A. DEVELOPMENTS IN THE ECONOMY AND THE OIL SECTOR
The Indian economy has grown by 7.3% during 2014-15, indicating an improvement ingrowth prospects. Agriculture sector growth in 2014-15 was negligible at 0.2% compared toabout 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. Servicessector 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 easedinflationary pressures progressively during 2014-15. The Brent crude, having reigned above100 USD per barrel for four years, fell steeply from June 2014 onwards, ending up close toUSD 45 per barrel by January 2015. An increase in non-OPEC supply coupled with OPECdecision not to cut production seem to have been the major factor in play.
Balance of payments improved during 2014-15 over the preceding year. Fall in tradedeficit and marginal improvement in the net invisible earnings lowered the current accountdeficit (CAD). The CAD shrank to US$ 27.5 billion in 2014-15 (1.3 per cent of GDP) fromUS$ 32.4 billion (1.7 per cent of GDP) a year ago. Indias exports as well as importsfell in 201415 compared to previous year. Global growth remains moderate affectingexports. Fall in oil prices reduced value of oil imports and hence, total import bill.Indias trade deficit narrowed to US$ 144.2 billion in 2014-15 from US$ 147.6 billionin 2013-14. Portfolio and direct foreign investment flows to India were buoyant in2014-15. Net foreign direct investment to India in 2014-15 was US$ 36.6 billion while newportfolio inflows totalled US$ 41 billion. There was an accretion to Indias foreignexchange reserves to the tune of US$ 61.4 billion in 2014-15 as compared with US$ 15.5billion in 2013-14. At the end of March 2015, the level of foreign exchange reserves stoodat US$ 341.6 billion. In contrast to volatility in the first half of 2013-14, Indian rupeeremained range bound between 59 and 63 per dollar in 2014-15.
The Diesel prices were deregulated in October 2014. Falling prices and deregulationreduced the under-recovery burden. In addition to deregulation of diesel, the governmentpushed 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 in2014-15. 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 byabout 1 MMT in 2013-14 recording a growth of 1.5% over 2013-14 volume. ATF consumption inthe country increased only marginally by 1%. FO consumption fell for the seventhconsecutive year. Naphtha and Bitumen consumption also declined during 201415.
B. PERFORMANCE PROFILE
The Corporation has secured Excellent rating in terms of the Memorandum ofUnderstanding (MOU) signed with the Government of India for the year 2013-14 with an MOUscore of 1.257.
For the year 2014-15, HPCL has achieved its highest ever profit after tax of ' 2,733crore resulting in a significant increase in the earning per share to ' 80.72. The marketcapitalization of the corporation increased by ' 11,500 crore during the year and thecorporation has proposed its highest ever dividend of ' 24.50 per share.
During the year 2014-15, interest costs came down by nearly 50% - from ' 1,336 crore to' 707 crore. The borrowings were also substantially lower by 37% -. The average cost ofborrowings were also significantly lower due to effective and proactive Treasurymanagement, aided by the fall in the international prices of crude & petroleumproducts and timely receipt of compensation from the Govt of India.
HPCL also continued its distinction of getting Nil Comments from C&AGon 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 31stMarch, 2015 was ' 2,17,061 crore as compared to ' 2,32,276 crore in the previous year. Thetotal 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 ' 4,154 crore in 2014-15 as comparedto ' 2,616 crore in 2013-14.
PROVISION FOR TAXATION
An amount of ' 1,421 crore has been provided towards income tax for 2014-15 consideringthe applicable income tax rates as against ' 882 crore provided during 2013-14.
PROFIT AFTER TAX
The Corporation has earned a Profit after Tax of ' 2,733 crore during the currentfinancial year as compared to ' 1,734 crore in 2013-14.
DEPRECIATION AND AMORTISATION
Depreciation for the year 2014-15 was ' 1,971 crore as against ' 2,188 crore for theyear 2013-14. The depreciation expense for the year ended March 31,2015 was lower due tothe adoption of revised useful lives / residual values for fixed assets in line with therequirements of Schedule II of Companies Act, 2013.
