MANAGEMENT DISCUSSION & ANALYSIS REPORT: 2014-15
A. DEVELOPMENTS IN THE ECONOMY AND THE OIL SECTOR
The Indian economy has grown by 7.3% during 2014-15, indicating an improvement in growth prospects. Agriculture sector growth in 2014-15 was negligible at 0.2% compared to about 4% in 2013-14. Industry and services sector growth improved slightly in 2014-15. Growth rate for industry in 2014-15 was about 6% compared to 4.5% in 2013-14. Services sector growth was 10% in 2014-15 vis-a-vis 9% in 2013-14.
Huge decline in global commodity prices and continuing slack in the economy eased inflationary brssures progressively during 2014-15. The Brent crude, having reigned above 100 USD per barrel for four years, fell steeply from June 2014 onwards, ending up close to USD 45 per barrel by January 2015. An increase in non-OPEC supply coupled with OPEC decision not to cut production seem to have been the major factor in play.
Balance of payments improved during 2014-15 over the brceding year. Fall in trade deficit and marginal improvement in the net invisible earnings lowered the current account deficit (CAD). The CAD shrank to US$ 27.5 billion in 2014-15 (1.3 per cent of GDP) from US$ 32.4 billion (1.7 per cent of GDP) a year ago. India's exports as well as imports fell in 201415 compared to brvious year. Global growth remains moderate affecting exports. Fall in oil prices reduced value of oil imports and hence, total import bill. India's trade deficit narrowed to US$ 144.2 billion in 2014-15 from US$ 147.6 billion in 2013-14. Portfolio and direct foreign investment flows to India were buoyant in 2014-15. Net foreign direct investment to India in 2014-15 was US$ 36.6 billion while new portfolio inflows totalled US$ 41 billion. There was an accretion to India's foreign exchange reserves to the tune of US$ 61.4 billion in 2014-15 as compared with US$ 15.5 billion in 2013-14. At the end of March 2015, the level of foreign exchange reserves stood at US$ 341.6 billion. In contrast to volatility in the first half of 2013-14, Indian rupee remained range bound between 59 and 63 per dollar in 2014-15.
The Diesel prices were deregulated in October 2014. Falling prices and deregulation reduced the under-recovery burden. In addition to deregulation of diesel, the government pushed for direct transfer of subsidy to LPG consumers in a big way.
Petroleum product demand in the country increased by about 3% to reach about 165 MMT in 2014-15. The growth is mainly due to increase in Petrol, LPG and Diesel consumption. Petrol and LPG consumption increased by about 1.9 MMT and 1.7 MMT respectively, registering a growth rate of 11% and 10% respectively. Diesel consumption increased by about 1 MMT in 2013-14 recording a growth of 1.5% over 2013-14 volume. ATF consumption in the country increased only marginally by 1%. FO consumption fell for the seventh consecutive year. Naphtha and Bitumen consumption also declined during 201415.
B. PERFORMANCE PROFILE
The Corporation has secured 'Excellent' rating in terms of the Memorandum of Understanding (MOU) signed with the Government of India for the year 2013-14 with an MOU score of 1.257.
For the year 2014-15, HPCL has achieved its highest ever profit after tax of Rs. 2,733 crore resulting in a significant increase in the earning per share to Rs. 80.72. The market capitalization of the corporation increased by Rs. 11,500 crore during the year and the corporation has proposed it's highest ever dividend of Rs. 24.50 per share.
During the year 2014-15, interest costs came down by nearly 50% - from Rs. 1,336 crore to Rs. 707 crore. The borrowings were also substantially lower by 37% -. The average cost of borrowings were also significantly lower due to effective and proactive Treasury management, aided by the fall in the international prices of crude & petroleum products and timely receipt of compensation from the Govt of India.
HPCL also continued its distinction of getting "Nil Comments" from C&AG on its Annual Accounts. The key performance parameters for the year 2014-15 are discussed below:
The Gross Sales of the Corporation (inclusive of excise duty) for the year ended 31st March, 2015 was Rs. 2,17,061 crore as compared to Rs. 2,32,276 crore in the brvious year. The total sale of products (including exports) for 2014-15 was 31.95 Million Metric Tonnes (MMT) as against 30.96 MMT during 2013-14.
PROFIT BEFORE TAX
The Corporation has earned a Profit before Tax of Rs. 4,154 crore in 2014-15 as compared to Rs. 2,616 crore in 2013-14.
PROVISION FOR TAXATION
An amount of Rs. 1,421 crore has been provided towards income tax for 2014-15 considering the applicable income tax rates as against Rs. 882 crore provided during 2013-14.
PROFIT AFTER TAX
The Corporation has earned a Profit after Tax of Rs. 2,733 crore during the current financial year as compared to Rs. 1,734 crore in 2013-14.
DEbrCIATION AND AMORTISATION
Debrciation for the year 2014-15 was Rs. 1,971 crore as against Rs. 2,188 crore for the year 2013-14. The debrciation expense for the year ended March 31, 2015 was lower due to the adoption of revised useful lives / residual values for fixed assets in line with the requirements of Schedule II of Companies Act, 2013.
The borrowings of the Corporation were Rs. 20,335 crore as on 31st March, 2015 as compared to Rs. 32,165 crore as on 31st March, 2014. HPCL continued with the strategy of dependence on Foreign Currency loans. Leveraging the image of creditworthiness of HPCL amongst international bankers and investors, ECB of US$ 300 million was borrowed at very fine pricing and high cost loan of US$ 400 million was refinanced at substantially lower cost. Revolving line of credit in US$ was also effectively utilized to manage changes in fund requirement. The total debt to equity ratio stands at 1.27:1 as on 31st March, 2015 as against 2.14:1 as on 31st March, 2014.
Net Fixed Assets (including Capital Work in Progress) increased from Rs. 30,498 crore as on 31st March, 2014 to Rs. 32,537 crore as on 31st March, 2015.
Investments as on 31st March, 2015 were Rs. 11,241 crore as compared to Rs. 10,860 crore as on 31st March, 2014.
GROSS REFINING MARGINS (GRMs)
Gross Refining Margin of Mumbai Refinery averaged at US$ 4.88 /bbl during the year as against US$ 5.38 /bbl for the year 2013-14.
Gross refining margin of Visakh Refinery averaged at US$ 1.12 /bbl during the year as against US$ 1.50 /bbl for the year 2013-14.
The decline in Gross Refining Margins for the refineries was mainly due to inventory losses suffered as a result of decline in international crude prices. The price of Indian Basket of crude fluctuated from US$ 104.5/bbl at the beginning of year to US$ 53.6/bbl per barrel at the close of FY 2014-15.
EARNING PER SHARE
Earnings per share for the current year increased to Rs. 80.72 as compared to Rs. 51.20 in 2013-14.
Dividend of Rs. 24.50 per share has been proposed for the year 2014-15. The dividend would result in total pay-out of Rs. 999 crore, including Dividend Distribution Tax.
To brpare for the future challenges and leverage opportunities, an elaborate transformational process was undertaken to develop the Vision for 2030 for the organisation christened 'UDAAN 2030' which defined the Strategic objectives for all the businesses lines till 2030. The exercise involved looking at the discontinuities affecting the energy industry, drivers for growth and scenario building for identifying the shifts impacting fuels and develop the long term future direction of HPCL. UDAAN 2030 objectives translate into 6 strategic bets across Refining, Marketing, Petrochemicals, Natural Gas, Exploration & Production and Renewables. To enable achievement of the Strategic objectives, associated "Bold moves" and "Initiatives" were identified across time horizons and familiarity levels in line with best practices.
STRATEGY MANAGEMENT & IMPLEMENTATION OFFICE (SMIO)
To ensure implementation of strategic objectives, a central Strategy Management & Implementation Office (SMIO) has been set up which helps in aligning the Business Units to the Vision and enables execution of the identified bold moves and initiatives through a defined review and monitoring architecture. The SMIO is helping the Business Units to take ownership for execution and undertake actions for achieving the Short term and long term objectives.
This strategic initiative is expected to help the organisation achieve sustainable competitive advantage in the continuously changing market and business environment.
World GDP grew by 2.6% in 2014 led by growth in Asia Pacific region & USA. After holding above the US$100 per barrel mark for more than three years, since mid-June 2014 oil prices have declined by more than 50% (through mid-January 2015) when weak market fundamental finally outweighed geopolitical uncertainty. OPEC's decision at their late-November meeting to maintain the current production ceiling, exacerbated the decline.
In 2014 total crude oil production was 93.35 million barrels per day (mbpd) as compared to 91.33 mbpd in 2013 registering a growth of over 2 mbpd or 2.2%. This growth in production was led by USA & Canada, where oil production grew by 12.8% (1.8 mbpd). Global Oil demand in 2014 was 92.52 mbpd as compared to 91.84 mbpd in 2013 registering a growth 0.68 mbpd which was led by Asia Pacific region. The year 2014-15 witnessed the highest ever production of tight oil (shale) in the US which reduced its dependency on West African crude. This has also resulted in highest ever crude inventory buildup in USA.
Brent averaged at US$ 109.63/bbl in first quarter of 2014-15, compared to US$ 108.22/bbl in the brvious quarter. The marginal rise was aided by continued tensions between Russia and Ukraine, supply outages in Libya and northern Iraq and stepped up crude buying by refiners as they came out of maintenance turnarounds. All these factors combined to offset the impact of seasonally weaker demand and market expectations for lifting of sanctions on Iranian exports. The first quarter in 2014-15 also witnessed Brent at a peak of US$ 115/bbl in the wake of a bold military campaign by ISIS in Iraq and apparent build up in China's crude strategic reserve in April and May of 2014.
The crude prices fell by $ 7.8/bbl during second quarter of 2014-15 and averaged at $ 101.85/bbl. The Brent structure flipped from backwardation to contango witnessing a drop of over $ 4/bbl every month owing to weak refinery demand, strong dollar index, slower US imports and rising Libyan exports. Brent fell by more than $ 25/bbl during the third quarter of 2014-15, the highest fall since 2008 meltdown mainly due to OPEC's decision not to cut production which resulted in inventory build-up. As supplies piled up and weighed on oil prices Brent tumbled to below $46/bbl in early January 2015, its lowest in nearly six years. The market rallied in late January 2015 on news of a steep drop in the US rig count and Brent averaged at $ 53.97/bbl in the fourth quarter.
Singapore refining margins were subdued in Q1 of FY 2014-15 and closed at US$ 6.03/bbl. The petroleum product demand remained subdued as the Asian major economies, China was experiencing slowdown in economy with surplus supplies in the region. The margins came under further brssure during Q2 and closed at US$ 4.26/bbl due to poor middle distillates cracks. Effective Q3 margins improved and posted US$ 7.31/bbl which showed further upward trend at end of the year and closed at US$ 9.04/bbl due to lower crude prices.
Middle distillates were under brssure during 2014-15 due to ample supplies in Asia and limited demand. The cracks for Gasoil and Jet were lower in 2014-15 compared to brvious year. The Gasoil crack fell to its lowest level since late March 2012. Middle distillates cracks showed no sign of recovery and stockpiles of Jet and Gasoil remained to be cleared which were built for Ramadan in the last week of June.
In comparison, Light distillates remained supported in Q1 with cracks for both Gasoline and Naphtha hitting their biggest gain in the last three years, owing to reduced supplies of the imported cargoes from Europe and healthy demand from the Far East Asian countries. Q2 saw Naphtha market remained bullish due to lesser volumes of LPG coming to the region as alternative petrochemical feedstock and surging demand in Europe for Naphtha as a Gasoline blending stock. However, Gasoline cracks saw a decline. Q3 saw Naphtha cracks coming under brssure due to more arbitrage volume coming to Asia as Europe had increased its operating rates for middle distillates to meet its domestic demand. Gasoline cracks dropped further in Q3 with expectation of lesser demand by Indonesia, the biggest buyer of the region on the news of elimination of subsidies in retail pricing by Indonesian Government. Both the cracks got support in the month of February 2015 due to strikes in US refineries and Chemical plants. The Naphtha market found support due to bad weather conditions in Europe, Mediterranean region and US leading to delay in arbitrage volume coming to Asia.
Fuel oil cracks remained heavily discounted to Crude Oil during April & May of 2014 due to huge western arbitrage volume coming to Singapore and weaker bunker demand. Decline in crude oil prices encouraged marine fuel demand and lesser western arbitrage volume coming into Asia leading to improvement on Fuel oil cracks in Q2 and showed a stronger upward trend after November 2014, after the sharp plunge in crude oil prices with OPEC deciding not to cut crude oil production. End of the year 2014-15, saw the continued upward trajectory of Fuel oil cracks due to tighter supplies and lower crude prices.
