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Indian Oil Corporation Ltd.

BSE: 530965 Sector: Oil & Gas
NSE: IOC ISIN Code: INE242A01010
BSE 00:00 | 01 Dec 117.70 -1.35
(-1.13%)
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120.00

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120.00

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116.55

NSE 00:00 | 01 Dec 117.70 -1.25
(-1.05%)
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119.65

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119.95

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OPEN 120.00
PREVIOUS CLOSE 119.05
VOLUME 733065
52-Week high 141.75
52-Week low 84.10
P/E 4.26
Mkt Cap.(Rs cr) 110,805
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 120.00
CLOSE 119.05
VOLUME 733065
52-Week high 141.75
52-Week low 84.10
P/E 4.26
Mkt Cap.(Rs cr) 110,805
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indian Oil Corporation Ltd. (IOC) - Chairman Speech

Company chairman speech

The last financial year has been a perfect guide in demonstrating theimportance of team-resolve in tiding over challenges... ...Your Company not onlysurmounted the pandemic crisis but it also rose to the occasion to thwart major threatsand chart new paths of excellence.

Dear Shareholders

I hope you are keeping well and safe.

It's my privilege to present the Integrated Annual Report 2020-21which provides an insight into IndianOil's performance during the last financial yearand its ever-expanding horizon of aspirations. Your Company was one of the early adoptersof the Integrated Reporting Format in India and we continue to refine it to create andcommunicate better value for the stakeholders through multi-capital reporting.

This report chronicles IndianOil's journey during a turbulent yearmarked by the raging Covid-19 pandemic and elaborates on how your Company navigatedthrough uncharted waters overcoming all odds and turning challenges into robust growthopportunities. This report also underscores the indomitable spirit of IOCians who withtheir commitment resilience and a strong sense of purpose kept the Company going as the‘Energy of India'.

Tiding over challenges Always

The last year has been an unprecedented and extraordinary year that hasaltered the course of our lives and livelihoods. Our plans objectives and evenperceptions have undergone a paradigm shift while the long-term impact of this disruptionon various sectors still remains uncertain. However the course of human evolution teachesus that challenges open up new horizons of growth besides underlining the primacy ofspecific skill sets and traits for surviving in a post-pandemic world. IndianOil teamsleveraged opportunities amidst these difficult times to catalyse future growth. Puttingthe country before business remains an intrinsic part of IndianOil's DNA. So whenthe pandemic struck IndianOil teams rose to the occasion swiftly and selflessly servingthe customers and stakeholders despite disruptions in the demand and supply dynamics.Displaying extraordinary zeal Team IndianOil kept the fuel supply lines going anddelivered a record 33.11 Lakhs Indane LPG cylinders on a single day on 30th April 2020braving the pandemic and a stringent lockdown.

Our energy warriors - the customer attendants LPG delivery personneltruck crew contract workers field force and employees at supply locations refineriespipelines and petrochemical plants kept the nation on the go. Moreover not losing sightof the future your Company continued to steer the growth agenda with new customerofferings innovative digital solutions infrastructure expansion and low carbonsustainable energy options for a greener planet.

Your unwavering faith in your Company coupled with the stupendousefforts of all IOCians has helped us scale a historic peak with the highest ever profitsduring 2020-21

The last financial year has been a perfect guide in demonstrating theimportance of team-resolve in tiding over challenges. Your Company not only surmounted thepandemic crisis but it also rose to the occasion to thwart major threats and chart newpaths of excellence.

On 3rd September 2020 the engine room of the Panama-flagged Very LargeCrude Carrier (VLCC) MT New Diamond carrying nearly two million barrels of Kuwait ExportCrude Oil for Paradip Refinery caught fire. The accident happened when the oil tanker wassailing east of the Sri Lankan seas. Our teams immediately swung into action and set up a24-hour disaster control room monitored by senior IndianOil officials. This control roomfacilitated communication among various stakeholders and coordinated firefighting effortswith the concerned authorities in India Sri Lanka and other geographies. A rescueoperation was swiftly launched on international waters by the Indian Coast Guard

Navy and their Sri Lankan counterparts supported by the salvagers andother maritime agencies. It took nearly a week of remarkable efforts to douse the blazeand avert a major environmental disaster. This incident displays the power of focused andcollaborative actions to overcome a crisis and emerge stronger as a Company driven byvalues.