The borrowings of the Corporation were ' 20,335 crore as on 31st March, 2015 ascompared to ' 32,165 crore as on 31st March, 2014. HPCL continued with the strategy ofdependence on Foreign Currency loans. Leveraging the image of creditworthiness of HPCLamongst international bankers and investors, ECB of US$ 300 million was borrowed at veryfine pricing and high cost loan of US$ 400 million was refinanced at substantially lowercost. Revolving line of credit in US$ was also effectively utilized to manage changes infund requirement. The total debt to equity ratio stands at 1.27:1 as on 31st March, 2015as against 2.14:1 as on 31st March, 2014.
Net Fixed Assets (including Capital Work in Progress) increased from ' 30,498 crore ason 31st March, 2014 to ' 32,537 crore as on 31st March, 2015.
Investments as on 31st March, 2015 were ' 11,241 crore as compared to ' 10,860 crore ason 31st March, 2014.
GROSS REFINING MARGINS (GRMs)
Gross Refining Margin of Mumbai Refinery averaged at US$ 4.88 /bbl during the year asagainst US$ 5.38 /bbl for the year 2013-14.
Gross refining margin of Visakh Refinery averaged at US$ 1.12 /bbl during the year asagainst US$ 1.50 /bbl for the year 2013-14.
The decline in Gross Refining Margins for the refineries was mainly due to inventorylosses suffered as a result of decline in international crude prices. The price of IndianBasket of crude fluctuated from US$ 104.5/bbl at the beginning of year to US$ 53.6/bbl perbarrel at the close of FY 2014-15.
EARNING PER SHARE
Earnings per share for the current year increased to ' 80.72 as compared to ' 51.20 in2013-14.
Dividend of ' 24.50 per share has been proposed for the year 2014-15. The dividendwould result in total pay-out of ' 999 crore, including Dividend Distribution Tax.
C. STRATEGY VISION 2030
To prepare for the future challenges and leverage opportunities, an elaboratetransformational process was undertaken to develop the Vision for 2030 for theorganisation christened UDAAN 2030 which defined the Strategic objectives forall the businesses lines till 2030. The exercise involved looking at the discontinuitiesaffecting the energy industry, drivers for growth and scenario building for identifyingthe shifts impacting fuels and develop the long term future direction of HPCL. UDAAN 2030objectives translate into 6 strategic bets across Refining, Marketing, Petrochemicals,Natural Gas, Exploration & Production and Renewables. To enable achievement of theStrategic objectives, associated Bold moves and Initiatives wereidentified 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 tothe Vision and enables execution of the identified bold moves and initiatives through adefined review and monitoring architecture. The SMIO is helping the Business Units to takeownership for execution and undertake actions for achieving the Short term and long termobjectives.
This strategic initiative is expected to help the organisation achieve sustainablecompetitive advantage in the continuously changing market and business environment.
D. REFINERIES GLOBAL SCENARIO
World GDP grew by 2.6% in 2014 led by growth in Asia Pacific region & USA. Afterholding above the US$100 per barrel mark for more than three years, since mid-June 2014oil prices have declined by more than 50% (through mid-January 2015) when weak marketfundamental finally outweighed geopolitical uncertainty. OPECs decision at theirlate-November meeting to maintain the current production ceiling, exacerbated the decline.
In 2014 total crude oil production was 93.35 million barrels per day (mbpd) as comparedto 91.33 mbpd in 2013 registering a growth of over 2 mbpd or 2.2%. This growth inproduction was led by USA & Canada, where oil production grew by 12.8% (1.8 mbpd).Global Oil demand in 2014 was 92.52 mbpd as compared to 91.84 mbpd in 2013 registering agrowth 0.68 mbpd which was led by Asia Pacific region. The year 2014-15 witnessed thehighest ever production of tight oil (shale) in the US which reduced its dependency onWest African crude. This has also resulted in highest ever crude inventory buildup in USA.
