EXECUTIVE SUMMARY

As per the university rule all students have to take the overview of all the
department which are working in the organization very well. So first of all I took an
overview of all the department. Then I have assigned totally three of the task. First to
analyze the present situation of all retail outlets whichever in the Rajkot city.
Secondly I have done one research on “customer satisfaction”. And at last I was
telling to increase a sell In & Out stores which are establishes near outlet.

Company’s product then and then will sell increase when each and every
dealer want to sell it at high level. So it is a very good and tough task to convey all
the dealers about their hidden potential. What they are getting right now and what are
the chances to get more from the road. So through the presentation I have conveyed to
the dealer.

Now in a competitive era what the consumers are demanding from

company and what they are actually getting as a service from the company, it is a
very important thing for the company. I visited at each of the retail outlet and take the
feedback of the consumers through the questionnaire. Thus we can measure the
satisfaction level of the consumers.

Bpcl provides many of the facilities to their consumers. Like air facility,
wash room, ATMS, STD PCO, Coffee house, laundry, etc. In the same way company
also provides the facility of In & out stores at each of the outlet. So now a day the
selling in those stores were so much less as compared to other state in Gujarat. So I
have to told that to increase the selling by introducing a new of the skims in those
stores. But that task then and then can be possible when we can find the sponsors
from the market. I move in the market so many of the days but unfortunately I can
find only two of the sponsors. And from the help of these two sponsors only we are
not able to introduce a new of the skim in the In & out stores.

But whatever I have done in these days that I have done pure heartily. And
also my sir has also praised of my hard working and honesty. And also they guided
me so well that’s why I can fulfill my assigned work.

1
 INDUSTRY PROFILE

• At Independence, domestic oil production was 250,000 tones per annum.

• E & P was controlled by the NOCs, ONGC and OIL.
• 70s Nearly 70% of the domestic requirement.

80s Production declined, Steady increase in consumption.

Today Two NOCs meet about 35% of domestic requirement.

• Petroleum Sector Reforms, 1990

4th – 8th bidding between 1991-94. Indian companies permitted to bid.

JV Exploration Program in 1995. 25% to 40% Participating Interest.

• Foreign Companies Exploration in India since early 50s.

Indo Stanvac Project- GOI and Standard Vacuum oil Company, West Bengal

Offshore, in early 50’s.

Carlsbons Natomas for Bengal offshore in early 70’s.

Shell for Kerala offshore and Chevronn- Texaco in Krishna-Godavery

Offshore.

Evolution of Oil & Gas Industry in India

Indian E&P Companies

Except HOEC, riding piggyback on the foreign companies.

Reliance Petroleum Ltd. joined with ONGC in bidding for exploration
and development ventures in India and abroad.
Downstream companies IOC, GAIL entered upstream with ONGC and OIL.

Opening of the Oil/Gas Fields for Development by Private Companies

The Indian oil/gas fields discovered by the two NOCs were first offered in 1992
under the First Offer. The second such offer was made in 1993.

2
Development of fields

Cost intensive venture. Contracts have upfront payments to be made to the NOCs for
past costs as well as in the form of signature bonds. Companies are also required to
make production bonus payments.74 Exploration Contracts and 28 Development
Contracts are in operation.

Major Players in India

ONGC

• Public sector company; Contributes 77% of India’s crude oil production;

Revenue (2006): $ 10.5 billion; Employees: 41000
• ONGC's setbacks in acquiring major oil resources and the government's
order to help shoulder the burden of subsidized fuels earlier this year,
pushed the country's biggest refiners into the red
• The 50-year-old firm has acquired interests in 16 overseas projects since it
started looking abroad in 2001.
• For three years in a row, the firm has failed to replace the reserves it
produced.
• ONGC must boost its reserve-to-production ratio (22 years) by improving its
drilling technology and management practices. In some on land areas the ratio
is 57 years.
• ONGC lost a major offshore platform at Bombay High, reducing the
company's output by 123,000 barrels per day (bpd). It has since restored half
that production.
• Oil Minister Mr. Ayer has pushed for Indian and Chinese firms to
cooperate not compete, for overseas assets, but his efforts appear to have met
with little interest in Beijing.

IOCL

• India's largest commercial enterprise; sales turnover of US $36.537 billion

• Indian Oil Technologies Ltd.(a wholly owned subsidiary company ) is the
19th largest Petroleum company in the world
• World-class R&D Centre has developed over 2,100 formulations of SERVO
brand lubricants and greases.

BPCL

• 3rd largest oil company in India; Owned by the Government of India;

Revenue (2005): $17.613 billion; Employees: 12400
• In 1976, the Burma Shell Group of Companies was taken over to form
Bharat Refineries Limited. Renamed Bharat Petroleum Corporation
Limited in 1977

3
 • First refinery to process newly found indigenous crude (Bombay High), in the
country

Global Oil Prices

• From the foundation of the Organization of Petroleum Exporting

Countries in 1960 through 1972 member countries experienced steady
decline in the purchasing power of a barrel of oil. In March 1971, the balance
of power shifted.
• Arab Oil Embargo 1973: Prices increased 400 percent in six short months.
• Events in Iran and Iraq led to another round of crude oil price increases in
1979 and 1980
• Prices spiraled in 2004 and 2005 as the spare capacity to produce oil has been
less than one million barrels per day which cannot cover an interruption of
supply from almost any OPEC producer. In a world that consumes over 80
million barrels per day of Petroleum products, that adds a significant risk
premium
• Fear that oil supplies might be reduced because of turbulence in the Middle
East and Venezuela
• Other reasons: US dollar’s slump; Peak Oil Theory and Speculation; Ever-
increasing demand, as witnessed by oil shortages in Africa, India, and China.
• Today: Oil prices into a downward spiral of more than 20 percent since the
middle of July. The price of oil fell 4 percent just this week.
• Reasons: Light hurricane season this summer, the cease-fire between Israel
and Hezbollah and the fact that UN has not imposed sanctions on Iran.

How is India Combating Price Hike?

• The oil price is increased, Revenue loss of Rs 73,512 crore in 2006-07 fiscal.
• India's ONGC Videsh, Spanish Oil Company Repsol YPF and Norway’s
Norsk Hydro to explore six offshore blocks in Cuba.
• India's ONGC Videsh Ltd. and GAIL together hold 30 per cent stake in A-1
field operated by Daewoo of South Korea. Myanmar agreed to sell gas from
offshore A-1 field to India through a land route bypassing Bangladesh.
• India is considering joining a Central Asian gas pipeline that originates from
Turkmenistan.
• China National Petroleum Corporation (CNPC) and India's ONGC jointly
won a bid to acquire 37% of Petro-Canada's stake in Syrian oilfields for
US$573 million.
• India is seeking the revival of Iran-Pakistan-India pipeline deal which has
currently reached a deadlock.
• Reliance Petroleum Ltd is working on a new 29-million-tonne (5, 80,000
barrels-a-day) refinery which will be housed in a SEZ adjacent to the existing
Jamnagar refinery of Reliance Industries.

4
COMPANY
OVERVIEW

5
6.) GENERAL INFORMATION

A.) HISTORY AND DEVLOPMENT

• Early History - Dawn of a New Era

Petroleum (derived from Latin Petra - rock and oleum - oil) first came up in wells
drilled for salt. People found it useful as illuminating oil and the demand for it
steadily increased.

Samuel Kier, a Pittsburgh druggist, bottled and marketed Petroleum as medicinal

cure. To market a deodorize variant, he designed the first primitive refinery in 1852,
which was a huge improvised kettle, connected to a metal tank.

'Colonel' Edwin Drake and 'Uncle' Billy Smith drilled a well with the specific
objective of finding oil, and on 27th August 1859, they "struck oil" at Titus vale, in
North Western Pennsylvania, USA, at a depth of 69.5 ft.

• From Nothing to Gold

The 1860s saw vast industrial development. A lot of petroleum refineries also came
up.

An important player in the South Asian market then was the Burmah Oil Company.
Though incorporated in Scotland in 1886, the company grew out of the enterprises of
the Rangoon Oil Company, which had been formed in 1871 to refine crude oil
produced from primitive hand dug wells in Upper Burma.

The search for oil in India began in 1886, when Mr. Goodenough of McKillop
Stewart Company drilled a well near Jaypore in upper Assam and struck oil. In 1889,
the Assam Railway and Trading Company (ARTC) struck oil at Digboi marking the
beginning of oil production in India.

While discoveries were made and industries expanded.

In 1928, Asiatic Petroleum (India) joined hands with Burmah Oil Company - an
active producer, refiner and distributor of petroleum products, particularly in Indian
and Burmese markets. This alliance led to the formation of Burmah-Shell Oil Storage
and Distributing Company of India Limited.

6
 • The Pioneering Spirit - Burmah Shell Marketing

A pioneer in more ways than one, Burmah Shell began its operations with import and
marketing of Kerosene. This was imported in bulk and transported in 4 gallon and 1
gallon tins through rail, road and country craft all over India.

The company took up the challenge of reaching out to the people even in the remote
villages to ensure every home had its supply of kerosene. The development and
promotion of efficient kerosene-burning appliances for lighting and cooking was an
important part of kerosene selling activity.

With motor cars, came canned Petrol, followed by service stations. In the 1930s,
retail sales points were built with driveways set back from the road; service stations
began to appear and became accepted as a part of road development. After the war
Burmah Shell established efficient and up-to-date service and filling stations to give
the customers the highest possible standard of service facilities.

7
On 15th October 1932, when civil aviation arrived in India, the company had the
honour of fuelling J.R.D. Tata's historic solo flight in a single engined de Havillian
Puss Moth from Karachi to Bombay (Juhu) via Ahmedabad. Thirty years later, i.e. in
1962, Burmah Shell again had the privilege to fuel JRD Tata's re-enactment of the
original flight. Burmah Shell also fuelled flying boats, which carried airmail at
slightly higher rates than sea transport, at several locations.

As a true pioneer would, the company introduced LPG as a cooking fuel to the Indian
home in the mid-1950s. And all along, it went beyond selling petroleum, to educate
the customer. Besides selling Bitumen, the company pioneered desert road
construction, training road engineers. It provided free technical services to industrial
customers - big and small - and it became a part of the company's culture.

• On Stream - The Burmah Shell Refinery

An agreement to build a modern refinery at Trombay, Bombay was signed between

the Burmah Shell group of companies and the Government of India on 15th
December 1951.

With this infrastructure, free India moved one step closer to self-reliance.

• From Burmah Shell to Bharat Petroleum

On 24th January 1976, the Burmah Shell Group of Companies was taken over by the
Government of India to form Bharat Refineries Limited. On 1st August 1977, it was
renamed Bharat Petroleum Corporation Limited. It was also the first refinery to
process newly found indigenous crude (Bombay High), in the country.

8
B.) The Journey

• Shaping the Future:-

The core strength of Bharat Petroleum Corporation Limited has always been the
ardent pursuit of qualitative excellence for maximisation of customer satisfaction.
Thus Bharat Petroleum, the erstwhile Burmah Shell, has today become one of the
most formidable names in the petroleum industry.

Bharat Petroleum produces a diverse range of products, from petrochemicals and

solvents to aircraft fuel and speciality lubricants and markets them through its wide
network of Petrol Stations, Kerosene Dealers, LPG Distributors, Lube Shoppes,
besides supplying fuel directly to hundreds of industries, and several international and
domestic airlines.

• Dynamic Growth Post Nationalisation

Following nationalisation in 1976, Bharat Petroleum changed gears and embarked

upon a rapid growth path. Turnover, profitability and financial reserves grew by leaps
and bounds. Massive expansion and modernisation provided a tremendous boost to
the company's performance. Large-scale recruitment and training became critically
important to meet the demands of expansion.

• The Winds of Change - A Transformed Organisation Emerges

Opening up of the Indian economy in the nineties brought with it more competition
and challenges, kindled by the phased dismantling of the Administered Pricing
Mechanism (APM) and emergence of additional capacities in the region in refining
and marketing.

In 1996, Bharat Petroleum went through a process of visioning, involving people at

all levels, which evolved a shared vision and a set of shared values. Based on this, the
company restructured itself, in a proactive move to adapt to the emerging competitive
scenario. The function-based structure was carefully dismantled and replaced with a
process-based one. This made the company more responsive to its customer needs.

Bharat Petroleum realises that, in the long run, success can only come with a total
reorientation and change in approach with the customer as the focal point. Today,
Bharat Petroleum is restructured into a Corporate Centre, Strategic Business Units
(SBUs) and Shared Services and Entities. The organisational design comprising of
five customers facing SBUs, viz. Aviation, Industrial & Commercial, LPG,
Lubricants and Retail and one asset based SBU, viz. Refinery, is based on the
philosophy of greater customer focus.