HPCL posted GRM of US$ 2.04/bbl for Q1 of 2014-15. For period April - September 2014, the GRM was maintained at US $ 2.09/bbl by minimizing inventory losses through innovative sourcing practice of delivered month pricing.Q3 witnessed steep fall in crude and product prices resulting in GRM of US $ 1.04/bbl for the period April - December 2014.In Q4, the margins improved and we closed the financial year 2014-15 with an average GRM of US$ 2.84/bbl.
CRUDE OIL IMPORTS
HPCL uplifted 4.85 MMT of indigenous low sulphur crude oil (Mumbai High & Cambay Basin grade) in 2014-15. The increased allocation of Mumbai High crude improved HPCL refinery margins during 2014-15.
HPCL imported 11.30 MMT of crude oil in 2014-15. Lower imports were mainly due to higher upliftment of indigenous crude. The import requirement of 11.30 MMT was met mainly through term imports and spot purchases. Total high sulphur crude oil procurement of 8.84 MMT was done through term contracts from the Gulf region. Main suppliers included Saudi Arabia, United Arab Emirates and Iraq. Total imported low sulphur crude oil procurement amounted to 2.46 MMT, which was sourced through term and spot purchases.
The Free on Board (FOB) cost of imported crude oil amounted to US$ 6917 million (Rs. 42,231 crore) in 2014-15 as compared to US$ 9,475 million (Rs. 57,556 crore) in 2013-14. The average cost of crude oil imported in 2014-15 stood at US$ 82.75 per barrel as compared to US$ 106.79 per barrel in 2013-14 on account of lower crude oil prices. The average exchange rate was Rs. 61.05/ US$ as compared to Rs. 60.75/ US$ in 2013-14.
During 2014-15, when crude oil prices were falling very steeply, HPCL adopted an innovative approach for sourcing crude oil from spot market by procuring it on delivered month price basis thereby minimizing the impact of inventory losses.
The import of 11.30 MMT crude oil was through ocean transportation from Arabian Gulf, West Africa and Far East. All the term crude was transported by Shipping Corporation of India (SCI) under Contact of Affreightment (COA) with HPCL. For spot purchases of crude, vessels were chartered directly by HPCL. During 2014-15, HPCL chartered 56 vessels on voyage and time charter for LPG, LOBS, Crude, Clean Petroleum Product, Dirty Petroleum Product and Bulk Bitumen at competitive freight / charter hire through global enquiries. SCI also carried out coastal movement of 1.72 MMT indigenous crude for HPCL.
During 2014-15, crude shipping freight markets have been higher than the historical as per Baltic Dirty Tanker Index (BDTI) mainly due to increased demand , low crude prices and use of vessels for floating storages. Delays in loading of Basrah crude were observed from Khor-Al-Amaya terminal mainly on account of slow loading rate, bad weather condition and port congestion and from Basrah oil terminal on account of heavy port congestions.
To reduce overall crude procurement costs, HPCL continued chartering of Very Large Crude Carriers (VLCCs) for Low sulphur spot crude cargoes. During FY 2014-15, VLCC unloading in refinery tanks at Visakh was a challenge due to limited tankage availability. Commissioning of ISPRL with additional storage capacity would enable HPCL to optimize crude procurement and maximize freight benefit.
PHYSICAL PERFORMANCE & INITIATIVES
During the year 2014-15, HPCL's refineries have maximized crude processing which enabled them to achieve a combined refining throughput of 16.18 MMT with a capacity utilization of 109% in spite of taking planned shutdowns. The refineries also achieved a highest ever combined distillate yield of 77.5% by improving yields of value added products.
The year 2014-15 marked a milestone in terms of compliance to auto fuel specifications for Euro IV High Speed Diesel (HSD) at both the refineries with the commissioning and sustained operation of Diesel Hydro Treater (DHT) units. The addition of the DHT units increased the complexity of the refineries and along with robust crude mix and operational strategy contributed to the highest ever production of high valued light and middle distillates. Production of Transportation fuels of Motor Spirit (MS) and High Speed Diesel (HSD) have seen an imbrssive growth from the brvious year recording an all-time high production of 6 million tonnes of HSD and 2.7 million tonnes of MS. Focus on diversification of products to meet customer needs has led to introduction of VG-40 grade bitumen at both refineries. Additionally, Mumbai refinery is now producing three different grades of naphtha to cater to customer needs.
During the year, Mumbai refinery has recorded the best ever production of HSD (2512 TMT) and Spindle Oil (Group II - 9 TMT, 90 N - 6.4 TMT) through effective utilization of assets. By blending reformate sourced from domestic imports, Visakh Refinery was able to enhance production of Motor Spirit (MS), and has recorded the best ever production of MS (1451 TMT), HSD (3544 TMT) and LPG (429 TMT).
The newly commissioned Fluidised Catalytic Convertor Unit (FCCU-2) of Mumbai Refinery has the capability to process feed stocks ranging from very light feed of 0.27wt% Continuous Catalytic Regeneration (CCR) to 4.2wt% CCR because of limited quantity of low sulphur residue available. During 2014-15, 60 TMT of Low Sulphur Heavy Stock (LSHS) which is a low value heavy stream was processed in FCCU-2 for producing value added products like MS, HSD and LPG resulting in an estimated saving of Rs. 30 crore.
Both the refineries have undertaken measures towards reduction of emissions on a continual basis ensuring environment protection. Initiatives to reduce Suspended Particulate Matter (SPM) and Sulphur emissions were undertaken by refineries through installation of Flue Gas Desulphurization (FGD) facility for treating Fluidized Catalyst Cracker (FCC) off-gases. All the FCC units are provided with flue gas desulphurization units, which provided both the refineries to have flexibility to enhance low value High Sulphur crude processing as well.
The energy conservation efforts have resulted in Mumbai refinery achieving Specific Energy Consumption of 79.7 MBTU/ BBL/NRGF (Million British thermal units / Barrel / Nelson's refining gross factor) against MoU Excellent target of 82.0 Similarly, Visakh refinery has achieved the best ever Specific Energy Consumption of 82.7 MBTU/BBL/NRGF against MoU Excellent target of 84.0. The energy conservation measures undertaken by both refineries during the year 2014-15 have resulted in a savings of 18,832 SRFT/year (Standard Refinery Fuel Tonnage per year).
Operations at Visakh Refinery were impacted due to cyclone HUDHUD that hit east coast during October 2014 and as a brcautionary measure refinery units were shut down. This has affected refinery crude throughput and production of petroleum products. All efforts were undertaken to restore normalcy and bring back the refinery to regular operations in shortest possible time. Despite this setback, HPCL ensured that there was no shortfall of petroleum products during the recovery time.
ENHANCEMENT OF REFINERY CAPACITY
In order to comply with the future fuel emission requirements of BS V/VI, HPCL is planning to upgrade and enhance the refining capacity of Visakh refinery from existing 8.3 MMTPA to 15 MMTPA under "Visakh Refinery Modernization Project" (VRMP). The expansion project includes state of the art processing facilities and Bottom up gradation units for increasing the production of value added products. Mumbai refinery expansion is also planned from 6.5 MMTPA to 9.5 MMTPA by utilising the acquired adjacent Calico land. Public Hearing as a part of Environmental clearance has been conducted successfully for the Mumbai Refinery Expansion Project (MREP).
INTEGRATED MARGIN MANAGEMENT
Conventionally, downstream companies have followed 'silo-based' margin management, where respective departments focus on managing processes within their realm. The downstream value chain in HPCL was managed by respective Business Units which were focused on SBU-specific metrics and performance management systems to drive efficiency and profitability of the respective SBUs. To realize this latent value, a single empowered group called Integrated Margin Management (IMM) was created with ultimate objective for maximizing Net Corporate Realization (NCR) across the crude to customer value chain.
Key cross-functional processes viz., Annual Planning, Monthly Planning and Retro-Analysis (Back-casting) were identified as the processes to be driven by IMM Group..
The IMM approach has helped in improving the cross-functional decision making across the organization. It has made the supply chain planning more streamlined with tight control on margins. All business units are now aligned to common objective of IMM for maximizing corporate realization. With segregation of planning the business units are now focused more on improving the physical operating metrics.
HPCL continued its excellent marketing performance amidst rapidly changing market landscape with consistent thrust on competitive marketing strategies, optimal resource utilization, cost optimisation and innovative sales practices. The Corporation has registered a total product sales (including exports) of 31.95 million metric tonnes during 2014-15 vis-avis sales of 30.96 MMT during the brceding year. HPCL recorded a growth of 2.3% in domestic marketing sales vis-a-vis public sector Oil Marketing Company's (OMCs) growth of 2.2%. This excellent marketing performance has helped HPCL achieve a market share gain of 0.02% amongst PSU OMCs and exceed MoU targets. The individual performances of the Marketing Division SBUs are detailed in the sections below:
Retail Strategic Business Unit (SBU) continues to occupy prime position as it accounts for almost 70% of HPCL's total market sales. The SBU's core philosophy of strategic network expansion and Service delivery process improvement continued to be the key thrust areas during 2014-15. Retail SBU achieved another stupendous performance this year too with a total retail sales volume of 21.4 MMT and in Total Motor Fuels (TMF) segment recorded a market share gain of 0.05% (in PSU category) for the 11th consecutive year. Despite stiff market challenges due to dismantling of the dual pricing in High Speed Diesel (HSD), Retail SBU achieved a market share gain of 0.04% in HSD sales.
During 2014-15, 380 new retail outlets were commissioned taking the total number to 13233 retail outlets and revived operations at 167 closed retail outlets which are expected to contribute incremental sales of 150 thousand kilo litres (TKL) in 2015-16. During the year, Retail SBU carried out modernization at a record 1200 retail outlets with an outlay of Rs. 234 crore, completed electrical safety audit at 4106 retail outlets and provided Retail Automation at 200 retail outlets taking the total number to 2309 automated retail outlets.
To ensure outstanding customer and vehicle care, HPCL has about 1291 Club HP outlets and during 2014-15, 108 retail outlets were upgraded from Club HP outlets to "Club HP Star outlets "(brmier category outlets). Over 15000 dealer men were covered through various training programs focusing on current business imperatives and behavioural changes for delivering the Club HP promise. Mass media along with outdoor campaigns were effectively utilised to communicate the brand promise under the theme Club HP - "Achcha Lagta Hai". HPCL sells the highest quantity of Branded Fuels in the country. During 2014-15, the sales of Power (Branded petrol) were commenced at 1365 Retail Outlets taking the total number of outlets selling Power to 1463 and registering a sales of 49 TKL of Power during the year.
HPCL has built a profitable Non-Fuel business (Allied Retail Business - ARB) with a wide range of services and facilities for the customers including ATM facility, take away food counters, "C" Stores, vehicle accessories etc. at retail outlets through tie-ups with leading Banks, Food Brands & OEMs. During 2014-15, commissioned 103 new ATMs taking the total number to over 1600 ATMs at HPCL retail outlets. The ARB income realized was Rs. 68.4 crore with a growth of about 23% over the brvious year. ARB continues to be a focus area for SBU as apart from enhancing the customer experience at retail outlets same also contributes significantly to non-fuel revenues.
Retail SBU has undertaken various customer centric initiatives during the year. Drive Track Plus, a flagship product under the Card based Loyalty Program of Retail SBU, is accepted at 5012 retail outlets and has built up a large customer base. It offers a combination of control, convenience, security and attractive rewards. This innovative payment device is designed for efficient management of fleet, through greater control over fuel consumption and operating costs. During 2014-15 Over the Counter (OTC) cards were launched under the branding of "My HPCL card" for single vehicle customers and Tatkal cards were launched for instant carding of customers. "HP Account Card" was launched for customers taking fuel from COMCO (Company Owned and Maintained by Company Officer) outlets and T&E (Training & Experimentation) stations and "Instafuel Card" was launched for corporate customers.
Good Fuel Promise, a Quality Assurance initiative has been given thrust through various initiatives. Check and Fill campaigns were regularly conducted during 2014-15 to invite customers to check the quality and quantity before fuelling their vehicles. Surveillance Audit of Club HP Outlets was conducted on regular basis through a 3rd party International Agency.
Retail SBU continued to focus on strategic initiatives to have competitive advantage. During 2014-15, Outlet Diagnostics and Monitoring Tool (ODMT) activity was completed at 1200 outlets taking the total number to 2621 ODMT enabled outlets. Standard Operating Practices (SOPs) enablement was completed at 545 retail outlets taking the total number to 5653 SOP enabled outlets and 3rd party audit was completed at 3250 SOP outlets.
After being Pioneers in technology enabled initiatives like Retail Automation and NANO (No Automation No Operation), HPCL has been innovating to find new ways to enhance efficiencies in business processes and connect with dealer channel and customers by leveraging technology.
HPCL has taken 'Customer Connect' in petro-retailing to the Next Level by introducing a Mobile Application for customers, particularly since majority of consumers of petro-products in retail segments also use mobile as a regular means of communication. Mobile Application is also seen as an effective mode to connect with technology friendly customers, particularly the one's moving up the value chain like Gen Next and others. It has features like Retail outlet locator, Lube oil recommendation chart, Insurance and PUC Tracker etc. We plan to introduce several value-added services through this App in the near future.