Brent averaged at US$ 109.63/bbl in first quarter of 2014-15, compared to US$108.22/bbl in the previous quarter. The marginal rise was aided by continued tensionsbetween Russia and Ukraine, supply outages in Libya and northern Iraq and stepped up crudebuying by refiners as they came out of maintenance turnarounds. All these factors combinedto offset the impact of seasonally weaker demand and market expectations for lifting ofsanctions on Iranian exports. The first quarter in 2014-15 also witnessed Brent at a peakof US$ 115/bbl in the wake of a bold military campaign by ISIS in Iraq and apparent buildup in Chinas 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 dropof over $ 4/bbl every month owing to weak refinery demand, strong dollar index, slower USimports and rising Libyan exports. Brent fell by more than $ 25/bbl during the thirdquarter of 2014-15, the highest fall since 2008 meltdown mainly due to OPECsdecision not to cut production which resulted in inventory build-up. As supplies piled upand weighed on oil prices Brent tumbled to below $46/bbl in early January 2015, its lowestin nearly six years. The market rallied in late January 2015 on news of a steep drop inthe 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 wasexperiencing slowdown in economy with surplus supplies in the region. The margins cameunder further pressure during Q2 and closed at US$ 4.26/bbl due to poor middle distillatescracks. Effective Q3 margins improved and posted US$ 7.31/bbl which showed further upwardtrend at end of the year and closed at US$ 9.04/bbl due to lower crude prices.
Middle distillates were under pressure during 2014-15 due to ample supplies in Asia andlimited demand. The cracks for Gasoil and Jet were lower in 2014-15 compared to previousyear. The Gasoil crack fell to its lowest level since late March 2012. Middle distillatescracks showed no sign of recovery and stockpiles of Jet and Gasoil remained to be clearedwhich were built for Ramadan in the last week of June.
In comparison, Light distillates remained supported in Q1 with cracks for both Gasolineand Naphtha hitting their biggest gain in the last three years, owing to reduced suppliesof 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 regionas alternative petrochemical feedstock and surging demand in Europe for Naphtha as aGasoline blending stock. However, Gasoline cracks saw a decline. Q3 saw Naphtha crackscoming under pressure due to more arbitrage volume coming to Asia as Europe had increasedits operating rates for middle distillates to meet its domestic demand. Gasoline cracksdropped further in Q3 with expectation of lesser demand by Indonesia, the biggest buyer ofthe region on the news of elimination of subsidies in retail pricing by IndonesianGovernment. Both the cracks got support in the month of February 2015 due to strikes in USrefineries and Chemical plants. The Naphtha market found support due to bad weatherconditions in Europe, Mediterranean region and US leading to delay in arbitrage volumecoming to Asia.
Fuel oil cracks remained heavily discounted to Crude Oil during April & May of 2014due to huge western arbitrage volume coming to Singapore and weaker bunker demand. Declinein crude oil prices encouraged marine fuel demand and lesser western arbitrage volumecoming into Asia leading to improvement on Fuel oil cracks in Q2 and showed a strongerupward trend after November 2014, after the sharp plunge in crude oil prices with OPECdeciding not to cut crude oil production. End of the year 2014-15, saw the continuedupward 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 innovativesourcing practice of delivered month pricing.Q3 witnessed steep fall in crude and productprices resulting in GRM of US $ 1.04/bbl for the period April - December 2014.In Q4, themargins improved and we closed the financial year 2014-15 with an average GRM of US$2.84/bbl.
CRUDE OIL IMPORTS
HPCL uplifted 4.85 MMT of indigenous low sulphur crude oil (Mumbai High & CambayBasin grade) in 2014-15. The increased allocation of Mumbai High crude improved HPCLrefinery margins during 2014-15.
HPCL imported 11.30 MMT of crude oil in 2014-15. Lower imports were mainly due tohigher upliftment of indigenous crude. The import requirement of 11.30 MMT was met mainlythrough term imports and spot purchases. Total high sulphur crude oil procurement of 8.84MMT was done through term contracts from the Gulf region. Main suppliers included SaudiArabia, United Arab Emirates and Iraq. Total imported low sulphur crude oil procurementamounted to 2.46 MMT, which was sourced through term and spot purchases.