9
C.) GENERAL INFORMATION

(1) Name of the company : Bharat Petroleum Corporation limited

(2) Year of establishment : 24th January 1976

(3) Address of registered office :Bharat Bhavan

4 & 6 currimbhoy road
Ballard estate
Mumbai 400001

(4) Size of organization :Large scale unit

(5) Form of organization : public limited company

(6) Nature of industry :oil and crude industry

(7) Web site :www.bharatpetroleum.in

(8) Bankers :State bank of India

Union bank of India
Corporation bank
Bank of India
State bank of Patiala
Central bank of India
Standard chartered bank
ICICI bank
HDFC bank
Indian bank

(9) Subsidiary company : Unmilitary Refinery Limited (NRL)

(10) Joint venture companies : Bharat Shell Limited

Petronet India Limited
Petronet CI Limited
Petronet CCK Limited
Petronet LNG Limited
Indraprastha Gas Limited
Central UP Gas Limited
Maharashtra Natural Gas Limited.
VI e Trans Private Limited

(11) Quality assurance certificate : ISO 9001

10
(12) Board of directors
: Ashok Sinha (chair man )
S.A. Narayan (director HR)
S.Radhakrishnan (director marketing)
S.K. Joshi (director finance)
R.K.Singh (director refinery)
P.K.Sinha (joint secretary)
Aditi S. Ray (economic advisor)

(13) Auditors : V.Sankar Aiyar and company

D) BPCL LOGO

In logo blue and yellow, currently in use at BPCL new retail outlets, are to be
implemented in all visual elements of the corporate identity viz. logo, stationary,
office signage, tank Lorries etc. in all locations by 30th June, 2007.

PHILOSOPHY: these new corporate colours mirror the following attributes:

Blue : Dynamic, Modern and Hi- tech.

Yellow : Warmth, Care and Energy.
White : Balanced and Fair.

11
 E.) . LIST OF THE HEAD DEPARTMENTS

Organization structure means how the unit its business. Not only this but also
organization structure shows that who is responsible to whom? And who is
accountable to whom?

The organization of BPCL is divided into following departments.

1) Production department

2) Management information department

3) Raw material department

4) Distributaries department

5) Distributaries department

6) Human resource department

7) Marketing department

8) Finance department

9) Retail outlet department

10) Research and development department

12
F.) CORPORATE VISION

1) Make BPCL a great place to work.

2) Effective boundary management.

3) Fulfill social responsibility.

4) Apply the best technology.

5) Be an ethical company.

6) Strong and dynamic system.

7) Establish first class brand and corporate image.

8) Sound business performance and operational efficiency.

9) Have excellent customer caring and customer service.

10) To be the best.

11) Make people a source of our improvement

13
CONTRIBUTION
OF THE UNIT

14
7.) Contribution of the unit:

CONTRIBUTION TO

ECONOMY SOCIETY

A. CONTRIBUTION TO ECONOMY

This unit is very famous unit in India. In the oil product company complete with best
research and development department with great performance. According to the
members of BPCL, BPCL it self is the contribution to oil industry. BPCL’S all
products play an important role in whole industry. Its own research department has
found good product SPEED PETRO which is 17 times better than general petrol. This
unit has completed 75 years of aviation service. This is the first unit which provides
Aviation Turbine Fuel (ATF), which is produced and marketed by BPCL.

BPCL has not only nation al market but BPCL is associated with most of the
international airlines operating through India including all the major domestic
players, like air India, air deccan,, alliance air, Asian airlines, British airways, china
airlines, gulf air, Indian air force, Japan airlines, jet airways.

15
 B. CONTRIBUTION TO THE SOCIETY

i. INDUSTRIAL RELATIONS

The industrial relations have been peaceful and cordial throughout the year. Extensive
communication on business and other related issues were sent to all the stakeholders
i.e. management, employees and their associations / unions during the year.

ii. FULFILLMENT OF SOCIAL OBLIGATIONS

As a responsible corporate citizen, BPC accords significant importance to Corporate

Social Responsibility (CSR) and takes it as one of the prime focus areas. Community
Development Programmes were undertaken to bring all round development in
adopted villages, consisting of economically and socially backward population and
significant resources were allocated towards these activities.

Under the Component Plan, welfare activities were undertaken at 37 adopted villages
spread over 13 states across the country. The main impetus of activities was given in
the fields of health, education, infrastructure development and usage of non-
conventional alternate energy sources.

16
BPC is always at the forefront to stand by the side of people affected by natural
disasters/ calamities and had contributed towards the relief of Jammu & Kashmir
earthquake victims as well as rehabilitation of tsunami affected people in Tamil Nadu
and Kerala.

BPC has been providing reservations and concessions for physically challenged
persons in the recruitment process since 1981. The reservations were earlier provided
for Group C and Group D posts. However, after the enactment of “The Persons with
Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act,
1995", the reservations stood extended to posts in Group A and Group B with effect
from February 1996.

BPC identified positions in these groups which could be reserved for filling up by
persons with disabilities. It is BPC’s endeavor to achieve the desired percentage for
physically handicapped persons in identified posts during direct recruitment. BPC
currently has 156 physically challenged persons employed in the Organization as at
31 st March 2006.

Various concessions are given to the physically challenged persons such as age
relaxation of 5/10 years, besides giving them a sympathetic consideration during
interviews; hearing aids are provided for the hearing-impaired persons and also
relevant equipment required by orthopaedic handicapped persons; visually
handicapped staff are provided with special “talking” computers; also, Income Tax
Relief through salary as per Section 80U is given, provided the physically challenged
person complies with the requirements ofIncome Tax rules.

Besides the above, as a corporate body, various initiatives have been undertaken as a
part of community development, like Pulse Polio Immunisation Programme; setting
up of a Thalessemia care unit at Sion Hospital and organising workshops for
physically handicapped persons in association with the Social Welfare branch of
Municipal.

iii. Corporation of Mumbai

1. Company’s philosophy on Code of Governance

BPC’s corporate philosophy on Corporate Governance has been to ensure fairness to

the stakeholders through transparency, full disclosures, empowerment of employees
and collective decision making.

17
 iv. Meeting Social Obligations

As energy corporate, BPCL feel that we may have a larger say in the course of many
events in the coming decades. It is thus that BPCL finds it necessary and proceeds
with utmost caution, when it comes to issues related with the environment.

The magnitude of the problem concerning this sensitive eco-balance is so massive

that the best way forward for BPCL, as it sees ahead, for the above being achieved is
using a two pronged approach of “executing environmental protection activities and
sharing knowledge, with a view to educate the common man on this front.

The four reasons, believed to be the cause for treading cautiously in matters related to
the environment are as follows.

 Our moral responsibility towards the environment.

 Understanding of the need for an ecological balance
 The understanding of the interlankages of the web of life
 Inadequacy of Human Understanding of Environmental Process.

.
The above four cover the entire canvass of concerns for the subject and BPCL’s
contribution towards the same has also been oriented around its objective.

Like mentioned, BPCL’s corporate philosophy towards environment is also directed

towards life and mankind. In other words, It would try and ensure that at least in its
conscious actions, BPCL would not become party to any decisions which will have
damaging consequences to this earth & the life on it.

18
BPCL, on the other hand would give its best in educating mankind, on the necessity
of understanding the dynamics of the fragile eco-diversity and hope to seek
contributions from each individual in maintaining the balance.

v. Implementation of the official language policy

The Official Language Committees function at the Corporate, Regional, Area and
Location levels in order to promote the use of Hindi at work places. These
committees review the progress made in Official Language Implementation. Hindi
workshops were organized in the Regions and Refinery. The Parliamentary
Committee inspected the Official Language Implementation at six of BPC’s locations
during the period and expressed their appreciation for the efforts taken by BPC. The
“Chairman’s Inter-Region Rajya-bhasha Rolling Trophy” has been instituted to create
competition and awareness. Various competitions and cultural programmes were
organized at locations during the Hindi fortnight celebrations from 14th – 28th
September 200

vi. Citizens’ charter

Citizens Charter - a tool for ensuring transparency in communicating with customers

and educating them about their rights, apart from various infrastructure / services
being available for customers, is always in the forefront of all activities of BPC.
The financial year was very eventful, particularly in respect of enhancing customer
service levels. The Grievance Redressal Mechanism was also well taken care of,
which is fully established and positioned at various consumer contact points.
The Right to Information Act, 2005 has been implemented in BPC, effective
12.10.2005 in the true spirit of the Act. People across the organization are familiar
with the Act and BPC has a unique single window concept of all replies under the
Act.
Various schemes, programmes and services to provide value addition to retail
customers, pioneered by BPC, received good response and created a brand
differentiation in the minds of customers. Various customer focused initiatives taken
by different SBUs .

vii. Non-conventional energy initiatives

BPC has embarked upon various non-conventional energy initiatives. Towards this
objective, BPC has an ambitious programme of generating power for its own
consumption through windmills. Work on windmills of 5 MW capacity in the State of
Karnataka will start shortly. There are plans to scale up the capacity gradually in a
few other States also. BPC has also started Jatropha plantation at a few places
in the country to enter the Bio-diesel value chain.

19
 A pilot project on end to end Bio-diesel production has been initiated in an area of
around 1000 acres of land in UP. Although at a very nascent stage, BPC plans to enter
the area of fuel cells in cooperation with BHEL and depending upon the commercial
viability, the programme will be accelerated. Also, BPC is experimenting on the
generation of solar power for part of our Retail Outlet requirements at a moderate
cost, coupled with a solar-cum-wind power generator, which is being tested for its
commercial prudence.

20
PRODUCTION
DEPARTMENT

21
8.) PRODUCTION DEPARTMENT

A.) Exploration and production of crude oil and gas

In continuation of its endeavor to consolidate its presence in the upstream oil and gas
sector, BPC has taken a number of strides forward in the past year. A strategic
decision has been taken to balance the risk by spreading it on a mix of exposure to
Exploration, Development and Production assets with a budget of up to Rs.15, 000
million over a five year period. With a view to achieving quick return on investment
and retaining the goal of oil security, a number of properties were evaluated during
the year, both in India and abroad.

Considering the need for a focused approach for Exploration and Production
activities, implementation of the investment plans of BPC at a quicker pace, facilitate
faster decisions, mitigate business risks, adopt the latest technology, acquire business
skills, expeditiously place competent human resources etc., it was felt that the
formation of a separate subsidiary company would be the best option. BPC’s board
has recently approved the formation of a wholly owned subsidiary company viz.
Bharat Petro Resources Limited, with an authorized share capital of Rs. 10,000
million, for carrying on Exploration and Production related activities.

22
BPC, in its ambition to fulfill the national endeavor of accruing reserves as well as
enhancing refining capacity, is successfully spreading capital in both risk related
ventures as well as revenue generation assets. With a view to enhancing the technical
capability and to become a robust exploration company, BPC has proposed to
strengthen the Exploration & Production activities by establishment of interactive
work stations for internal evaluation of seismic, geological, well logging and testing
data of different exploration and exploitation blocks. The process of augmenting
manpower required for manning these work stations and to give a thrust in its
endeavor to succeed in its operations is being seriously pursued.

23
B.) REFINERIES

Mumbai Refinery achieved its highest ever crude processing level of 10.30 MMT
during the year, covering 21 types of crude, including 4 new ones, taking the total
number of crude processed to 67.

The refinery also commenced export of 380 cyst viscosity Fuel Oil during the year to
save on high value middle distillates. Production and delivery of Euro III equivalent
MS and HSD was enhanced for meeting the demand of Mumbai metro and other
major cities. The first batch of 97 octane petrol was produced and dispatched in
October 2005.

Since the unit is based on Hydro processing technology, the LOBS production is not
constrained by crude origin and quality, as is the case with conventional units. This
plant is the first of its kind in the country.

The capabilities of the quality assurance laboratories were upgraded to test and certify
Euro-III quality Gasoline and Diesel. New generation analytical instruments like
High Performance Liquid Chromatograph (HPLC) for determining Poly Nuclear
Aromatics (PNA) species, instrument for measuring low concentration Sculpture

24
levels using X-ray technique etc. have been installed to meet the new business
requirements.

The refinery achieved 4 million man-hours without any Lost Time Accident (LTA)
during the year. This year, 1599 maydays of safety training were imparted to the
employees. Around twenty managers from various functions were trained For
enhancing contractors’ safety, training was conducted for 7288 contractors’
workmen, 1065 contractors’ supervisors and 47 contractor owners. As a part of
women empowerment

During the year, the refinery was conferred with the following awards:

a) Three Star Export house status from Joint Director General of Foreign Trade.

b) Jawaharlal Nehru Centenary award for Energy Performance of Refineries.

c) OISD award for overall performance in safety.

d) FACT MKK Nayar Memorial productivity award.

25
C.) RETAIL
The fiscal year 2005-2006 was a testing year for the industry. Spiraling crude prices,
uncertainty over retail price increases, erosion of margins, expansion and
consolidation of the business by private oil companies and treading a fine line
between profitability and market share, brought into play business dynamics and
ushered in a new paradigm, bringing in new experiences for the industry The Retail
Business unit overcame stiff competition and aggressive market tactics deployed by
the competition and was able to stem the initial slide by retaining the second position
in the retail fuels market with sales of 11.61 MMT during 2005-2006.