Record profit driven by ‘People'

Taking the multiple challenges in its stride your Company cruisedahead riding on the strength of dedicated teams a broad customer base channel partnersand frontline associates working cohesively. I am happy to share with you that our strongfocus on consolidating the core business while exploring new and sustainable energyfrontiers has yielded positive outcomes. This success has taken us closer to our goal ofbeing an integrated future-attuned energy major that continues to catalyse thenation's growth story.

Your unwavering faith in your Company coupled with the stupendousefforts of all IOCians has helped us scale a historic peak with the highest ever profitsduring 2020-21.

People First Always

As Team IndianOil battled the invisible enemy at the frontlines thebrutality of the ongoing Covid-19 pandemic amplified the fragility of human life.IndianOil stands firmly with the families of IOCians and our large stakeholder fraternitywho suffered losses in the wake of the pandemic.

IndianOilPeople are central to our existence and we remain committedto ensuring their well-being and prosperity. Your Company has extended the IndianOil KarmaYogi Swasthya Bima Yojana for the second year running for the frontline teams. Thismedical insurance covers over 3 Lakhs customer attendants LPG delivery personnel tanktruck crew and security guards. An ex-gratia assistance of Rupees Five Lakhs has also beenextended for the families of the energy soldiers who succumbed to the Covid-19 virus whileserving the nation's energy needs.

With the vaccine emerging as the best bet to counter the coronavirusyour Company has taken the responsibility to facilitate vaccination for this 4.2 Lakhsstrong stakeholder family.

Crafting a new energy future

With more than 1.3 billion people India is home to 18% of the globalpopulation but accounts for a mere 7% of the world's energy demand. This vast gapcoupled with the rising aspirations of Indians for improved living standards will be thekey driver of the country's energy demand. As a result India is set to experiencethe fastest growth in energy consumption among all large economies. To cater to thisexponential demand growth we need a more comprehensive diverse energy basket wheretraditional offerings like coal oil and natural gas coexist with bioenergy andrenewables. Each energy form has its role cut out in fuelling the emergent nation that isthe world's third-largest oil consumer. I want to assure you that IndianOil'sgrowth agenda reflects this diversity and translates into refinery expansions as well asscaling up renewables and alternative fuel options.

Your Company is pacing ahead to energise the nation and strengthen thefour pillars of India's energy future as envisioned by the Hon'ble PrimeMinister - Energy access Energy efficiency Energy sustainability and Energy security;at the same time ensuring Energy justice with the objective of access to safe affordableand sustainable energy for all citizens. In addition the post-Covid world will witness arenewed consensus on urgent climate action with a more significant push for sustainablesolutions. So while the aspirations of our nation are unique the commitment towards alow carbon economy remains steadfast.

A new era of customer service excellence

For a Company with one of the most extensive customer interfaces weconstantly endeavour to make today's customer experience better thanyesterday's. Each of our offerings reflects this resolve.

With the launch of XP100 India's only 100 octane petrol thecountry zipped into an elite league of nations that offer such high-tech fuel for theircustomers. We also rolled out the differentiated fuel-efficient cooking gas offeringIndane XtraTej. The convenient 5 Kg Free Trade LPG cylinder relaunched as‘Chhotu' has been a game-changer in the segment marking an almost 50% increasein sales over the corresponding period last year. We have recently launched two premiercustomer-centric o_erings Combo Cylinder (offers 14.2 Kg LPG cylinder with Chhotu asDouble Bottle Cylinder) and the Composite Cylinder an aesthetic light-weight valueoffering for a modern kitchen.

Leveraging digital innovation your Company has introduced a host ofuser-friendly options to make LPG more accessible and easier to avail. From ‘askingAlexa' to book your next refill to registering for a new connection through a missedcall we are offering an array of digital delights for our customers. Further we are nowin the process of launching the ‘Tatkal' delivery of LPG refill at thecustomers' doorsteps within two hours of booking in select cities. For enhancingsupply logistics bottling plants at Goindwal Sahib Tirunelveli and Gorakhpur werecommissioned and three bottling plants at Nagpur Korba and Jabalpur have also beencompleted during the year. I am sure that these customer convenience initiatives shoredup by a robust supply chain will play a crucial role in retaining the leadership ofIndane as the most preferred kitchen fuel in the country.

Retail remains the focus for your Company and all-out efforts arebeing made to strengthen its market leadership. The commissioning of 3000 fuel stationsduring the last fiscal year has been the highest yearly number ever achieved in thehistory of IndianOil taking our total tally to 32062 fuel stations.

