CHAPTER 1 INTRODUCTION

1.1GENERAL INTRODUCTION

An organization is a social arrangement which pursues collective goals, which controls its own performance and which has a boundary separating it from its environment. Organization is the association formed by a group of people who see that there are benefits available from working together towards some common goal. Organizational studies are the study of individual and group dynamics in an organizational setting, as well as the nature of organization themselves. Whenever people interact in organizations many factors come into play. Organizational studies attempt to understand and model these factors. Organizational study is essential to any MBA graduate as it help them to connect theory with practice. Organizational study refers to the study of organization as a whole and getting adequate knowledge with various departments in the organization. The study is based on the different aspects and dimensions of different departments of the company. The study provides an insight into various management styles, various types of communication used within an organization, work ethics, cultural diversity, types of technology used and also politics, because no organization can work in the complete isolation as they are living in a global village. Organizational studies involve careful study about how people inside the organization interact with one another and how they can be made better to communicate their concerns. There are many factors that come into play when people interact with each other not just as individuals but as a team as well. Corporation Ltd, Ernakulam. The study was carried out at Hindustan Petroleum

Brief about HPCL

HPCL is a Government of India Enterprise with a Navratna Status, and a Fortune 500 and Forbes 2000 company, with an annual turnover of Rs. 1,90,048 Crores and sales/income from operations of Rs 2,15,675 Crores(US$ 39.726 Billions) during Fianancial Year 2012-13 having about 20% Marketing share in India among Public Sector Undertakings and a strong market infrastructure. HPCL's Crude Thruput and Market Sales (including exports) are 15.78 Million Metric Tonnes (MMT) and 30.32 MMT respectively in the same period.

HPCL operates 2 major refineries producing a wide variety of petroleum fuels & specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per Annum (MMTPA) capacity and the other in Vishakhapatnam, (East Coast) with a capacity of 8.3 MMTPA. HPCL holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals Limited, a state-of-theart refinery at Mangalore with a capacity of 15 MMTPA. In addition, HPCL has constructed a 9 MMTPA refinery at Bathinda, in Punjab, with Mittal Energy Investments Pvt. Ltd.

HPCL also owns and operates the largest Lube Refinery in the India producing Lube Base Oils of international standards, with a capacity of 335 TMT. This Lube Refinery accounts for over 40% of the India's total Lube Base Oil production.

HPCL's vast marketing network consists of 13 Zonal offices in major cities and 101 Regional Offices facilitated by a Supply & Distribution infrastructure comprising Terminals, Pipeline networks, Aviation Service Stations, LPG Bottling Plants, Inland Relay Depots & Retail Outlets, Lube and LPG Distributorships. HPCL, over the years, has moved from strength to strength on all fronts. The refining capacity steadily increased from 5.5 MMTPA in 1984/85 to 14.8 MMTPA presently. On the financial front, the turnover has grown from Rs. 2687 Crores in 1984-85 to an impressive Rs 1,69,011 Crores in Financial Year 2011-12.

1.2 INDUSTRY PROFILE

INTRODUCTION

HPCL, a Government of India undertaking and a Fortune 500 company, is one of the major integrated oil refining and marketing companies in India. It is a Mega Public Sector Undertaking (PSU) with Navaratna status.

HPCL accounts for about 20% of the market share and about 10% of the nation's refining capacity with two coastal refineries, one at Mumbai (West Coast) having a capacity of 6.5 Million Metric Tonnes Per Annum (MMTPA) and the other in Vishakhapatnam (East Coast) with a capacity of 8.3 MMTPA. HPCL also holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals Limited (MRPL), a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. In addition, HPCL, in collaboration with M/s Mittal Energy Investment Pvt. Ltd. has set up a 9 MMTPA refinery at Bathinda, in the state of Punjab, as a Joint Venture.

HPCL owns the country's largest Lube Refinery with a capacity of 335,000 Metric Tonnes which amounts to 40% of the national capacity of Lube Oil production. HPCL has given India a firm ground in this sector with its world class standard of Lube Base Oils. Presently HPCL produces over 300+ grades of Lubes, Specialities and Greases.

HPCL has earned "Excellent" performance for fifteen Consecutive years upto 2005-06, since signing of the first MOU with the Ministry of Petroleum & Natural Gas. HPCL won the prestigious MOU Award for the year 2007-08 for Excellent Overall Performance, and for being one of the Top Ten Public Sector Enterprises who fall under the 'Excellent' category. HPCL's performance for the year 2010-11 also qualifies for "Excellent" rating.

HPCL, over the years, has moved from strength to strength on all fronts. The refining thruput has increased three fold between 1984/85 to 2007/08, rising from 4.47 MMTPA in 1984/85 to 16.19 MMTPA (2011-12). Consistent excellent performance has been made possible by highly motivated workforce of over 11,226 employees working all over India at its various refining and marketing locations.

HPCL continually invests in innovative technologies to enhance the effectiveness of employees and bring qualitative changes in service. Business Process Re-Engineering exercise, creation of Strategic Business Units, ERP implementation, Organizational Transformation, Balanced Score Card, Competency Mapping, benchmarking of refineries and terminals for product specifications, ISO certification of Refineries and Supply Chain Management are some of the Initiatives that broke new grounds.

HPCL has successfully integrated Information Technology in its activities at different levels. The Enterprise Resource Planning (ERP) system is now operational on J.D.Edwards, an Oracle product, across the Corporation.

The strengthening of the marketing network over the years has lead to dominance in the market reflected in its growth and leading to best quality of service.

HPCL was one of the first companies to understand the nation's energy requirements and take necessary measures to fulfill the expectations. Its increasing infrastructure facilities are due to the successful realization of set targets and sustained quality of Service and customer relations.

GLOBAL SCENARIO

HPCL is a Fortune Global 500 company as per the ranking of 2013 and was ranked at position 260. HPCL was featured on the Forbes Global 2000 list for 2013 at position 1217. Hindustan Petroleum Corporation Limited is committed to continue rendering support to the

Global Compact programme of the United Nations and will Endeavour to abide by the ten Principles of the programme, some of which are a part of HPCL Vision and Mission Statements. Therefore, the company continues to pledge support to the programme through its policies, processes, products and services.

INDIAN SCENARIO

HPCL is the 10th most valuable brand in India according to an annual survey conducted by Brand Finance and The Economic Times in 2010. HPCLs commitment to the development of weaker sections of society is over 2 decades old. Lately, it has upgraded its activities to cover a larger section of the society. HPCL draws its strength from its Vision and Mission statements, to support the downtrodden, needy and marginalized citizens and create social infrastructure for their sustenance. HPCL has undertaken projects under 5 different themes: They are: Under CSR,

Child Care
o o o

Child Rights - "Bal Haq" Care of Slum Children - "Muskan" Rescue of Children in destress- "Child Line"

Education
o o o o

Computer awareness- "Unnati" Girl Child - Nanhi Kali Children with special needs- ADAPT Mid-Day Meals for Govt. schools- Akshaya Patra

Health Care
o o o

Medical facilities at Rehabilitation centres- Navjyot Awareness on HIV among truckers -"Suraksha" Medical Care in Rural Areas -Wockhardt 6

Sushrut Hospital

Livelihood
o o

Skill Development - "Swavalamban" Employability for youth in Urban Slums -Smile

Community Development
o o o

Rain water harvesting -"Jal-tarang" Solar lighting- LaBL Community Kitchen -"Rasoi Ghar"

The CSR (Corporate Social Responsibility) programs undertaken at the field level, focused on the backward communities are completely employee driven. The field personnel identify the needs of the community in the periphery of their function / location. Plans are then drawn in consultation with Local Government authorities and projects / schemes are implemented to bridge the need gaps of these communities. These projects create a very strong bond between the community and the local setup where HPCL has its business operations

The oil industry of India can be broadly classified into two major streams.

Upstream:

This stream is dominated by the firms which deal in exploration and production of petro chemical products. Firm engaged in the exploration of the fields do not undertake the refining of the crude oil as their main area of business. They explore and become the provider of the crude oil to the refining units located inside the country and outside as well.

Downstream: This stream includes firm which undertake the refining of the crude oil and marketing the final products. They get their raw material from the firms engaged in the exploration of the crude oil.

Awards

The Corporations commitment to excellence has won several national awards and accolades for outstanding performance in the field of Safety and Environment.

Mumbai Refinery

Mumbai Refinery has won the following Safety & Environment awards:

Refinery has been conferred with "GREENTECH AWARD" for the year

2008

under the 'Environmental Excellence' category by Greentech Foundation, New Delhi.

Refinery has been conferred with GOLDEN PEACOCK AWARD for the year 2007 for excellence in Environmental Management Systems by World Environment Foundation (WEF) & Institute of Directors (IOD), New Delhi.

Visakh Refinery

Visakh Refinery has won the following Safety & Environment awards:

Conferred with "SILVER GREENTECH AWARD" for the year 2007 under the 'Environmental Excellence' category by Greentech Foundation, New Delhi.

Jawaharlal Nehru Centenary Award, instituted by Ministry of Petroleum and Natural Gas for Improvement in Specific Energy Consumption was bagged by the refinery.

Energy Conservation in Petroleum Refining Sector for the year 2007 by Center for High Technology New Delhi. 8

Marketing Loctions:

The Marketing Locations have won the following Safety & Environment awards:

Oil Industry Safety Directorate Award - 2006-07 for SBU of LPG and Lubes operations.

Jawaharlal Nehru Centenary Award, instituted by Ministry of Petroleum and Natural Gas for Improvement in Specific Energy Consumption was bagged by the refinery.

nergy Conservation in Petroleum Refining Sector for the year 2007 by Center for High Technology New Delhi.

Greentech Environment Excellence Gold Award 2007 for Hasan Terminal . Golden Peacock Award 2007 for Excellence in Occupational Health and Safety Management for Mangalore Terminal.

National Safety Award -2006 for Budge Terminal.

Silver Green Tech Safety Award -2007 for Salawas depot and Sanganer.

Green Tech Safety Award 2007 for Loni, Nasik , Raipur Jatni , Hazaribagh and Patna LPG Plants.

Safety Innovation Award 2007 from Institution Of Engineers (India)for Palam ASF.

Safety Innovation Award 2007 from Institution Of Engineers(India)for Santacruz ASF. 9

Environment Excellence Gold Award 2007 from Greentech Foundation for Palam ASF.