HPCL has further leveraged technology by incorporating IT enabled initiatives like online e-Request For Disposal (e-RFD) for disposal of scrap, Pilot launch of Short Messaging Service (SMS) feature through retail automation system, scanning of 11600 lease agreements & capturing under e-repository of property documents under "Project Sangraha" and effective usage of Network Planning (NP) tool to validate potential at locations were rolled out during 2014-15. Other initiatives taken during the year include introduction of attractive loan policy for dealers to install Solar Power systems at retail outlets and revival of Vapour Recovery System at 418 retail Outlets.
Retail SBU Tied-up with SBI for providing working capital finance at attractive rates to over 540 retail outlet dealers under the e-Dealer Finance Scheme (e-DFS) scheme.
Under "Swachh Bharat" campaign, 100% of the toilets at retail outlets were inspected during the year and 96% of these toilets were found in clean condition. A total 171 new toilets were constructed at retail outlets where the facility was not brviously available.
"HP GAS", the HPCL brand of LPG, lights the kitchen in millions of Indian homes. During 2014-15 HPCL has achieved highest ever LPG sales volume of 4.7 MMT and registered a growth of 11% against PSU Industry growth of 10.6 % and gained a market share of 0.10%. LPG SBU increased its Leadership position in the highly competitive Non Domestic (ND) segment and achieved over 50% market share in ND Bulk for the first time.
During 2014-15, HP GAS has released 41.9 lakh new connections (highest in the Industry) and achieved a customer base of over 47.1 million domestic LPG consumers catered through a network of over 3961 LPG distributors as of March 2015. LPG SBU also commissioned highest number of LPG distributorships (159 regular and 366 RGGLV) during the year.
HPCL maintained leadership all throughout the PAHAL (Direct Benefit Transfer for LPG - DBTL) drive and became first in the Industry to achieve 80% Cash Transfer Compliant (CTC) across the country. An amount of Rs. 2,287 crores was transferred under PAHAL during the year with lowest failure rate of 0.78%.
To aid the LPG customers in selecting the distributor of their choice, HPCL launched "Distributor Portability" option in the customer portal. Inter-company portability was initially commenced in 24 cities of 14 states and was further extended to entire country. A unified Transparency and consumer portal was developed and implemented, where customers can book cylinder, track booking and delivery dates, choose for portability, check Aadhaar linking status, monitor subsidy transfer to their bank account, request for mechanic service and surrender connection. Provision for Registration for New connection/ DBC is also provided on the same platform.
As most of the accidents in domestic LPG installations occur due to lack of awareness on safety norms, special drive on safety clinics was carried out across the country. A total number of 12,004 safety clinics were conducted by the distributors and officers of the Corporation covering 8.48 lakh customers.
On the operations front significant achievement during 2014-15 has been the highest production of 4.28 million metric tonnes (MMT) at 46 LPG Bottling Plants with a record production rate of 1560 cylinders per hour. In other notable achievements, 15 LPG Plants achieved ISRS Certification and HP GAS was the first to reach Kashmir Valley within a week of normalization of floods in Jammu & Kashmir.
A new LPG plant was commissioned near Bangalore with the World's largest 72 head flex speed carousel which is the first SIL Certified Plant in the Industry. Commissioned facility to connect Jetty no 12 to the existing Mangalore LPG Import Facility (MLIF) at Mangalore to receive Very Large Gas Carriers (VLGC) by having India's largest LPG Marine unloading arms. The first VLGC at MLIF was unloaded on 15th August 2014. A Mounded storage facility with 3x650 MT and 8-bay Tank-Truck (TT) Gantry & New LPG Pump house was commissioned at Hubli LPG plant meeting all requirements of OISD-144. Completed largest mound of 6 x1400 MT storage at MLIF, Mangalore. Mahul - Uran LPG Pipeline was commissioned in December 2014. Commissioned Pump Control Valve (PCV) at Visakh and commenced simultaneous pumping operation to GAIL and new LPG plant from Visakh LPG Import Facility (VLIF), thus enhancing the evacuation in GAIL pipeline by approximately 15%. Pampore LPG Plant was revamped and brought back into operation post floods in less than 2 months. LPG SBU has also signed an MOU with M/s Aegis for setting up a LPG Import facility in Haldia.
Various new IT initiatives were launched by LPG SBU this year which include development of Revised Distributor evaluation tool, Aadhaar based inter-OMC De-duplication of Consumer data, development of Google Map Application to calculate RTKM for transport payment, expansion of Inter-company Distributor portability to 488 more districts covering 32 States/ UTs, Transparency and consumer portal enhancements and unification, Installation of Carousel Monitoring System, development of a portal-based Reporting system to facilitate instant access to Q & Q parameters at the LPG Bottling Plants, Implementation of e-Samaharan : a seamless integrated process between the distributor, Distributor Consumer Management System and ERP system resulting in receipt of fund instantly.
In keeping with the Corporation policy of highest safety standards Live Fire Training was conducted for employees, security staff and contract labour during the year.
Direct Sales business unit has two divisions viz. Lubes & Industrial & Consumer ( I&C ). Lubes business line caters to Lubricant and Greases requirement of industrial customers in both private and government sectors viz. power plants, chemical units, fertilizer companies and railways, state transport units, army etc. Lubes business line also manages lube sales through network of Lube Distributors catering to bazaar market and Lube CFAs catering to SME segments. I&C business line caters to bulk fuels, bitumen & specialties supplies to industrial customers in both private and government sectors as mentioned above. This unit is also involved in exports of bulk fuels and finished petroleum products.
DIRECT SALES - LUBES
India is estimated to be the third largest lube market in the world after US and China, with share of 7% approx. of the total world's sales. During the year, the lube market size in India remained steady at approx. 2800 TMT, including Transformer and White Oils.
The Lubes business line recorded excellent sales during the year, resulting from aggressive business strategy adopted for both segments viz. Consumer Lubes and Retail Lubes.
During the year 2014-15, HPCL has recorded total Lube Sales of 477.9 TMT, thereby retaining the No 1 Lube marketer position in the country for the consecutive second year. Value added lubes also recorded excellent volume of 253.6 TMT with 16.4% growth over brvious year with all channels viz. Distributor network, CFA network and Retail dealer network achieving highest ever volumes at 44 TMT (growth 10.2%), 78 TMT (growth 0.6%) and 45.7 TMT (growth: 4.0%) respectively.
HPCL is the largest producer of Base Oils in the country with capability of producing Group I and Group II / III Base Oils. The strength of own Base Oil production facility gives a great advantage to HPCL in terms of flexibility in manufacture of wide range of products.
The SBU retained its focus on Original Equipment Manufacturer (OEM) sector during the year, with consolidation of business at important OEMs including JCB India, Royal Enfield and Bajaj Auto along with renewed partnerships with reputed OEMs like Komatsu, San Engineering & SKF. A cornerstone for OEM business development was the close interactions between HPCL and R&D teams of various OEMs enabling MNC OEMs acknowledging HPCL's strengths and capabilities and opening the way for more partnerships in the coming years.
HPCL also rolled out and completed "Project LubTrek" at Lube Distributors across the country, developed on Tally platform with ERP interface. This is a Lube distributor billing software which is going to provide unified access of lube sales in bazaar market to HPCL for rolling out better customer centric schemes.
In order to meet the ever-evolving market requirements, Direct Sales (Lubes) SBU, expanded its lube product range during the year with launch of HP Racer 4 Skutex 10W 40 which is targeted at modern 4-stroke scooters. Special focus also was given to improve market share in hydraulic oil segments by promoting newly launched 26 Ltr pack for Enklo 68. New attractive coloured PET bottle introduced for Racer 4 in 1 Ltr pack, which is first of its kind pack in Oil industry. This pack has been awarded brstigious Golden Peacock Innovative product award 2015.
The R&D wing of the SBU continued its meticulous activities during the year, with development of new products like Moly based grease, chain compound etc. for various customers. One of the major achievements was multiple formulations approval from Defence for engine oils / gear oils with significant 8000 KL annual potential. The group also facilitated many approvals viz. Transformer oil with RDSO and BHEL, Gear oils with Flender Siemens MD Germany, Turbinol with Alstom Germany and many more. The R&D team brsented papers at international and national seminars and conferences which were well received with positive peer reviews. Collaborative completed projects include engine test studies on "Nano catalyzed diesel fuels" project with NIT, Calicut.
DIRECT SALES - INDUSTRIAL & CONSUMER (I&C)
I&C business-line, which handles institutional sales of fuels, bitumen, naphtha and other bulk products consumed by industries, mining sector, construction, power plants, shipping, etc. achieved a volume of 3.98 MMT with sales growth of 2.8% during 2014-15.
Industry growth leadership position was achieved in MS and HSD with MS sales of 9.8 TMT with a growth of 26.2% and HSD sales of 822.1 TMT with a growth of 34.1%. I&C business line gained Market share in all major products, viz., HSD (0.35%), FO (1.41%), LSHS (0.85%) and Bitumen (0.04%). Focus on highly profitable marine bunker fuels sales resulted in excellent volume of 295.2 TMT with a growth of 17% over last year.
In an attempt to have closer business relationship with armed forces, HPCL commissioned 48 Kerb Side Pumps (KSPs) in J&K sector during 2014-15. HPCL also commissioned world's highest KSP at South Pullu at an altitude of 15300 feet on Leh-Khardunga road during the year.
Corporate tie ups with important I&C customer's viz. BGR Mining, Perkins, RIL, Madhucon, Techno Unique, Jindal group, Asian Paints etc. enabled major volume realization during 2014-15. New agreements include, MoU for one year with RIL for petrochemical grade naphtha supplies to RIL's Hazira and Dahej plants, with yearly sales potential of 240 TMT and Five years agreement with RIL for supply of Special Cut Naphtha (84 TMT p.a.) and LABFS-forward stream (360 TMT p.a.) to their Plant at Patalganga.
Commissioning of bitumen packaging plants, one near Mumbai refinery and two plants near Visakh refinery helped de-bottleneck refineries in evacuation of bitumen. New inland Packed Bitumen storage facilities at Bokaro, Bihta and Hubli, were commissioned during the year for evacuation of bitumen from refinery during slack monsoon season.
Aviation SBU, provides fuelling services to the aviation industry through its vast network of Aviation Service Fuel stations (ASFs) covering all the major airports in India. HP Aviation fuelling service meets and exceeds the stringent International regulations for handling Jet fuel. During 2014-15, Aviation SBU has achieved Sales volume of 506 TMT with growth of 13.5% against PSU industry growth of 0.2% resulting in a Market share gain of 1.1%.
Aviation SBU is now supplying Jet Fuel to all the eight scheduled domestic airlines of the country, by restarting refuelling services to Indigo and commencing supply to Vistara, Air Asia and Go Air during the year.
Aviation SBU has been the brferred Jet Fuel supplier to the international carrier like FedEx, British Airways, Air France - KLM, Singapore Airlines, Malaysian Airlines, Air Mauritius, Tiger Airways, China Eastern, China Airline, Saudi Arabian Airlines, Oman Air, Gulf Air, Srilankan Airlines and Iran Air among other esteemed airlines. During the year 2014-15, the SBU added some more valued airlines like Turkish Airlines, Air Arabia, Fly Dubai etc. to the existing portfolio.
Infrastructure additions viz Trivandrum and Jammu fixed facility and strategic decisions like outsourcing operations at Santacruz and Palam ASF, new business agreements and renewals with existing/new airlines, strategic commercial partners etc. and entering into hospitality agreements with oil majors have contributed to the growth. Customer base was sbrad by addition of new corporates under the General Aviation segment. Unique payment solution in collaboration with HDFC Bank was leveraged. This enabled the SBU to register a sale of more than 50% of the total Non-Schedule segment sales on the cobranded card. Training programs were conducted by the Aviation group to enhance/impart various skill set to its officers/workmen. For the first time training on Quality Control and Aviation Fuel handling was provided to senior IAF officers at HPCL facilities.IT based initiative viz. rolling out of 'HP Aviation Credit check' application and Launch of online portal for HSE Index was completed during 2014-15.
The existing supply chain management of Jet Fuel was reviewed and new options were explored in product sourcing and transportation thereby bringing efficiency and optimizing the costs.
HPCL is geared up to position itself in full gas value chain starting from LNG sourcing from International market, building of regasification terminals, laying of cross country gas pipelines and finally gas marketing to be a major gas player in India.