I'm happy to share that our strategy of unlocking the value andoptimum potential of each product offering has yielded fruitful outcomes. The lube oilsegment has come out with brilliant results during the fiscal year registering growth insales by around 25% and a spectacular 100% rise in the bottom line. Recent endeavours likethe state-of-the-art Lube Blending Plant at Kolkata and Trombay a CIDW (CatalyticIso-Dewaxing) unit at Haldia Refinery LuPech (Lube-Petrochemical) project at Gujarat andthe recently approved Panipat expansion project are in sync with the Company's focuson unlocking the potential of the high-margin lubes segment.

Underground energy highways

The Pipelines Division of your Company has achieved the milestone of15000 km pipeline network length with the commissioning of the 144 km Ramanathapuram -Tuticorin section of the 1444 km long Ennore – Thiruvallur – Bengaluru –Puducherry – Nagapattinam

– Madurai - Tuticorin (ETBPNMT) Natural Gas pipeline. This sectionwas dedicated to the nation by the Hon'ble Prime Minister Shri Narendra Modi inFebruary 2021. Earlier Shri Modi had also inaugurated the Durgapur - Banka LPG Pipelinein September 2020. In addition our Pipelines Division is also providing EPMC(Engineering Procurement Construction Management) service in laying the world'slongest 2809 km Kandla - Gorakhpur LPG pipeline (KGPL).

New horizons of refining excellence

IndianOil refineries during the financial year have achieved totalcrude throughput of 62.4 MMT against a target of 72.4 MMT the shortfall being mainly dueto Covid related disruptions.

Speaking of another positive the Petrochemicals vertical iscontinuously scaling new heights and has emerged as a silver lining to cushion ourbusiness against the risks of oil price volatility. Besides achieving a record annualPetrochemical sale of 2.68 MMT we also expanded the basket of offerings adding an arrayof niche grades. Currently the Petrochemical spreads are high and your Company is focusedon maximising production at Panipat and Paradip to reap maximum benefit.

As part of the larger vision refinery expansion coupled withvalue-added products and petrochemical integration are the cornerstones of yourCompany's growth strategy. This year we have taken crucial mega-investment decisions

- 9 MMTPA greenfield refinery at Nagapattinam in Tamil Nadu through aJoint Venture with CPCL Panipat Refinery expansion from 15 to 25 MMTPA and GujaratRefinery expansion from 13.7 to 18 MMTPA. All refinery expansion and petrochemicalintegration projects viz. PX-PTA at Paradip and Ethylene Glycol at Paradip (Odisha) andOxo Alcohol project at Dumad (Gujarat) are on track. The newly approved projects translateinto an investment commitment of close to Rupees One Lakhs Crore over the next 4 to 5years. This concerted drive will surely catapult your Company into a higher growthtrajectory.

The past few months have witnessed several projects gettingcommissioned. Commissioning of INDMAX and PrimeG units at Bongaigaon unit contribute toincreasing refinery capacity from 2.35 to 2.7 MMTPA. Infrastructure development tofacilitate grid power import at Gujarat Refinery three additional crude oil tanks atParadip Refinery etc. have also been completed. Besides these Gas integration inIndianOil's Refineries is also being pursued.

Capex achieved against all odds

Ramping up project work amidst the raging pandemic while ensuring 100%compliance of all health advisories was a significant challenge. But I am happy to sharethat building upon the vision of an ‘Aatmanirbhar Bharat' IndianOil hassuccessfully surpassed the Capex target for the year.

Cutting edge R&D: Towards a Sustainable Tomorrow

IndianOil's R&D Center has been undertaking pioneeringresearch and our IP (Intellectual Property) wealth creation has resulted in 1165effective patents which is the highest amongst PSU Oil and Gas companies in India. Thisyear we are celebrating the Golden Jubilee year of R&D Centre. To coincide with thisimportant milestone we are in the process of expanding R&D set-up at Faridabad byconstructing a second campus with an investment of Rs 3200 Crore. This new campus willsupport cutting-edge research in futuristic alternative energy domains and fast-track ourjourney towards a net-zero goal. It shall be built over an area of about 59 acres andwould focus on demonstration and deployment of various futuristic technologies developedby IndianOil R&D.

As the ‘Energy of India' your Company shall leverage itsR&D prowess to play a pivotal role in India's journey towards a greener tomorrow.Today I can confidently say that our R&D Centre has evolved into a world-classtechnology solution provider. With the successful deployment of various indigenoustechnologies Team R&D has also contributed to the vision of an ‘AatmanirbharBharat'.