Golden Peacock Innovation Award 2007 from Institution of Directors for Chennai ASF.

Environment Excellence Silver Award 2007 from Greentech Foundationfor Santacruz ASF.

According to the reports of consumption and production from petroleum and planning cell, the production and the consumption of the petroleum products has increased more. It can be noticed that the consumption rate is higher than the production rate of the petroleum products.

PRESENT SCENARIO

HPCL maintains high standards of safety, health and environmental care at all its operating locations, always ensuring that increasing scales of operation have no negative impact on the standards of safety, health and environment and without losing sight of its long term goal of zero occupational injuries, operational incidents and environmental releases.

HPCL is committed to conducting business with a strong focus on preserving the environment, sustainable development, safe work place and enrichment of the quality of life of employees, customers and the community. Established systems and procedures are constantly revised for continual improvement to achieve the higher standards of safety, occupational health and environment protection.

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Health: HPCL has well equipped health care facilities / arrangements at all major locations. Occupational Health is focus area for HPCL and all issues pertaining to occupational health are addressed comprehensively

Safety: HPCL has made significant improvements in its safety performance over the years. The safety management systems of both the refineries are being audited continually by M/s. DNV, in line with their International Safety Rating System (ISRS). Mumbai Refinery & Visakh Refinery has already been upgraded from level 6 to level 8.

Environment: Emissions of pollutants in the refineries like SO2 have been drastically reduced from 60 TPD in 1984 to less than 25 TPD now, in spite of capacity increase from 4.5 MMTPA to 13 MMTPA and addition of various secondary processing and lube producing facilities.

HPCL had pioneered Eco-friendly technologies such as changeover from Phenol to NMP solvent in three lube extraction units and changeover from Oleum to NMP in the Hexane Treating Plant, which were widely appreciated.

Diesel Desulphurisation facilities are fully operational in both the Refineries to reduce the sulphur in diesel from 1.0% to less than 0.05 %, to conform to BIS 2000/Euro II norms. HPCL has undertaken projects worth about Rs. 2750 Crore for its green fuels project in its Refineries for de-bottlenecking and process up gradation for the production of Euro III diesel and petrol, to be in line with the national policy to implement Euro III and Euro IV norms for fuel quality. These Projects are in an advanced stage of completion.

Both refineries have taken initiatives for treating the crude tank sludge, in environmental friendly manner using in situ BALCO Technology of M/s Balmer and Lawrie & Co. Ltd .

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Over 75% of the petroleum products from the Refineries are being evacuated through pipelines. Dependence on road transport for evacuation of products has been reduced drastically, resulting in considerable reduction in auto emissions to atmosphere.

Waste Management: In line with the hazardous Waste Management rules, different hazardous waste like spent catalysts, oily silt, non oily insulations etc. are being disposed off to Treatment, Storage & Disposal Facilities approved by Pollution Control Board. In order to comply with the future proposed liquid effluent norms, replacement of existing ETP-I & ETP-II with new integrated ETP by adopting Cyclic activated Sludge treatment followed by Membrane Bio-Reactor and TTP has been approved and work placement is in progress at Mumbai Refinery.

Ambient Air quality is being monitored round the clock and maintained as per National Ambient Air Quality Standard.

On line Monitoring of pollutants like CO, NOx, HC, SO2, SPM from all the stacks are being carried out.

The Environment Management System of both the Refineries, have been re-audited and awarded accreditation under ISO-14001 revised standards.

Marketing Locations: All the 44 LPG Plants are certified with ISO 9001:2000, 38 plants with ISO 14001 and 21 plants are OHSAS: 18001 certified.

68 POL locations (as of 2008) are certified with ISO 9001, 32 locations with ISO 14001 and 12 locations with ISRS and 3 locations with OHSAS 18001.

Extensive green coverage has been provided in and around the refineries, marketing installations and housing colonies.

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1.3 COMPANY PROFILE

INTRODUCTION

Hindustan Petroleum Corporation Limited (HPCL) is a Government Company within the meaning of Section 617 of the Companies Act 1956. The Registered Office of the Corporation is at Petroleum House, 17 Jamshedji Tata Road, Churchgate, Mumbai 400020. HPCL is an amalgamation of the erstwhile foreign oil companies ESSO and Caltex, which were taken over by the Government of India in 1974 and 1976 respectively. HPCL is a Central Public Sector Undertaking, with a subscribed capital of Rs. 339.33 Crores. The President of India is presently holding 51.01 % of the paid share capital, the remaining shares being held by various Financial Institutions, FIIs, Banks, Mutual Funds, NRIs and general public including employees of the Corporation. The shares are listed on BSE / NSE and are actively traded. HPCL is one of the largest integrated Public Sector Undertaking, engaged in the business of refining Crude Oil and marketing of various petroleum products like Petrol, Diesel, LPG, Kersoene, Lube Oils, Asphalt, branded products like Power, Turbojet, naphtha, ATF (Aviation Turbine Fuel) throughout India and at select foreign countries. Some of these products are exported to other countries. HPCL owns and operates two refineries situated at Mumbai and Visakhapatnam. HPCL has focused on its business throughout India by segmenting its business outlook into Retail (Petrol Pumps), LPG, Industries & Commercial (Bulk Fuels supplies to industries, ships), Lubes, Aviation, Refineries etc, with support from the shared services like Finance, Company Secretary, Human Resources, Public Relations, Legal etc. HPCL has 7 Retail and 6 LPG Zonal offices at major Cities, in addition to 90 Regional Offices, 37 major Terminals / Installations / Tap Off Points and an elaborate Pan India Infrastructure network comprising Lube Blending Plants, Depots, LPG Bottling Plants, LPG 13

Import Facilities, Petrol Pumps, Compressed Natural Gas outlets, Auto LPG Pumps, HP Gas LPG Distributors, Superior Kerosene Oil/ Light Diesel Oil Distributors, Lube Carrying and Forwarding Agents, Aviations Service Facilities (ASF) etc.

HISTORY

HPCL was incorporated in 1974 after the takeover and merger of Erstwhile Esso Standard and Lube India Limited by the Esso (Aquisition of Undertakings in India) Act 1974. Caltex Oil Refining (India)Ltd.- CORIL was taken over by Govt. of India. in 1976 and merged with HPCL in 1978 by the CORIL-HPCL Amalgamation Order, 1978. Kosan Gas Company was merged with HPCL in 1979 by the Kosangas Company Aquisition Act, 1979.

In 2003, following a petition by the Centre for Public Interest Litigation (CPIL), the Supreme Court of India restrained the Central government from privatizing Hindustan Petroleum and Bharat Petroleum without the approval of Parliament. As counsel for the CPIL, Rajinder Sachar and Prashant Bhushan said that the only way to disinvest in the companies would be to repeal or amend the Acts by which they were nationalized in the 1970s. As a result, the government would need a majority in both houses to push through any privatization

HPCL has been steadily growing over the years. The refining capacity steadily increased from 5.5 million metric tonnes in 1984/85 to 14.80 million metric tonnes (MMT) as of March 2013. On the financial front, the Net income form Sales/operations grew from IN 2687

crores in 1984-85 to IN 2,06,529 Crores in Financial year 2012-13. During Financial Year 2012-13, its net profit was IN 904 Crores.

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MANAGEMENT HPCL is managed by a Board of Directors. The Board of Directors consists of a maximum of 15 Directors, incuding the Chairman & Managing Director. The Chairman and Managing Director is the head of the Corporation. The Board comprises of Wholetime Directors also called Functional Directors Director Marketing, Director Refineries, Director Human Resources, Director Finance. In addition, part time Directors representing Government of India, through Ministry of Petroleum & Natural Gas, and part time Independent Directors, also called Navratna Directors are on the Board. All these Directors are nominated by the Government of India. The Board of Directors is assisted by Executive Directors, General Managers and other Officers / employees in carrying out the day-to-day functions of the Corporation

Nature of business

HPCL deals with the product and services like Refineries, Aviation, Bulkfuels and specialities, International trade, LPG- Hp gas Lubes- Hp lubes, Retail, Exploration and production, Joint ventures, Alternate energy. HPCL is concerned with refining and marketing of petroleum products.

Powers and Duties of Officers & Workmen The power and duties of the officers and workmen of the Corporation are derived mainly from the provisions of the Company Act 1956, the Memorandum & Articles of Association of the Corporation, and the various manuals specifying the area of operation of individuals, basis the job description, terms and conditions of appointment, and the delegation of the authorities as specified. HPCL is a commercial organization and the officers and workmen are appointed to carry out the business operations of the Corporation, in line with the objectives set forth in the Memorandum of the Association of the Corporation and the cocreated vision statement. 15

While discharging the assigned duties, all employees are required to comply with the applicable provisions of statutes and rules and regulations in force, including the manualised instructions. Decision Making Process The apex level decision making authority is the Board of Directors of HPCL, except for matters which, as per the Companies Act 1956 are to be decided by the shareholders in the Annual General Body Meeting. The Board has constituted several sub committees, such as Committee of Functional Directors (CFD), the Audit Committee, the Investment Committee, the HR Committee, the Investor Grievance Committee, etc. The meetings of these committees are convened on need basis and the minutes of these meetings are placed for information of the Board. Majority of the members of the Committees except the CFD are independent Non-Executive of Government nominated directors with the whole time directors playing a facilitating role. The Corporation has constituted an Executive Council comprising of C&MD, the Functional Directors and the Business Unit Heads. This Council discusses important issues concerning the organization, analyse the same and recommend the way forward in respect of matters discussed. The emphasis laid by this council is on team approach, mutual support of functions and joint deliberations on issues which has enhanced further the decision making process. It has thus facilitated an integrated thinking process and an aligned approach across the Corporation for achieving the Corporate Vision. Exercise of Authority: The Corporation has well documented Limits of Authority Manual, Purchase Manual, Chart of Accounts, etc, facilitating the decision making process at various levels within the organization.