The high point of the year for the Retail Business was BPC being conferred the award
of the Forecourt Retailer of the Year 2005 by Images, the leading Retail publishing
house.

The jury, while deciding on BPC as the winner in this category, took into account
BPC’s unique bouquet of retail products and services and particularly for “setting
innovative trends in retailing”, “providing increased value for money to its
customers” and “providing evidence of leadership in the field of collaborative efforts
for its retail operations.”

The emphasis during the year was on network expansion with the commissioning of
902 retail outlets, representing21% of the 4304 new retail outlets commissioned by
the industry during 2005-06. Numbers apart, the qualitative aspect of the retail
network continued to make BPC stand out in the industry, with throughput per RO at
153 KL being15% higher than that of other industry members. The year also saw a
significant increase in competition from private sector players.

The subdued growth in MS sales has to a large extent been compensated by the
extensive success enjoyed by “Speed”, the market leader in the branded fuels
segment. With an 18% share of MS volumes, Speed recorded sales of 445.8 TMT
through a 2700 strong retail outlet network and consolidated its leadership position
with a 40.2% share of a rapidly expanding market.

Speed 97 was available in 79 retail outlets in major urban markets. Speed 97 sales
stood at 334 MT for the first 6 months after its launch. During the year, a series of

26
new mass media campaigns around Speed and Hi-Speed Diesel were launched. In
keeping with BPC’s tradition of connecting with today’s contemporary Indian, the
latest youth icon of the country – Mahendra Singh Dhoni – has been signed as the
new Brand Ambassador for Speed and MAK brands. BPC is confident that the
association with M. S. Dhoni and its existing Brand Ambassador, Narain
Karthikeyan, will enable the brands to scale new boundaries of brand recall and
visibility.

BPC continues to remain committed to delivering superior value to customers. The

year saw the expansion of the “Pure for Sure” (PFS) network through the enrolment
of 670 fresh retail outlets under the PFS brand. With a total of 4643 retail outlets
certified under the PFS banner, 65% of the RO network now consistently delivers
superior value to customers. With the product assurance of Quality and Quantity, the
customer validation of the PFS brand has further strengthened, with 7.2 out of every
10 liters purchased from the BPC network being through a PFS outlet. With a view to
assure quantity and quality across the entire network, there are plans to bring the non-
PFS outlets also under the ambit of third party audit. Automation at retail outlets is
another key area of attention. The objectives behind this initiative are to provide
assurance on Quality and Quantity to customers, improvement in service / transaction
time at the outlet, mitigate risks relating to frauds and ensure effective monitoring of
stocks.

Keeping pace with the increasing penetration of credit and debit cards in various
consumer segments, BPC has firmed up strategic payment facilitating alliances with
State Bank of India and HDFC Bank, for increased customer convenience and to
drive their respective customer bases to BPC’s outlets. BPC added another dimension
in its Customer Relationship Management programme by joining hands with the Tata
group in the launch of the Tata Credit-cum-Loyalty Card.

27
D.) AVIATION

The Indian aviation industry has been going through a dynamic growth phase. A
number of new players have entered the market. There has been a quantum increase
in the number of international flights into the country.

The booming economy, coupled with the attractive fares on offer, has led to a sharp
increase in the number of first time fliers. The once stagnant market is now buzzing
with activity. In this scenario, ATF sales have been growing rapidly despite the high
prices. The growth is expected to continue in the o continue in the coming years.

• Infrastructure

These changes and activities have opened tremendous opportunities for growth for
the Aviation Business Unit. During the year 2005-06, BPC grossed a sales volume of
680.67 TMT of ATF. This represents a growth of15.91% over the previous year.
Several locations, including strategic locations like Mumbai, Delhi, Bangalore,
Hyderabad, Ahmedabad and Cochin achieved their highest ever sales during the year.
Despite the intense competition, BPC has been able to retain most of the major
domestic and international customers.

28
At all the 19 Airports we have adequate tankage and modern fleet of Refuellers and
Dispensers.

After nationalisation in 1976, we have come a long way. At Indira Gandhi

International Airport, we own & operate one of the modern Hydrant Fuelling
Systems. Presently, it is the largest Hydrant System being operated in India. Recently,
at newly inaugurated Cochin International Airport, we have constructed and are
operating the State of Art Hydrant system. The hydrant system at Cochin airport has
console with Programmable Logic Control (PLC) based control/monitoring system
for entire tank farm, pump house, QC ops. The added features of console is the on
line data in respect of fuel level, pump sequencing, pump tripping, Pd on line and
history of all facilities.

Our mobile & static facilities are equipped with features to ensure high standard of
quality and safety. We are constantly improving upon by updating technology.

They have also exposed our officials and staff to international work culture and
practices with placement abroad and periodic inspections of our facilities by shell
specialists.

29
 QUALITY
CONTROL
DEPARTMENT

30
9.) QUALITY CONTROL DEPARTMENT
Pure For Sure
A) Concept
B) Quality Measures

A.) Concept

PURE FOR SURE

The Sign of a New Revolution

Bharat Petroleum recognizes that one of the basic needs of the customers is pure
quality and correct quantity of fuels. Bharat Petroleum is passionately committed to
making this need a reality at its Retail Outlets. As one of the major initiatives in this
direction, Bharat Petroleum has launched an 'Enhanced Fuel Proposition' (EFP)
programmed - A nation-wide effort a dispensing pure quality and correct quantity of
fuel, and at the same time delivering courteous, fast and efficient service.

The retail outlets covered under this program display the 'Pure for Sure' sign - an
outturned palm forming a circle with the thumb and the first finger - also imprinted
on the dispensing units and on the back of the blue uniform sported by DSMs, and
TUV's certificate displayed at the outlet. At such Retail Outlets, Bharat Petroleum
guarantees that the correct quality and quantity are dispensed. In order to be able to
do so, strict quality control and tracking measures have been put in place at every
point from the Supply Point (Depot) to the customer's fuel tank.
Special locks have been provided in tank lorries and comprehensive sealing has been
undertaken at the dispensing units. Before certification, the Retail Outlets are
subjected to stringent tests by TUV SUDDEUTSCHLAND - INDIA, a renowned
international agency, to ensure that all parameters of the program are complied with.
Mystery audits and extensive inspections are carried out at these Retail Outlets to
ensure that they continue to comply with the requirements of the EFP program.

Expectations of the Customers out of this program:

 Values for money from “Pure for Sure” outlets as these outlets dispense
right Quantity of pure fuel.
 Better mileage and lower maintenance expenses on their motor vehicles
 Efficient fuelling and courteous service resulting in saving of time.

31
  Reduced pollution due to the use of pure fuel.

During the last 3 years Bharat Petroleum has implemented a set of Customer Service
Standards, which has been well appreciated by customers. The 'Pure for Sure'
program is an even more focused, and intense effort towards ensuring Quality and
Quantity, courteous and quick

B.) Quality measures

• Guaranteed Q&Q

With the ultimate aim to inspire complete trust in its retail outlets, Bharat Petroleum
has adopted stringent measures to ensure quality and quantity at every point - right to
the customer's fuel tank. To achieve this, two sets of Q&Q measures - 'Input
measures'

The 'Output Measures' involve rigorous periodic and surprise checks, regular testing
of samples both for clinical and octane number, dedicated mobile vans, etc. Bharat
Petroleum has collaborated with an independent global agency 'TUV
SEDDEUTSCHLAND INDIA' to build a fully computerized format to be installed at
every outlet.

• Courteous service:

Customers choose vendors on their value perceptions, which include quality,

reliability and expertise. Each time the customer drives into the forecourt he needs to
be recognized and acknowledged, greeted with a smile, made to feel special, and
cared for.

It may perhaps take three or four fills for the customer to notice an improvement in
Q&Q. But his first exposure to exemplary courtesy and personalized service will
make an instant impact, resulting in reinforced consumer confidence and positive
referrals.

Efficient fuelling:
Here, time is a vital factor. The level of service should be quick and efficient so as to
bring home the fact that precious time is not wasted on delayed transactions.

the resultant performance on various elements like total time taken to fuel each
vehicle, Q&Q checks, etc. Performance is also tracked through mystery customer
audits. Feedback on an outlet, i.e. dealer/DSMs performance is obtained from
customers frequently patronizing an outlet, through a questionnaire specially designed
for the purpose.

32
 RETAIL
OUTLETS

33
 10.) Retail Outlets

A.)Petrol Pumps:-

Making A Difference through Innovative Retailing

Bharat Petroleum's efforts have all along been to build a superior understanding of
customer needs and relentlessly work towards fulfilling these needs. Bharat
Petroleum is consciously working towards providing added value to customers, both
in fuel and non-fuel areas. Initiatives, some of them pioneering efforts, have been
introduced based on need gaps articulated by consumers during focus group
discussions and extensive market research.

Recognizing that the basic need of the customer is pure quality and correct quantity of
fuels. As one of the major initiatives in this direction, Bharat Petroleum has triggered
a virtual movement at select Retail Outlets (Petrol Pumps) to guarantee pure quality
and correct quantity to its customers.

This 'Enhanced Fuel Proposition' movement, which is the sign of a new revolution,
has been gaining nation-wide momentum after its initial launch at a few centers.
Retail Outlets enrolled in the movement display the 'Pure for Sure' signage very
prominently at the Outlet.

Bharat Petroleum's efforts began with remodeling and upgrading Retail Outlets to
world class standards back in 1996. Retail Outlets have been equipped with state-of-
the-art modern infrastructure, including the Multi Product Dispensers to pre-set price
and quantity of fuel and Electronic Air Gauges facilitating precise inflation of tires.
Attractive Canopies are suitably designed to provide shelter and adequate lighting of
the forecourt at most Retail Outlets.

On the Non-Fuel front, Bharat Petroleum has introduced the Errand Mall concept
successfully at select markets. Called the 'In & Out' , these malls offer the customer a
broad range of facilities and brands to choose from. ATM's, Cyber café, Courier
services, Laundry, Photo Studio, Music, Fast Food, Greeting Cards, Courier Services,
Bill Payments, Movies / Entertainment Tickets, etc. have made Bharat Petroleum's
Retail Outlets a happening place and indeed an rewarding experience for motorists.

To make life more convenient and rewarding for customers, Bharat Petroleum has
introduced the 'Petro Card™' for individual customers and the 'Smart Fleet Card' for
fleet owners. Using the Petro Card entitles the customer to PetroMiles under the
Poltroons rewards programmed.

34
Bharat Petroleum has also pioneered the concept of convenience stores at select petrol
pumps that operate under the name 'Bazaar'. These Bazaars provide a wide range of
convenience items and fast foods to customers in conditioned and friendly
environment.

Retail Outlets services:

1) In & Out Stores

2) ATM's in RO's
3) Air, Water & Wash room
4) Lubricant Top-ups
5) Credit & Debit Cards

35
Services:-
i. In & Out Stores:

Bharat Petroleum has pioneered the concept of Convenience Stores in the country.
Called 'In & Out', these Stores go a long way in meeting customers' convenience
needs on the road. The fact that these 'In & Out' work late in the night when most
other stores are closed is a significant help. The product mix extends from light
snacks and a can or glass of Pepsi for the hungry traveler, to breads, milk and
personal care products. Some of the stores even vend frozen foods, greeting cards,
music and gift item.
Managing the supply chain efficiently holds the key to the success of the retail
business. During the year, BPC finalized a Road Transport rate contract through a
process of e-bidding. This was a first in the Indian petroleum industry. This process
has significant potential for bringing about savings in transportation costs, which
forms a major portion of the distribution costs for oil marketing companies. With a
view to effectively track the fuel movements transported through lorries,
BPC has commenced a new initiative of segmenting customers, with a view to
provide superior customer enablement, thereby achieving market leadership position.
This initiative of offering solutions to customers, based on their psychographics and
fuelling behavior, was initiated during the year.

ii. ATMs
Automatic Teller Machines of various leading banks have been provided at select
Bharat Petroleum Retail Outlets (Petrol Pumps) for the convenience of the customer.
The convenience of the ATM is that it removes the restriction of timings of the
traditional banking system. In an emergency, especially at night when the good old
bank is closed, the ATMs become a boon.

Our petrol pumps are ideal locations from the customer convenience point of view.
With various networks emerging amongst the banks in future, a cardholder will be

36
able to draw cash from the ATM of any bank. Bharat Petroleum has started this
initiative with two banks and now has ATMs of over 13 banks on its sites.
iii. Lubricant Top-ups

Lubricant fills & top-up

Getting the oil changed for a vehicle is no longer time consuming. One can drive into
one of Bharat Petroleum's modern petrol stations that have the latest equipment,
which just sucks out all the used oil and automatically fill the engine with fresh
Automol Gold Engine oil - All this in just 14 minutes.

iv. Air, Water & Wash room

While free air, water and wash room are mandatory requirements, Bharat Petroleum
has extended it beyond the mandatory need by providing automatic air gauges at its
new generation outlets.

v. Credit Cards & Debit Cards

Bharat Petroleum pioneered the concept of a co-branded credit card. Today over
1,500 Bharat Petroleum Petrol Pumps accept Debit & Credit cards that have either a
MasterCard or Visa logo on them.