I firmly believe that Hydrogen will be the ultimate sustainable fuel ofthe future. To realise this vision IndianOil R&D has played a pioneering role insupporting the exciting journey of Hydrogen and Fuel Cell research. In October 2020IndianOil carried out a trial in Delhi where 50 CNG BS-IV buses were run on Hydrogenspiked CNG (HCNG) fuel. The results have been quite promising. The use of HCNG fuel hasshown a drop in emissions & improvement in Fuel Efficiency. Taking the juggernautforward your Company is setting up pilot plants using four innovative hydrogen pathways.

Moreover your Company will be doing trial run with 15 fuel cell busesin the Delhi NCR region. We also intend to seed Hydrogen fuel cell mobility by utilisingthe surplus Hydrogen from Gujarat Refinery. The first set of buses will soon ply fromGujarat Refinery to the Statue of Unity and Sabarmati Ashram.

I would also like to elaborate on how IndianOil has been reconcilingits business objectives with national priorities through a sharpened focus on bioenergyand renewables. Under the ambitious SATAT (Sustainable Alternative Towards AffordableTransportation) scheme on CBG (Compressed Biogas) IndianOil has taken significant stridesand awarded 1456 Letters of Intent (LOI) till June 30 2021. We have also initiatedmarketing of CBG from 12 Plants through 23 retail outlets spread over eight states with atotal sale of 1907 MT of CBG till June 30 2021. For the record we are the only OilMarketing Company offering CBG under the brand name ‘IndiGreen' since the launchof the SATAT programme.

Producing biodiesel from Used Cooking Oil (UCO) is yet anotherpotential route that's also being explored by your

Company with 22 LOIs being issued for an annual cumulative capacity of22 Crore litres. Presently your Company has a portfolio of 232.95 MW of renewable energyincluding close to 170 MW of wind capacity. The total generation from the above renewableenergy projects during 2020-21 is 329.45 GWh which resulted in emission mitigation of 260

TMT of CO2e equivalent.

In yet another futuristic initiative a Joint Venture IOC PhinergyPrivate Limited has been forged between IndianOil and the Israeli Company Phinergy tocommercialise the Aluminium-Air Battery Technology in India. We have also set up 257 EVCharging Stations and 29 battery swapping stations at our energy pumps across the country.

Embracing the power of digitalisation

During the India Energy Forum CERAWEEK held in October 2020Hon'ble Prime Minister had underlined seven critical pillars of India's energystrategy. One of the key drivers among these seven pillars is "Digital Innovationacross all the energy systems". Aligning with the Prime Minister's vision yourCompany has been implementing various digital initiatives to enhance energy efficiencyreliability and performance while contributing to environmental sustainability. AtIndianOil we declared the year 2020 as the ‘Year of Digitalisation' and Ifirmly believe that our digital initiatives will ensure business continuity in a mannerthat is compatible with the ecological and economic needs of the communities in which weoperate.

Last year we heralded in a slew of digital initiatives at IndianOil. Ihave already touched upon few pioneering offerings to enhance the experience of ourcustomers. Let me now elaborate on a few other path-breaking efforts. In a novelreliability improvement initiative IndianOil and BHEL GE Gas Turbine Services PrivateLimited have implemented the first of its kind Remote Monitoring of Gas Turbines acrossall IndianOil refineries to enhance refinery reliability. We have also initiated thedigital transformation of the turnaround processes in all nine IndianOil refineries. Thisis aimed at optimising productivity quality and safety metrics by integrating the fieldworkforce with technology.

Digitalisation has been an effective tool for enhancing employeeengagement through learning which has become a buzzword in the Company today. The digitallearning platform of Swadhyaya designed for IndianOil employees has kept our workforcegainfully engaged during the lockdown period and with the growing popularity ofSwadhyaya today your Company has indeed become a learning organisation. We recentlyreached the milestone of a million courses completed by employees on the digital platformreflecting the readiness of IOCians to embrace digital transformation.

Caring for the society and women empowerment

A strong social conscience has always driven your Company which isreflected in our social stewardship initiatives. Women welfare and empowerment has been afocus area for our recent CSR endeavours. We have introduced a one-time educationalscholarship of Rs 10000/- each for 75 girl students

across 33 Education Boards from the economically backward and sociallymarginalised sections excelling in the Board examinations. Also the Skill DevelopmentInstitute's (SDI) pilot Campus in Bhubaneswar has benefited about 2300 studentssince its inauguration in 2016. This institute driven by IndianOil aims to skill over50000 students in the next ten years. You will be happy to know that the new 46-acre maincampus of SDI has been completed and will soon be commencing regular academic sessions.