HPCL has signed a Joint Venture Agreement with M/s Shapoorji Pallonji Port Pvt Ltd with 50:50 partnership to build a Liquefied Natural Gas (LNG) Terminal of 5 Million Metric Tonne Per Annum (MMTPA) capacity at Chhara Port in Gir Somnath District of Gujarat. The terminal will be built with an investment of Rs. 5400 crore. Target year for commissioning the terminal is 2019. Commissioning of this terminal would facilitate the corporation to source LNG for HPCL refineries and to market gas for customers connected through gas pipelines
LNG Sourcing & Sales
HPCL is in active discussion with suppliers based in US, Qatar, Russia, Mozambique, Australia to source LNG for meeting the long term and mid-term requirements. HPCL had made arrangements for sourcing RLNG to meet captive requirement and marketing to downstream customers. HPCL commenced its maiden RLNG sales during 2014-15 with a volume of 10.87 million metric standard cubic meter (MMSCM). To map LNG demand of own Industrial customers, assessment has been carried out in the states of Andhra Pradesh, Telangana, Uttar Pradesh, Karnataka and Gujarat and also along the GIGL/GITL pipeline route. MoUs have been signed with Industrial customers covering power, fertilizer and steel sectors.
Gas Pipeline Infrastructure
HPCL has 11% stake in two joint venture companies viz. GSPL India Gasnet Limited (GIGL) and GSPL India Transco Limited (GITL) to lay approximately 4000 KM gas pipeline. Other promoters in the JVC are GSPL, IOCL and BPCL. . HPCL has acquired a right of transporting 1.5 MMTPA gas in initial years through these pipelines.
City Gas Distribution Network
Presently HPCL is operating 22 CNG Stations in Ahmedabad city. Cumulative sales for Ahmedabad CNG was 9.6 TMT during 2014-15 with a growth of 395% over historical. HPCL participated in CGD bidding invited by PNGRB under Round 4 for 5 cities. However, HPCL could not succeed as lowest bidder. In 5th round of bidding, consortium of HPCL and APGDC (Andhra Pradesh Gas Distribution Corporation) has emerged as the successful entity for building City Gas Distribution (CGD) Network in East Godavari and West Godavari District in Andhra Pradesh.
OPERATION & DISTRIBUTION
Operations & Distribution (O&D) is a key enabler of robust supply chain management to the Marketing SBUs. It provides unstinted support and innovative delivery logistical solutions resulting in enhanced customer satisfaction levels in both Retail and I&C businesses. HPCL has achieved a record market thruput of 44.38 MMT during 2014-15 which played a key role in increasing market share. Timely and adequate delivery through optimization of resources remained a focus area. Enhanced Safety processes at POL installations enabled uninterrupted product supplies & improved service levels.
The year 2014-15 witnessed successful commissioning of state-of-art supply location at Tikrikalan , Delhi having a total tankage of 35 TKL, enhancing the infrastructure capability in the North of India. Patna Depot (Bihta), Kadapa, New Bokaro Terminal & Salawas Terminal were successfully commissioned and tankages at Kolkata Terminal commissioned after revamping. HPCL Commissioned Additional Tankages of 23.5 TKL at Paradeep terminal making it the Gateway for feeding POL depots at Balasore, Cuttack, Tatanagar and Dhanbad. During the year the Tank Truck Loading capacity has been enhanced by about 34 Lakh KL/ Shift/ year by addition of 58 tank truck loading bays at Kadapa, Bokaro, Bareilly and Lucknow. HPCL and IOCL signed an agreement for Common User Terminal at Nagpur which will result in synergy between Oil Marketing Companies (OMC) and optimize Infrastructure cost.
Technology aided processes viz Online Logistics Assistant (OLA) has been redesigned to suit changing market needs and the same has been registered for patenting. In an innovative approach to curb pilferage and malpractices, O&D has developed customized Electro-Mechanical Locking system having both mechanical key as well as electronic password and has been registered for Patent. Auto Indenting Application was formally launched at Vadodara Depot, enabling a proper inventory management system. Auto Load building was successfully piloted at Secunderabad terminal, bringing transparency in Load Building and enhancing customer service.
The corporation places stress on environment protection and sustainability measures at oil installations and has taken steps for significant reduction in greenhouse gases (GHG) emissions at locations. A combrhensive energy & power quality audit was completed for 3 major terminals to recommend more efficient usage of energy. Kolkata Terminal became the first POL Terminal to obtain ISO 50001 certification on energy management. Strict monitoring of Specific energy & water consumption across locations achieved thru' sustained awareness building. Rain water harvesting at all major locations along with fresh water management has helped reduce water consumption significantly.
With a prime objective to achieve greater conversion efficiency and customer delight through timely delivery O&D SBU has been able to add value to the stakeholders and controlling Opex/Capex of the corporation. For achieving these objectives, de-bottlenecking through Process improvement using quick wins in man, machine & method related solutions and productivity enhancement techniques continued to be key area of O&D during the year. Project Utkrisht, the HR centric Change Management initiative achieved significant reduction of in-Process idle time and increase in productivity by 15% without any significant capex investments.
Capability building of employees remained a key thrust area for Operations & Distribution (O&D) groupOfficers and workmen were trained on Live Fire Simulation, Six Sigma, HSE and many more contemporary topics.
M B Lal Committee Recommendations Implementation
During the year 100% compliance to Ministry targets have been achieved. The corporation has invested Rs. 709 crore towards safety enhancement through implementation of MB Lal Committee Recommendation at its various depots / terminal. New Initiatives viz state of the art integrated terminal automation system has been provided at Depots & Terminal and as part of the MB Lal Committee Recommendations Implementation Project, instrumented safety systems are being provided at 53 locations. Knowledge Management Centre has been setup under the Projects & Pipeline SBU focusing on Standardization of specifications, Developing Engineering manuals, online library of technical standards and organizing technical trainings for project officers.
PIPELINES & PROJECTS
HPCL has laid special emphasis on acquiring high level of competency in managing the pipeline network effectively for maximizing revenue gains along with planning & development of a varied set of cross country product pipelines.
HPCL has a pipeline network of about 2500 kms. HPCL achieved remarkable successes on this front with a record combined pipeline thruput of 14.9 MMT during the financial year 2014-15. A significant achievement of the year was commissioning of two new pipelines (i) Awa - Salawas Pipeline (92 KM) during January 2015 much ahead of the target schedule of Nov 2015 (ii) Bahadurgarh-Tikrikalan Pipeline (14km), an extension of Cross Country Mundra-Delhi Pipeline for providing logistic support to the new green field Delhi Terminal.
New pipeline projects under progress include the Rewari-Kanpur Pipeline (442 KM), which is under advance stage of completion and. Mangalore -Hassan-Bangalore-Mysore LPG Pipeline (355 KM) which has achieved almost 80% completion as of Mar'15 and will give competitive edge in Logistics.
As a part of sustainability initiative, HPCL has installed solar power at SV Station in Jodhpur and Pali in Rajasthan to cater to both critical and non-critical loads at recently commissioned Awa Salawas Pipeline. Two Solar Voltaic (SV) stations have been installed with 7.2 Kw power panel each connected to incomer power supply.
F. QUALITY ASSURANCE
In line with the directives of MOP&NG, HPCL has a dedicated Quality Assurance Cell, having officers posted at all the seven Zones and its functioning is independent of Refining and Marketing functions and directly reports to Human Resources Department. Quality Assurance (QA) Cell carries out surprise inspections covering Retail Outlets, SKO agencies, LPG Distributors, Depot-Terminals in compliance with the revised Marketing Discipline Guidelines (MDG) & HQO directives. The QA Cell acts as an important nodal agency for ensuring supply of quality and quantity of products from all supply sources, storage points, distributors and outlets to customers. QA Cell has been delivering consistent and best in industry performance during last 4 years. During 2014-15, QA Cell performance has again been the best among the Industry both in terms of absolute number of inspections carried out and also by each of the quality assurance parameters. QA Cell has carried out inspections of 3075 Retail Outlets, 139 SKO Agencies, 437 LPG Distributors, 15 O&D locations and 2 LPG plants during 2014-15. Establishment of such robust systems has enabled HPCL set high customer service benchmarks both for supply locations and channel partners and helped in strengthening key focus areas in line with the Vision of the company to provide high quality products and innovative services.
Quality Assurance remained a focal point in HPCL with the Quality Control (QC) wing under Direct Sales SBU ensuring continuous vigil on input materials and finished product quality by monitoring at every stage. One of the major achievements was obtaining approval from Directorate General of Aeronautical Quality Assurance (DGAQA) for Tikrikalan QC Laboratory. This is the first HPCL QC Lab which has been granted approval from this brstigious Aviation Regulatory body. BIS Certification of Mazagaon QC Lab was also obtained for Testing of Transformer Oils. To enhance day-to-day effectiveness at field level Regular Quality Control audits / inspections of Petroleum Products installations have been carried out. During the year, the new QC Lab at Jodhpur was made operational for testing HSD initially.
G. HEALTH, SAFETY & ENVIRONMENT
HPCL continues to leverage workplace Health, Safety & Environment (HSE), including Sustainable Development (SD) as an ingredient of its business policies and strategic plans. Emphasis is given to make HSE an integral part of each and every business activity and build a HSE culture amongst internal and external stakeholders.
HPCL focuses on achieving excellence in occupational and personal health of employees at all manufacturing sites as well as at its offices. With this objective, employee 'Wellness' program has been undertaken to improve and maintain employee health. HPCL has set up state-of-the-art Occupational Health Centres (OHC) at refinery locations. Besides emergency medical services, the OHCs also offer brventive & curative health services to its employees. These OHCs are equipped with state-of-the-art diagnostic and therapeutic equipment and are manned by qualified occupational health specialists. HPCL carries out extensive health, education and awareness sessions and diagnostic camps at all major locations. All HPCL employees undergo regular periodic medical examinations. The results are computerised and analysed to provide targeted interventions at the individual and group levels. The employees are also supported for hospitalisation by regular liaison and cashless admission facilities in pan-India hospitals.
HPCL is committed to provide a safe workplace to its employees and contractors and safety to the communities where it operates. During 2014-15, steps were taken to institutionalise Process Safety Management systems at Visakh refinery. HPCL believes that continuous learning and upgrading of systems and processes are indispensable for achieving best-in-industry status with respect to safety systems and culture. Recognizing that personnel competency is a key area to ensure safe and efficient operations, the focus at most of refinery sites and locations during the year was to enhance safety culture, contractor safety management, risk assessment and training. Surveillance audits and benchmarking were undertaken to strengthen HSE governance and compliance systems across all businesses and functions.
HPCL is committed to ensure environmentally sustainable operations to achieve highest standards of environmental excellence. The manufacturing divisions and marketing locations have implemented internationally accepted 'Environmental Management Systems' based onISO-14001 Standards. HPCL, prioritises maintenance and performance of the assets with continual improvement programs. HPCL has set up the latest state of art pollution control facilities viz. effluent treatment plants, air emission control facilities and waste disposal facilities that are maintained and operated in line with the industrial best practices. Thus, HPCL's concerted efforts have resulted into compliance of all applicable environmental regulations.
HPCL, follows a combrhensive methodology, to evaluate its 'Environmental Impact Assessment' (EIA) studies, for each new and expansion projects. Towards, resource conservation efforts, both refining as well as marketing SBUs have undertaken 'Rain Water Harvesting' and 'Solar Energy' initiatives and have engaged into maximum possible use of water/ reuse of treated waste water and reduction of electricity consumption as well.
During 2014-15, HPCL published its 3rd Sustainability report with Application Level A+ of GRI G3.1 Guidelines, duly assured on AA1000 Sustainability assurance standards by an external agency. In the year, HPCL undertook Sustainable Development projects of Solar Panel Installations, Green Landscape, and Installation of Energy Monitoring Systems at various locations. A 33 KWp Grid-Interactive Solar PV Captive Plant was installed at a residential colony of HPCL in Mumbai. Total wind power generation from HPCL wind farms was 544 Lakh KWH. HPCL developed the Integrated Green belt and drip irrigation facilities at Visakh New White Oil Terminal. A pilot project for waste water recycling and treatment was undertaken using Plants with bioremediation capacity at two locations, with a cumulative capacity of 9 Kilo litres per day. In addition to already existing rainwater harvesting installations at 40 POL and 30 LPG locations, Rainwater harvesting project was executed at a residential colony of HPCL in Mumbai. 18 Pipeline locations are having solar powered installations. Around the year numerous workshops and training programs with internal and external stakeholders were conducted on business sustainability. During the current year 350 stakeholders including employees have been consulted through a structured process resulting in interaction with more than 1400 stakeholders and employees in the past three years.
HPCL has been at the forefront of sustainability and is a a responsible corporate citizen. During 2014-15, HPCL undertook rating assessment based on Sustainability parameters at two locations, (1) A Lube manufacturing Plant and (2) An LPG bottling Plant. This was done by GreenCo under the aegis of Confederation of Indian Industries (CII). HPCL holds the distinguished achievement of becoming 1st PSU and 1st company in the oil & gas sector in the country to have undergone rating assessment in sustainability and to have been awarded with GreenCo Silver Rating for Silvassa location. Going forward, HPCL shall remain proactively engaged in business sustainability by building a climate change resilience strategy, thoroughly complemented with initiatives at ground level.