The Free on Board (FOB) cost of imported crude oil amounted to US$ 6917 million ('42,231 crore) in 2014-15 as compared to US$ 9,475 million (' 57,556 crore) in 2013-14. Theaverage cost of crude oil imported in 2014-15 stood at US$ 82.75 per barrel as compared toUS$ 106.79 per barrel in 2013-14 on account of lower crude oil prices. The averageexchange rate was ' 61.05/ US$ as compared to ' 60.75/ US$ in 2013-14.
During 2014-15, when crude oil prices were falling very steeply, HPCL adopted aninnovative approach for sourcing crude oil from spot market by procuring it on deliveredmonth 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 ofIndia (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 onvoyage and time charter for LPG, LOBS, Crude, Clean Petroleum Product, Dirty PetroleumProduct 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 asper Baltic Dirty Tanker Index (BDTI) mainly due to increased demand , low crude prices anduse of vessels for floating storages. Delays in loading of Basrah crude were observed fromKhor-Al-Amaya terminal mainly on account of slow loading rate, bad weather condition andport congestion and from Basrah oil terminal on account of heavy port congestions.
To reduce overall crude procurement costs, HPCL continued chartering of Very LargeCrude Carriers (VLCCs) for Low sulphur spot crude cargoes. During FY 2014-15, VLCCunloading in refinery tanks at Visakh was a challenge due to limited tankage availability.Commissioning of ISPRL with additional storage capacity would enable HPCL to optimizecrude procurement and maximize freight benefit.
PHYSICAL PERFORMANCE & INITIATIVES
During the year 2014-15, HPCLs refineries have maximized crude processing whichenabled them to achieve a combined refining throughput of 16.18 MMT with a capacityutilization of 109% in spite of taking planned shutdowns. The refineries also achieved ahighest ever combined distillate yield of 77.5% by improving yields of value addedproducts.
The year 2014-15 marked a milestone in terms of compliance to auto fuel specificationsfor Euro IV High Speed Diesel (HSD) at both the refineries with the commissioning andsustained operation of Diesel Hydro Treater (DHT) units. The addition of the DHT unitsincreased the complexity of the refineries and along with robust crude mix and operationalstrategy contributed to the highest ever production of high valued light and middledistillates. Production of Transportation fuels of Motor Spirit (MS) and High Speed Diesel(HSD) have seen an impressive growth from the previous year recording an all-time highproduction of 6 million tonnes of HSD and 2.7 million tonnes of MS. Focus ondiversification of products to meet customer needs has led to introduction of VG-40 gradebitumen at both refineries. Additionally, Mumbai refinery is now producing three differentgrades of naphtha to cater to customer needs.
During the year, Mumbai refinery has recorded the best ever production of HSD (2512TMT) and Spindle Oil (Group II - 9 TMT, 90 N - 6.4 TMT) through effective utilization ofassets. By blending reformate sourced from domestic imports, Visakh Refinery was able toenhance 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 Refineryhas 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 lowsulphur residue available. During 2014-15, 60 TMT of Low Sulphur Heavy Stock (LSHS) whichis a low value heavy stream was processed in FCCU-2 for producing value added productslike MS, HSD and LPG resulting in an estimated saving of ' 30 crore.
Both the refineries have undertaken measures towards reduction of emissions on acontinual basis ensuring environment protection. Initiatives to reduce SuspendedParticulate Matter (SPM) and Sulphur emissions were undertaken by refineries throughinstallation of Flue Gas Desulphurization (FGD) facility for treating Fluidized CatalystCracker (FCC) off-gases. All the FCC units are provided with flue gas desulphurizationunits, which provided both the refineries to have flexibility to enhance low value HighSulphur crude processing as well.
The energy conservation efforts have resulted in Mumbai refinery achieving SpecificEnergy Consumption of 79.7 MBTU/ BBL/NRGF (Million British thermal units / Barrel /Nelsons refining gross factor) against MoU Excellent target of 82.0 Similarly,Visakh refinery has achieved the best ever Specific Energy Consumption of 82.7MBTU/BBL/NRGF against MoU Excellent target of 84.0. The energy conservation measuresundertaken by both refineries during the year 2014-15 have resulted in a savings of 18,832SRFT/year (Standard Refinery Fuel Tonnage per year).
