facilities to its members through the numerous salient features such as Flexible Pre-paid and Credit options, Card Limits for better control, Web-bases allocation of funds on specific cards, Card-to-Card Fund Transfer, Attractive Reward program, Option for Real Time tracking of vehicles at subsidized cost, interest-free credit with an option for customers to choose from more than one credit partners, discounts on purchase through reward points, redemption of points not only for fuel/lubes but also for a wide range of

consumer goods and novelties and Free Personal Accident Insurance Cover for fleet owners, Drivers, Co-drivers and Helpers. The XtraPower Fleet Card Program is thus a solution to every Fleet Owner/Operators Fleet management Problems.

7. XtraRewards:
The countrys first online loyalty card for cash customers, XtraRewards was launched in Bangalore on the 26th of March 2007. XtraRewards is a loyalty program for urban vehicle owners through which the customers can add further value to their purchases by piling up loyalty points. These loyalty points can also be accrued by customers paying through credit and debit. Having been launched in 60 outlets all over Bangalore, this program will be unveiled later in Chennai followed by Hyderabad. In the first phase, 1,250 outlets of IndianOil and IBP will be automated by September at a cost of Rs. 169 crore to be followed by 1,178 outlets at Rs. 163 crore to be implemented by the middle of 2008. IndianOil has launched this reward program with an aim to leverage technology in its retail business in order to provide maximum facilities and benefits to its customers and also to help the dealers plan and manage inventory, monitor activities of their fore-court and to maintain records for dealing with customer complaints and queries online. The card is backed by Tata Indicoms CDMA based PDSN technology which will act as the communication backbone with HDFC Bank providing Point of Sale Terminals (POST) at the designated IndianOil Retail Outlets.

8. Swagat Highway Flagship Retail Outlets:

The Swagat Retail Outlets have been launched by IndianOil to cater to the high growth areas of National Highways forming a part of the golden Quadrilateral and the North-South, East-West corridors. These Flagship retail outlets are spread across the country and 45 out of the total 111 Swagat

retail outlets have already been commissioned with fuel and non-fuel facilities. These retail outlets have been designed to provide customers with fuel/lubes including XtraMile and XtraPremium as well as non-fuel facilities such as food/rest, communication, healthcare, parking, vehicle care etc. These retail outlets maintain high Q&Q standards through retail outlet site and tank truck automation, third party certification through Bureau Veritas, fortnight sampling through Quality Audit Officers and training through a professional agency.

9. XtraCare:
IndianOils XtraCare outlets are benchmarked against international standards of Q&Q, housekeeping, maintenance and customer service as certified by the global agency Bureau Veritas. The launch of XtraCare was a result of a series of plans in retail design, product and service upgradation, capability training, automation, loyalty programs and retail site management techniques. The non-fuel services are boosted in the IndiaOil XtraCare plan with a wide range of loyalty programs- XtraPower, more recently XtraRewards and cobranded cards like IndianOil-Citibank credit cards. XtraCare has the most state-of-the-art automation with cutting edge technology including automatic tank level gauges, temperature sensors, density measurement sensors, backoffice server with DU controls, automatic bill printing facility, customer database, etc. IndianOil had recently introduced the Platinum Circle and Gold Circle as a precursor to the XtraCare launch. The Platinum Circle and Gold Circle are exclusive, top of the line clubs for high selling retail outlet dealers and these dealers have emerged as peer leaders and are an integral part of the XtraCare dealer sensitization strategy.

10. Kisan Sewa Kendras:

IndianOil launched Kisan Sewa Kendras for the rural markets as a new growth area in retail business. These outlets offer a variety of products and

services besides autofuels and kerosene, thus meeting the diverse needs of the rural population. The Kendras mainly market petroleum fuels, SERVO lubricants, fertilizers and agro inputs like seeds, pesticides, farming equipment; vegetables, stationery and other items. Besides serving the farming community through wide-ranging products, services and facilities, this initiative is also expected to create employment avenues in rural India, which is fast emerging as one of the largest consumer bases, thereby providing attractive returns to the operators.