H. EXPLORATION & PRODUCTION (E & P)
HPCL has mandated Prize Petroleum Company Ltd (PPCL) to participate in exploration and production of hydrocarbons. During 2011-12, PPCL became wholly owned subsidiary and upstream arm of HPCL. Further details on PPCL have been elaborated under the section "Joint Ventures & Subsidiaries".
I. RENEWABLE ENERGY
HPCL has installed 50.5 MW windmills in Rajasthan and Maharashtra and another 50 MW is planned to be added for which bids have been received and are under technical evaluation. During the year 2014-15, HPCL achieved Wind energy Generation of 546 Lakh kWh and earned a revenue of Rs. 22.2 crore.
To enhance the Renewable portfolio and increase its footprints in Renewables, HPCL is also focussed on Solar Power projects and has undertaken a project to meet combined solar purchase obligation of POL/ LPG locations based in the state of Tamil Nadu and get Renewable Energy Certificate (REC).
J. INFORMATION SYSTEMS
Information systems are being used to support all business processes of the Corporation. All business transactions are carried out in Enterprise Resource Planning (ERP) system & various applications bolt-on to the ERP system. Various other applications have been developed and are being used for providing decision support to the Management.
To enhance the competencies of employees to manage Information systems, a combrhensive training plan has been put in place. Over 2000 man days of training have been provided during the last year to the end users of the systems covering the functional and operational areas of the system.
A multitude of IT enabled solutions have been developed & implemented to help managers do their job effectively. ERP platform has made possible the development of real time interface to the IT enabled systems of HPCL's various business partners. Various new initiatives have been implemented and sustained efforts are underway to bring more of these to reality. In line with the "Digital India" initiative of the Government of India (GoI), new initiatives have been undertaken to help consumers transact easily and bring in better visibility of information to all stakeholders
DBTL (PAHAL) and related applications for LPG
HPCL led the industry in developing the applications to facilitate the smooth roll out of the PAHAL initiative of Government of India (GoI) under very tight and strict timelines. A number of applications have been developed and implemented for the smooth and timely roll out of this major initiative.
My LPG Portal
My LPG Portal was implemented in coordination with the industry. The effort for implementation of the site in local languages was led by HPCL, on behalf of the industry. Documenting the requirements, identifying the challenges, identifying a feasible solution, doing a Proof of Concept and getting the industry consensus on the solution and its implementation was achieved within a very tight timeframe. The site has been made available in 12 regional languages. This is the only website of any government or PSU entity which is available in 12 regional languages of India.
Development of the process for e-SV generation and e-collection process is currently underway. The process for e-collection has been developed and tested with the e-Gateway solution of banks. This solution has been developed in a generic manner so that the same can be plugged into any application which would require collection of monies from external stake holders. The payers have the option of paying through their net banking, credit/debit cards or account-to-account transfers.
In house e-procurement system has been rolled out across the Corporation and is being used by various purchasing authorities in all SBUs and functions. The targets of e-procurement as laid down by Central Vigilance Commission (CVC) and MoP&NG have been achieved during the year. It ensures Data security with complete audit trail as well as conformance to CVC guidelines, complete integration with ERP system and results into improved cycle time from Purchase Requisition (PR) to Purchase Order (PO). HPCL is the only company among the major PSUs to have its own e-procurement platform.
As a pioneering initiative in the oil industry e-transportation agreement has been introduced which provides for generation/ acceptance of electronic LOA, digital signing of Electronic Agreements with auto incorporation of transportation rates and Truck details from an e-procurement platform. Physical Stamp paper has been replaced with digital stamp duty by paying consolidated stamp duty and incorporating reference in each agreement. This initiative brings transparency, easy storage and retrieval of documents, less paper work and proper controls.
Specific thrust has been given to Business Intelligence (BI) application to drive data literacy and support decision making process. The available analytics are ranging from volumes to value, revenue to cost, etc. Special dashboards have been developed for the Top Management to provide critical business insights. The analytics provide past trends as well as future projections covering lag as well as lead indicators.. BI has significantly begun to usher in a culture of data supported fact-based decision making in HPCL.
Portal Application for OGCF-2015 and Swachh Bharat monitoring
To capture the awareness campaigns carried out at POL locations and field offices, online portals 'OGCF -2015' and 'Swachh Bharat Abhiyan' were developed in quick time. The portals captured status of different activities at various levels with facility for uploading photographs and provided a mechanism to quickly capture developments for compilation and reporting.
Pricing toolkit for deregulated bulk products was introduced during 2014-15. To be in tune with the contemporary mobile platform, pricing tool kit also provides a mobile application of pricing information for Bulk products. Specifically for retail business, a mobile application has been developed through which the dealers can obtain the Retail Selling Price through sms on demand.
Integrated disbursement management system
HPCL is using a centralized payment system through work flow for recording receipts, by building a library of the purchase orders and integrating image processing software to ERP system. The system captures the images of the vendor invoices at the source locations and enables quick payments at the disbursement locations. As the documents do not have to physically flow from source locations to the disbursement locations, thus the system ensures vendor satisfaction through speedy handling of payments. The system helps to significantly reduce the payment cycle times and provides for visibility of all documents related to the payments including the vendor documents in the ERP system itself.
Communication Infrastructure & Security
HPCL has implemented 802.1 X IEEE standard access controls, which has given the capability to permit or deny network connectivity. After deployment of this mechanism every employee has to authenticate by using his Active Directory Secure (ADS) username and password to get network access into HPCL network. 802.1X authentication has enabled HPCL to secure its corporate network from unauthorized access.
Security of information systems continues to be a key consideration and HPCL has taken a number of steps to address this critical area. Security Operations Centre continuously monitors systems for any security related incidents. Identity management system has been implemented.
The IS Center at Hyderabad has received ISO 27001:2913 certification for information security management systems (ISMS). This is the first instance of any PSU in the Oil sector receiving the Certification for the Data Centre.
K. HUMAN RESOURCES
The constantly evolving business landscape necessitates perpetual transformation of Human Resource (HR) priorities and approaches so as to be aligned to the short term and long term objectives of the corporation under TARGET SHIKHAR and UDAAN-2030. HPCL HR has promptly responded to the needs of business requirements through novel innovative HR Initiatives.
"Employee Connect" has been the major theme of HR during 2014-15 with the objective to enhance Employee engagement and reach out to the families of the employees for building a stronger bond within employees.
Excellence in performance has been a key to HPCL's philosophy of developing capability of workforce and talent management. A major development in this direction is introduction of a much more robust, objective and contemporary performance management process christened HP PACE.
The focus on enhanced engagement levels of the young talent and making the newer members to imbibe the strong values remains for the Corporation.
Project Akshaypath is a leadership development initiative, conceptualized and implemented in-house through a structured process of leadership development with an objective of robust succession planning. Under this initiative executive coaching is being provided to the participants focused on leadership development inputs on 'one on one' basis including feedback based on the various psychometric tools, 360 degree feedback on Emotional & Social competency inventory. The participants are required to engage with their teams on the basis of these inputs to leverage this understanding for effectiveness of the team functioning. Each participant has also taken up a project with focus on innovation in her/ his area.
Capability Building Department continually endeavours to create values by enhancing competencies to achieve the short term and long term strategic objectives. During the year, Capability Building Department focussed on strengthening the leadership pipeline, undertook initiatives to enhance HP FIRST Values. During the year, 31000 man days training was imparted to officers which translated into 5.86 man-days of training per Officer.
A full time M-Tech program in Chemical Engineering was designed in collaboration with IIT Bombay to develop technical expertise for Refinery Officers, while a one year part time program was designed in collaboration with NITIE to cater to the Project Management competency development. HPCL also partnered with various reputed Business Schools like TISS, IIMs, etc. for programs aligned to its business requirements and employees were encouraged to pursue learning through these programs.
A state of the art "e-learning centre" was established at HP's Management Development Institute (MDI) at Nigdi which helped trainee participants leverage the e-learning resources.
Certified Petroleum Manager Program
A Certified Petroleum Manager Program is being conducted to provide right mix of technical, functional, managerial and behavioural competencies and harness the full potential of young officers. During 2014-15, the program has been conducted for the first batch of officers and program for the second batch of officers is underway.
MBA (Oil & Gas)
Through University of Petroleum and Energy Studies, Dehradun, a MBA (Oil & Gas) Program was started for the officers who have completed Certified Petroleum Management Program. Module I and II of this MBA batch was organized during 2014-15.
A week long development program for employees promoted to clerical cadres from workmen category is organized to hone their skills and to ensure a smooth transition of their work profile. During 2014-15, 7 such programs covering 140 employees were organized.
Project Sankalp (Operation and Distribution)
Project Sankalp initiative is directed towards development of safety related technical and behavioral competency framework for non-management employees in O&D locations. During 2014-15, Phase III was rolled out and the analysis of the scores during reassessment showed an increase in safety co-efficient.
Ji Haan Samarth and Samvad (LPG SBU)
"Ji Haan Samarth" program has been designed to traverse the course of a day in the life of LPG Deliverymen and aims to equip them with the requisite skills, knowledge and attitude to perform job and to succeed in their various roles. "Samvad" program aims to sensitize the customer service cell staff of LPG Distributors on various types of customers and equip them with skills to handle grievances in an effective manner. The ultimate objective of both programs is to give HP GAS customers a unique and differentiated customer experience. During 2014-15, 8097 Delivery Men were trained through 251 Ji haan Samarth programs and 2714 Customer Service Cell Staff through 66 Samvad Programs.
Sada Aap Ke Liye (SAKL)SOP (Retail SBU)
Sada Aap ke Liye SOP is a training initiative for forecourt sales men(FSM) of retail outlets. A total of 3505 FSMs were trained during 2014-15. HR trainers for the initiative SAKL SOP have made 602 audits at retail outlets across India.
A Business Symposium on Innovation was organized during November 2014 which was the first of its kind in the industry. The intent of this two day symposium was to explore the world of innovation and share innovative practices. The symposium was structured in the form of keynote address, panel discussions and paper brsentations. Papers were invited on the themes of 'HR Practices for Promoting Innovation', 'Process Innovation', 'Service Innovation' and 'Product Innovation'. Rebrsentatives from over 30 Organizations including Reliance, McKinsey, Accenture, HDFC, ICICI, IOCL, AAI, LIC, SAIL, Thermax, Blue Star, Hinduja Group, etc. participated in the Symposium. HPCL is now poised to provide support to large number of organizations for promoting innovation.
TALENT SOURCING AND ACQUISITION Talent Sourcing
During the year, Talent Sourcing department took significant steps in harnessing technology to reduce lead time and bring about enhanced transparency in the recruitment processes. For the first time, Computer Based Test (CBT) was conducted successfully in two phases across 63 centres in 22 states.
'Samavesh' (Induction Program)
Newly recruited officers were inducted through specially designed program called 'Samavesh' which has been specially designed to culturally integrate the aspirations of officers with the Corporate Objectives. In this unique way of inducting new officers helps them to "Learn" better about the Organization, "Grow" as an individual and professional, and "Lead" on the path towards Organizational excellence. The Samavesh program has 5 phases and each phase has been designed with a specific purpose to help the Officer Trainees understand the Organization, Self, Jobs performed in the Organization, Competencies required to perform job better and their Role in achieving Organizational excellence.
Performance Appraisal System
Existing Performance Management process was revisited and it was envisaged to make the goal setting process more robust keeping in view the Strategic Objectives of each Business unit (BU). Towards bringing about objectivity in the appraisal process, "Relative Assessment" was introduced to enable fine grained distinctions regarding performances of various officers.
REWARDS & RECOGNITION
To promote 'Culture of Apbrciation' specific categories were introduced in the Outstanding Achievement Award during the year. 538 officers were nominated and 52 officers finally selected under the 'Best of Best' and the 'Best' Categories. Under the 'You have done Well' category 37 officers were recognised and under the 'Spot the Brilliance' Scheme 11 officers were felicitated. Special Commendation Awards were brsented to those Officers who showed unbrcedented mettle and unwavering commitment in sustaining the supplies during the Jammu Kashmir floods and the Hudhud cyclone in Vishakhapatnam.
IMPROVEMENT IN INDUSTRIAL HARMONY
HPCL maintained its thrust for maintaining industrial harmony which, it believes, is a br-requisite for sustainable growth. The focus was to further build on positive employee relations through increased communication, employee engagement initiatives and employee wellbeing. The Unions and workmen demonstrated their commitment to achieve organisational objectives through partnering in the various processes which resulted in increase in productivity, optimum deployment of human capital and commissioning of new Units/ rationalisation of Shifts across SBUs.