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Limits of Authority Manual: Limits of Authority Manual lays down the authorities that can be exercised at various levels, i.e. the Board, Committee of Functional Directors, the Executive Committee, the Contracts Committee, the Bids Committee and also the senior individual positions, etc. for different activities of the Corporation. The manual is divided into segments representing different functions like Sales, Crude & Shipping, Capital Projects, Operations & Distribution, Finance, HR etc., and provides for a decision making process through various committees as above, represented by inter-functional groups including Finance. This ensures a transparent and streamlined decision making process adhering to the laid down systems and procedures and thereby leaving no room for arbitrariness. The Committee of Functional Directors has delegated further powers to various subcommittees within the organization, viz., Contracts Committee, Bids Committee, Credit Committee etc. Purchase Manual: This manual lays down elaborate procedures to be followed while undertaking purchases and in finalization of contracts. It lays down, inter alia, the purchasing authorities at various levels, norms and process for procurement. The norms set for discharge of functions The entire organizational functioning is basis the down delegation of authority at appropriate levels and measures to the individual officers. Several documented manualised instructions have been developed and approved by the Board of Directors, for the discharge of functions by the officers of the organization. Further guidelines issued by the Government of India, through the applicable departments, and Central Vigilance Commission, Central Information Commission from time to time are also followed. The guidelines issued by SEBI, Central Vigilance Commission, Stock

Exchange listing agreements also aid in the discharge of the functions. Particulars of 17

arrangement for consultation with the members of the public in relation to the formulation of policy or implementation thereof: HPCL is a commercial organisation engaged in the refining of crude oil and marketing of finished products and allied products and does not have formal arrangement or committee wherein public can attend to formulate policies in the area of activity of HPCL. However, HPCL do have mechanism of collecting feedback from customers / public for upgrading the service levels to improve the customer satisfaction. Infrastructure

HPCL's infrastructure is at par with that of the best global corporations in the hydrocarbons sector. For over a quarter century now, HPCL has been consistently breaking new grounds in production and marketing.

Operations HPCL operates two major refineries producing a wide variety of petroleum fuels & specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per Annum (MMTPA) capacity and the other in Vishakapatnam, (East Coast) with a capacity of 8.3 MMTPA. HPCL holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals Limited (MRPL), a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. Another Refinery of 9 MMTPA, set up in Bathinda, Punjab by HMEL, a Joint Venture with Mittal Energy Investments Pte.Ltd. HMEL has commenced commercial operations. HPCL has signed a MOU with Government of Rajasthan for setting up a Refinery near Barmer in Rajasthan. HPCL also owns and operates the largest Lube Refinery in India producing Lube Base Oils of international standards, with a capacity of 335 TMT. This Lube Refinery accounts for over 40% of India's total Lube Base Oil production. Presently HPCL produces over 300+ grades of Lubes, Specialities and Greases.

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The marketing network of HPCL consists of 13 Zonal offices in major cities and 101 Regional office facilitated by a Supply & Distribution infrastructure comprising Terminals, Aviation Service Facilities, LPG Bottling Plants, Lube filling plants, Inland Relay Depots, Retail Outlets (Petrol Pumps) and LPG & Lube Distributorships. HPCL has state of art information technology infrastructure to support its core business. The data center is located at Hitech city in Hyderabad.

Joint Ventures

HPCL-Mittal Energy Ltd.(HMEL) The refinery is designed to process Arab Heavy Crude with flexibility to process other heavy / sour / acidic crudes. The configuration of the refinery includes primary units and secondary process units viz. CDU/VDU, VGO-HDT, FCC, NCU/ISOM, HGU, DHDT, SRU, DCU and Polypropylene manufacturing facilities. Other facilities include utilities such as CPP, Steam generation, Effluent Treatment plant, product storage etc. Facilities include refinery units, a pipeline from Mundra to Bathinda, crude oil receiving terminal, SPM and jetty at Mundra port. HPCL Biofuels Limited (HBL) In line with Governments policy for blending of Ethanol, a new wholly owned subsidiary company HPCL Biofuels Limited (HBL) was incorporated on October 16, 2009 to produce Ethanol for blending into Petrol. HBL has set up Ethanol plants for blending into petroleum fuels, through installation of integrated Sugar plant (3500 TCPD capacity), Ethanol plant (60 KLPD capacity) & Co-Gen power plant (20 MW capacity), one each at Sugauli in East Champaran District and Lauriya in West Champaran District of the State of Bihar.

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CREDA-HPCL Biofuel Limited (CHBL) CREDA-HPCL Biofuel Limited is a Subsidiary company of Hindustan Petroleum Corporation Limited (HPCL), with Chhattisgarh State Renewable Energy Development Agency (CREDA) for the plantation of jatropha in the State of Chhattisgarh. CHBL was incorporated on 14th October 2008. Jatropha seeds are used for the production of bio-diesel as viable renewable source of energy. The Companys objective is to carry out jatropha planatation on 15,000 hectares of land leased to HPCL by the Govt. of Chhattisgarh. HPCL holds 74%, and CREDA holds 26% shareholding in CHBL. Hindustan Colas (HINCOL) Joint Venture promoted with M/s COLAS SA, France. Incorporated on July 17, 1995. Manufactures International quality value-added bituminous products such as bitumen emulsions & cutbacks and modified bitumen. The products of HINCOL are widely used by agencies associated with road construction. Prize Petroleum Company Limited HPCL, in partnership with ICICI and HDFC, had formed this Joint Venture E & P Company for participating in exploration and production of hydrocarbons. Prize Petroleum Company Ltd (PPCL) was incorporated on October 28, 1998. PPCL is also providing consultancy services related to E & P. It has since become a 100% subsidiary E&P unit of HPCL.

South Asia LPG Co Pvt. Ltd. ( SALPG) Joint Venture with Total Gas and Power India (a wholly owned subsidiary of Total of France) with HPCL's equity participation of 50% was incorporated on November 16, 1999.

First of its kind in India, the underground SALPG Cavern facility for storing LPG was commissioned in December, 2007 and formally inaugurated by the Minister of Petroleum & Natural Gas on 14th January, 2008. Setup at the cost of Rs.333.30 crores,the Cavern Marine 20

Terminal has a 60,000 MT capacity underground LPG storage Cavern and associated receiving & despatch facilities at Visakhapatnam. The SALPG Cavern is the largest LPG storage facility in South Asia with the lowest point 192 M below the Mean Sea Level (MSL) ranking among the deepest Caverns in the World. SALPG has obtained IMS certification from DNV for ISO 9001, ISO 14001, and OHSAS 18001. Bhagyanagar Gas Limited (BGL) Joint Venture with GAIL for distribution and 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 Andhra Pradesh. Incorporated on August 22, 2003.

Aavantika Gas Limited Incorporated on June 07, 2006, is is a Joint Venture Company with GAIL for distribution and 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.

Petronet India Limited (PIL) Joint Venture formed in May 1997. PIL, with different oil companies, implement individual pipeline projects-like Petronet MHB, through Special Purpose Vehicles (SPVs). Since oil companies are now having pipelines independently, PIL has initiated action to disinvest its equity holding in individual Joint Ventures. Petronet MHB Limited (PMHBL) Promoted (PMHBL) with Petronet India Limited (PIL) for the construction and operation of Mangalore - Hassan - Bangalore product pipeline. Meets fuel transportation needs between Mangalore, Hassan and Bangalore. Executed at a cost of Rs. 667 crores.

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Mangalore Refineries and Petrochemicals Limited (MRPL) Commissioned in March 1996 with a Refinery capacity of 3 MMTPA . HPCL and MRPL have been exchanging intermediate process streams between their refineries to supplement efforts to meet new environmental norms in respect of products like MS and HSD on mutually agreed terms. Rajiv Gandhi Institute of Petroleum Technology (RGIPT) The Rajiv Gandhi Institute of Petroleum Technology (RGIPT), an Institute of national importance, was set up at Jais, Dist. Rae Bareli, Uttar Pradesh through an Act of Parliament. RGIPT is co-promoted as an energy domain specific institute by six leading Oil Public Sector Units (ONGC, IOCL, OIL, GAIL, BPCL and HPCL) in association with the Oil Industry Development Board (OIDB). The Institute is empowered to award degrees in its own right. The Institute associates with leading International Universities / Institutions specializing in the domain of Petroleum Technology. Sushrut Hospital and Research Centre SUSHRUT HOSPITAL is an exclusive effort of the Chembur Hospital Project Trust - a joint venture promoted by likeminded Organizations, both from the Public and Private Sectors. Since its inception in 2000 Sushrut Hospital and Research Centre has an outstanding reputation for providing the highest quality health care services at a reasonable cost. Sushrut Hospital and Research Centre endeavors to provide medical treatment that is safe, ethical and affordable.

It is a five storeyed Multi Speciality Hospital with a large basement and is strategically located at Swastik Park in Chembur, Mumbai. The Hospital offers comprehensive medical and surgical care by renowned doctors and experienced staff using state-of-the-art technology. Sushrut also offers specialized care in Oncology, Nephrology, Trauma and Burns.

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MAJOR ONGOING PROJECTS o New Refinery near Barmer in Rajastan o Rewari Kanpur Pipeline (RKPL) o Diesel Hydro Treating(DHT) at Mumbai & Visakhapatnam Refineries. o Rajiv Gandhi Institute of Petroleum Technology.

Profile in brief

Type Industry Founded Headquarters Owners Revenue

: : : : : :

Public Oil & Gas 1974 Mumbai Govt. of India US $34.44 billion

MISSION

HPCL, along with its joint ventures, will be a fully integrated company in the hydrocarbons sector of exploration and production, refining and marketing; focusing on enhancement of productivity, quality and profitability; caring for customers and employees; caring for environment protection and cultural heritage.

It will also attain scale dimensions by diversifying into other energy related fields and by taking up transnational operations 23

VISION

To be a World Class Energy Company known for caring and delighting the customers with high quality products and innovative services across domestic and international markets with aggressive growth and delivering superior financial performance. The Company is a model of excellence in meeting social commitment, environment, health and safety norms and in employee welfare and relations.

IMPORTANCE OF LOCATION HPCLs location has a great importance as it is located in Cochin City. The Raw Crude Oil has been received directly at Cochin Port as it is a harbour city, so the availability of Raw Material becomes easier. Facility to purchase of Crude Oil from Cochin Refinery through Pipe Lines is another advanatage of the location. Shifting of raw material through Bullets are expensive as compared to pipe line transfers.