GROUP OF COMPANIES

The IndianOil Group of Companies comprises of: 1. Lanka IOC Limited (LIOC) 2. IndianOil (Mauritius) Limited. 3. IBP Co. Limited (IBP) 4. Chennai Petroleum Corporation Limited (CPCL) 5. Bongaigaon Refinery and Petrochemicals Limited (BRPL) 6. IndianOil Technologies Limited

1. Lanka IOC Limited (LIOC):

IndianOils subsidiary in Sri Lanka, Lanka IOC, is the only private oil company other than the state owned Ceylon Petroleum Corporation (CPC) that operates retail petrol/diesel stations within Sri Lanka. IndianOil entered into Sri Lanka with a view to accomplish its objective of becoming a transnational energy major. IndianOils vast experience in downstream petroleum operations in India creates a healthy and competitive petroleum industry in Sri Lanka which largely benefits the island nation.

Lanka IOC Limited has been incorporated mainly to carry out retail marketing of petroleum products, bulk supply to industrial consumers, building and operating storage facilities at the Trincomalee Tank farm, etc. Thus it not only provides energy security and supply stability to Sri Lanka but also upgrades the overall standards of service, particularly in the retail sector of the nation. Having a market share of 22% and operating over 160 outlets, the company occupies the NO. 2 position among the top 50 listed companies operating in Sri Lanka. Its oil terminal at Trincomalee is Sri Lankas largest petroleum storage facility. In order to provide world class quality petroleum products and services at the most competitive prices to the Sri Lankan customers, Lanka IOC is making periodic investments to the tune of about INR 450 crore. The retail outlets are being refurbished with state-of-the-art facilities and services at par with international standards. Through its retail chain, the company is also making available non-fuel facilities like convenience stores, 24-hour ATMs, automatic carwash, food marts, etc. These revamped stations of Lanka IOC have earned praises for the company from all sections of the Sri Lankan society.

2. IndianOil (Mauritius) Limited.

IndianOil is investing US$ 36 million to set up a range of marketing infrastructure in Mauritius through its wholly owned subsidiary IndianOil Mauritius Ltd. (IOML). A state-of-the-art petroleum storage terminal with a capacity of 15,500 metric tonnes has already been commissioned at Mer Rouge to serve as the supply base of petroleum products. This microprocessor-controlled facility with automated product level monitoring, truck loading and computerized access control is the first-of-its-kind in Mauritius. As part of this project, separate import lines for Motor Gasoline (petrol), Gas Oil (Diesel), Jet Fuel (Aviation Fuel) and Fuel Oil have also been

laid. IOML has also strengthened the bunkering facilities with new lines to various quays in the port, which is fast emerging as the regions busiest port. IOML has undertaken means to set up a network of 25 world class petrol stations in Mauritius in order to provide the Mauritian customers with auto fuels and lubricants of international quality. These outlets will be equipped with a range of value-added services including both fuel and non-fuel facilities. IOML has also joined a consortium of four existing oil companies to operate aviation fuel storage, hydrant lines and aircraft fuelling facilities in Mauritius. The consortium will soon build a new Aviation Fuel Terminal at Sir Seewoosagar Ramgoolam International Airport. IndianOil (Mauritius) Ltd. which has attained a 14% market share includes aviation fuelling and bunkering business. Besides the expansion of the retail network, a modern product-testing laboratory is also being set up in Mauritius. It now occupies the 25th place among the top 100 companies in Mauritius in less than 30 months after commencement of operations there.