In addition to this, selective Petrol Pumps offer a waiver of the fuel surchage on
HDFC Bank Debit Cards, SBI Debit Cards, Standard Chartered Bank Credit Cards,
Standard Chartered Bank SmartFill Debit Cards and HSBC Credit Cards.

37
B.) Technology in retailing:-

Revolution in Indian Consumer behavior…

 Rising disposable incomes (higher buying power)
 Male no longer the sole income generator
 Enjoys traveling, shopping, and eating out
 Increased indulgence in entertainment and lifestyle products
 Pester Power, seeking variety
 Seeking value for money (High quality and price consciousness)
 Technology Savvy (Internet, Mobiles, Voice Recognition …)
 Getting used to speed of service
 Convenience seekers

… Urban, rural, highway, all are getting more demanding and Technology savvy.

Industry has been adopting technology in piecemeal. BPC accelerated technology

adoption post 96-97 transformed the fuelling experience …

Fuels
 Fuels
 Impulse & Grocery
 Vehicle Care
 Payment Options

38
Fuelling facility should include …

 Fuel Dispensing and Electronic mode of payment fully integrated

 Fuel Dispensing and Cash Memo generation fully integrated

 DSMs identifiable for each transaction

 Reduce re-fueling time; “pump to non pump time ratio not to exceed 2”

 Control over fuel receipt and issue ex-RO KEY BENEFITS

 Seamless transaction- value of goods & services, electronic mode of payment,

and ticket printing

 Single payment transaction for multiple point purchases

 Convenience / Efficiency/ Speed

 Control/ Reliability/ Security

39
Impulse & Grocery

The convenience store has in place …

 POS systems including bar coding that enable efficient store management.

 Consolidated Store data that is analyzed at Enterprise level.

KEY BENEFITS

 Implement retail best practices

 Merchandising (category management strategies)
 Customer Relationship (track buying pattern, run customized promotions,
implement CRM program)
 Cashiering / billing (increased check-out efficiency, I.e. accuracy of billing
and speed of transaction)
 No over-charging and sale of Expired products
 Enterprise connectivity across 30 cities
 Category analysis at HQ

40
Vehicle Care

Our V- CARE is …
 A mid point solution between the high- ends authorized service stations and
road side mechanics.

 Has Repairs and Maintenance. Automatic Car Wash, ATM, Digital Air
Inflator, Pollution Checks.

KEY BENEFITS
 Customers get . . .
 Choice
 Convenience location
 Reduced cost of servicing
 Improved Profitability
 Extended working hours

41
Payment Options

Payment options are …

 Smart Card; PetroCard and Smart Fleet
 Credit Card
 Debit Card

Smart Fleet Site PetroBonus Site Speed93

Site

KEY BENEFITS
 Customers get . . .
 Choice
 Convenience of not handling cash
 Array of Information on web
 Loyalty Rewards
 Dealers/ Company have . . .
 Less cash handling
 Speed in Fore Court and accuracy in accounting
 PetroBonus Site
 Smart Fleet Site
 Speed93 Site

42
Fuels and Non- Fuels

Resulting in enhanced value for all

CUSTOMER
 Seamless integration of goods received and amount paid
 Reduced transaction time
 Flexibility in payment mode
 Cashless transaction
 Convenience
 Loyalty rewards
 Q&Q assurance
 Improved vehicle care/ less cost

DEALER
Effective control over forecourt transactions and RO operation

 Reduced no. of staff in forecourt

 Easier and automatic accounting
 Reduced cash handling
 Improved market image
 Increased Profitability

COMPANY

 Improved customer knowledge

 Improved efficiency in forecourt
 Improved profitability
 Enhanced customer satisfaction
 Improved brand equity
 Customer loyalt

While the level of automation is, invariably, a trade-off between the cost of
investment and the customer value

Critical Success Factors:

43
  Defining Levels of Automation
 Best in the class vendors; mostly Global
 Indigenous equipments compatibility
 Change Management
 Dealers
 Company

C.) GHAR

BPCL GHAR

For the ‘Trucker and Tourists’ ‘Home away from home’

BPCL GHAR is one stop trucker’s shop proposition with multi-facility retail outlet
with all the comforts to meet the ‘Trucker and Tourists’ needs and convenience.
These outlets are located on all major highways across the country. There are
dedicated BPCL officers at these outlets and who offer the ‘Trucker and Tourists’
personalized service all through the day with host of facilities; hence the drivers call it
‘Home away from home’.

At the GHARs, customers can experience many convenient facilities like dhaba
services, secure parking space, essential items store, emergency assistance, Doctor,
Messaging service, Smart Route assistance and many more at all the 60 outlets as on
date and many more will be operations shortly.

• Pure for Sure Fuel:-

All the GHARs offer the customer guaranteed quality & quantity of fuel and are
PURE FOR SURE. So customers can set aside their worries about compromising on
the quality and quantity of fuel!

• Secure Parking:-

We understand that it is very important to secure customer’s loaded trucks. That is

why at GHARs provide the customers with a safe parking space. That too, absolutely
free! Customers can rest aside their worries for loaded trucks while their driver eats,
sleeps or shops with us.

44
 • Shop, Eat or Simply Relax:-

‘Trucker and Tourists’ can avail of many more convenient facilities. They can eat
hygienic food at the Dhaba at extremely affordable prices! They can even sleep and

relax in the resting cots; bathe and refresh themselves if they wish to. In fact, they can
also shop for essential items like toiletries at these outlets.
• Health Care Facilities:-

At select BPCL GHAR, drivers are provided with free medical consultations for
minor problems at select outlets during certain timings. They can also benefit from
first-aid medication at the BPCL GHAR outlets whenever the requirement arises. To
complement this facility which is in remote area we have launched innovative
telemedicine services by name “sanjivane” at select GHARs. With this proposition
customer would not be required to search for a medical assistance while on the
highway, we are there to serve them with world class consultancy and advisory
service from one of the best hospital in India.

With BPCL GHAR, drivers need not worry about unforeseen emergency situations.
In case an emergency does arise, we have arrangements to provide the ‘Trucker and
Tourists’ with assistance like Auto electrical, automobile mechanic, crane,
ambulance, insurance agent and even RTO assistance.

• Smart Fleet Dak Service:-

Today contacting the driver by the Smart Fleet customer while he is on the move has
become very easy. They could simply send him an email message through the Smart
Fleet Dak service, which is presently available at select BPCL GHAR outlets. There
are GHAR staffs waiting to help him with this facility. The drivers can also contact
their transporters through email from these outlets.

• Smart Route Assistance:

While on the highway it will be easy to find your route to any place henceforth. With
Smart Fleet Route Service all the GHAR are equipped with an e-atlas of India, where
from they can help the customers reach their destination with precision of district
level roads. They can avail host of information like the name of the place from the pin
code, location of important spots etc from this e-atlas provided at the GHARs.

BPCL GHAR today introduces to the ‘Trucker and Tourists’ lot many benefits and
opens a new world of convenience to them!

45
RESEARCH AND
DEVELOPMENT
DEPARTMENT

46
 Research analysis

I have made research on customer satisfaction. The main objective of this research
was to know that the customers of BPCL are satisfied with the services which is
being provided to them.

To make the research we made one questionnaire which includes the questions
regarding our objective. I went to the BPCL retail outlets of Rajkot city and tried to
collect the information by asking them questions which I have included in my
questionnaire.

The aim of this research was to identify the area of improvement in the retail outlets
so that customer satisfaction could be fulfilled and selling could be increased.

The findings and my observation is as follows:

NO. OF PETROL PUMPS VISITED: 3

47
SAMPLE SIZE: 150

LOCATION: RAJKOT CITY

RESEARCH INSTRUMENT: QUESTIONNAIRE

TYPESOFVEHICLE
S

140 128

120
98
100

80

60 Series1

40
24
20

0
2-WHEELER 4-WHE
E LER BOTH

The above graph shows that which type of vehicle the person owns the most. This
shows that most of the person is having 2-wheeler the most which is 128, then
comes the combination of both that is 98 and last comes 4wheeler that is only 24.
This says that 2-wheeler users are more.

TYPE OF FUEL USED IN 4-W

80 74
70
60
50 46
37
40
28
30
19
20
10
0
PETROL DIESEL SPEED HI-SPEED OTHERS

4-wheeler is such vehicles which consumes the fuel the most. So our focus is on 4-
wheelers is more compare to other vehicles. So our observation tells that petrol is
such a fuel which is used in the four wheeler the most. And then comes diesel and
like vice.

48
 Facilities Providwd By BPCL

51
Quality
88 Welcomer
Cleanliness
35 Stores
ATMs
14 Services
24 37

In this competitive era, Facilities are such a tool by which we can attract
the customers. In the same way in the petroleum industry all the companies
provide very good facilities to the customers. So BPCL tries to serve the
customers very well. So above chart shows that which facility attract the
customers the most.

Extra Services No hindrance like

roadside venders or any
others
Easy and wide entry to
the outlet

45 No pits/holes/bumps on
65 entrance

Spick & span RO/De

43 cluttering/properly paved

34 Human signals to show

the path after entry
22
Availability of forecourt
14 manager
67
Use of chain
55
links/disciplined queuing

Good lighting facility at

night

As we know that customer is the king of the market so whatever they

demand from the marketer those the entire things marketer has to provide to them.
So above extra facilities is that which BPCL provide to the customer in extra.

49
 Side Services

56 Clean hygienic wash

63
room facility
Air filling facility

Presence of Exit
supervisor
49 Easy & smooth exit
87

These are some facilities which are being provided by the company to the customers
at the time of exit. In this free air filling facility is very popular in all. This
satisfaction is given by the company to the customers. The above graph shows this
only.

INFORMATION
SYSTEM
DEPARTMENT

50
12.) INFORMATION SYSTEM DEPARTMENT

A.) INTEGRATED INFORMATION SYSTEMS

BPC has continued with its tradition of using Information Technology (IT) as a
facilitator in achieving business objectives and deriving significant benefits. Several
milestones were achieved in 2005-06 with the successful deployment of various IT
initiatives. The “Supply Chain Management” (SCM) project was implemented during
the year for the Lubes business. The project was aimed at improving responsiveness
to market demand while substantially lowering overall supply-chain costs. The end to
end supply chain planning processes cover demand planning, supply network
planning, production planning and detailed scheduling. The SCM project went live in
October2005. In the days to come, this solution is expected to yield major benefits
through inventory optimization across the Lubes supply network, in addition to
providing complete visibility and transparency for the entire supply chain.

51
In recognition of the successful SCM implementation, BPC was awarded the
prestigious ‘NASSCOM IT USER award - Best Supply Chain Management under the
Oil& Petrochemical Refineries/Fertilizer Category’. There are now plans to undertake
implementation of SCM in the LPG SBU, which is one of the largest SBUs having
complex logistics involved in the movement of packed and bulk LPG and associated
inventory management problems.

Subsequent to the receipt of ‘in principle’ approval from the Ministry of Petroleum &
Natural Gas for the merger of BPC’s erstwhile subsidiary, KRL, work was initiated
on achieving system integration across the merged entity. This involved aligning

business processes, making changes in a running SAP R/3 system and training of the
affected users. The process was completed within a short span of four months and
things were kept in readiness pending completion of the merger formalities.
Consequently, there was a smooth transition to a single system on1st October 2006
within a short time of receiving all relevant approvals for the merger. With a view to
exercising better budgetary control over expenditure, BPC has implemented the Fund
Management module. Another process improvement achieved was the
implementation of the off-cycle payroll feature, by which all employee
payments/reimbursements from the financial year 2006-07 onwards are directly
remitted to the employee’s bank account, thus eliminating the generation of a large
number of payment vouchers across the company.

by the in-house team. This will help build a strong base for integration with the Net
Weaver components of SAP and thereby keep up with new technology, offering new
and powerful features. The Solution Manager tool in SAP, that enables all users to
directly log in issues for speedy response from the support desk as well as for on line
system monitoring, has been upgraded.

52
BPC has connected 200 retail outlets through Ku Band based VSATs across the
country for on-line capturing of data in respect of Petro Card / Smart Fleet Card and
the Cash Management System. This will also support the retail automation initiatives

This will help in creating a common communication medium across different

applications, leading to cost savings and highest possible network uptime.

The Uptime Champion award is in honor of organizations where IT infrastructure

needs are to be guaranteed with an uptime of 99.999 percent and protection available
on 24x7 basis.