BUSINESS MANTHRA

Hindustan Petroleum" slogan

"Future full of Energy"

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COMPETITORS

The main Competitors are :

BPCL (Bharath Petroleum Corporation Ltd) IOCL (Indian Oil Corporation Ltd) RELIANCE PETROLEUM LTD. ESSAR OIL CALS REFINERIES LTD BONGAIGON REFINERY & PETROCHEMICALS LTD. (Merged)

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1.4 ORGANISATIONAL CHART

CHAIRMAN & MD

DIRECTOR MARKETING

DIRECTOR FINANCE

DIRECTOR HR

DIRECTOR REFINERY

INDEPENDENT DIRECTOR

EXECUTIVE DIRECTOR RETAIL

EXECUTIVE DIRECTOR DIRECT SALES

EXECUTIVE DIRECTOR LPG

EXECUTIVE DIRECTOR PIPE LINE

EXECUTIVE DIRECTOR AVIATION

GM WEST ZONE

GM NORTH ZONE

GM EAST ZONE

GM SOUTH ZONE

GM NORTH CENTRAL

GM NORTH WEST

GM SOUTH CENTRAL

DGM RETAIL ENGINEERING

DGM OPERATION & DISTRIBUTION

CHIEF MANAGER MARKETING

SENIOR REGIOAL MANAGER

DGM FINANCE

DGM LEGAL

SALES OFFICER S

RETAIL ENGINEERING

MARKETING MANAGER

MANAGER FINANCE

OFFICER SALES/MIS

MOBILE LABORATORY

VIGILE NCE

HR

OFFICER RETAIL ENGINEERING

ASSISTANT MANAGERS

ASSISTANT MANAGERS

LEGAL

CLERK

CLERK

MD - Managing Director GM General Manager DGM Deputy General Manager

26

1.5 PRODUCT PROFILE

1. Petrol : Known as Motor Spirit (MS) in Oil Industry. HPCL markets the product through its retail pumps spread all over India. Its principle consumers are regular personal vehicle owners.

2. Diesel : Known as Heavy Stock Diesel (HSD) in Oil Industry. HPCL markets the products through its retail pumps as well as terminals and depots. Its consumers are not only regular auto owners but also transport agencies, industries etc.

3. Lubricants : Riding on its brand HP Lubes, HPCL is the market leader in lubricant and associated products. It commands over 30% of market share in this sector. The popular brands of HP lubes are Laal Ghoda, Milcy, Thanda Raja, Koolgard, Racer4, etc.

4. LPG : HPGAS, The HPCL brand of LPG is a popular brand across India for domestic and industrial uses.

5. Aviation Turbine Fuel With major ASF(Air Service Facility) present in all major airports of India. HPCL is a key player in this sector supplying ATF to major airlines. It has an accomplishment of sorts to supply fuel to US Air Force.

27

6. Bitumen Low Sulpher 7. Furnace Oil 8. Light Diesel Oil 9. Kerosene 10. Naphtha Furnace Oil 11. Heavy Stock Lubes 12. Greases Propylene

28

CHAPTER 2 OBJECTIVES OF THE STUDY

29

2.1 OBJECTIVES OF THE STUDY

Objectives of the study can be broadly classified into two. They are as follows:

PRIMARY OBJECTIVE SECONDARY OBJECTIVE

Primary Objective: To study about the departments and its functions in Hindustan Petroleum Corporation Ltd.

Secondary Objective: To understand how the key business processes are carried out in Hindustan Petroleum Corporation Ltd. To familiarize with different departments in Hindustan Petroleum Corporation Ltd (HPCL) and the functions and activities including documentation. To know about the duties and responsibilities of key personnel. To study about the overall performance of HPCL. To understand the growth and diversification strategies of HPCL. To understand the technology adoption in HPCL for various activities. To check out whether there is a need for introducing corrective measures in any of the company strategies. To understand the performance measurements of the employees and various employee welfare activities. To get practical experience regarding the HPCLs functioning. To conduct a SWOT analysis of Hindustan Petroleum Corporation Ltd.

30

2.2 Scope of the Study

To get accustomed with the business environment of Hindustan Petroleum Corporation Ltd. To understand the structure, function and process of various departments and the interdependence. To experience the organizational culture and its real colours. To know the environmental issues regarding Hindustan Petroleum Corporation Ltd. To evaluate the real business situation and to know how HPCL cope with its challenging situations. To know about the competing business Links. To familiarize with the innovative technologies adopted by the HPCL. To familiarize with the training measures given by HPCL to their employees. Overall practical experience about HPCL and the business world, would enable to understand the real situation and help the studies easier. To understand the steps taken to increase the productivity in HPCL.

31

CHAPTER 3 METHODOLOGY

32

3. METHODOLOGY

The methodology of research was to conduct a detailed study of an organization. The main part of the study includes data collection. The major data collection tools of study were interviews, searching the websites, reports and brochures that were provided from the organisation.

1. METHODS OF DATA COLLECTION

PRIMARY DATA SECONDARY DATA.

Primary Data Primary Data are those data which are collected by the investigator for the first time. It is fresh in nature and is specially designed to fulfill the requirement of the problem in hand. For collecting Primary Data the following are conducted: Interviews Discussion with Department Heads and Managers Direct Observation

Secondary Data As the name indicates, it is the data which is collected by the investigator for the second priority. It needs less time, money and effort and it includes :

33

Annual Reports Brochures and other quality manuals Website etc.

II.

Period of Study

The period of study covers 30 days, from August 15th 2013 to September 15th 2013 at Cochin Regional Office of Hindustan Petroleum Corporation Limited.

34

CHAPTER 4 DEPARTMENTAL ANALYSIS

35

4.1 HR DEPARTMENT

DIRECTOR (HR) DIRECTOR (HR) DIRECTOR (HR)

ED HR

ED EMPLOYEE RELATION

ED COMPENSATION MANAGEMENT

HEAD HR MARKETING

GM (HR) MUMBAI REFINERY

DGM (HR) VISHAKPATNAM REFINERY

HR NORTH ZONE

HR EAST ZONE

HR WEST ZONE

HR SOUTH ZONE

HR NORTH CENTRAL

HR SOUTH CENTRAL

HR NORTH WEST

DEPUTY MANAGER

HR OFFICERS

COCHIN HR

CLERK

ED - Executive Director GM General Manager DGM Deputy General Manager

36

Human Resource is the most important asset of every company. The success and failure of every company is dependent upon its human resource. It is a fact that the people are vital for the effective operation of a company as human efforts and minds are the main driving force behind any organization. Employment of competent and specialized persons a various levels is one important reasons of their contiuous success. Moreover employment of women at certain key areas of operations avoid to great unreasonable labour problems. The key factor in the growth of HPCL is mainly the good and healthy employer-employee relationship.

Objectives

To develop and sustain core values.

To develop business leaders for tomorrow.

To provide job contentment through empowerment, accountability and responsibility.

To build and upgrade competencies through virtual learning, opportunities for growth and providing challenges in the job.

To foster a climate of creativity, innovation and enthusiasm. To enhance the quality of life of employees and their family. To inculcate high understanding of Service to a greater cause HR vision, mission and objectives.

37

HR Strategy

To meet challenging demands of the business environment, focus if the HR strategy is on change of the employees mindset.

Building quality, culture and resources.

Re-engineering and redeployment for maximizing utilization of human resource potential.

To Build and upgrade competencies through virtual learning, opportunities for growth and providing challenges in the job.

Re-strengthening mutual faith, trust and respect.

Developing human resource through virtual learning, providing opportunities for growth including involvement and exposure to benchmarking in performance.

Role of HR

Alignment of HR vision with corporate vision. Shift from support group to strategic partner in business operations. Enhance productivity and performance by developing employee competency and potential. Developing professional attitude and approach. Developing Global managers for tomorrow to ensure the role of gloal player.

38

Training & Development

HPCL has a full-fledged Corporate Training Department, to augment the learning and development requirements of its officers. The specific training needs of individual

employees are identified through Competency Mapping Exercises. The Training Department interacts with all Business Units/functions to identify and design training programs to cater to these needs. These programs enable employees to enhance their skills and realize their full potential. Objectives

Improve the performance of Employees in their respective assignments Enhance competencies to take up higher responsibilities Strengthen the Leadership Pipeline Bring cultural change from Command & Control to Team based structure Leverage technology in human resources development

Facilitate learning in the organization and build a Learning Organization Training Policy The Training Policy at HPCL provides broad directions to guide the learning solutions and initiatives.

Management Staff
o

Entry level: Samavesh (Induction/ orientation Training) facilitates a new employee to build a sense of belongingness.

Supervisory level: Employee is equipped with function specific inputs and job related technical skills.

Managerial Level: Employee is exposed with the principles of Management which will help blend theory with practice, with focus on leadership development. HPCL has developed Project Akshay" for development of leadership pipeline. 39

All training initiatives are planned in order to address new needs required by change in the market scenario.

Non-Management Staff
o

Trainings with focus on Safety at locations, Skills relating to job requirement (technical, computer operations, team spirit etc.)

Identifying Training Needs

Individual Level: Mainly through recommendation from the Performance Appraisal System.

Functional / Departmental Level: Customized Training programs are developed for the departments in consultation with the SBU/Functions.

Organizational Level: Individual Development Plan obtained from the Competency mapping exercise is used to provide specific Training to bridge the observed the employee skill gaps.

Other Training Plans for enhancement of the officers' competencies are scheduled.

Training Plans In-Company Programs The In-company programs are conducted through internal faculty, external faculty and external courses. Focus is given to the development of core internal faculty members, who will effectively train employees at different levels of the Corporation. HP Management Development Institute, (HPMDI) Nigdi. HPCL has a full-fledged, well equipped Training Institute at Nigdi, Pune, standing testimony to the value that HPCL places on training. Away from distractions, it is the Temple of learning by virtue of its perfect learning ambience. HPMDI is equipped with the best infrastructure conducive for effective learning. It is also having adequate recreational facilities to keep the employees occupied before / after learning hours.

40

The faculty is largely drawn from premier institutes or reputed independent training consultants. They are academicians and professionals who are well versed with the updated techniques and changing trends in the field of professional training. Tools like Group discussions, Role plays, case studies, presentations etc are used in the training. Customized Programs The training plan for the year for each Business Unit / Function is finalized after mutual discussions with them. The SBU specific requirements due to the change in market scenario and thereby required competencies are delved upon. Then suitable Consultants/ practitioners are identified and customized programs are designed in consultation with line functions. External Seminars/ Conferences HPCL nominates officers for external seminars and conferences in connection with their functional requirements. Foreign Training Advanced Management Programs are organized for officers of levels DGM and above, by reputed Business Schools like ASCI- Hyderabad, MDI- Gurgaon, ISB- Hyderabad and IIMKolkata, including visit to select foreign countries. HPCL also sponsors Study Tour for employee groups to enrich their knowledge and skills, a few employee groups for select foreign training to enrich their knowledge and skills, in the form of select foreign training. E-Learning Various e-learning programs on defined competencies, including Online certification courses on Project Management, Supply Chain Management, different e learning resources on various behavioral areas are facilitated.