3. IBP Co. Limited (IBP):

IBP Co. Limited, a subsidiary of IndianOil, is a stand-alone petroleum marketing company with exclusive Business Groups for Petroleum, Explosives and Cryogenics. IBPs marketing efforts are fully focused on improving its sales of petrol and diesel. During the period April Dec 2006 the company achieved a sales volume of 798,559 KL of petrol and 2,959,018 KL of diesel which resulted in a sales growth of 2.8% in petrol and 6.4% in diesel as compared to same period last year. The revenue from the Business Group (Petroleum) witnessed an increase of 16% during the fiscal year 2005-06. A pioneer in introducing quality and quantity assurance of all products and services at its retail outlets, IBP is constantly striving to keep up with industry standards by implementing third party audits by reputed agencies. The

branding activities are further reinforced through an initiative called Project Horizon in which IBPs 422 select top of the line high-volume outlets are specially branded with an upgraded retail visual identity. Independent agencies are appointed to collect samples from these retail outlets in order to test them on a monthly basis so as to guarantee that products available to customers meet the specified standards. As part of synergy with the parent company IndianOil, the Company has begun marketing branded fuels, viz., XTRAPREMIUM petrol and XTRAMILE diesel at select retail outlets of the Company. IBP has also introduced Indian Oils XtraCare Fleet Card Program in its network. This program is designed to help transporters in efficient management of their fleets besides rewarding them for their loyalty to the Company.

4. Chennai Petroleum Corporation Limited (CPCL):

A subsidiary of IndianOil, Chennai Petroleum Corporation Limited has two refineries with a combined capacity of 10.5 Million Tonnes Per Annum (MMTPA). The Manali Refinery, with a capacity of 9.5 MMTPA is one of the most complex refineries in India with Fuel, Lube, Wax and Petrochemical feedstock production facilities. CPCLs second refinery is located at Cauvery Basin at Nagapattinam with a capacity of 1.0 MMTPA. The main products of the company are LPG, Motor Spirit, Superior Kerosene, Aviation Turbine Fuel, High Speed Diesel, Naphtha, Bitumen, Lube Base Oil, Hexane and Petrochemical feed stocks. Stocks, Paraffin Wax, Fuel

The crude throughput for the year 2005-06 was highest-ever at 10.36 Million Metric Tonnes (MMT) against the Memorandum of Understanding (MoU) target of 10.2 MMT. The crude processing was 16% higher than the previous year crude throughput of 8.92 MMT. During the year, the Manali Refinery processed 9.68 MMT and Cauvery Basin Refinery (CBR) processed 0.68 MMT. CPCLs MoU target for 2006-07 has been set at 10.4 MMT. The turnover for the year 2005-06 was the highest-ever at Rs.25,409 Crore as against Rs.16,270 Crore in the previous year registering an increase of about 56%.

The turnover was higher mainly due to increase in crude throughput and higher prices for the products based on import-parity. CPCL has commissioned many new facilities including a Zero Discharge Plant, Additional 2.5 MGD Capacity Sewage Reclamation Plant and a 5.8 MGD Desalination Project. The new project and initiatives being implemented are Crude Oil Pipeline Project, Resid Upgradation Project, Propylene Recovery Project, Windmill Power Project, Quality upgradation Projects to meet Euro-IV Products and Refinery Capacity augmentation at Manali.

5. Bongaigaon Refinery and Petrochemicals Limited (BRPL):

Bongaigaon Refinery and Petrochemicals Limited (BRPL) has its registered office and production units at Dhaligaon in the Bongaigaon District (now under recently constituted Chirang District) of Assam. The company has its Regional/Marketing offices at Guwahati, Kolkata, Mumbai and Delhi. The core activities of BRPL are refining of crude oil and production of petroleum products. The Company is also engaged in the production and marketing of value-added petrochemical and PSF products. The Company has a Refinery with a rated capacity of 2.35 million tonnes per annum of crude oil, a petrochemicals complex comprising of a Xylene plant, a Dimethyl Terephthalate (DMT) plant and a Polyester Staple Fibre (PSF) plant. Commercial production of the refinery started in 1979 and other plants were commissioned in stages. The Refinery, which normally processes crude oil available in Assam, is presently processing crude from Ravva Oil Fields of Krishna Godavari Basin also. The Petrochemicals units consume Naphtha as its major raw material, which is supplied from the Refinery itself. The major products from the refinery are LPG, Unleaded MS, Naphtha, ATF, SKO, HSD, LDO, LSHS, LVFO, RPC & CPC. The major products of the Petrochemicals and PSF units are DMT and PSF. The petroleum products (except RPC & CPC) are marketed by Indian Oil Corporation Ltd. (IOCL). BRPL markets RPC, CPC, Petrochemicals and PSF products through its own marketing network.