With the excellent cooperation from non-management employees and the Unions, various projects viz. Project Utkarsh in LPG, Project Utkrisht in O&D etc. has yielded substantial increase in Productivity.
Settlements were signed with various Unions in Mktg. Division, Mumbai Refinery and Visakh Refinery in the areas of Productivity Enhancement, Outsourcing/ Closure of Operations, Redeployment etc. which truly reflect high performance work culture in the Corporation.
Industrial Relations (IR) Council consisting of senior management from Business & HR and senior office bearers from each of the Unions operating in the Corporation, deliberated on various issues pertaining to future challenges of the Corporation and came out with meaningful suggestions. The then Working President of Hindustan Petroleum Karamchari Union, Mumbai was awarded with Shri Raja Kulkarni Samman for promoting industrial harmony in the Corporation on June 21, 2014. During the year, with an objective to enhance the leadership capabilities of Union Rebrsentatives, 2 programmes on Leadership Development were conducted.
A new training initiative titled "Prerna" was designed to develop awareness among Contract Workmen regarding various aspects of their functioning. 28 such programmes were conducted during 2014-15.
EMPLOYEE ENGAGEMENT INITIATIVES
Employee connect has been the theme of the year. In line with same several outdoor activities such as visits to heritage locations, science centres, movie screening, career guidance workshops for the employee's children etc. have been organized across locations.
It is a unique Youth engagement initiative at HPCL, aimed at holistic development of youth (below 35years) and sbrads across the length and breadth of the country towards ensuring the organizational excellence. First of its kind, it was conceived with the objective of developing youth into multi-faceted personalities keeping the 3Es in mind - energise, engage & enhance the youth. As a part of Yuvantage, "The Youth carnival" - the biggest ever youth meet was organized during Sept'14. More than 250 officers participated in the event.
Gyanjyoti is a two day training program for workmen to ensure 100% IT literacy. The train the trainer workshop has been conducted in January 2015 and February 2015 and the sessions for the stakeholders will commence from April 2015 onwards.
In order to ensure commitment to increase the safety quotient across all the LPG Plants, Project Shapath was rolled out in August 2014. Competency frameworks were developed and Technical Competency Test and Behavioural Competency Assessment was conducted across all LPG plants during November 2014.
PRODUCTIVITY ENHANCEMENT INITIATIVES
Project Utkarsh is a longitudinal and integrated initiative jointly designed by HR & LPG Strategic business unit. This initiative aims at bringing about significant productivity improvements by fostering collaboration, building ownership, imparting knowledge and skills to enable the employees especially workmen to achieve excellence in a consistent manner.
Swachh Bharat Abhiyan
Swachh Bharat Abhiyan is a national campaign by the Government of India which aims to accomplish the vison of 'Clean India' by 2nd October 2019, the 150th birthday of Mahatma Gandhi HPCL, as part of Swachh Bharat Abhiyan has taken various initiatives under CSR ensuring that clean environment is created and maintained in all its business units as well as in community at large.
The following are the major initiatives taken under Swachh Bharat Abhiyan at HPCL:
• Multiple activities including cleanliness drive, walkathon, school functions, and community based activities were conducted by employees of the corporation in collaboration with various agencies
• Annual and Five year Plan developed for activities under Swachh Bharat Abhiyan.
• Construction of toilets in schools in states of Assam, Andhra Pradesh, Bihar, Chhattisgarh and Odisha have been initiated and are to be completed by June 30, 2015.
• Shram Daan initiatives have been taken by HPCL locations which involved cleaning of the unit brmises, cleanliness drives in neighbouring communities, walkathons, street plays, competitions, school based activities etc. this involved large number of employees of the corporation in the task of cleaning the surroundings and generating awareness.
• Initiated task of adoption of Urban Slum in Mumbai to maintain its cleanliness and sensitize citizens on sanitation practices.
The Corporation coordinated with the Ministry of HRD and the Ministry of PNG for construction of 1205 school toilets in Assam, Bihar and Chhattisgarh under Prime Minister Swachh Bharat Vidyalaya/ Abhiyan. 79 toilets in Government schools were constructed during the year.
SC/ST Welfare & Liaison
During the year, the Corporation undertook various welfare/development activities under the SC/ST/OBC component plan which included organising health camps, eye check-up camps and distribution of spectacles, distribution of books and provision of free drinking water facility. In order to adequately rebrsent the cause of employees belonging to OBC-NC category, an All India HP OBC Association was formed during the year.
The interview panels for recruitment to various positions were also re-drawn to include members belonging to OBC-NC category and women employees apart from the SC/ST and Minority members.
Implementation of PWD's Act
HPCL is ensuring compliance of Presidential Directives with respect to recruitment of Persons with Disabilities (PWD's). 3% of the total vacancies are reserved for Persons with Disabilities and separate rosters are maintained for the same. During the year, the Corporation has recruited 10 PWD candidates in various streams.
OVERVIEW OF SPORTS ACTIVITIES AT HPCL
HPCL gives a major impetus on Sports Promotion. During 2014-15, HPCL organized three internal tournaments for the employees viz. All India Inter Unit, Indoor Games Tournament (Badminton, Bridge, Carrom, Chess & Table Tennis), All India Inter Unit Cricket Tournament and All India Annual Sports Meet (Athletics, Track & Field Events). HPCL hosted XXXV Petroleum Sector Sports Promotion Board (PSPB) Carrom Tournament at Mumbai during July 2014 and XX PSPB Veterans Cricket Tournament at Indore during December 2014.
HPCL takes promising and deserving boys/girls on Contract/ Scholarship basis and gives them financial assistance to help them grow to the International standards. Many of the players have performed at National & International level.
HPCL participated in 11 Sports disciplines in PSPB tournaments viz. Athletics, Badminton, Bridge, Carrom, Chess, Cricket, Football, Golf, Table Tennis, Tennis, and Veterans Cricket and performed exceptionally well. Team HPCL finished Runner up in Team Championships as well as Track & Field events in the PSPB Athletic Meet held at Goa. Team HPCL finished First Runner up each in Men Category & Women Category in PSPB Carrom Tournament held at Mumbai. Team HPCL was Second Runner up in the PSPB Veterans Cricket held at Indore and PSPB Football Tournament held at Guwahati.
HPCL Team also participated in 4 Sports disciplines in the All Indian Public Sector Sports Promotion Board (AIPSSPB) Tournaments viz. Athletics, Badminton, Carrom, Chess and Cricket. Team HPCL finished First Runner up in Track & Field events in the AIPSSPB Athletic Meet held at New Delhi. Team HPCL was ended up as Runner-up in the AIPSSPB Cricket Tournament held at Mumbai.
L. RIGHT TO INFORMATION (RTI)
HPCL has a dedicated and well-structured set-up for handling RTI applications and Public grievances. The revised Citizens'/Clients' charter (CCC) was developed in line with the guidelines of Department of Administrative Reforms and Public Grievances (DARPG). Vulnerability Assessment and Penetration Testing (VAPT) security audit was also conducted successfully for the website.
M. CORPORATE SOCIAL RESPONSIBILITY
HPCL believes business and society are interdependent and success of one depends on the progress of other. Intervention models which have the potential to sustain its outcomes and create a long-term impact on not only the beneficiary, but also on the root social factors, are given utmost support and encouragement. Initiatives of the corporation are broadly classified under Focus Areas: Child-Care and Education, Health Care, Skill Development, Environment and Community Development. Interventions in these areas make a meaningful and long-term impact on the community.
The CSR policy of the Corporation was formulated in line with Companies Act 2013. During 2014-15 Rs. 34.03 crore was spent on various CSR activities with emphasis on Child Care, Education, Healthcare and Skill development. The Corporation provided 100 days skill development programs for 136 youths under project Swavalamban in partnership with CII. In addition to the above, field activities were also carried out by HPCL employees on Community Development and Environment.
Senior Officials in HPCL have been associated with CSR major projects and driven the same in impactful manner. Field Officers of the corporation has taken several CSR activities in the vicinity of HPCL business units with the aim to development of host communities. Employees also participated in voluntary activities for the development of less privileged communities.
CHILD CARE AND EDUCATION
HPCL's initiatives in the field of education have been manifold with a large impact on various sections of society. Project Nanhi Kali encourages girl child education and is building gender equality among communities in remote rural areas. The efforts are made to bring first generation learners from remotely located tribal villages to the fold of mainstream education. The social barriers of education for girls are removed through constant engagement at family and village level and a support network for girl child is created which enables her to start and continue her education. 10052 Girls from Sheopur (Madhya Pradesh), Araku (Andhra Pradesh), and Gavanpada (Mumbai) were supported during the year 2014-15.
Through Project Akshaya Patra HPCL is bridging the gap by providing hygienic and nutritious food to students of schools at Visakhapatnam. The intervention through this program has resulted in higher enrolments and negligible drop-outs from schools. 5000 children have been provided Mid-Day Meals in Visakhapatnam, Andhra Pradesh in the vicinity of Visakh Refinery of HPCL.
In today's scenario where e-literacy has become as important as literacy itself, HPCL too, has partnered with specialized agencies to provide computer awareness and basic education to first generation computer learners of Class VI to Class IX in semi-urban and rural areas under Project Unnati. Beyond just providing classroom-teaching, the sustainability of the project is also ensures by following the "Training the Trainer" Model wherein the school teachers are also trained. Further, a well-equipped computer lab is established at each of these schools where training is imparted, to ensure continued practice for the students. 4100 students in the rural and semi urban schools have been trained in basic computers in the year 2014-15.
Self-dependency in all aspects of lives of Children with Special Needs (CwSN) is the objective of ADAPT. The critical importance of inclusion of CwSN through state of art therapies and special education facilities are taken care by HPCL through project ADAPT. 300 Children across the city of Mumbai were provided support in an inclusive environment to bring equality to the lives of Persons with Disability.
HPCL has undertaken following initiatives in the area of Healthcare: Dil without Bill
The costly treatment of heart problems have taken lives of those who could not afford it. Project Dil without Bill supported those who could not afford Heart Surgeries through their means. For them surgeries are performed free of Cost at Sai Heart Hospital supported by HPCL. 375 People have been supported under Dil without Bill in 2014-15.
Truckers occupation put them at risk on many health issues including HIV/AIDS. The Khushi Clinics apart from providing basic medical facilities which are scanty at the highways, also provide AIDS awareness, STI treatment, social marketing of condoms, counselling, etc. to ensure the health and well-being of the truckers. The interventions through the Khushi Clinics under project Suraksha set up at 7 retail outlets on the highways has been but an obvious and a rational engagement.
To address the critical situation of health requirements and to provide basic medical facilities to people in need at remote rural areas and far flung villages, HPCL CSR in partnership with ground-level NGOs are running seven Mobile Medical Vans in states of Odisha, Bihar, Rajasthan, Maharashtra, Jammu & Kashmir, Andhra Pradesh and Jharkhand. These vans provided basic medical attention to rural populace in approx. 175 villages.
To respond to problems of brvailing Health Infrastructure, Sushrut hospital a multispecialty hospital and charity institute at Chembur, Mumbai is being supported by HPCL. The hospital has been providing medical care to the people in the vicinity since long.
A number of students in the country drop out from regular education for various compelling reasons which narrows their livelihood option in later part of their lives and they remain unskilled and earn very little daily wages. At the same time there is a diverse labour demand in the country requiring various skills. It is in line with these demands of employment as well as skills, the diverse training in skills like electrical, welding, hospitality, driving, tailoring, beautician course, etc. are identified and imparted to underprivileged youth in these areas through the Swavalamban program.
DEVELOPMENT OF SC/ST COMMUNITIES
CSR initiatives at HPCL has taken specific efforts for the development of economically and socially backward communities. A number of initiatives have been taken during the year for the development and empowerment of SCs, and STs and towards women empowerment. The long term projects specifically focus on people from SC/ST Communities and efforts for the benefit to the socially marginalized groups. A large of community development initiatives were undertaken by the field level employees of the corporation for the development of SC, ST, OBC and Minority communities. Approximately 45% of expenditure other than on Swachh Vidyalaya Abhiyan was made on Development of SC/ST Communities pan India.
HPCL as a responsible corporate citizen undertakes various activities for the welfare of the weaker sections including the Differently abled Persons. During 2014-15, HPCL has spent an amount of approx. Rs. 154.46 lakh towards various projects and activities taken up for upliftment, self - sustenance and education of the differently abled persons. Further, an amount of Rs. 9.32 lakh was disbursed towards scholarships to 199 meritorious differently abled students identified from communities from adjoining business locations of HPCL. In addition, various one time initiatives were undertaken at strategic business locations in the areas of Social / Community development, education, etc. for people with special needs at an approximate expenditure of Rs. 59.95 lakh.