41

 Learning Centers Learning Centers are available in all Zones and Corporate HQO for accessing information through internet, books and CDs leading to learning. Education Refund Plan (ERP) Education Refund Plan (ERP) enables the employees to undertake academic courses to further their self-development process, in relation to Corporation's requirement. Akshay Project Akshay is leadership development programme, where multiple methodologies like executive coaching, 360 Degree Feedback based on Emotional and Social Competency Inventory, Classroom sessions by experts, experiential learning through mentoring opportunities and group projects etc. are entwined together and deployed in well designed, co-ordinated and aligned manner. This provides the participants :

With a simulation on working with peers towards a common objective and consciously examine their own interactions with peers

To explore for themself their reactions to different situations as they present themselves

To observe how their behaviors impact others and To identify their own strengths and areas for development.

Training Effectiveness Based on the post-training evaluation, the Training department continuously monitors the effectiveness of the facilitator and relevance of the content. Alterations / modifications take place on this basis. Similarly Participant assimilation of training is also recorded.

42

Performance Management The performance management processes strives to effectively tread through employees hopes and aspirations. It is all about endorsing an empowering environment which takes the employee to their best. And makes sure that the employees get valuable feedback, coaching, and knowledge from the people they work with.

Grievance Handling

For the Redressal of Grievances, workmen will be governed by the provisions of the agreed grievance procedure adopted by the corporation. The HR Department Head, who takes decisions regarding grievances of employees. Employee can inform HR Manager, regarding grievance. In case of not getting any response within 6 dyas after the information, the employee can appeal to the top authorities. The Grievance Redressal Cell, who takes decisions regarding grievances of Tendering Parties. There will be a process to deal with the grievances received from the tendering parties or the prospective tenders based on the Tender document issued. The first level, say Level I, of such process will comprise of a Grievance Redressal Cell. This Cell will examine the grievances received from the parties and decide the matter. The Co-ordinator for each of the Cell is respective Head - Materials/Procurement of - Visakh Refinery, Mumbai Refinery, Marketing SBUs & Corporate. lodged with the Co-ordinator of the Cell. The second level of Grievance Redressal Mechanism is the Executive Committee Refineries for both Mumbai & Visakh Refineries, Executive Committee - Marketing & Executive Committee -Corporate for respective functions. The decision of the Executive Committee is final. All the grievances will be

Grievance Redressal Cell (GRC) consist of the following:

43

Sr.No.

BU/Function

Head

Member Finance

Member Purchase (Coordinator)

Refineries GRCs 1 Visakh Refinery Head Refinery HeadFinance 2 Mumbai Refinery Head Refinery HeadFinance Marketing GRCs 1 Retail SBU Head-Retail HeadComml.** 2 Direct Sales SBU Head-Direct Sales 3 LPG SBU Head-LPG HeadComml.** HeadComml.** 4 Aviation SBU Head-Aviation HeadComml.** 5 Projects & Pipelines* Head-P&P HeadComml.** 6 Operations Distribution (O&D) Corporate GRCs 1 Corporate Head-IS/HR (as Headapplicable) Finance (Corp.) 2 Central Engineering (CE) Head-CEC HeadFinance (CE) Head-Procurement Head-Procurement (DGM-Administration) and Head-O&D HeadComml.** Head-Proc.** Head-Proc.** Head-Proc.** Head-Proc.** Head-Proc.** Head-Proc.** Head-Materials Head-Materials

Includes Marketing Projects.

** Concerned SBU 44

Compensation Management Remuneration to the officers is governed by the directives of the Department of Public Enterprise. During the training period, trainees are entitled to a consolidated stipend per month. The Management and Non-Management staffs are paid as per their Salary Grades. The workmen compensation is through negotiations with the recognized unions. Besides the salary other perquisites as applicable to particular grade are also provided. . The monthly pay structure for officers and workmen, indicating the minimum and maximum of the pay scales are as under:

Management Employees

Salary Grade A B C D E F G H I

Basic Minimum 24900 29100 32900 36600 43200 51300 51300 51300 62000

Basic Maximum 50500 54500 58000 62000 66000 73000 73000 73000 80000

DA Pattern

Industrial DA pattern.

45

Marketing Non Management Employees (effective from1st Oct. 2008)

Salary Grade M 00 M 01 M 02 M 03 M 04 M 05 M 06 M 07 M 08 M 09 M 10 M 11

Basic Minimum 10380 12370 12510 12550 12610 12670 12870 13110 13500 13610 13920 14470

Basic Maximum 15000 20410 22470 26310 27150 29380 31250 32850 37630 39300 40680 48600 DA Pattern Industrial DA pattern

Visakha Refinery Non Management Employees (effective from 1st July 2007).

Salary Grade RW 00 RW 01 RW 02

Basic Minimum 8000 10000 11000

Basic Maximum 14000 20000 22000 DA Pattern Industrial DA pattern

46

RW 03 RW 04 RW 05 RW 06

12800 13000 13300 13500

28000 33000 38000 45000

Mumbai Refinery Non Management Employees (effective 1st Oct. 2008)

Salary Grade R 00 R 01 R 02 R 03 R 04 R 05 R 06 R 07 R 08 R 09 R 10

Basic Minimum 10380 12370 12510 12610 12670 12870 13110 13800 13910 14120 14470

Basic Maximum 15000 20410 22470 27150 29380 31250 33500 38000 40000 41500 48600 DA Pattern Industrial DA pattern

47

Perquisites:

VDA (Variable Dearness Allowance) HRA (House Rent Allowance) Medical insurance program: - That covers the whole array of medical expenses for you, spouse and dependent children only, as per the applicable policy from time to time. Educational refund plan: - Offers the support in pursuing the course of your interest. Study leave policy: - Includes a time-off to pursue higher studies related to their profession. Housing and vehicle loans: - Housing and vehicle loans at prescribed interest rate will help in securing employees family future. Superannuation benefit City Compensatory Allowance

Other benefits: Furniture and computer advance Home lease facility Accommodation at a very minimal charge depending upon availability.

48

 Allowances and Medical Reimbursement schemes Provident fund, gratuity and retrial benefits.

Non-Monetary Benefits

Outstanding Achievement Award :

Employees Hardwork and contribution never go unnoticed at HPCL. If their performance is of unrevaled standards and has led to substantial savings, their contribution is rewarded with Outstanding Achievement Award. performance. It is a recognition of their unrelenting and steady

Service Awards :

HPCL values loyalty and rewards it suitably.

Employees who have been a part of the

corporation for more than fifteen years are rewarded for their service since they have proved to be a major force behind the HPCLs successful journey.

Recruitment & Selection

HPCL has two modes of recruitment - Campus Recruitment and All India Written Test. The Corporation publishes advertisement through major Newspapers, National Dailies, Employment News, Web site etc. During the specified period, applications are received online through the website. Candidates application which satisfies the needs of the organization are called for a preliminary Interview. The selected candidates has to undergo for Medical test, Aptitude Test, Mental Ability Test etc.. Then the final Interview is conducted.

49

Induction and Placement

Samvesh:

HPCL conducts six month Induction programme (Samvesh) for a newly appointed person. The Induction programme is conducted by a mentor and an HR person. classified into four stages such as : The duration is

The selected candidate has to undergo for a classroom lecture for one week. During this period an introduction about the company, Strategic Business Unit (SBU), Divisions etc.. are given through lecture. From 2nd week to 30 days the plant location is visited to get familiarize with different machines and processes.

From 30 days to 90 days the candidate is sent to plant location to get practical experience.

From 90 days to 180 days a project has been given for completion and at the same time training also has been completed.

Industrial Relations Scenario

Industrial Harmony between the Union Members, Employer and the employees in the organization is attained. The Outstanding Industrial Relations award is only one-of-its-kind in the country constituted by AIOE(All India Organization of Employers) and given to organizations with sound track record in Industrial Relations. HPCL bagged this prestigious award for the year 2008-09 for its excellent track record.

50

Discipline

Each and every employee in the organisation has to follow the Policies framed by the organization to achieve certain Discipline. if anyone is found to be violated, they are punished. For example Practice of continuous Leave, Late coming, Not in proper dress code etc.. The Punishments will be Warrning Letter, Suspension, Transfer and finally Dismissal. The Policy is framed on the basis of Indian Employees Act and with the consensus of Trade Union in view of organisations vision and mission.

Corporate Social Responsibility

HPCL has always worked towards being a model of excellence in meeting our commitment to society with which we engage and interact, and beyond. HPCL has been consciously striving towards this commitment. The initiatives of the corporation are broadly classified as Child Care, Education, Healthcare, Skill development and Community development. Interventions in these areas make a meaningful and long-term impact on the community.

The CSR(Corporate Social Responsibility) programs undertaken at the field level, focused on the backward communities are completely employee driven. The field personnel identify the needs of the community in the periphery of their function / location. Plans are then drawn in consultation with Local Government authorities and projects / schemes are implemented to bridge the need gaps of these communities. These projects create a very strong bond between the community and the local setup where HPCL has its business operations

51

4.2 PRODUCTION DEPARTMENT

ZONAL MANAGER SOUTH ZONE

MANGLORE REGIONAL OFFICE

CHENNAI REGIONAL OFFICE

COCHIN REGIONAL OFFICE

MADHURAI REGIONAL OFFICE

SECRETARY

PALGHAT PLANT

COCHIN LPG PLANT

LPG SALES OFFICERS

FINANCE MANAGER

CLERK
PLANT MANAGER

PRODUCTION PLANNING

OPERATIONS OFFICER

SAFETY OFFICER

MAINTENANCE

PLANNING CLERK

PLANT OPERATOR

TECHNICIAN

52

LPG Storage

LPG storage Bullets 3X300 mounded type filled in soil and covered with wall. A new storage system has been introduced in Vishakpatnam named Cavern. Cavern excavated 200 meter below in a fully saturated rock mass situated below permanent water table.

There are two ways of receiving LPG to storage bullets.

- LPG is transferred directly

through pipeline from Cochin Refinery and the other mode of receiving LPG is transfer to pressure vessels / Tank Trucks using compressors / pumps. This mode of receiving LPG is highly expensive. A Weigh Bridge cabin has been kept there in order to weigh the TT Gantry.