Operations at Visakh Refinery were impacted due to cyclone HUDHUD that hit east coastduring October 2014 and as a precautionary measure refinery units were shut down. This hasaffected refinery crude throughput and production of petroleum products. All efforts wereundertaken to restore normalcy and bring back the refinery to regular operations inshortest possible time. Despite this setback, HPCL ensured that there was no shortfall ofpetroleum products during the recovery time.
ENHANCEMENT OF REFINERY CAPACITY
In order to comply with the future fuel emission requirements of BS V/VI, HPCL isplanning to upgrade and enhance the refining capacity of Visakh refinery from existing 8.3MMTPA to 15 MMTPA under Visakh Refinery Modernization Project (VRMP). Theexpansion project includes state of the art processing facilities and Bottom up gradationunits for increasing the production of value added products. Mumbai refinery expansion isalso 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 forthe Mumbai Refinery Expansion Project (MREP).
INTEGRATED MARGIN MANAGEMENT
Conventionally, downstream companies have followed silo-based marginmanagement, where respective departments focus on managing processes within their realm.The downstream value chain in HPCL was managed by respective Business Units which werefocused on SBU-specific metrics and performance management systems to drive efficiency andprofitability of the respective SBUs. To realize this latent value, a single empoweredgroup called Integrated Margin Management (IMM) was created with ultimate objective formaximizing Net Corporate Realization (NCR) across the crude to customer value chain.
Key cross-functional processes viz., Annual Planning, Monthly Planning andRetro-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 acrossthe organization. It has made the supply chain planning more streamlined with tightcontrol on margins. All business units are now aligned to common objective of IMM formaximizing corporate realization. With segregation of planning the business units are nowfocused more on improving the physical operating metrics.
HPCL continued its excellent marketing performance amidst rapidly changing marketlandscape with consistent thrust on competitive marketing strategies, optimal resourceutilization, cost optimisation and innovative sales practices. The Corporation hasregistered a total product sales (including exports) of 31.95 million metric tonnes during2014-15 vis-avis sales of 30.96 MMT during the preceding year. HPCL recorded a growth of2.3% in domestic marketing sales vis-a-vis public sector Oil Marketing Companys(OMCs) growth of 2.2%. This excellent marketing performance has helped HPCL achieve amarket share gain of 0.02% amongst PSU OMCs and exceed MoU targets. The individualperformances of the Marketing Division SBUs are detailed in the sections below:
Retail Strategic Business Unit (SBU) continues to occupy prime position as it accountsfor almost 70% of HPCLs total market sales. The SBUs core philosophy ofstrategic network expansion and Service delivery process improvement continued to be thekey thrust areas during 2014-15. Retail SBU achieved another stupendous performance thisyear 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 consecutiveyear. Despite stiff market challenges due to dismantling of the dual pricing in High SpeedDiesel (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 to13233 retail outlets and revived operations at 167 closed retail outlets which areexpected 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 withan outlay of ' 234 crore, completed electrical safety audit at 4106 retail outlets andprovided Retail Automation at 200 retail outlets taking the total number to 2309 automatedretail outlets.
To ensure outstanding customer and vehicle care, HPCL has about 1291 Club HP outletsand during 2014-15, 108 retail outlets were upgraded from Club HP outlets to Club HPStar outlets (premier category outlets). Over 15000 dealer men were covered throughvarious training programs focusing on current business imperatives and behavioural changesfor delivering the Club HP promise. Mass media along with outdoor campaigns wereeffectively utilised to communicate the brand promise under the theme Club HP -Achcha Lagta Hai. HPCL sells the highest quantity of Branded Fuels in thecountry. During 2014-15, the sales of Power (Branded petrol) were commenced at 1365 RetailOutlets taking the total number of outlets selling Power to 1463 and registering a salesof 49 TKL of Power during the year.