As a part of the Information Security Policy, the password policy was successfully
implemented in the BPC domain across the country to enhance data security. During
the year, strong support continued to be provided to the businesses in implementing
new initiatives like e-Chou pal, B2B and sale of CNG and LNG. Implementation of
the Instant Messaging feature has enabled businesses in bringing down the
communication cost at major locations. Vendor Portal, an in-house development,
provides real time information on Request For Quotations, Contracts, Purchase
Orders, Statement of Accounts etc. for select vendors from the backend SAP R/3
system over the Internet. BPC leverages smart card technology to design and offer
loyalty cards. B2B and B2C transactional platforms have been created to assist
industrial customers and global aviation consumers to transact business online.

SMS PULL Applications, developed in-house for Smart Fleet Card owners, helps
them to know their balance, set limits or block the usage of Fleet cards and track the
location of the vehicle, based on the usage of the Fleet card.

B.) Keeping Pace in Time:-

53
 The Performance Index for IT Infrastructure and support on Facilities Management
Services/Call Centre operations have been maintained at near 100% levels, thus
helping to maintain the highest level of satisfaction amongst the end user community.
Clearly, BPC is one of the few Indian corporate houses that walk the talk when it
comes to using the information super highway, giving it an “e-edge”.

To get real time information on various transaction and the processes there of, SAP
R/3 version of Enterprise Resource Planning (ERP), has been implemented through
out the organization. All our airport locations and Head Office have gone live on
SAP. We can now access all the transactions on real time basis. If we can access so
can you - our customers!

Very soon BPCL will come to you with the detailed proposal on B2B and B2C
arrangements with it, which will give the opportunity to customers to access all

transactions related to the re fuelling of aircrafts and payments details through BPCL
website on real-time basis.

BPCL is also implementing Astranova - An Apron automation system, which would

relay the information’s right from the apron through SAP to it’s customer.

C.) Internal control system and their adequacy

BPC has a system of internal controls to ensure optimum utilization and protection of
resources, IT security, speedy and accurate reporting of financial transactions and
compliance with applicable laws and regulations, as also internal policies and
procedures. For this purpose, the company has formulated a clearly defined
organization structure, authority limits and internal guidelines, rules for all operating
units and service entities. SAP R/3 and Business Information Warehouse systems
have further enhanced the internal control mechanism.

54
BPC has an internal audit department consisting of experts from various functions,
which supplements the review of key business processes and controls through regular
audits. Audit reports, significant risk area assessment and adequacy of internal
controls are also periodically reviewed by the Audit Committee through meetings
held with management, internal audit and statutory auditors.

55
 HUMAN
RESOURCE
DEPARTMENT

56
13.) HUMAN RESOURCE DEPARTMENT

A.) Introduction to the personnel department:

In any organization management of people plays an important role to be success in

the competition. Personnel management refers to management of personnel. We
know the important component of an organization is its human resources or
personnel. It is the human resource or personnel .it is the human resource which is of
prominent important in success of any organization because most of the problems in
organizational settings are human and social rather than physical and technical and
due to its vast importance human resources should be managed properly so personnel
department is prominent.

EDWARD FLIPPO STATES:-

Personnel management is the planning, organizing, directing, and controlling of the

procurement, development, compensation, integration, maintenance and separation of
human resources to the end that individual organizational and social objectives are
accomplished.

This definition shows that personnel management covers both management function
as well as operative function. The purpose of all these functions is to assist in the
accomplishment of basic objectives.

It is important branch of knowledge, most of the progressive organization having

separate department, and they are appointing the expert as personnel managers. The
success of any organization depends upon workers and therefore it is considered as

“Mind your men and Men will mind all other things.”

This management of personnel is done by personnel department. In BPCL also there

is one separate personnel department and it is handled by the personnel managers.
Personnel manager manages the problem of personnel and also does activities of
recruitment, selection, training, wages and administration etc. of personnel.

57
B.) HUMAN RESOURCES

As on 1st April 2006, BPC had 11,995 employees and the erstwhile KRL had 1879
employees on its rolls. BPC’s core strength has always been the quality of its human
resources. In line with this belief, BPC always seeks to involve people across the
organization in all the major initiatives being undertaken. This engagement ensures
ownership of people at all levels to the goals and targets set. Accordingly, a cross
section of the employees were enrolled in the process of revisiting BPC’s vision,
keeping in mind the emerging needs of the competitive market place through the
process of ‘Appreciative Inquiry’. A total of around 1000 management staff has been
covered during the year.

The entry of competitors in the Indian market, both in the upstream and downstream
segments of the industry, have driven compensation levels upwards, which in turn
posed a major problem of retention of staff in the public sector oil companies.
Attracting and retaining the best talent has become a big challenge. Several
recommendations have been made to the Government of India in this regard. As a
proactive step, with a view to differentiate performance and reward high performers,
BPC had introduced a Performance Related Incentive Scheme for the first time in
2003-04. The scheme has been fine tuned during the year by increasing the
differential of incentive across various levels of performance. Notwithstanding these
initiatives, BPC had an attrition rate of 4.71% during the year 2005-06. With a view
to benchmark performance with the highest standards, BPC had identified
competencies which set apart outstanding performers. During the year, the process
was carried forward and these competencies have been used to profile select staff.

BPC has implemented the ‘development center’ for its employees. The ‘development
center’ is a method for assessing the competencies and development potential of the
participants by trained assessors using diagnostic processes. A total of three
Development Centers were conducted during the year covering 31 Territory
Managers. Training and Development continues to be an important thrust area. The
Bharat Petroleum Learning Center at Mumbai and the Regional/Refinery Training
Centers are used for imparting training on new initiatives and for skill up gradation of
employees. During the year 2005-06, 7977 mandays of training were conducted in
BPC and 6015 mandays of training in the erstwhile KRL. Through this process, 4103
employees of BPC and 1455 employees of the erstwhile KRL were trained and inputs
given in both functional and managerial areas. The Bharat Petroleum Scholarship for
Higher Studies scheme launched in 2003-04 is BPC’s contribution to promote
excellence in higher education. Deserving students are identified and financial
support provided for higher studies in prestigious institutions in India and abroad.
During the year, 19 students going abroad and 5 students studying in India were
awarded scholarships under the scheme.

58
Reaching out to others has been BPC’s forte over the years. This has now been
recognized internationally as BPC, along with Maruti Udyog has been ranked number
one in Corporate Social Responsibility in the country by TNS Automotive. The study,
conducted across 16 countries, addressed issues like ethics, concern for employees,
products that improve the quality of life, creation of jobs, preservation of natural
resources and disaster relief efforts on the part of companies. The Ideas platform,
which was institutionalized in the year 2000, to nurture creativity and innovation
amongst employees, has become a key event in the organization. Employees look
forward to this event to share the innovations made by them at their work place.
During the year, new award categories were introduced, both in Refining and
Marketing, besides Research & Development. A total of 51 Awards were given away
in recognition of the contribution made by the participants. One of the key challenges
that BPC is facing is the retention of skilled and experienced manpower. The opening
up of the economy has created numerous avenues, besides increasing overall
compensation levels. At the same time, BPC has ambitious plans and goals. While
attrition is a reality, BPC is constantly focused on improving its HR policies to face
the emerging challenges.

C.) Time keeping system

Each unit has its own time keeping system. Every company must have time keeping
section to measure regularity of its employees in time keeping system. The arrival and
departure of employees is recorded.

In each retail out let timings are in 2 or 3 shifts. Generally they are as under.

If 2 shifts,
8:00 a.m. to 8:00 p.m.

8:00 p.m. to 8:00 a.m.

If 3 shifts,
7:00 a.m. to 3:00 p.m.

3:00 p.m. to 11:00 p.m.

11:00 p.m. to 7:00 a.m.

This is about the retail out let but for office worker timings are from morning 10:00 to
6:00 o’clock. These employees get holiday once in a week that is on Sunday.

59
D.) Recruitment, Selection and Induction

To fill the vacancy in the organization recruitment and selection is done.

RECRUITMENT:

“Recruitment is the process of searching for prospective employees and

stimulating them to apply for the job.”

Recruitment is the positive process. There are mainly 3 methods of recruitment viz.,

 Direct method
 Indirect method
 Third party method

There are 2 sources of recruitment

1) Internal sources
2) External sources

If company adopts internal source of recruitment then recruitment is done within the
organization, and if company adopts external source for recruitment then employees
are recruited from outside.

The best internal source is promotion and external sources are advertisement, trade
unions, schools, colleges etc. In BPCL recruitment is done from colleges i.e. campus
placement. And promotion is based on the performance not on the basis of seniority.

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 • SELECTION:

After the ending of recruitment process the selection process start.

According to Dale Yoder:-

“Selection is the process in which candidates for employment are

divided into two classes.”

 Those who are to be offered employment.

 Those who are not.

Thus the selection is hands of the management of differentiate the qualified and
unqualified applicants by applying various techniques.

In BPCL for different posts different applications forms are there with each
application form are assessment sheet is there which is assessed by the interviewer at
the time of interview. They adopt the simple policy for general post means there is no
lengthy process for selection for selection of general post. They send the candidates to
concern supervisor and candidates have to work under that person say for one week.
If supervisor satisfied then he selects the person foe the job, but for executive post
like officers and engineers, they arrange interview and such interview is conducted by
managing directors, general manager and other managers. In such interviews are
assesses by interviewer according to assessment sheet. In this selection salary
negotiation is also there.

After this, they issue an official form for selected persons. If the person wishing to
work he will sign this offer by this way the person is selected.

• INDUCTION:

A selected person is then goes through process of induction. induction means the
introduction of employees to the organization and the job by giving them all the
possible information about the organization history, objectives, rules, code of
conduct, productions, good will in the market and in the community, future
development opportunities and by introducing them to other employees.

BPCL also fulfills the formality of induction. This work is done by the head of the
department.

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E.) TRAINING AND MANAGEMENT DEVELOPMENT

• TRAINING:

Every organization needs to have trained and experienced employees to perform the
activity that have to be done. Employees training for development are not only an
activity that an organization must it. Training and development of personnel is a
follow up of selection. It is an improvement and enhancement of different type of
skills so that employee can perform their jobs effectively. There are two types of
training methods.

 On the job training

 Off the job training

In on the job training persons are trained during the working hours. no, extra time is
given for that on the job training. In BPCL departmental head and welfare officer
handle the training. Training is given whenever required at least once in a year
training is given to each employee.

The employees of retail outlets i.e. petrol pump given training twice in a year.
Training is related to their job profile, service to customers, and knowledge about
new products. This training is given by senior officer of BPCL.

• DEVELPOMENT:

Development is long term education process utilizing systematic and organized

procedure by which managerial personnel learn conceptual and theoretical knowledge
for general purpose.

Thus, development covers not only those activities which improve job performance
but also which bring about growth of the personality, help individuals in the progress
towards maturity and actualization of their potential capacities and over all
development like the attitude, behavior, thinking level etc. BPCL also performs
various functions for the development. For the employees of the petrol pump BPCL
planned one development program for the spiritual development by distributing the
“YOGA CARDS” with c.d. and demonstration. That yoga card is as under.

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F.) Promotion and transfer policy:

A promotion may be defined as

“an upward advancement of employees in an organization to another

job, which commands better wages, better status and higher
opportunities, responsibilities and authorities, better working
environment hours of works and facilities etc.”

A promotion is a vertical move in rank and responsibilities while a transfer a

horizontal movement of an employee from one job, section, department, to another at
the another place where his salary, status, responsibilities are the same.

Here in BPCL there is no such standard policy is available, but generally promotion is
based on experience and performance. While transfer is done at any corner of the
country as per requirements and situation. Transfer is done after every 3 years.

Consideration in transfer:

 Organizational requirement in terms of functional and managerial skill for

managing various positions.
 Filling in vacancies consequent upon promotion of officers or on creation of
new posts.
 Rotational assignment aimed at career development of the officer.
 Demand at a particular location requiring specialized knowledge or
experience.

G.) Performance appraisal system:

Once the employee has been selected, trained and motivated, he is then appraised for
his performance. “Performance appraisal is the process of evaluating the performance
and qualification of the employees in terms of the requirement of the job for which he
is employed, for purpose of administration including placement, promotion.”

There are so many methods to appraise the employees but BPCL system to appraised
the employees are as under.

Grading
Graphing rating scales
Critical incidents
Group appraisal
Field review method
Accounting method

63
They measure the skills, experience, ability, discipline, attendance, regularity, and
give this report to the head and this report is useful in promotion etc. thus they
determine the performance appraisal.

H.) Working on ESI scheme:

Employee state insurance is the one of the most popular scheme for the employees
sickness and insurance scheme. In BPCL employees state insurance scheme is applied
which works under the act of 1948.This scheme can be applied in only those units
which have more then 50 workers so naturally it is applicable in this unit also.
Personnel having rs.3000 monthly salary and downwards is eligible for ESI scheme.
They get benefits for self and dependent, accident on duty, death benefits etc.

The main benefits of employees at the time of contingences are;

Sickness
Maturity
Accident.

These all types of facilities are given in ESI scheme.

I.) PROVIDENT FUND SCHEME:

Provident fund scheme is a kind of saving. Any company having more than 50
employees can join this scheme. This is a statutory scheme meant for welfare of the
employees. In India this scheme is applied in all the industry.