6. IndianOil Technologies Limited (ITL):

A wholly owned subsidiary of IndianOil, IndianOil Technologies Limited (ITL) is the technology-marketing arm for the entire range of technologies developed at IndianOils R&D Centre at Faridabad. This centre, which was set up over three decades ago, has developed several technologies and technical expertise both in refining and the lubricant sector. The R&D activities in refining technology are targeted in the areas of fluid catalytic cracking (FCC), hydro processing, catalysis, residue upgradation, distillation, simulation and modeling, lube processing, crude oil evaluation, process optimization, material failure analysis, remaining life assessment and other technical services. ITL also offers state-of-the-art sludge disposal technology based on biotechnology which is widely accepted in the hydrocarbon sector. ITL also markets the R&D developed lubricants technology, which possesses USPs, established through wide market acceptance. The company imparts training in the areas of FCC, Hydroprocessing, Catalytic Reforming, Delayed coking, Simulation and Modeling, Bio-remediation, Crude Assay, Material Failure Analysis, Remaining Life Assessment, Analytical techniques, Lubricants & grease etc. covering the basics, plant trouble shooting and technical solutions. In the recent past ITL carried out such trainings in Kuwait, Iran etc. IndianOil has adopted the approach of nurturing human talent as a means to nurturing technology. This approach has worked well as the hydrocarbon sector is both technology and knowledge intensive. As a result, the Corporation is now in a position to offer a bouquet of technologies, products, processes and solutions that are aimed at improving performance and profitability.

FINANCIAL ANALYIS OF INDIANOIL

BALANCE SHEET

As on 31Mar06 Assets Gross Block Net Block Capital WIP Investment s Inventory Receivable s Other Current Assets Balance Sheet Total(BT) Liabilities Equity Share Capital Reserves Total Debt Creditors and Acceptance s Other current liab/prov. Rs mn 435588.1 0 249193.9 0 96453.00 145263.8 0 242777.9 0 66994.80 58329.70 31Mar 05 %BT 50.71 29.01 11.23 16.91 28.26 7.80 6.79 Rs mn 397824.4 0 233037.2 0 87339.10 57049.20 195048.2 0 56898.70 67608.40 31Mar 04 %BT 57.08 33.44 12.53 8.19 27.98 8.16 9.70 Rs mn 363413.6 0 220018.1 0 52865.70 55954.30 149510.8 0 39731.20 121088.6 0 639168.7 0 Rs mn 11680.10 %BT 56.86 34.42 8.27 8.75 23.39 6.22 18.94

859013.1 0 Rs mn 11680.10

100.0 0 %BT 1.36

696980.8 0 Rs mn 11680.10

100.0 0 %BT 1.68

100.00

%BT 1.83

279731.2 0 264037.2 0 128307.4 0

32.56 30.74 14.94

247061.9 0 173199.3 0 112479.2 0

35.45 24.85 16.14

217613.1 0 121776.1 0 79699.60

34.05 19.05 12.47

175257.2 0

20.40

152560.3 0

21.89

208399.8 0

32.60

Balance Sheet Total(BT)

859013.1 0

100.0 0

696980.8 0

100.0 0

639168.7 0

100.00

RATIO ANALYSIS

CURRENT RATIO = 1.224

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

QUICK RATIO = 0.26

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

DEBT EQUITY RATIO = 0.903

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