N. OFFICIAL LANGUAGE IMPLEMENTATION
Office Language Implementation (OLI) has been given the utmost importance in the Corporation. To promote implementation of Official Language with the spirit of persuasion and motivation, various new initiatives like Rajbhasha Aapki vayavsayik sahyogi, Rajbhasha - Aapke dwar, Hindi e-mail Abhiyaan, Gennext Aur Hindi programs like Hindi Pakhwada, Hindi Officers Annual/Review Meets, Hindi workshops, Hindi Coordinators Conferences, Zonal OL Conferences were organised.
HPCL also bagged various brstigious awards in the field of Official Language Implementation during year 2014-15.
1. "16th Fastest Growing Energy Company in Asia" adjudged by PLATTS
2. "100 Most Valuable Brands, 2014" award to HP GAS for the second consecutive year
3. "National Energy Conservation Award (First prize)" in the Refinery Sector for the year 2014
4. "SCOPE" award in Human Resource category for Project Utkarsh - a project for improving operational performance
5. "Global Award on Innovation Management" by Golden Peacock for Online logistics assistance, Electro Mechanical Locking, Online Zero Based Budgeting and other IT initiatives in POL operations and distribution
6. "Petrofed Oil & Gas Pipeline Transportation Company" of the year 2013 for transportation of POL products
7. "12th National Award for Excellence in Cost Management for the year 2013-14" under the category "Public Manufacturing Organization - Large".
8. "Best Public Sector Initiative" for Petro Retailing in Rural Markets and "Best Initiative for Community Awareness" for raising public consciousness towards Oil Conservation through innovative awareness campaigns at Asia Social Innovation Excellence Awards
9. "Greentech Gold Award" for Outstanding Achievement in Best HR Strategy by Greentech Foundation for Innovation in Employee Retention Strategies
10. "Golden Peacock Award 2015" in Innovative Product/ Service category for aesthetic Polyethylene Terephthalate (PET) Lubricant container
11. "Golden Peacock HR Excellence Award" for the year 2014
12. "Indira Gandhi Rajbhasha Puraskar" for the Seventh consecutive year for best official language implementation among Public Sector Enterprises in India for outstanding achievements of the Corporation in the realm of Official Language Implementation in 'B region'
13. OISD Award for (a) Best Safety Practices in POL Marketing and (b) Best Safety Practices in Cross Country Pipeline for the 5th consecutive year.
14. "FICCI Award on Sustainability and Excellence" in Safety for HSE Innovations viz. near Miss Reporting, HSE Index, Management of Change (MOC) and Safety integrity Level (SIL) etc.
15. "Excellence in practice" award by American Society for Training & Development (ASTD) for Project Utkarsh - a project for improving operational performance
16. Silvassa Lube Blending Plant achieved the distinction of becoming the First in Indian Petroleum Industry and also the First Public Sector Unit in India to get the "GreenCo Silver Rating"
17. "Greentech Environment Award 2015" in Silver Category in Petroleum Storage & Transportation Sector awarded to Loni, Usar & Goa POL locations
18. National Safety Council Of India (NSCI) Safety Award 2014 (Bronze) to Mundra Delhi Pipeline (MDPL, RBPL, RBhPL) in recognition of development and implementation of highly effective management systems and procedures in the Manufacturing Sector category.
19. "Golden Peacock Award" for Productivity enhancement initiatives to O&D.
20. "British Safety Council International Safety Award 2014" for Mundra-Delhi Pipeline in Merit Grade.
21. Kolkata Terminal achieved the distinction of becoming the First POL Installation in the country with ISRS Level 8 Certification.
22. "Zero Accident Frequency Award" to Mazagaon Terminal by National Safety Council, Maharashtra.
23. "Golden Peacock Award" for 'Project Sankalp' under Occupational Health & Safety Category
24. "Golden Peacock National Training Award" to Visakh-Vijayawada-Secunderabad Pipeline (VVSPL) for best training practices imbibed in Pipeline Operations
25. "Silver Medal" awarded to the CSR initiative - "Nanhi Kali" in the 1st Madan Mohan Malviya Awards for Best CSR Practices in Education during 2014
26. "Bronze Medal" to Silvassa Lube Blending Plant in the Chemical Sector in National Awards for Manufacturing Competitiveness for 2013-14
27. Petroleum Rajbhasha Shield awarded for best Rajbhasha implementation in organization
28. "FICCI Award 2013" for Mundra-Delhi Pipeline for commendable work for changing public perception.
29. "Best Supplier award" by M/s Gabriel India Ltd as a recognition of quality of service and products
30. Greentech Platinum Award at "13th Annual Greentech Safety AwardS 2014" to Operations & Distribution SBU for Fire & Safety management
31. "Organization for a Globalized ultra-competitive world" award by All India Management Association (AIMA)
32. "Excellence in developing leaders of tomorrow" award by Society for Human Resource Management (SRHM)
P. CORPORATE GOVERNANCE
A separate segment on Corporate Governance forms part of the Annual Report. However, it would be relevant to point out here that the Corporation is giving utmost importance to compliance with Corporate Governance requirements including compliance of regulations, transparent management processes, and adherence to both internal and external value norms and has implemented a robust grievance redressal mechanism.
Q. INTEGRITY PACT
The Corporation has complied with "Integrity Pact" (IP) to enhance ethics/ transparency in the process of awarding contracts. An MOU has been signed with "Transparency International" on July 13th, 2007. HPCL has implemented the Integrity Pact with effect from September 1st 2007. The Integrity Pact has now become an integral part of procurement process for all tenders above Rs. 1.0 crore.
R. RISK MANAGEMENT
HPCL has put in place a properly defined Risk Management framework. This system is implemented as an integral part of business processes across the entire HPCL's operations and includes recording, monitoring and controlling internal enterprise business risks and addressing them through informed and objective strategies. The Company has engaged the services of independent experts to facilitate the detailed exercise and ensuring the effectiveness by adopting best practices in Risk Management.
As a part of effective implementation of the Risk Management framework, Risk Management Steering Committee (RMSC) continues to provide direction and guidance. The Company has in place mechanism to inform Board Members about the risk assessment and minimization procedures and periodical review to ensure that executive management controls risks by means of a properly defined framework.
S. GLOBAL COMPACT
HPCL is also a member of the Global Compact Society of India which is the India Unit of the UN Global Compact, the largest voluntary corporate initiative in the world. It offers a unique platform to engage companies in responsible business behaviour through the principles of Human Right, Labour Standards Environment norms and Ethical practices. In HPCL, all these areas receive constant attention of the management to ensure continuous compliance.
As per the latest World Economic outlook 2015 of IMF, Global growth is projected at 3.3 percent in 2015, marginally lower than in 2014, with a gradual pickup in advanced economies and a slowdown in emerging market and developing economies. In 2016, growth is expected to strengthen to 3.8 percent.
In emerging market economies, the continued growth slowdown reflects several factors, including lower commodity prices and tighter external financial conditions, structural bottlenecks and rebalancing in China.
India's growth outlook has improved since May 2014, helped by lower uncertainty and improved business confidence. These developments have been accompanied by revival in investment and industrial activity. GDP growth appears to have accelerated after the new Initiatives announced by the Govt. of India.
The crude oil prices hovered in USD 60 per Barrel range during year end and showing signs of weakening as there is not much of hindrance in supply accompanied by a weaker demand for oil. Domestically the expectation of pick up in Diesel demand is yet to materialise immediately and the expectation is that it may happen during the course of the coming year. Not much volatility is seen in the Exchange rate of the Rupee .With continued lower oil prices, accompanied by deregulated Petrol and Diesel markets , the prospects for the downstream companies are expected to be positive .
U. JOINT VENTURES & SUBSIDIARIES
The Joint Venture companies and subsidiaries of HPCL have performed well during the year 2014-15. HPCL-Mittal Energy Ltd. (HMEL)
HMEL is a joint venture of HPCL & Mittal Energy Investments Pte. Ltd. (MEI), Singapore a wholly owned subsidiary of Mittal Investments S.a.r.l). As of 31st March 2015, HMEL's authorised Share Capital is Rs. 10,000 crore and paid-up share capital is Rs. 7,541.46 crore. Currently, HPCL as well as MEI respectively hold 48.94% equity in HMEL.
HMEL has built a Greenfield refinery of 9 MMTPA capacity at Bathinda, in the State of Punjab. The refinery produces two principal categories of products: (i) liquid products such as LPG, naphtha, MS, HSD and ATF etc. and (ii) solid products such as pet coke, polypropylene and sulphur. The various units of the refinery and associated facilities including the 165 MW captive power plant are located at Bathinda.
HMEL has a wholly owned subsidiary company HPCL-Mittal Pipelines Ltd. (HMPL), engaged in receipt, storage and cross country transportation of crude oil to refinery. HMPL has built a 1,017 km cross-country pipeline and associated facilities for transportation of crude oil from Mundra to Bathinda, crude oil receiving facilities including Single Point Mooring (SPM), sub-sea pipelines and Crude Oil Terminal (COT) at Mundra and Receipt Terminal at Bathinda.
During 2014-15, HMEL achieved a crude thruput of 7.32 MMT and reported a total revenue of Rs. 30,121 crore on consolidated basis compared to total revenue of Rs. 43,286 crore last year.
South Asia LPG Company Pvt Ltd (SALPG)
South Asia LPG Company Pvt Ltd (SALPG) is a Joint Venture Company for LPG Cavern Storage, between HPCL and Total Gas and Power India (a wholly owned subsidiary of Total, France). As of 31st March 2015, SALPG's authorised Share Capital is Rs. 100 crore and Paid up Share Capital is Rs. 100 crore. HPCL has 50% Equity participation in SALPG.
SALPG has commissioned an underground Cavern Storage of 60 TMT capacity and associated receiving & dispatch facilities at Visakhapatnam in December 2007. SALPG Cavern is the first-of-its-kind in South and South East Asia, and ranks among the deepest Caverns in the World. The commercial operations commenced in January 2008. SALPG has resulted into easing-out the product movement constraints across the east coast and ensured smooth availability of LPG in the surrounding zones. Also, propane-butane blender at the Cavern Terminal has helped Oil Marketing Companies to maximize the propane inputs into Visakhapatnam considering the limited availability of butane and price advantage of propane in the international market.
During 2014-15, SALPG has reported a total revenue of Rs. 160.37 crore as compared to total revenue of Rs. 159.04 crore during last year and also recorded a net profit of Rs. 69.51 crore in FY 2014-15 as compared to a net profit of Rs. 79.38 crore last year.
SALPG has been continuously paying dividend for the last 5 years. During 2014-15, HPCL received Rs. 25 crore (Rs. 5 per share) in respect of dividend declared by SALPG for 2013-14. For the year 2014-15, SALPG Board has recommended a dividend of Rs. 5.50 per share.
SALPG has been certified for all three International standards for Health, Safety, and Environmental and Quality Systems viz. ISO 9001-2008 (for Quality Management System), ISO 14001-2004 (for Environmental Management System) and OSHAS 18001-2007 (for Occupational Health and Safety Management System).
Prize Petroleum Company Ltd. (PPCL)
Prize Petroleum Company Ltd (PPCL) is a wholly owned subsidiary of HPCL. PPCL was incorporated as Joint Venture Company and subsequently became a wholly owned subsidiary of HPCL effective Dec 2011. As on 31st March 2015, PPCL's authorised Share Capital is Rs. 720 crore and Paid up Share Capital is Rs. 120 crore.
PPCL is upstream arm of HPCL and is in business of Exploration and Production (E&P) of Hydrocarbons as well as providing services for management of E&P blocks.
PPCL has signed Service Contract with ONGC for development of Hirapur Marginal Field in Cambay Basin with 50% holding in the consortium. Also, PPCL is operator for Hirapur field. PPCL has also entered into a Production Sharing Contract (PSC) with 50% Participating Interest in Sanganpur Block as Joint Operator.
PPCL has a wholly owned subsidiary namely Prize Petroleum International Pte. Ltd. (PPIPL), incorporated in Singapore. PPIPL has acquired 11.25% and 9.75% participating interest in two E&P blocks (Yolla and Trefoil blocks respectively) in Australia.
During 2014-15, PPCL achieved total production of 38,898 barrels of crude oil from the two fields as compared to 40,519 barrels production during last year in which PPCL's share was 50%. PPIPL also got its share of 1, 22,164 Barrels of Oil Equivalent (BOE) production from Australian block during 2014-15. During 2014-15, PPCL has reported almost three times higher total revenue of Rs. 33.45 crore on consolidated basis as compared to total revenue of Rs. 11.56 crore during last year.
Hindustan Colas Pvt. Ltd. (HINCOL)
Hindustan Colas Pvt. Ltd. (HINCOL) is a Joint Venture Company between HPCL and Colas S.A. of France. HINCOL was incorporated on July 17, 1995. As on 31st March 2015, HINCOL's authorised Share Capital is Rs. 30 crore and Paid up Share Capital is Rs. 9.45 crore. HPCL has 50% Equity participation in HINCOL.