In order to gets the benefits of those scheme employees should have completed
continuous at least 60 days service. In the organization- under these scheme
employees has to contribute 6.25% for provident fund and 1.75% for family person
pension. An employee gets 12% interest on the contribution of his provident fund.

64
J.) GRIEVANCE HANDLING PROCEDURE:

In BPCL grievance procedure contains the following steps.

I f a person faces any type of problem then he will report to the concerned officers. If
any grievance arises in the mind of any employees they explain his grievances to
nearest supervisor or the departmental head. Dissatisfaction was arising due to certain
reasons like:

 Payment of wages and salary

 Problem of leave
 Transfer
 Promotion etc.

If the grievance is not settled by the supervisor, then it is sent to higher level manager
or personnel manager.

If the decision of the manager is not accepted by the grievant, he may approach to the
top manager.

In spite of all those steps if the grievance is not settled then employee go to the labor
court.

In short we can say that there is a good grievance policy in BPCL and it handled very
smoothly and satisfactory.

K.) COLLECTIVE BARGAING AND AGREEMENTS:

Collective bargaining refers to agreement between the management and

representatives of the union of the workers. The system of collective bargaining and
agreement is adopted in the Gujarat since 1952 and this is adopted by different units,
many a time problems and grievances occurs which have to be solved. Problem
related to working condition, facilities, salary etc.

These problems are to be solved by agreement between both parties. To settle a

problem first survey of industries are made and general conditions are find out. There
must be a positive agreement between two parties. If the favorable agreement is not
made strikes or goes slow occurs. Go slow process is now-a-days very common
process. Management can not prove anything in this case because production is on the
process but is slow.

65
L.) TRADE UNION:

BPCL has registered trade union. According to selection 2(6) of the trade union act-
1926. “A trade union is any combination of persons, whether temporary or
permanent, primarily for the purpose of regularizing the relations between workers
and employers, or between workers and workers and for imposing restrictive
condition on the conduct of any trade or business, and includes the federation of two
or more trade unions” usually trade unions are influences by political parties.

BPCL has its own trade union but it is not strong. Many workers present their
problems directly and get them solved. This company does not face many problems
with trade unions because they themselves settles all the problems of workers like
wages, promotion etc. in BPCL workers and engineers are also in their trade union.

M.) PERSONNEL RECORDS:

Personnel records means preservation of information in files and documents. They are
generally prepared and completed from reports, and they are meant for long they use.
Personnel record is used by management at the time of promotion, transfer etc.of the
employees they contain for the employers and the employee information on job
analysis. Evaluation and description, recruitment, selection, performance appraised
etc.in BPCL.

In BPCL there are also certain files and registers like attendance register, leave
register, bonus register, ESI correspondence file, and P.F. correspondence file, man
power planning file, recruitment file and personnel file for each individual.

In BPCL human resource department records this type of information.

 Application form
 Personnel data of the employees
 Family information
 Qualification
 Annual confidential report
 Present address
 Record of employee’s behavior.
 The personnel officer of the company keeps the records with there and uses
this at the time of promotion.

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N.) EMPLOYEE BENEFITS AND SERVICES:

Employees are important assets of any organization. So for better work performance
they should be motivated. For this they should be given not only financial incentives
but also non-financial incentives, and facilities. BPCL much concentrated on above
facts and gives many benefits to their employees. They are follows.

• Benefits

 Paid leave
 House rent allowance
 Annual bonus
 Group gratuity insurance
 Group insurance of LIC
 Medical facility

• Welfare measures

 Uniforms
 Industrial shoes
 Winter wear
 Safety equipment
 Company loan
 Welfare fund
 Canteen
 Festival sweets
 Holiday tour
 Culture programme and sports activities.

67
MARKETING
DEPARTMENT

68
14.) MARKETING DEPARTMENT
A.) INTRODUCTION

Marketing is the performance of the business activities that directs the flow of goods
and services from producer to the consumer in the process of distribution.

According to CUNDIFF and STEEL,

“Marketing is the managerial process by which products are matched

through which consumer is enable to use and enjoy the product.”

According to Paul mazur,

“Marketing as the creation and delivery of standard of leaving to the

society.”

Here in BPCL, there is a separate marketing department at head office. The study of
marketing management is essential for concern responsible officer or every
organization for successful operation because without effective management of
marketing, organization goal can’t be achieved.

In BPCL marketing department is managed by experience manager, officers and staff.

There are presently two divisions for marketing.

 Marketing division
 Sales division.

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B.) ORGANISATION STRUCTURE

CEO (HEAD OFFICE)

MARKETING
DIRECTOR

MARKEING
MANAGER

MARETING SALES OFFICER

OFFICER

MARKETING RETAIL OUT LET SALES

ASSISTANT OFFICER ASSISTANT

C.) PRODUCT LINE

Product line is a group of products that are related either because they satisfy similar
needs of different market segments or because they satisfy similar need of different
market segments or because they satisfy different but related needs of a given market
segment.

PRODUCTS OF BPCL

 Simple petrol
 2t mix
 speed
 speed 97
 speed power
 mak
 diesel
 Bharat gas
 fuel for aviation

70
D.) CHANNEL OF DISTRIBUTION

Distribution means to distribute or spread out in the field of marketing. Channels of

distribution indicate routes or pathways through such goods and services flows, or
move from producers to consumers. The line or channel includes the manufactures
and the consumer as well as intermediates.

The most common routes used for brining the products in the market from producer
to the consumer are as follows.

1) Producer ------- consumer.

2) Producer-------- retailer.

3) Producer -------wholesaler--------retailer--------consumer.

4) Producer--------agent--------wholesaler------retailer-------consumer.

5) Producer-------wholesaler------consumer.

6) Producer--------dealers-------consumers.

BPCL use only two ways to reach the consumers.

 Producer------consumer for aviation and to general consumers by company
owned company operated.
 Producer-------dealers------consumers by retail outlets i.e. petrol pumps.
In Rajkot city there is total seven retail out lets of BPCL from that only one is
company owned and company operated while rest six retail outlets are through
dealership basis.

E.) SALES PROMOTION

Sales promotion is an important instrument in marketing to lubricate the marketing

efforts. It is not expenditure. It is an investment which can pay rich dividends.

Sales promotion is referred to activities other then personal salesmanship. Advertising

and publicity, which stimulate consumer purchasing and dealer effectiveness e.g.,
displays, exhibition, and showrooms demonstration, free samples, coupons, premium
and various other nor-recurrent selling efforts not in the ordinary routine.

It is a plus ingredient in the marketing mix. It is a bridge or a connecting link

covering the gap between advertising and personnel salesmanship the two wings of
promotion.

71
BPCL gives sales promotion in two types,
 Lot of dealers schemes
 Focus consumers schemes

BPCL uses sales promotion to a certain extent.

F.) ADVERTISING

“Advertising can be defined as mass, paid communication of goods, services or ideas

by identified sponsor.”

It is a paid communication because the advertiser has to pay for the space or time in
which his advertisement appears. Advertising appears in the recognized media such
as news papers, magazines, TV, radio etc.

It is a unique means of non personal or mass communication announcing the sale of

goods or services. It can help to introduce a new product quickly. The advertising is
non-personal salesmanship. It is silent but forceful salesmanship. by advertising we
can tell numerous people about product or service in the quickest time interval at the
lowest possible cost. Advertising by facilitating mass production and mass
distribution has provided immense employment opportunities to people. It is
backbone of modern national and international marketing.

G.) MARKETING RESEARCH

Marketing research is a systematic and scientific collection, recording and analysis of

data regarding problems in the field of marketing. Marketing function places
particulars stress upon marketing research as an invaluable techniques in decision.

In decision making process to solve any marketing problem as well as in the

evaluation of decisions when these are implemented to accomplish the set objective,
customer satisfaction and welfare. It is through marketing research an enterprise plans
the appropriate marketing strategies and implements the marketing concept, and takes
a scientific approach to marketing management.

Marketing research invoices special projects and studies of various kinds including
the purchase of outside services on an on going basis designed to improve
understanding of the entire marketing system especially the behavior of the buyers,
dealers of resellers and competitors.

In BPCL first of all they study about the customer’s requirements. They try to
introduce well facilities every time, they have marketing research them which goes all

72
over the country and studies about the customer needs and desired. Thus, BPCL carry
out its marketing research programme successfully.

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H.) COMPETITION AND MARKET POSITION

 Competition

Today’s area is globalization area. So every company has to face competition any
how, to stand in the market.

The major competitors of the BPCL are, Indian oil, HPCL, cell, reliance, IBP etc.

 Market position

Market position of BPCL, can be seen through following charts.

Supe Name of the Sales Rs. Sales Net Profit Profit Market Market
r 100 company Cr. Rank Rs. Cr. After Value Capture
Rank Tax Rs.Cr. Rank
Rank
1 ONGC 59,874.10 5 14,511.60 1 1,39,748.2 1
7
2 Reliance 66,073.30 3 7,628.20 2 76,183.19 3
3 IOC 1,35,578.9 1 6,012.00 4 59,591.87 7
0
7 GAIL 13,851.80 13 2,039.80 8 21,944.88 12
9 Bharat 66,444.70 2 1,542.0 12 13,180.50 24
petroleum 0
17 HPC 62,968.10 4 1,415.50 13 11,184.32 31

I.) CUSTOMER SATISFACTION

Twice in a year BPCL gets the feedback and meet the customer directly. BPCL keeps
the “customer satisfaction index” to know whether customers are fully satisfied with
their products or not.

They prepare questionnaire and schedules approach customers directly with series of
questions regarding their demands, problems. This way directly information is
collected through these replies of questions.

They also approach dealer-retailers and ask about the availability of product, sales
promotion measures position and rivals and current competition.

74
They also form consumer’s panel and product is submitted to them opinion,
suggestions and criticism.
J.) BRANDING ON WHEELS

The metro bus recently launched in JABALPUR covers the entire city. Catering to
about 1200 people every day. JABALPUR retail territory decided to use this medium
to build its corporate image, counting on its continuous visibility (55000 people
daily), extended reach and huge impact it creates on the road.

BPCL adopted a bus route in the center of the city and painted the bus with it’s
“energizing lives” theme along with energizing skies, business, homes and wheels.

It’s major brands viz. PFS, speed, Hi Speed, In & Out Petro Cards, Fleet Card were
prominently displayed on all three sides of the bus as well as the inside windows for
the benefit of traveling commuters. The bus was flagged off by deputy general
manager of retialoutlet) West on 2.3.2007 at perto lubes JABALPUR.

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K.) LOCAL LEVEL PROMOTIONAL ACTIVIES.

high spirit prevailing among the people On 14th feb.2007 i.e. on valentine day, was
enough incentive for Rajkot retail territory to create awareness about BPCL schemes.
delares and DSM’S distributed pamphlets informing people about the schemes. A
very cost effective way of reinforcing communication, the rally successfully
conveyed BPC’s scheme to customers.

76
bearing in mind the success of the valentine day rally, Rajkot retail territory greeted
the people of Rajkot with a “Bharat petroleum Sadbhavana rally” on Holi, the festival
of color and festivity.

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 L.) INTERNATIONAL TRADE AND RISK MANAGEMENT

BPC had commenced imports of crude oil for meeting the Refinery requirements in
2002. Since then, the international markets have witnessed considerable volatility and
fluctuations in the prices of crude oil and finished products. BPC has been making
efforts to develop the required capabilities for efficiently managing the emerging
business realities. BPC’s International Trade department had undergone a
restructuring exercise in line with the global best practices during 2004-05. The
essence of the restructuring, which was to build Trading Risk Management capability,
has helped in developing competence in managing commodity risk and innovative
decision making capability to support future trading potential. During the year, BPC
made a small beginning in hedging its margin risk through selling swaps in product
cracks (Dubai crude – Singapore product differential).

International Trade department. With the shipping rates as volatile as the crude prices,
it became necessary to balance the shipping arrangement through a combination of
Contract of Affreightment (COA), Spot and Time Charter.
In line with international best practices, a sound governance mechanism has been put
in place. The volume and nature of hedge to be undertaken is determined by the Risk
Management Committee appointed by the Board and the overall risk management
approach is approved by the Trading Risk Management Board. Counterparties are
enrolled through a rigorous evaluation process and trading is commenced only after
completion of registration and ISDA (International Swaps and Derivatives
Association) negotiations are concluded the first year of hedging operations saw net
cash inflow to counter margin loss in physical volumes.

78
 FINANCE
DEPARTMENT

79
15.) FINANCE DEPARTMENT

A.)INTRODUCTION

All the functions of management like personnel, production; marketing etc. requires
finance for implementation. Financial management is that activity which is concerned
with planning, improving and controlling of the firms financial resources.

Prof. S.C.Kunchal has rightly said “Money is the pivot around which all economic
activities cluster”

Finance in the modern business world is the life of blood of a business. it is said
that :-

“Businessman takes money to make money”

From the above statement one question raised, how the business man make money?
And there is only one answer by the extra ordinary management of finance.