10kg of pressure is given in bullets because pressure on air liquefies gas and keeps the LPG in its form. But in the case of Cavern, no continuous check and pressure is given as it is kept below the water table.

Washing:

The unloaded empty cylinders are sends through the water tap to wash them. For the movement of cylinders, the cylinders are kept on a chain which is moving. Two casual employees has been placed to remove the caps of cylinders and to encode the DPT (Due for Pressure Test). Each cylinder has different weights. The encoded empty weight cylinders are moved towards the filling unit. The Code will be A18, C14 etc.. that means the next rechecking period

Hydro Testing :

An year is divided into four on quaterly basis. Code A represents Jan, Feb and March, Code B means April, May and June, Code C is July, August and September and Code D shows 53

October, November and December. 14, 18 etc.. represents the year 2014, 2018 respectively. Hydro Testing is conducted on cylinders after 5 years. The empty cylinders are filled-in waters to detect the leakages if any. After that it paints and the next Hydro Testing Date is noted on cylinders for future veifications and test.

LPG Evacuation System :

The Cylinders which are having leakages, sends to Evacuation System. Valves of the cylinder has been removed and is put downward to evacuate the gasous present in the cylinder and extracts the same. The emptied cylinder is forwarded to fix a new valve and then sends for Hydro Testing.

Kerosene Filling Unit:

The encoded empty cylinders are pushed by a piston to the Kerosene Filling Unit. 24 cylinders are filled at a time. Yellow Pipe lines are connected towards the filling unit for the incoming of LPG from the storage unit. A gun has been connected to the valves of the cylinders and fills it. The filling of LPG is 14.2kg per cylinder. The vapour spreads out

while filling LPG is extracted by vapour extractors (Air System humatic) founded on floor. It functions like a vaccum cleaner. The filled-in cylinders are pushed by another piston towards the chain movement and hence to weight checking system. The Total weight

(weight of empty cylinder plus 14.2kg LPG) of the cylinder is checked by each cylinders code. Even a slight variation in cylinder weights are moved to another section (Weight Adjustment Scale) for filling as per total weight.

54

Weight Adjustment Scale :

All Cylinders that shows variation in weight are brought here by the piston. Man Power is used here to fill the cylinder as per accurate weight and pushes the cylinder to the moving chain.

GMS (Gas Monitor System) :

Gas Monitor System has been introduced in order to check the quantity of LPG present in the cylinder as per Indian standards . LPG is the mixture of Propane and Butane gasous. Certain percentage of pressures are given on these gasous form to liquefy it.

Quality Checking : The three different types of Leakages are Valve Leakage Regulator Leakage Body Leakage

Valve Leakage :

The dust particles struck by the cylinder valves may cause leakage of LPG. Electronic Bulb Detector is used to detect the leakage on valves. Whether the bulb shows 180PPM (Parts Per Million) above, there is leakage caused to the cylinder.

55

Regulator Leakage : Rubber O Ring is used to prevent the leakage in Regulator. When the valve is pressed and the gas releases. Rubber O Ring helps to prevent the jamming of valves. Body Leakage:

To detect the Body leakage of the cylinder, a test bath is conducted. The cylinder is moved through the water and checkes whether there is any bubbles present in the water. After Test Bath is conducted successfully the cylinder is send for capping and sealing.

Capping & Sealing :

After checking the quality of the cylinder a cap is placed on the valve and a blue colour thick plastic paper is put above it. This plastic paper is firmly fixed by using Hot Air Sealing. Now the cylinder is ready for dispatch and sends to dispatch Section.

Re-Testing :

For Re-Testing Valves has been removed and filled in water by 25kg pressure to detect the leakage

Pump House :

An Operator has been placed to operate the LPG Pump House. Three types of pipe lines has been connected to the plant. One is yellow in colour, which carries LPG to the filling unit. The other is Green colour pipe lines which carries water for washing and the red colour pipelines keeps water as safety measures when fire occurs.

56

4.3 SAFETY AND SECURITY DEPARTMENT

ZONAL MANAGER SOUTH ZONE

MANGLORE REGIONAL OFFICE

CHENNAI REGIONAL OFFICE

COCHIN REGIONAL OFFICE

MADHURAI REGIONAL OFFICE

SECRETARY

PALGHAT PLANT

COCHIN LPG PLANT

LPG SALES OFFICERS

FINANCE MANAGER

CLERK

PLANT MANAGER

PRODUCTION PLANNING

OPERATIONS OFFICER

SAFETY OFFICER

MAINTENANCE

PLANNING CLERK

PLANT OPERATOR

TECHNICIAN

57

General Safety, Health & Environment

In HP gas Safety, Health and Environment have continued to gain increasing importance, and rightly so, in view of the ecological imbalance that the world is facing at large. HPCL as a responsible Corporate Citizen has always strived to strike a right balance between operating its business and maintaining a sense of harmony with its surroundings.

It is the PEOPLE who make their working environment safe by adopting safe work practices and it is these work practices that form a part of any Environment, Health & Safety (Sh&e) Policy. The Objective of SH&E Policy is not only to bring about awareness, but also to promote a pollution free environment; and create a healthy surrounding and safe working conditions by constantly guiding all the actions within a consciously recognized and adopted set of standards.

The SH&E Policy is a testimony to HP GAS's Commitment towards protection of environment as they have a great responsibility not only to protect the health & safety of the employees but also hand over a safe word to the future generation to come. HPCL follow the SH&E Policy, not only in word but in spirit, and actively contribute towards achieving its objectives.

Safety

HP GAS committed to conduct its business in the way that protects the safety of personnel involved in the business including the customers and the public. HPCLs goal is to have their business 100% free from accidents, injuries and occupational illness through the active participation of everyone involved in the business.

58

To meet goal of 100% accident free operation HP Gas carry out following: nstall, implement and maintain facilities which control safety risks.

effective use of equipment's to avoid any incident/accident.

operational equipment's for achieving the accident free operations economically.

ation of SafetyDirectorate),

OISD

(Oil Industry

Ministry of Petroleum and Natural Gas,New Delhi(india) for safe

operation of plants. DMP (Disaster Management Plan) & RA (Risk Analysis) studies being conducted as and when required at Plants/Import facilities to analyze the risk involved and how to manage the risk.

Necessary measures taken to mininmize the risk at work places. o GMS (gas Monitoring System) o Wireless Communication o Metal Detector o Wall with Consertive Barred Coil o Work Permit System o Boom Barrier to Vehicles o 24 hour manned plant o Watch Tower to see the Peremeters o Locked Gate o Fire Water Storage

59

DMP(Diaster Management Plan)- On site & off site DMP has been prepared in consultation with local administration and other concerned statutory authorities to control on any emergency/exigency situation. Monitoring for improvement and well control for safe working. Safety and Security Department carry out internal safety audits and coordinate for 100% compliance of internal & external safety audits recommendations. Following are key activities of SH&E:

Product Knowledge

Health

HP GAS is committed to create a healthy working atmosphere and to overcome on any kind of Ocupational Health hazard associated with LPG at work place. HP Gas have plans to evaluate health risk is any at work place, and take appropriate measure to overcome on such risks.

HP GAS has engaged Company Designated Physicians and made arrangement with nearby hospital for regular medical checkup / monitoring health & handling of medical emergency of the employees. In addition company has got medical centers at main controlling offices at metros. In addition the employees are medically insured as per HPCL Policy. HPCL comply with statutory regulations on "HEALTH".

60

Few plants have carried out Occupational Health Survey and implemented the recommendations of survey report. HP GAS plans to carry out occupational health survey at all the plans and implement recommendations of surveyor.

Training on Occupational Health and Environment are regularly imparted to employees to encourage them to be concerned and respect the environment and make them understand that everyone is responsible for maintaining healthy environment and adopt appropriate working practices.

Environment

HP GAS is committed to conduct its business in healthy and environment friendly. HP GAS plans to carry out study on environmental risks at all the plants and implement recommendations of survey Various Environment Programs are done for betterment of environment in and around work place. Training on Occupational Health and Environment are regularly imparted to employees to encourage them to be concerned and respect the environment and make them understand that everyone is responsible for maintaining healthy environment and adopt appropriate working practices.

HPCL comply with environment standards and statutory regulations/requirements on environment like Air & Water pollution prevention, waste management procedure etc

Given below values to environment Eco Friendly:

is reduced and becoming more environments friendly.

61

progress.

ETP(Effluent Treatment Plants) at our major plants to ensure that no pollution go out of plants through waste.

nt has been installed at few plants. MLIF has planned to install shortly second harvesting plant.

Under ISO 9000 Certifications: lants.

certification.

ting System) Level 7 Certified location. It's the First Marketing Location in Oil Industry in India who has got ISRS level certification

62

Major Fire Fighting Facilities:

- Quarzoid Bulb heat detection system for detection of any fire and actuate for Auto fire fighting system and operating water sprinklers for extinguish fire. Also push buttons Auto fire fighting system is provided.

fighting.

tuate auto shut off pumps/compressors system.

any leakage/short circuit.

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4.4 MARKETING DEPARTMENT

SOUTH ZONE (RETAIL)
GENERAL MANAGER

DGM OPERATION & DISTRIBUTION

DGM RETAIL ENGINEERING

SENIOR MANAGER MARKETING

DGM FINANCE

CHIEF MANAGER SALES

REGIONAL MANAGERS

KOZHIKODE

MADURAI

CHENNAI

SRM COCHI N

SECRETARY

-------------------------------------------HR VIGILENCE LEGAL

CLERK

MANAGER MARKETING& ADVERTISING

DY. MANAGER RETAIL ENGINEERING

OFFICER RETAIL ENGINEERING & MIS

MANAGER FINANCE

AREA SALES MANAGER

SR. OFFICER RETAIL ENGINEERING

CLERKS

CLERKS

CLERK

DGM Deputy General Manager Dy. Depuy SR. - Senior 64

Marketing is the core of an organization. Without Marketing any product cannot be sold or purchased. The corporation produces the entire range of petroleum products and serves all sectors of economy - industry, agriculture, transport, domestic public utilities and also major cosumers like the railways, power plants, steel plants, defence, fertilizer plants etc. For retail outlets HPCL have only one marketing manager. Role of the Marketing Manager is to give support to the sales team, which consists of number of officers. Sales Officers look at the outlets or dealers. Marketing Manager has to guide these sales officers. Markting Managers are different for retail, LPG, Lubes etc.