Let me also share that your Company acknowledges the need for agender-diverse work environment in today's world. The Covid-19 crisis has highlightedthe centrality of women's contributions and the added responsibilities women continueto carry on the professional and domestic fronts. Women in IndianOil have been shiningexamples of corporate excellence and their contributions have strengthened the cause ofgender-neutral work culture in the Indian corporate ecosystem. Your Company hascontinuously supported its women professionals' career progress by building aconducive environment through various efforts and initiatives related to their healthsafety gender sensitisation and empowerment. This International Women's Dayseveral facilities were rolled-out to empower women employees like providing travel farefor infants of up to two years of age and an attendant when the working mother is touringany location within India.

Serving the nation beyond business

When the second wave of Covid-19 started sweeping across the nationyour Company went beyond business priorities to leverage its expertise to help the countryin the hour of need. When faced with a massive surge in demand for medical oxygen acrossthe nation IndianOil diverted the high-purity oxygen used in its Mono Ethylene Glycol(MEG) Unit at its Panipat Refinery and Petrochemical Complex to produce medical-gradeliquid oxygen. The throughput of the MEG unit was scaled down to divert much-needed oxygento serve this more critical cause.

Moreover inspired by the zeal to serve the nation your Companysupported the Government in creating a robust infrastructure for Liquid Medical Oxygen(LMO) transportation in the country. IndianOil deployed over 100 ISO containers andtankers and transported around 5000 MT of LMO from various sources. Further your Companyis rapidly expanding this fleet to enhance the carrying capacity. IndianOil also imported500 MT of LMO during in Kerala

this period and coordinated with the Indian Missions in West Asia forthe procurement. In addition IndianOil is manufacturing 20 cryogenic road tankers at itscryogenic plant in Nasik.

To further streamline the medical oxygen supply scenario IndianOil haslaunched a single-window application

– Sanjeevani Express portal. This application is equipped toenable real-time monitoring of liquid oxygen supply logistics across the country. Thesingle window platform has been created to help all stakeholders including the Ministryof Road Transport and Highways (MoRTH) Oil companies and other Central and StateGovernment agencies. In May 2021 Union Minister of Petroleum & Natural Gas and Steelinaugurated the 100-Bed ICU Ventilator facility at Vikash Multi-Specialty Hospital (VMSH)in Bargarh Odisha augmented under IndianOil's CSR initiative. In yet anotherinitiative IndianOil's Panipat Refinery began supplying 15 MT gaseous Oxygen per dayto the Guru Teg Bahadur Sanjeevani Hospital for Covid care through a pipeline directlyfrom our Panipat complex.

A future-ready IndianOil

Worldwide the most significant overall long-term challenge is tosupply clean and affordable energy while addressing the concerns related to climatechange. Therefore the next few years will be crucial for the energy sector and let meaffirm that IndianOil is geared up to cater to the new energy order of the future.

India like several other countries is in the midst of an energytransition. There will be a continuity of energy consumption patterns but a profoundchange in the energy mix is inevitable as we integrate renewables more intensely. For acountry like India with high energy appetite the path towards energy transition willinvolve balancing our enthusiasm for the future with the reliability of the old order.Given the magnitude of incremental energy required in addition to meeting existing needsthe dovetailing of new greener energy options in a requisite scale and scope is needed tooffer sustainable choices for a smooth changeover.

IndianOil has been working in mission mode to meet the rapid growth ofthe nation's energy needs while pursuing the aspiration for a greener tomorrow. Wehave been investing assiduously across various facets of the energy spectrum. Be itNatural Gas Renewables or Biofuels our teams have been working on cutting edge fields ofHydrogen CCUS (Carbon Capture Utilisation & Storage) advanced biofuels and batterytechnology. The recent paradigm-shifting experience with the Covid-19 pandemic hasstrengthened our resolve to go quicker and bigger on new energy bets. This IntegratedAnnual Report enumerates your Company's concerted drives to diversify into cleanerenergy forms with high growth opportunities while pursuing downward integration intopetrochemicals.

To sum up IndianOil continues to fuel the aspirations of a billionIndians and remains steadfast to the national mandate for a greener India and a saferplanet. I solicit your support as we chart our path towards a brighter energy future!

Stay healthy stay safe!
Sd/-
Shrikant Madhav Vaidya
Chairman IndianOil

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