Finance management is that management activity which is concern with planning and
controlling of the firm’s financial resources.

Finance function means procurement of find and their effective utilization in the
business. In other word, the finance function is concerned with solution of three
major problem relations to the financial operation of the firm and i.e. investment,
financing and dividend decision.

We know from the above fact that all activities require finance for their
implementations. So finance function is the most important for every organization.

In BPCL there is a separate financial department and manage all the financial
activities like,

 Estimating the requirements of capital for company.

 Distribution of the profit.
 Determining the capital structure.
 Find out new sources of finances.
 Working of cash and bank management.
 Control overall financial activities.
 Recording of transactions.
 Maintenance of accounts.

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B.) ORGANISATION STRUCTURE

In BPCL the organization structure of finance department is as under.

PRESIDENT

JOINT PRESIDENT

VICE PRESIDENT

GENERAL MANAGER

DEPUTY GENERAL MANAGR

SENIOR MANAGER

COSTING MANAGER A/C TAXATION

& COMPANY
LAW MATTER

C.) Financial planning

The world of financial planning starts with an idea of establishing a business.

Financial planning refers to the process of determining the objectives, polices,
procedures, programmes and budgets to deal with the financial activities of an
enterprise. The term financial planning means different things to different
managers depending on the nature of the business, the firm’s size and so on.

According to walker and baughn, “financial planning pertains only to the

function of finance and includes the determination of the firms. Financial
objectives formulating and promulgating financial policies and developing
financial procedures.” There are two types of financial planning.

 Short term planning which made for one year

 Long term planning which made for more than one year.

BPCL undertakes both the term of planning is done for current assets and long
term planning is done for fixed assets.

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 The mainly undertakes planning for,
- managing liquid budget
- Establishing credit policy.
- Controlling inventory
- Determining debt equity ratio
- Determining method for financial etc.

Their main goal of financial planning is to maximize value of its firm.

D.)SOURCES OF FINANCE

Sources of finance means a place from where a company gets their finance.
There are mainly two types of source.

1) Internal source
2) External sources

BPCL use both types of sources. The internal sources are as under

Internal sources
- Depreciation fund
- Profit fund etc.

External sources
The external sources of company, are banks, financial intuitions etc. they
gets fund from
- Public issues
- IDBI
- Bank of India
- Bank of America
- Central bank of India
- State bank of India
- Union bank of India.

E.) FINANCIAL POSITION

Financial position of the company plays a vital role. It suggest outside, either they
take a chance to invest their money in the company or not. It is the skimming of the
company’s work. Through various statement of the company. This includes profits &
loss and balance sheet etc.

Financial position of the BPCL is very strong, which we can easily determine because
of the various statements. Various financial statement of the BPCL is as under.

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F.) RATIO ANALYSIS

1.) Net Profit Ratio

The net profit margin is indicative of management’s ability to operate the

business with sufficient success not only to recover from the revenue of the
period, the cost of merchandise or services, the expenses of operating the business
(including depreciation) and the cost of the borrowed funds, but also to leave a
margin of reasonable compensation to the owners for providing their capital at
risk.
The ratio of net profit (after interest & taxes) to sales essentially expenses
the cost prize effectiveness of the operation.

Net Profit Ratio = EBIT

Net Sales

Mar 06’-07’ = 5.27 Mar 07’-08’ = 7.64

56.90 80.48

= 0.092 * 100 =0.095 * 100

= 9.2 % =9.5

2.) Current Ratio

Current assets, normally it can be converted within a short period of time

(exceeding 1 year). The current liabilities defined as liabilities which are short
term maturing obligations to be met.

The higher the current ratio, the larger is the amount of rupees available
per rupee of current liability, the more is the firm’s ability to meet current
obligation and the greater is the safety of funds of short-term creditors. Thus,
current ratio, in a way, is measure of margin of safety of creditors.

Current Ratio = Current Assets

Current Liabilities

Mar 06’-07’ = 20.87 Mar 07’-08 = 31.85

9.69 15.56

= 2.15 = 2.05

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3.) Inventory Turnover Ratio

The liquidity is to determine how quickly certain current assets are

converted into cash. Poor turnover ratio limits the usefulness of the current and
asid tast ratio.

Inventory Turnover Ratio = Cost of good sold

Average inventory

Mar 06’-07’ = 50.72 Mar 07’-08’ = 71.78

21 30.13

= 2.42 = 2.38

The cost of goods sold means sales minus gross profit. The average
inventory refers to the opening and closing inventory. The ratio indicates how
fast inventory is sold. A high ratio is good from the view of liquidity and vice
versa.

4.) Debtor Turnover Ratio

It is determined by dividing the net credit sales by average debtors

outstanding during the year.

Debtor Turnover Ratio = Net credit sales

Average debtors

Mar 06’-07’ = 56.90 Mar 07’-08’ = 80.48

6.61 11

= 8.61 = 7.32

Net credit sales consist of gross credit sales minus returns, if any,
from customers. Average debtors are the simple average of debtors (including
bills receivable) at the beginning and at the end of the year.

The ratio measures how rapidly receivable are collected.

84
5.) Debt – Equity Ratio

The relation between borrowed funds and owner’s capital is a

popular measure of the long-term financial solvency of the firm. This
relationship is shown by the debt-equity ratio. This ratio reflects the relative
claims of creditors and shareholders against the assets of the firm.

Debt –Equity Ratio = Long – term debt

Shareholders’ equity

Mar 06’-07’ = 15.97 Mar 07’-08’ = 24.29

3 3

= 5.32 = 8.10

A high ratio shows a large share of financing by the creditors

of the firm, a low ratio implies a smaller claim of creditors. The D/E Ratio
indicates the margin of safety to the creditors. D/E ratio is 2:1 ,it implies low
safety margin for the creditors.

85
 Future Plans
a) Intensifying and enlargement of activities in the area of Refinery processes and
residue up gradation

b) Development of new process technologies for clean fuels

c) Enlargement of crude basket and identification of opportunity crudes and crude

blends

d) Value added Products/Solvents from the refinery streams

e) Bio-technological processes

f) Alternate Fuels e.g. Bio-diesel, Ethanol and Hydrogen

g) Coal/residue to clean liquid fuels

h) Extended R&D Services to other group refineries

i) Developing the following grades/products:
i) Customer Specific Cutting Oil
ii) Rolling Oil for Steel Industry
iii) Metal Working Oil for Aluminum
iv) Agricultural Spray Oil
v) Heat Treatment Oil
vi) Defense specific grade
vii) Alternate formulations for existing grades

86
SWOT ANALYSIS
SWOT is a good tool for a manager, like a thermometer and a
stethoscope for a doctor.

S- Concentrates on your STRANGTH.

It enables to put your best foot forward.

STRENGTH:

 Good brand image.

 Large scale refining.
 Good retail net work.
 Diversified and top quality asset base.
 Good service.
 Consumer satisfaction.
 Dedicated workforce.

W- Recognize your WEAKNESS.

Who doesn’t have them? Only when you recognize them can you do something to
correct them.

WEAKNESS:

 Interference of the government.

 Transportation cost.
 Heavy import of raw-material.

87
O- Evaluate your OPPORTUNITIES.
“Opportunities are plenty even in adversity. Only one has to evaluate them for what
they are.”

OPPORTUNITIES:

 Good marketing opportunity in LPG and non conventional energy.

T- Research your THREAT.

“Threat are like tickling time bongs, defuse them by anticipating and taking
preventive actions.”

THREATS:

 Increase price of crude oil in inter national market, causes variation in

domestic market.
 Competition from the multinational companies.

88
 CONCLUSION
The oil industry has become very competitive and it’s becoming increasingly more
competitive. This has necessitated each company to identify and develop any function
or which can provide a competitive edge. as a result of that many company now
recognizing the important role of the service to the customers.

Old is gold may have been in vogue in the last century, but generation next is hooked
on to new technologies which are gaining ground in every field, new products and
new generation vehicles. An easy start, smooth drive fuel economy and minimum
maintenance is what a vehicle owner wants. But all this is possible provided the right
quality of fuel and lubricants are used. Having already given their customers the
choice of the best branded fuels. BPCL has now come out with the best lubricants
with anti-ageing magic to keep their engines young forever!

BPCL is giving constant training to all the employees. From the interaction, interview
with all the DSM and DSW. I have given some suggestions which has accepted and
implemented by me.

89
ANNEXURE

90
 ACHIEVEMENTS

List of Awards and Accolades won by BPCL between the years

2004-2006:

1. In November 2006, PSU refining and marketing major BPCL has been voted
as one of the leading brands in India by MEDIA, a leading international
magazine. The company stands first among Indian petroleum companies, 17th
among Indian brands and 204th among Asia’s top 1000 brands. Asia 1000
brands is based on a survey for Asian Integrated Media in association with
MEDIA magazine.

2. In September 2006, Bharat Petroleum was ranked 110 in Platts 2006 ranking,
recognizing the industry's top-performing companies around the world, with
Hindustan Petroleum ranked at 122 and IOCL ranked at 41 in the list.

3. Bharat Petroleum has been ranked 32nd according to Fortune 500 2006
listing.

4. On 31st August 2006, BPCL Kochi Refinery bagged the GreenTech

Environment Excellence Gold Award in Petroleum Refinery Sector for
outstanding achievement in Environment Management for 2006.

5. In June 2006, “Institutional Investor”, a US journal which serves the global

investor community has placed BPCL in the 5th position amongst the top 28
Oil & Gas companies in Asia in the area of management of Investor
relations. Only PTT Public Company Limited, CNOOC Limited, Sinopec
Corporation and Formosa Petrochemical Corporation were ranked above
BPCL. The next Indian company ranked in the list was Indian Oil Corporation
Ltd in the 12th position. For the purpose of this study, Asia was defined as
including Australia and New Zealand and excluding Japan.

6. In an inaugural study conducted by TNS Automotive (the world’s largest

Automotive Research company) in March-April 2006, across 16 countries,
Bharat Petroleum and Maruti Udyog have been ranked highest for Corporate
Social Responsibility. The study shows that consumers across the world are
very likely to accept or reject a corporation based on its reputation for social
and environmental responsibility. Hindustan Petroleum has been ranked
Fourth while Indian Oil Corporation has been ranked Seventh among all the
companies mentioned in the list.

7. In April 2006, Bharat Petroleum Corporation Limited has been ranked third at
Rs.134,673 million after IOC and SBI as India’s most Valuable brands, in a
survey conducted by Brand Finance.

91
8. On 2nd December, 2005, BPCL was awarded the NCPEDP-Shell Helen
Keller Award-2005 for its significant contribution to creating employment
opportunities for people with disabilities.

9. In December, 2005, Bharat Petroleum was ranked one of the top ten on
Business India’s ‘Super 100’ list ! The basis is its strong financials,
particularly on the four parameters utilized for the listing – sales, net fixed
assets, net profit and market capitalization. BPC ranked 9th on the overall
rating, surpassing a host of other corporates.

10. In October 2005, Bharat Petroleum was awarded the ‘Business Superbrands
Award 2005-06’

11. Bharat Petroleum was awarded the title “Forecourt Retailer of The Year “ in
the IMAGES RETAIL AWARDS ceremony that was held in October 2005.

12. On 25th July, 2005, Bharat Petroleum Corporation won the "Award for
Excellence" in Information Technology for the year 2003-04, from National
Petroleum Management Programme (NPMP) in recognition for our various IT
initiatives.

13. In April 2005, the Government of Madhya Pradesh presented Udyog Ratna
award to Bharat Petroleum Corporation Limited, to recognize cutting edge
entrepreneurship in an environment that is turning more challenging by the
day.

14. In November 2004, BPCL achieved yet another significant milestone in

bagging the prestigious “Greentech Environment Excellence Award” for the
year 2003 – 04.

15. Bharat Petroleum with a turnover of 12.0 billion USD and market
capitalization of 2.1 billion USD has found its rightful place in “The World’s
Best Big Companies” published by Forbes in October 2004.

16. In April 2004, BPCL was honoured to receive the CIO 100 Honouree 2004
award for excelling in strategic enterprise that used IT strategically to deliver
innovations, value and high return to its Businesses. With this ‘BPCL’ enters
Asia's most prestigious index of innovative enterprises for the year 2004.

92
 AUDITOR REPORT

1. We have audited the attached balance sheet of Nile Limited as at

31st March 2007 and also the Profit and loss account and the cash flow
Statement tor the year ended on that date annexed thereto these
Financial statements are the responsibility of the Companies
Management. Our responsibility is to express an opinion on these
Financial statements based on our audit.

2. We conducted our audit in accordance with the Auditing Standards

Generally accepted in India. Those Standards require that we plan and
Perform the audit to obtain reasonable assurance about whether the
Financial statements are free of material misstatement. An audit
Includes examining, on a test basis, evidence supporting the amounts
And disclosures in the financial statements. An audit also includes
Assessing the accounting principles used and significant estimates made
By management, as well as evaluating the overall financial statement
Presentation. We believe that our audit provides a reasonable basis for
Our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued

By the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, as amended from time to time,
We enclose in the Annexure a statement on the matters specified in
Paragraphs 4 and 5 of the said Order to the extent applicable to this
Company.