Products at a Glance o PETROL o DIESEL o LIGHT DIESEL OIL o LPG o KEROSENE o AVIATION TURBINE FUEL o NAPHTHA FURNACE OIL o BITUMEN LOW SULPHUR o HEAVY STOCK LUBES o GREASES PROPYLENE

Vast Marketing Network

HPCL's vast marketing network consists of 13 Zonal offices in major cities and 101 Regional Offices facilitated by a Supply & Distribution infrastructure comprising Terminals, Pipeline networks, Aviation Service Stations, LPG Bottling Plants, Inland Relay Depots & Retail Outlets, Lube and LPG Distributorships. HPCL, over the years, has moved from strength to strength on all fronts. The refining capacity steadily increased from 5.5 MMTPA in 1984/85 to 14.8 MMTPA presently. On the financial front, the turnover has grown from Rs. 2687 Crores in 1984-85 to an impressive Rs 1,69,011 Crores in FY 2011-12. 65

Supply Chain Management

HPCL operates 2 major refineries producing a wide variety of petroleum fuels & specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per Annum (MMTPA) capacity and the other in Vishakapatnam, (East Coast) with a capacity of 8.3 MMTPA. HPCL holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals Limited, a state-of-theart refinery at Mangalore with a capacity of 15 MMTPA. In addition, HPCL has constructed a 9 MMTPA refinery at Bathinda, in Punjab, with Mittal Energy Investments Pvt. Ltd.

HPCL also owns and operates the largest Lube Refinery in the India producing Lube Base Oils of international standards, with a capacity of 335 TMT. This Lube Refinery accounts for over 40% of the India's total Lube Base Oil production.

Promotional Activities

For the promotion of different petroleum products, company is providing loyalty cards to the customers and dealers. With the help of dealers company started ATM centre and provided stores at Petrol Pumps which will turn to profit.

Competitors

The main Competitors are : BPCL (Bharath Petroleum Corporation Ltd) IOCL (Indian Oil Corporation Ltd) RELIANCE PETROLEUM LTD. ESSAR OIL CALS REFINERIES LTD BONGAIGON REFINERY & PETROCHEMICALS LTD. (Merged)

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Competition Strategy

For all petroleum companies products are same. So competition would increase day by day. HPCL competition strategies are :

Show good attitude towards customers Value added service Customer oriented service Free air service Wind screen cleaning Attitudes towards consumers by delivery boys ATM Centres Providing drinking water to consumers

Hindustan Petroleum retail formats are mainly divided into three

Urban

HP Express / HP Class / HP Apna HP Junction / HP Model / HP Highway HP Hamara

Highway Rural -

HP Express

:-

A good looking outlet with modern technology offering quick Fill and Convenience to customers.

HP Class HP Apna HP Junction HP Model

::::-

A clean outlet with some non-fuel Offering. A friendly low cost fuel outlet with Basic facilities. An outlet to refuel, refreshes and Relaxes for travelers and truckers. A small format outlet to refuel and refresh for travelers and truckers. An outlet to refuel A simple outlet with a small store. 67

HP Highway :HP Hamara :-

4.5 FINANCE DEPARTENT

DIRECTOR FINANCE

EXECUTIVE DIRECTOR MARKETING FINANCE

EXECUTIVE DIRECTOR CORPORATE FINANCE

GENERAL MANGER FINANCE MARKETING

GENERAL MANGER FINANCE CORPORATE

DEPUTY GENERAL MANAGER

CHIEF MANAGER

SENIOR MANAGER

MANAGER

DEPUTY MANAGER

ACCOUNTS OFFICER

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Finance department is the life blood of an organization. Finance plays a key role in the all activities of business viz Decision Making, Analysis of Fund Flow and Cash Flow, Investments, Dividend Policy, Capital Structure etc. It may be defined as the service of money. It deals with the principles and methods of administrating it by those who control it. The success of finance function depends on how finance is planned at the various levels of administration under the management. Financial Management is that managerial activity which is concerned with the planning and controlling of the firms financial resources. It deals with finding out various sources of fund to be raised for the company.

Functions o One of the main functions of finance department is Disbursement. It may be employee related payment, contractors related payment and statutory payment. o Finance concurrence for all the proposals involving Investment / Sales / Credit / Interest o Preparing Bank Reconciliation statement. o Preparing Regional Office profitability statement o Finance department have major role in Dealer selection process. o It has a major role in taking land on lease profitability aspects. o Filing of returns like monthly returns, quarterly returns, TDS, VAT etc. o Attending the sales tax notices, excise tax notices etc. o It has a major role in Allied Retail Business (ARB) ATM, C Stores, Gift Shops. o Monitoring of customer outstanding.

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Importance

o Finance Department has an impact on all activities of the firm. o Financial Department aims to discharge the finance functions successfully. o Financial Departments main aim is to use business funds in such a way that the earnings are maximized / Spending prudently. o Financial Department is necessary to every type of organizations, irrespective of its size, kind and nature. o Financial Department is useful for all types of organisation where there is any use of finance.

Objectives

The objective of Financial Management or goals of business finance is to maximize the companys economic welfare. There two steps for achieving this specific objectives are :

PROFIT MAXIMISATION

Profit earning is the main aim of every economic activity. No business can survive without earning profit. Profit also serves as a protection against the risks which cannot be measured. Thus, profit maximization is considered as the main objective of the business.

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WEALTH MAXIMISATION

When the firm maximizes the stock holders wealth, the individual stock holder can use this wealth to maximize his individual utility. This objective helps in increasing the value of share in the market.

Accounting System Adopted

The Financial Statements are prepared under historical convension in accordance with generally accepted Accounting Principles (GAAP), Accounting standard is issued by The Institute of Chartered Accountants of India (ICAI) and the Provisions of the Companies Act, 1956. All Income and Expenditure having material bearing are recognised on accrual basis, except where otherwise stated in Note to Accounts in Balance Sheet. Necessary estimations and assumptions of income and expenditure are made during the reporting period and difference between the actual and the estimates are recognised in the period in which the results materialise. Now it has been integrated with the ERP (Enterprise Resource Planning) System. The ERP System is J D Edwards.

Sources of Funds

HPCL adopts the different sources of finance like: Short Term Loans Long Term Loans Share Capital Reserves and Surplus

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Application of Funds o The finance obtained through the different sources by Hindustan Petroleum Corporation has been utilized mainly for the purchase of Crude Oil.

o For the completion of New Ventures, Expansion, Terminal, LPG Plants, Crosss Country Product, Pipe Lines for transporting Petroleum products. o Expansion of Existing Facilities, Maintenance and Repairs of Refinery / Depots. o Employee Cost o Other Raw material Cost.

Management of Receivables and Payables :

Receivables Sales Cash and Carry. Credit purchases (Only Furnace Oil, Bitumen etc.) Credit against Bank Guarantee Letter of Credit

Payables

Purchase of Crude Oil against Letter of Credit. Purchase Order - payable within 15 days or some other cases 30 days as per tender terms. Payment against Bill 72

Pricing System

Hindustan Petroleum Corporation Ltd follows the price system of Import Parity Pricing System. Import Parity Pricing System is the sum total of Total Expense (Exchange rate of Dollars, Freight, Insurance and all other related expenses) plus Refining Costs plus Marketing Costs. The Import Parity Price is decided by the Ministry that is Petroleum Planning and Analysis Cell. The Products which follow the Import Parity Price system are:

Motor Spirit (MS) High Speed Diesel (HSD) Superior Kerosene Oil (SKO) Liquified Petroleum Gas (LPG)

Budgeting

The Finance Department in Hindustan Petroleum Corporation deals with three different kinds of areas : Plan Project : Refinery.

Mainly deals with New Refinery Project/ Expansion of existing

Non-Plan Project : Non Planned Projects less than Rs.100 crores.

Marketing Expense Budget :

Budgeting is done in connection with Expansion related to

Sales / Marketing, which has an yearly target. A Zero basis Budget system is maintained by the department in order to avoid unnecessary expenses and hence loss to the organization. Other Operations expansion such as Terminals / LPG Plants / Offices

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Gross Profit

HPCL has Gross Sales of Rs.2,15,675.49 crores in 2012-2013 as against Rs.1,88,130.95 Crores in 2011-2012 and Profit after Tax of Rs.904.71 Crores as compared to Rs. 911.43 crores in 2011-2012.

Dividend

After taking into account the financial results of the company during the year, have recommended dividend of Rs.8.50 per share for the year 2012-2013 as against Rs.8.50 per share paide for the year 2011-2012. The dividend for the year 2012-2013, including dividend tax provision will absorb Rs.336.75 crores.

Performance of the Company

Turnover Total Expenditure Profit/Loss before tax Profit/Loss after tax Earnings per Share

: : : : :

2,15,675.49 2,06,472.45 1,474.56 904.71 26.92

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4.6 MANAGEMENT INFORMATION SYSTEM (MIS) DEPARTMENT

MANAGER SOUTH ZONE

REGIONAL MANAGER

MANAGER

CLERK Functions:

Deals wth Leasing

The MIS Department functions include Leasing of land / Real Estate for petrol bunks.

Sales Data Reveiw

The Sales Datas are reviewd by the MIS Department on Daily/Weekly/Monthly basis and made available to all departments for further process.

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 Solving Legal Issues

One of the other functions of MIS Department is the solving of issues relating to law. Any Legal Issue arises in the organization has been handed over to the MIS Department.

Data Bank

Serves as a Data Bank to the entire Organisation. Any information regarding the organization has been collected from the MIS Department.

Real Estate related issues

Real Estate related issues are to be solved by the MIS Department.

Market related issues

Market related issues are reviewed by the MIS department and finds solution to that problem.

Engineering Department Issues

Issues from Engineering Department is forwarded to Managerment Information System and seeks solution that issues.

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4.7 ENGINEERING DEPARTMENT

MANAGER SOUTH ZONE

DEPUTY MANAGER

SENIOR OFFICER

CLERK

Function Purchase Handling To handle the dealings regarding purchase of raw material and any other assests to the organization is made through Engineering Department.

To deal with safety outlet Engineering Department deals with the different Safety measures needed by the organization for its smooth functioning.

Manages Civil, Mechanical, Electronics and Electrical related matters. Maintenance relating to Civil, Mechanical, Electronics, Electrical sections are handled by the Engineering Department.

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Supportive Function Engineering Department is supportive to Sales Department while dealing with the technical aspects of that department.