HPCL has built a profitable Non-Fuel business (Allied Retail Business - ARB) with awide range of services and facilities for the customers including ATM facility, take awayfood counters, C Stores, vehicle accessories etc. at retail outlets throughtie-ups with leading Banks, Food Brands & OEMs. During 2014-15, commissioned 103 newATMs taking the total number to over 1600 ATMs at HPCL retail outlets. The ARB incomerealized was ' 68.4 crore with a growth of about 23% over the previous year. ARB continuesto be a focus area for SBU as apart from enhancing the customer experience at retailoutlets same also contributes significantly to non-fuel revenues.
Retail SBU has undertaken various customer centric initiatives during the year. DriveTrack Plus, a flagship product under the Card based Loyalty Program of Retail SBU, isaccepted at 5012 retail outlets and has built up a large customer base. It offers acombination of control, convenience, security and attractive rewards. This innovativepayment device is designed for efficient management of fleet, through greater control overfuel consumption and operating costs. During 2014-15 Over the Counter (OTC) cards werelaunched under the branding of My HPCL card for single vehicle customers andTatkal cards were launched for instant carding of customers. HP Account Cardwas launched for customers taking fuel from COMCO (Company Owned and Maintained by CompanyOfficer) outlets and T&E (Training & Experimentation) stations and InstafuelCard was launched for corporate customers.
Good Fuel Promise, a Quality Assurance initiative has been given thrust through variousinitiatives. Check and Fill campaigns were regularly conducted during 2014-15 to invitecustomers to check the quality and quantity before fuelling their vehicles. SurveillanceAudit of Club HP Outlets was conducted on regular basis through a 3rd party InternationalAgency.
Retail SBU continued to focus on strategic initiatives to have competitive advantage.During 2014-15, Outlet Diagnostics and Monitoring Tool (ODMT) activity was completed at1200 outlets taking the total number to 2621 ODMT enabled outlets. Standard OperatingPractices (SOPs) enablement was completed at 545 retail outlets taking the total number to5653 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 enhanceefficiencies in business processes and connect with dealer channel and customers byleveraging technology.
HPCL has taken Customer Connect in petro-retailing to the Next Level byintroducing a Mobile Application for customers, particularly since majority of consumersof 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 friendlycustomers, particularly the ones moving up the value chain like Gen Next and others.It has features like Retail outlet locator, Lube oil recommendation chart, Insurance andPUC Tracker etc. We plan to introduce several value-added services through this App in thenear future.
HPCL has further leveraged technology by incorporating IT enabled initiatives likeonline e-Request For Disposal (e-RFD) for disposal of scrap, Pilot launch of ShortMessaging Service (SMS) feature through retail automation system, scanning of 11600 leaseagreements & capturing under e-repository of property documents under ProjectSangraha and effective usage of Network Planning (NP) tool to validate potential atlocations were rolled out during 2014-15. Other initiatives taken during the year includeintroduction of attractive loan policy for dealers to install Solar Power systems atretail outlets and revival of Vapour Recovery System at 418 retail Outlets.
Retail SBU Tied-up with SBI for providing working capital finance at attractive ratesto 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 wereinspected during the year and 96% of these toilets were found in clean condition. A total171 new toilets were constructed at retail outlets where the facility was not previouslyavailable.
HP GAS, the HPCL brand of LPG, lights the kitchen in millions of Indianhomes. During 2014-15 HPCL has achieved highest ever LPG sales volume of 4.7 MMT andregistered a growth of 11% against PSU Industry growth of 10.6 % and gained a market shareof 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 anetwork of over 3961 LPG distributors as of March 2015. LPG SBU also commissioned highestnumber 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 ' 2,287 crores was transferred under PAHAL during theyear with lowest failure rate of 0.78%.
To aid the LPG customers in selecting the distributor of their choice, HPCL launchedDistributor Portability option in the customer portal. Inter-companyportability was initially commenced in 24 cities of 14 states and was further extended toentire country. A unified Transparency and consumer portal was developed and implemented,where customers can book cylinder, track booking and delivery dates, choose forportability, check Aadhaar linking status, monitor subsidy transfer to their bank account,request for mechanic service and surrender connection. Provision for Registration for Newconnection/ DBC is als