4. Further to our comments in the Annexure referred to above, we

Report that:

(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit.

(ii) In our opinion, proper books of account as required by law have

been kept by the Company so far as it appears from our examination of
those books.

(iii) The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account.

(iv) In our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
Accounting Standards referred to in sub- section (3C) of Section 211 of

93
 the Companies Act, 1956.
(v) On the basis of written representations received from the
Directors, and taken on record by the Board of Directors, we report
that none of the Directors is disqualified as on 31st March 2007 from
being appointed as a Director in terms of clause (g) of sub-section (1)
of Section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:

(a) in the case of the balance sheet, of the state of affairs of the
Company as at 31st March 2007;

(b) in the case of the profit and loss account, of the profit for the
year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.

ANNEXURE TO AUDIT REPORT DATED 17.05.2007

(Referred to in paragraph 3 of our report of even date)

(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.

(b) The fixed assets have been physically verified by the management at
reasonable intervals as per a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. No material discrepancies were noticed on
such verification.

(c) During the year, the Company has not disposed off any substantial
part of its fixed assets, affecting the going concern status of the
Company.

(ii) (a) The inventory has been physically verified during the year by
the management at reasonable intervals. In our opinion, the frequency
of verification is reasonable and adequate.

(b) The procedures of physical verification of inventories followed by

94
 the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.

(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956.

(b) The Company had taken unsecured loans and fixed deposits from 9
parties covered in the register maintained under Section 301 of the
Companies Act, 1956. The maximum amount involved during the year in
these transactions was Rs.124.00 lacs and the year-end balance of loans
from such parties was Rs.36.61 lacs. (Rs.33.80 lacs of fixed deposits
and Rs.2.81 lacs of unsecured loan).

(c) In our opinion and according to the information and explanations

given to us, the rate of interest and other terms and conditions on
which the unsecured loans have been taken from the parties listed in
the register maintained under Section 301 of the Companies Act, 1956
are not, prima facie prejudicial to the interest of the Company.

(d) In our opinion and as per the information and explanations given to
us, the payment of the principal amount and interest on the unsecured
loans are also regular.

(iv) In our opinion and according to the information and explanations

given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.

(v) (a) According to the information and explanations given to us, we

are of the opinion that the particulars of contracts or arrangements
referred to in Sec.301 of the Act have been entered in the register
required to be maintained under that Section.

(b) In our opinion and according to the information and explanations

given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act have been made at prices which are reasonable having regard to
the prevailing market prices at the relevant time.

95
(vi) In our opinion and according to the explanations given to us, the

Company has complied with the directives issued by the Reserve Bank of
India and the provisions of Sections 58A, 58AA or any other relevant
provisions of the Act and the rules framed there under with regard to
the deposits accepted from the public. No order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.

(vii) In our opinion, the Company has an internal audit system

commensurate with its size and nature of its business.

(viii) According to the information and explanations given to us, the

Central Government has not prescribed maintenance of cost records
U/s.209( 1 )(d) of the Companies Act, 1956 to this Company.

(ix) (a) According to the information and explanations furnished to us

and as per records of the Company, the Company is regular in depositing
the undisputed statutory dues including provident fund, employees
state insurance, income-tax, sales-tax, wealth-tax, service tax, custom
duty, excise-duty, cess and other statutory dues as applicable to it
with the appropriate authorities. According to the information and
explanations give to us, the Company is not required to transfer any
amount to the investor education and protection fund at present.

(b) According to the information and explanations given to us, there

are no undisputed arrears of statutory dues as at 31/3/2007 which are
outstanding for a period of more than six months from the date they
became payable.

(x) The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.

(xi) In our opinion and according to the information and explanations

given to us, the Company has not defaulted in repayment of dues to
financial institution or bank or debenture holders.

(xii) Based on our examination of documents and records and according

to the information and explanations given to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations

given to us, ihe Company is not a chit fund or a nidhi/mutual benefit

96
fund/society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to this
Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly,
provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to this Company.

(xv) According to the information and explanations given to us, the

Company has not given any guarantee for loans taken by others from bank
or financial institutions.

(xvi) In our .opinion, the term loans have been applied for the purpose
for which the loans were obtained.

(xvii) According to the information and explanations given to us and on

an over all examination of the balance sheet of the Company, we report
that no funds raised on short term basis have been used for long term
investment.

(xviii) According to the information and explanations given to us, the

Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under section 301 of
the Act.

(xix) According to the information and explanations given to us, during

the period covered by our audit report, the Company has not issued any
debentures and hence the provisions of clause

(xix) of the Companies (Auditors Report) Order, 2003 are not

applicable to this Company.

(xx) According to the information and explanations furnished to us,

during the period covered under audit, the Company has not raised any
money by public issues. Therefore, the provisions of clause 4(xx) of
the Companies (Auditors Report) Order, 2003 are not applicable to this
Company.

(xxi) According to the information and explanations given to us, no

fraud on or by the Company has been noticed or reported during the
year.

97
Balance sheet

98
 Mar '03 Mar '04 Mar '05 Mar '06 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 3.00 3.00 3.00 3.00 3.00
Equity Share Capital 3.00 3.00 3.00 3.00 3.00
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 14.33 11.53 12.62 14.21 16.63
Revaluation Reserves 4.29 4.00 3.69 3.41 3.13
Networth 21.62 18.53 19.31 20.62 22.76
Secured Loans 5.94 4.66 7.90 12.11 18.24
Unsecured Loans 1.89 1.98 2.64 3.86 6.05
Total Debt 7.83 6.64 10.54 15.97 24.29
Total Liabilities 29.45 25.17 29.85 36.59 47.05
Mar '03 Mar '04 Mar '05 Mar '06 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 24.98 22.46 23.68 26.40 27.74
Less: Accum. Depreciation 9.35 8.83 10.05 11.29 12.54
Net Block 15.63 13.63 13.63 15.11 15.20
Capital Work in Progress 0.22 0.04 1.23 0.63 0.00
Investments 0.03 0.00 0.00 0.00 0.00
Inventories 12.36 13.46 21.39 21.00 30.13
Sundry Debtors 3.60 3.28 4.41 8.80 13.20
Cash and Bank Balance 0.17 0.17 0.24 0.26 0.67
Total Current Assets 16.13 16.91 26.04 30.06 44.00
Loans and Advances 4.33 3.28 1.41 1.92 3.86
Fixed Deposits 0.35 0.30 0.85 0.59 0.60
Total CA, Loans & Advances 20.81 20.49 28.30 32.57 48.46
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 6.69 8.40 12.05 9.69 15.56
Provisions 0.77 0.59 1.26 2.01 1.05
Total CL & Provisions 7.46 8.99 13.31 11.70 16.61
Net Current Assets 13.35 11.50 14.99 20.87 31.85

99
Miscellaneous Expenses 0.23 0.00 0.00 0.00 0.00
Total Assets 29.46 25.17 29.85 36.61 47.05

Contingent Liabilities 1.98 0.00 0.00 0.00 0.00

Book Value (Rs) 57.73 48.40 52.03 57.33 65.39

PROFIT AND LOSS A/C

Mar '03 Mar '04 Mar '05 Mar '06 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Income
Sales Turnover 31.33 32.42 51.42 65.11 91.89
Excise Duty 4.03 3.76 6.51 8.21 11.41
Net Sales 27.30 28.66 44.91 56.90 80.48

100
Other Income 0.03 -1.78 0.02 0.11 0.03
Stock Adjustments 0.79 0.07 2.40 2.48 3.89
Total Income 28.12 26.95 47.33 59.49 84.40
Expenditure
Raw Materials 17.30 16.77 31.08 41.23 61.07
Power & Fuel Cost 2.19 2.36 2.81 3.08 3.62
Employee Cost 2.18 2.96 3.11 3.54 4.22
Other Manufacturing
1.83 2.86 4.10 3.77 4.99
Expenses
Selling and Admin Expenses 1.12 1.55 1.40 1.38 1.50
Miscellaneous Expenses 0.22 0.21 0.20 0.20 0.27
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Total Expenses 24.84 26.71 42.70 53.20 75.67
Mar '03 Mar '04 Mar '05 Mar '06 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 3.25 2.02 4.61 6.18 8.70

PBDIT 3.28 0.24 4.63 6.29 8.73
Interest 1.16 0.90 1.22 1.72 2.31
PBDT 2.12 -0.66 3.41 4.57 6.42
Depreciation 1.42 1.01 1.07 1.02 1.09
Other Written Off 0.12 0.00 0.00 0.00 0.00
Profit Before Tax 0.58 -1.67 2.34 3.55 5.33
Extra-ordinary items 0.00 0.02 0.00 0.00 0.05
PBT (Post Extra-ord Items) 0.58 -1.65 2.34 3.55 5.38
Tax -0.16 -0.83 0.38 0.94 1.94
Reported Net Profit 0.73 -2.57 1.95 2.61 3.41
Total Value Addition 7.55 9.94 11.62 11.98 14.58
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 0.30 0.00 0.75 0.90 0.90
Corporate Dividend Tax 0.04 0.00 0.10 0.13 0.14
Per share data (annualised)
Shares in issue (lakhs) 30.02 30.02 30.02 30.02 30.02
Earning Per Share (Rs) 2.43 -8.57 6.49 8.70 11.36
Equity Dividend (%) 10.00 0.00 25.00 30.00 30.00
Book Value (Rs) 57.73 48.40 52.03 57.33 65.39

CASH FLOW STATEMENT

101
 Mar '03 Mar '04 Mar '05 Mar '06 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 0.57 -3.40 2.33 3.55 5.35

Net Cash From Operating
1.17 1.95 2.22 0.56 1.40
Activities
Net Cash (used in)/from
-0.18 -0.91 -1.94 -2.25 -1.39
Investing Activities
Net Cash (used in)/from
-0.92 -1.08 0.35 1.45 0.40
Financing Activities
Net (decrease)/increase In
0.08 -0.04 0.62 -0.24 0.41
Cash and Cash Equivalents
Opening Cash & Cash
0.44 0.51 0.47 1.09 0.85
Equivalents
Closing Cash & Cash
0.51 0.47 1.09 0.85 1.26
Equivalents

102
 APPENDIX

BIBLIOGRAPHY

During the training period, I have referred following reference books and web sites

 Human resource management (Ashwat thappa)

 Marketing management (Kotler keller)
 Finance management (I M Pandey)
 Management information system
 Journals published by the BPCL’s.

 www.bpcl.com
 www.bharatpetro.com
 www.crudeoil.com
 www.hpcl.com

103
 www.ongc.com
 www.bharatpetroleumcorporationlimited.com

QUESTIONNAIRE

1) Which vehicle you owning/having?

a) Two wheeler b) Four wheeler c) Both

2) Specify type of Vehicle:

a) Name of two wheeler b) Name of four wheeler

3) If four wheeler, specify the fuel type:

a) Petrol b) Diesel c) Speed d) Hi-speed e) If any other, please specify

4) Daily average fuel consumption by your vehicle (in litres):

a) 2 wheeler b) 4 wheeler

6) What is your occupation?

a) Business b) Service c) Student d) If any other, please specify

7) What is your annual household income range?

a. Below b) 15000- c) 48000- d) 120000- e) 480000- f) Above

104
 15000 48000 120000 480000 600000 600000

8) What are the facilities that are being provided to the customers in the BPCL
retail outlets?

a) Quality of fuel
b) Presence of welcomer at the entry
c) Cleanliness
d) Convenience stores/ shopping mall
e) ATM machine
f) Other related products & services {oil, PUC etc.}

9) What pre-fuel filling services the customers want from each retail outlets?

a) No hindrance like roadside vendors or any other

b) Easy & wide entry at the outlets
c) NO pits/ bumps/ holes on entrance
d) Spick & span RO/De cluttering / properly paved
e) Human signals to show the path after entry
f) Availability of forecourt manager
g) Use of chain links/ disciplined queuing
h) Good lighting facility at night

10) What fuel filling services did you consider most important while choosing
petrol retail outlets?

a) Advance payment while waiting in queue

b) Ceiling at top in summer
c) Behaviour of employee in retail outlets
d) Displaying zero reading by DSM before fuel filling
e) Water service/ windscreen cleaning
f) Simultaneously air & fuel filling facility
g) No spillage of fuel while filling
h) Quick money transaction
i) Quick service ( fast & friendly)

11) What post fuel filling service does BPCL provide to the customers at retail
outlets?

a) Clean hygienic wash room facility

b) Air filling facility
c) Presence of exit supervisor

105
d) Easy & smooth exit

Gender: a) Male b) Female

Age: a) 18-24 b) 25-34 c) 35-44 d) 45-59 e) 60 & Above

Place:

106