During 2014-15, HINCOL has achieved total sales volume of 182 TMT as compared to a volume of 197 TMT last year. HINCOL has reported a higher net profit of Rs. 48.94 crore in the year 2014-15 as compared to net profit of Rs. 48.60 crore last year and total revenue of Rs. 756.22 crore as compared to total revenue of Rs. 833.61 crore last year.
HINCOL has been continuously paying dividend for last 15 years. During 2014-15, HPCL received Rs. 15.36 crore (Rs. 32.50 per share) in respect of dividend declared by HINCOL for 2013-14. For 2014-15, HINCOL Board has recommended a dividend of Rs. 42.50 per share which is highest ever dividend declared by HINCOL.
HPCL Biofuels Ltd. (HBL)
HPCL Biofuels Ltd (HBL) is a wholly owned subsidiary company of HPCL. HBL was incorporated on 16th October 2009. As on 31st March 2015, HBL's authorised Share Capital is Rs. 700 crore and paid up Share Capital (including brference share capital) is Rs. 625.17 crore.
HBL was promoted by HPCL as a backward integration initiative to foray into manufacture of ethanol for blending in petrol. HBL brsently has two integrated sugar-ethanol-cogen plants at Sugauli and Lauriya in East Champaran and West Champaran Districts respectively in the State of Bihar. Each plant has capacity of 3,500 Tonnes of cane crushed per day (TCD), Distillery of 60 Kilolitre per day (KLPD) and co-gen power plant of 20 MW capacity.
During 2014-15, HBL has achieved an increased cane crushing of 588 TMT against 468 TMT last year. HBL achieved sugar production of 46,211 MT, ethanol production of 13,117 KL and power production of 54.042 Million Units during 2014-15 which were significantly higher than corresponding numbers of 33,252 MT, 7,684 KL and 51.812 Million Units last year.
HBL has also achieved 39% higher sales revenue of Rs. 188.37 crore in 2014-15 as compared to total revenue of Rs. 135.77 crore last year.
CREDA-HPCL Biofuel Ltd. (CHBL)
CREDA-HPCL Biofuel Ltd. (CHBL) is a subsidiary company of HPCL. CHBL was incorporated on 14th October 2008. As on 31st March 2015, CHBL's authorised Share Capital is Rs. 200 crore and Paid up Share Capital is Rs. 21.76 crore. HPCL has 74% equity participation in CHBL and balance 26% is held by Chhattisgarh State Renewable Energy Development Agency (CREDA), an agency under Department of Energy, Govt. of Chhattisgarh.
CHBL was promoted to venture into alternate fuels through the process of undertaking cultivation of Jatropha plant (an energy crop used for production of bio-diesel) on leased land from the Government of Chhattisgarh.
During 2014-15 CHBL has achieved a total revenue of Rs. 0.21 crore as compared to total revenue of Rs. 0.24 crore last year.
Petronet MHB Ltd. (PMHBL)
PMHBL was incorporated on 31st July 1998 as a Joint venture company between HPCL and Petronet India Ltd (PIL). Initially, PIL and HPCL contributed 26% each towards equity of the company. In April 2003, ONGC joined as a strategic partner in PMBHL. Post debt restructuring of PMHBL, the equity holding of HPCL and ONGC increased to 28.77% each and PIL's holding decreased to 7.90%. As of 31st March 2015, PMHBL's authorised Share Capital is Rs. 600 crore and paid-up share capital is Rs. 548.71 crore.
PMHBL is operating 362.36 K.M. Petroleum Product Pipeline from Mangalore to Devanagonthi (Bangalore) with Tap off Point (TOP) at Hassan, transporting Petroleum Products for HPCL, IOCL and BPCL & MRPL for their marketing requirement at Hassan & Bangalore.
During 2014-15, PMHBL has achieved a 2.2% higher pipeline Thruput of 3.141 MMT as against 3.073 MMT in 2013-14. PMHBL has also achieved 10.5% higher total revenue of Rs. 145.25 crore during 2014-15 as compared to total revenue of Rs. 131.39 crore last year and net profit of Rs. 34.09 crore in 2014-15 as compared to net profit of Rs. 38.40 crore last year.
PMHBL has been certified for Integrated Management System (IMS) covering Quality Management System-ISO-9001-2008, Environmental Management System-ISO-14001-2004 and OHSAS-18001-2007. The company deploys various technology solutions for its operations.
Bhagyanagar Gas Ltd. (BGL)
Bhagyanagar Gas Limited (BGL) is a Joint Venture Company between HPCL and GAIL (India) Ltd. BGL was incorporated on 22nd August 2003. As on 31st March 2015, BGL's Authorised Share Capital is Rs. 100 crore and Paid up Share Capital is Rs. 45.03 crore. HPCL has 49.97% equity participation in BGL.
BGL has been authorised by MOP&NG and PNGRB to set up City Gas Distribution networks in Hyderabad, Vijayawada and Kakinada for marketing of environmental friendly fuels (green fuels) viz. CNG and Auto LPG for use in the transportation, domestic, commercial and industrial sectors, in the states of Andhra Pradesh and Telangana.
BGL operates 32 CNG stations in the three cities of Hyderabad, Vijayawada and Kakinada put together and 1 Auto LPG station at Tirupati.
During 2014-15, BGL has achieved sales of 25,829 MT of CNG, 722 MT of PNG and 131.40 MT of Auto LPG compared to 24,598 MT, 1,492 MT and 205.16 MT respectively last year.
During 2014-15, BGL has reported 4.3 % higher revenue of Rs. 109.53 crore as compared to total revenue of Rs. 104.99 crore last year and net profit of Rs. 2.08 crore as compared to net profit of Rs. 14.98 crore last year.
Aavantika Gas Ltd. (AGL)
Aavantika Gas Ltd (AGL) is a Joint Venture Company between HPCL and GAIL (India) Ltd. AGL was incorporated on 7th June 2006. As on 31st March 2015, AGL's authorised Share Capital is Rs. 100 crore and Paid up Share Capital is Rs. 45.03 crore. HPCL has 49.97% equity participation in AGL.
AGL has been authorized by MOP&NG and PNGRB to set up City Gas Distribution networks in Indore, Ujjain and Gwalior for marketing of environmental friendly fuels (green fuels) viz. CNG and Auto LPG for use in the transportation, domestic, commercial and industrial sectors, in the state of Madhya Pradesh.
AGL operates 18 CNG stations - 3 mother station, 7 online stations and 8 daughter stations in the cities of Indore, Gwalior and Ujjain.
During 2014-15, AGL has recorded sales of 15,605 MT of CNG and 6,863 MT of PNG compared to 14,435 MT and 7,156 MT respectively last year.
During 2014-15, AGL has achieved almost 21 times higher net profit of Rs. 10.56 crore as compared to net profit of Rs. 0.50 crore last year and a total revenue of Rs. 110.07 crore as compared to total revenue of Rs. 115.26 crore last year.
GSPL India Gasnet Ltd (GIGL) and GSPL India Transco Ltd (GITL)
GSPL India Gasnet Limited (GIGL) and GSPL India Transco Limited (GITL) are Joint Venture Companies between Gujarat State Petronet Ltd (GSPL), Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and HPCL. GIGL and GITL both were initially incorporated on 13th October 2011 as subsidiaries of GSPL. Pursuant to signing Joint Venture Agreement with GSPL, IOCL and BPCL on 30th April 2012, HPCL became an equity partner in GIGL and GITL. The authorised Share Capital of GIGL and GITL as on 31st March, 2015 is Rs. 2,000 crore and Rs. 2,200 crore respectively. As on 31st March 2015, Paid up Share Capital of GIGL and GITL is Rs. 187.02 crore and Rs. 140 crore respectively. HPCL has 11% equity participation in both the companies.
GIGL is laying two cross country gas pipelines viz 1,640 KM Mehsana to Bathinda Pipeline (with initial capacity of 43 MMSCMD to final capacity of 77 MMSCMD) and 740 KM Bathinda to Srinagar Pipeline (with initial capacity of 32 MMSCMD to final capacity of 43 MMSCMD). GITL is laying 1,746 KM pipeline Mallavaram to Bhilwara (with initial capacity of 53 MMSCMD to final capacity of 77 MMSCMD).
During 2014-15, GIGL has reported total revenue of Rs. 1.89 crore (interest income) and net profit of Rs. 1.28 crore as compared to total revenue of Rs. 2.34 crore (interest income) and net profit of Rs. 1.58 crore last year. GITL has reported total revenue of Rs. 2.17 crore (interest income) and net profit of Rs. 1.47 crore in 2014-15 as compared to total revenue of Rs. 2.43 crore (interest income) and net profit of Rs. 1.64 crore last year.
The above JV Companies will facilitate HPCL to source gas and market it independently to customers along the pipeline route.
HPCL Shapoorji Energy Limited (HSEL)
HPCL Shapoorji Energy Pvt. Limited (HSEL) is a Joint Venture Company between HPCL and SP Ports Private Limited [a wholly owned subsidiary of Shapoorji Pallonji Infrastructure Capital Company Ltd.]. HSEL was incorporated on 15th October 2013 as a public company. As on 31st March 2015, HSEL's authorised Share Capital is Rs. 50 crore and Paid up Share Capital is Rs. 10 crore. Subsequent to 31st March 2015, HSEL has allotted shares against application money of Rs. 4 crore which was received from its promoters in March 2015. HPCL has 50% equity participation in HSEL.
HSEL was formed to build and operate 5 MMTPA LNG regasification terminal at Chhara Port in Gir Somnath District of Gujarat. The key LNG terminal facilities include Marine Facilities for LNG carrier berthing, Tanks and Storage Facilities, Re-Gasification Facility based on Shell & Tube Vaporizer (STV) and Utilities such as Boil-Off System and Emergency generator.
HSEL has received Terms of Reference for Environment Impact and Risk Assessment (EIRA) Study from Ministry of Environment & Forest for the project and National Environment Engineering Research Institute (NEERI) and National Institute of Oceanography (NIO) has completed the EIRA Study. Front End Engineering Design and various other technical studies for brparation of EPC package are being carried out along with the Financial Closure of the Project.
During 2014-15, HSEL has reported total revenue of Rs. 0.49 crore (interest income) as compared to Nil revenue last year.
Mumbai Aviation Fuel Farm Facility Private Limited (MAFFFL)
Mumbai Aviation Fuel Farm Facility Private Limited (MAFFFL) is a new Joint Venture Company between Mumbai International Airport Private Limited (MIAL), Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and HPCL. MAFFFL was initially incorporated on 26th February, 2010 as a wholly owned subsidiary of MIAL. HPCL along-with other Oil Marketing Companies (OMCs) made equity investment during 2014-15 pursuant to Joint Venture Agreement and Share Purchase Agreement dated 6th March, 2014. As on 31st March 2015, MAFFFL's authorised Share Capital is Rs. 300 crore and Paid up Share Capital is Rs. 18.01 crore. HPCL has 25% equity participation in MAFFFL.
MAFFFL would operate and maintain existing Aviation fuel farm facilities and will provide Into-plane services at Chhatrapati Shivaji International Airport, Mumbai. The Company will also construct, maintain and operate the new Integrated Fuel Farm Facility on an open access basis. The integrated facility is proposed to be mechanically completed by October 2017.
During 2014-15, MAFFFL has reported a total revenue of Rs. 19.82 crore as compared to nil revenue last year.
HPCL Rajasthan Refinery Limited (HRRL)
HPCL Rajasthan Refinery Ltd. (HRRL) is a Joint Venture Company between HPCL and Govt. of Rajasthan to set up a 9 MMTPA refinery cum petrochemical complex in Barmer in the state of Rajasthan. HRRL was incorporated on 18th September 2013 as a public company. As on 31st March 2015, HRRL's authorised Share Capital is Rs. 4,000 Crores and Paid up Share Capital is Rs. 5 Lakhs. At brsent the project is under review by a committee comprising officials from HPCL and Government of Rajasthan.
V. MANGALORE REFINERY & PETROCHEMICALS LTD. (MRPL)
HPCL holds an equity of 16.95% in Mangalore Refinery and Petrochemicals Ltd (MRPL). MRPL operates a refinery of 15 MMTPA capacity at Mangalore, in the State of Karnataka. During 2014-15, MRPL, in their consolidated financial statements, has recorded total revenue of Rs. 57,917 crore as compared to Rs. 71,874 crore last year and reported loss of Rs. 1,803 crore in 2014-15 as compared to profit of Rs. 606 crore last year.
W. CAUTIONARY STATEMENT
Matters covered in the Management Discussion and Analysis Reports describing the Company's Objective, Projections, estimates, expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. The actual performance could vary from those projected or implied, important or unforeseen factors that could make a difference to the Company's operations include economic conditions affecting demand / supply and price conditions in the domestic market in which the company brdominantly operates, changes in regulations and other incidental factors.