Procurement related Function The Procurement of any subject to HPCL is done through Department of Engineering.

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4.8 VIGILANCE DEPARTMENT

CHIEF VIGILANCE COMMISSION

CHAIRMAN & MD

CHIEF VIGILANCE OFFICER

DEPUTY VIGILANCE OFFICER

VIGILANCE EXECUTIVES

Vigilance Administration

The concept of Vigilance as an investigative agency for punitive action, has today evolved to that of "Vigilance for Corporate Growth". The emphasis too has shifted from "punitive vigilance" to "preventive and proactive vigilance." Vigilance function in HPCL is an integral part of the management and supports ethical business decisions.

HPCL, with two operating refineries, about 2300 km of pipelines network, and a countrywide marketing and distribution network, has its main Vigilance Department at the Corporate Office in Mumbai. The Vigilance Department is headed by the Chief Vigilance Officer, Shri.S.M. Misra, IRS.

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The Vigilance Department at the Corporate Office provides guidance, supervision and control to all the Vigilance functionaries of the Corporation. Its major work area comprises handling and investigation of complaints received from individuals, Ministry of Petroleum & Natural Gas, CVC, PMO, HPCL Management and other sources. View HPCL's Whistle Blower Policy.

Preventive vigilance includes system studies, surprise inspections, joint surprise inspections, regular surveillance/scrutiny of procurement and contract files, scrutiny of property returns of employees, coordination with Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC), Chief Technical Examiner (CTE), Vigilance Wing of Ministry of Petroleum & Natural Gas (MOP&NG).

The CVO provides advice to the Chairman and acts as a link between the Corporation and outside agencies like MOP&NG, PMO, CBI, CVC, etc., on vigilance matters. The Vigilance executives function under the direct control and overall guidance of CVO. The unit Vigilance functionaries also provide assistance to the unit heads in respect of interpretation of CVC, CTE instructions, standing instructions of CVO, and other norms of statutory bodies like CBI, etc.

Functions Handling of Complaints - Verification of complaints. Forwarding the complaint of administrative nature to concerned departments. Conducting test check/surprise checks. Collection of intelligence/source information. Reporting daily important development to the Head of organization.

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 Intensive examination of Contracts/works on CTE Pattern According Vigilance clearance to SECL officials in respect of promotion, probation, resignation, superannuation, foreign visit etc. Scrutiny of Annual Property Returns of Executives. Furnishing of different type of returns to CVC, CBI, MOC, CVOetc. Arranging co-ordination meeting with CBI and other agencies. Preparation of Agreed List and ensuring their postings in nonsensitive posts. Monitoring posting of employees to sensitive/non-sensitive posts as per CVCs guidelines. Monitoring vigilance initiated departmental proceedings to take them to their logical conclusion. Periodical vigilance awareness workshops for Preventive Vigilance activities.
Observance of Vigilance Awareness Week.

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CHAPTER 5 SWOT ANALYSIS

82

STRENGTH

Cost advantage HPCL has provided opportunity to operate sweet shop / ATM Centres in their Petrol Bunks in order to make more profit and cost effective.

Effective communicatio An Effective Communication System has been implemented throughout the organization for the smooth functioning.

High Research & Development The Research and Development System adopted by HPCL is highly qualitative, Experimental and expensive.

Inquisitiveness to Society HPCLs concern to Society has been proved through its various Corporate Social Responsibility Programmers.

Loyal customers HPCL concentrates on better Customer Service and Customer Satisfaction which keeps its customers more loyal to the organization.

Market share leadership HPCL owns about 20% Market share in India among Public Sector Undertakings and have a strong market infrastructure.

Strong management team The success of HPCL lies in its strong Management System.

Strong brand equity 83

HPCL won the prestigious MOU Award for Excellent Overall Performance. Strong financial position Attained an annual turnover of Rs. 1,90,048 Crores and income from operations of Rs.2,15,675 Crores (US$ 39.726 Billions) during FY 2012-13. Ability to adopt high Technology The Innovative Technology adopted by HPCL reveals its ability in the adoption of high Technology. Experienced and Qualified employees The employees working in the organisation has been Experienced and Qualified, which leads to smooth functioning of the organization and more cost effective. Employer Employee Relationship Strong employee-employer relationship with attractive perquisites retains the existing employees and keeps more loyal. Availability of Raw-material Adequate supply of Raw Materials, Labour and other inputs helps to meet output demands.

WEAKNESS

Expensive Research & Development The Research & Development Process is highly expensive, so purchases technology.

Changes in Operations Handling of types of crude mix leads to sub optimal changes in operations.

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Employees at High Cost The payment structrure and perquisites to employees are at high cost which leads to increase the expenses of the organization.

Delay in Decision Making Delay occurs in taking steps regarding Decision Making Due to the large structure of the organization.

Lack of Promotional Activities Promotional Activities helps to increase Sales, enhance Productivity and hence profitability.

OPPORTUNITIES

Acquisitions and mergers The opportunity for Acquisitions and Mergers, help the organization to start new business units.

Emerging markets and expansion abroad The emergence of market strategies and globalization leads to expanstion of new business units to abroad.

Joint Ventures Business through Joint Ventures can meet the highly expensive infrastructure facilities easily.

Innovative Technology The adoption Innovative Technology leads to increased productivity and reduction of cost.

Product and services expansion The Expansion of products and services of the organization lead to more productivity and profits.

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Highly qualified, skilled and experienced labour Availability of highly qualified, skilled and experienced labour makes possible proper function of the organization.

Support from Government agencies Adequate support from Government agencies helps the organization to achieve its goal.

Increasing Market Demand One of the other opportunity is the increasing Market Demand of the shares as it is a Government concern.

High demand for By-products Demand for By-products and petroleum feedstocks are increasing day by day.

THREAT

Strong Competition Like any other business concern HPCL also has to face the competitors in the same industry.

Fall in value of Currency Fluctuations in the value of Indian Money against Dollars is one of the major threat faced by HPCL, which leads to high in overall expenditure and hence the price of petroleum products.

External changes The External Changes such as government, politics, taxes, etc also affects the business adversely.

Reduced availability of crude oil. Sometimes the availability of Crude Oil is reduced because of Non-shipment from the exporting countries.

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Technological Change Rapid Technological Change affects the smooth functioning of the organization. Trade Barriers Increased Trade Barriers implemented by the Government becomes a threat to the organization.

High Price of Raw Material The purchases are made at a higher rate due to scarcity.

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CHAPTER 6 FINDINGS & SUGGESTIONS

88

6.1 FINDINGS

HPCL is a Navaratna PSU oil company of the Government of India.

HPCL is a Fortune Global 500 company as per the ranking of 2013 and was ranked at position 260.

HPCL was featured on the Forbes Global 2000 list for 2013 at position 1217.

HPCL has given India a firm ground in oil sector with its world class standard of Lube Base Oils.

HPCL is one of the Top Ten Public Sector Enterprises who fall under the 'Excellent' category.

HPCL continually invests in innovative technologies to enhance the effectiveness of employees and bring qualitative changes in service.

The company is very committed to the Environment and the society, this is reflected in the number of CSR activities that the company has been engaging with.

HPCL has successfully integrated Information Technology in its activities at different levels. The Enterprise Resource Planning (ERP) system is operational on J.D.Edwards across the Corporation.

The marketing network of HPCL consists of 13 Zonal offices in major cities and 101 Regional office facilitated by a Supply & Distribution infrastructure.

There are a lot of employee development and social welfare schemes.

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They also have good industrial relations and that leads to industrial harmony.

Excellent customer care and services.

Innovative and aggressive in marketing.

Best quality people with a high degree of dedication and motivation.

Supports sales activities by reviewing customers business.

Understand and respond to competitors business structure, strategy and prospects.

Capitalise on competitors weaknesses and target the market opportunities available to them.

HPCL has succeeded in the development of alternative fuel source.

Vigilence, an investigative agency is functioning with HPCL to ensure the business in ethical nature as per policies and to support ethical business decision.

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6.2 SUGGESTIONS

Appointing a young energetic front office staff will boost the first impression of the outsiders and also towards the organisation.

The land kept futile nearby the office area can be used properly by gardening or by some other activities.

As one of the Corporate Social Responsibility, Whether the hike in petroleum Products is reduced, will be a great relief to the public as the hike affects value of all other products in the market regarding transportation.

Recruitment must be done without any delay of time. Maintenance of Plant must be done or regular basis. Reduce luxurious expenses inside the organisation in order to reduce cost. Cost of production can be reduced by adopting most modern methods and modify plants to become more efficient.

It has to maintain and exploit the goodwill it has created over the past years.

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CHAPTER 7 LIMITATIONS OF THE STUDY

92

LIMITATIONS OF THE STUDY

Through the course of study, I found that it is virtually impossible to identify the core competence of an organization within a restricted time period. Since, the complex people power is the principle instrument of an organization, many of the factors, which are relevant for the study, could not be expressed fully. These are due to :
Time Constraints :

Time was a major limiting factor as the managers were busy with their own routine work. Within a restricted period of 30 days, it is not practicable to study about the entire organisation.
Chances of Bias :

The study conducted mainly on the basis of Primary Data obtained through the interviews with managers amd therefore chances of personal bias can exist.

Other Factors: Secondary data given by the organization was outdated. The informations received from some Department were not sufficient. The study is mainly based on secondary data therefore errors are possible. The detailed study on many units demands more time. Lack of co-operation from certain departments due to their work load.

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CHAPTER 8 CONCLUSION

94

13. CONCLUSION

HPCL is one of the best oil sector companies in India. It has good HR practices and has an ideal work environment for the overall development of the employees. The company is not only concerned with making profits but also it is a company that has a deep commitment to the society and is involved in various socially useful activities.

The Internship Training in HPCL as Organisational Study has benefited me with so much of confidence and awareness, so as to be capable of myself to work in a firm. The study gave me an opportunity to experience and improve my practical knowledge besides my theoretical knowledge about an organisation.

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BIBLIOGRAPHY

96

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Websites

www.hpcl.co.in www.wikipedia.com www.Hindustanpetroleum.com www.mrpl.co.in www.hmel

www.ibm.com www.hpaviation.in www.encyclopedia .com www.indiaprwire.com www.salpg.com www.hpclbiofuels.co.in www.hincol.in www.prizepetroleum.com www.bglgas.com www.aglonline.net www.mrpl.co.in

Annual Report 2012-2013

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