ASSIGNMENT ON BHEL with respect to

PROFIT;

EMPLOYEE ENGAGEMENT;

CUSTOMER SATISFATION/ SERVICE

Submitted To: Submitted By:

Mrs. Sanjeela Mathur Mani Gupta

PGDM (IB)

Roll No-16

INTRODUCTION:

BHEL is an integrated power plant equipment manufacturer and one of the largest engineering

and manufacturing companies in India in terms of turnover. Established in 1964, BHEL ushered

in the indigenous Heavy Electrical Equipment industry in India - a dream that has been more

than realized with a well-recognized track record of performance. It has been earning profiles

continuously since 1971-72 and paying dividends since 1976-77.

BHARAT HEAVY ELECTRICALSLIMITED:-

BHEL has acquired certifications to Quality Management Systems (ISO 9001), Environmental

Management Systems (ISO 14001) and Occupational Health & BHEL Installed equipment for

over 90,000 MW of power generation for Utilities, Captive and Industrial users. Safety

Management Systems (OHSAS 18001) and is also well on its journey towards Total Quality

Management.

BHEL manufactures over 180 products under 30 major product groups and caters to core

sectors of the Indian economy viz., power generation and transmission, industry, transport,

telecommunication, renewable energy etc. The wide network of BHEL,14 manufacturing

divisions, four power sector regional centers over 100 project sites. It services its customers and

provides them with suitable product, system and services efficiently and at competitive prices.

The company has 15 manufacturing divisions, two repair units, four regional offices, eight

service centres, eight overseas offices and 15 regional centres and currently operates at more

than 150 project sites across India and abroad. The company places strong emphasis on

innovation and creative development of new technologies. The company has realized the

capability to deliver 20,000 MW p.a. of power equipment, enabling to address growing demand

for power generation equipment. Our research and development (R&D) efforts are aimed not

only at improving the performance and efficiency of our existing products, but also at using

state-of-the-art technologies and processes to develop new products. This enables us to have a

strong customer orientation, to be sensitive to their needs and respond quickly to the changes in

the market.

The high level of quality & reliability of our products is due to adherence to international

standards by acquiring and adapting some of the best technologies from leading companies in

the world including General Electric Company, Alstom SA, Siemens AG and Mitsubishi Heavy

Industries Ltd., together with technologies developed in our own R&D centres.

Most of our manufacturing units and other entities have been accredited to Quality Management

Systems (ISO 9001:2008), Environmental Management Systems (ISO14001:2004) and

Occupational Health & Safety Management Systems (OHSAS 18001:2007). BHEL, where

Quality Systems as per ISO-9000 have taken deep roots has made significant achievements in

the CII Exim Award Scheme for Business Excellence by securing ‘Commendation for Significant

Achievements in TQM’ for three of its manufacturing units and one power sector-region during

2011-12.

Continuing its tradition of bagging prestigious National/ International awards, the company has

been honoured with several awards which included ‘MoU Excellence Award 2009-10’ as the

Top Performing CPSE in ‘Industrial Sector’; ‘SCOPE Meritorious Award for R&D, Technology

Development and Innovation’; ‘NDTV Profit Business Leadership Award’ for the second year in

succession; ‘Golden Peacock Award for Occupational Health & Safety 2011’& the ‘Golden

Peacock Award for Innovation Management 2011’; three Quality Circles won Gold Medals for

their case studies at the International Quality Circle Conference (ICQCC – 2011) held in

Yokohama, Japan; 8 Prime Minister’s ‘Shram Awards’ including 2 ‘Shram Bhushan’ and 5

‘Vishwakarma Rashtriya Puraskars’

Haridwar & Trichy units and Power Sector Eastern region have recorded an improvement of

5.26%, 5.19% & 7.14 % respectively in Customer Satisfaction Index as per Customer

Satisfaction Survey conducted in 2011-12 over previous survey establishing company’s

sustained commitment towards quality. As a part of its thrust to ensure cost competitiveness,

the company has successfully completed 32 case studies in respect ofprocess improvement &

cost reduction.

BHEL HAS:-

i. Supplied over one million valves to power plants and other industries.

ii. Supplied traction electrics and AC/DC locos to power over 12000 km railway network.

iii. Supplied over 25,000 motors with drive control system to power projects,

petrochemicals, refiners, steel, aluminum fertilizer, cement plants etc.

iv. Supplied over 2, 25,000 MW transformer capacities and sustained equipment operating

in transmission and distribution network up to 400 KC-AC and DC.

v. Installed equipment for over 1, 15,356 MW of power generation for utilities, captive and

industrial users.

RATING OF BHEL VIS-À-VIS MOU TARGETS

Performance of BHEL for the year 2010-11 has been rated as ‘Excellent’ in terms of MoU

signed with the Government of India. BHEL has been awarded the MoU Composite score of

‘1.02’.

The MoU rating for 2011-12 is under finalisation by the Government of India. However,

company’s own assessment places performance of the company in ‘Excellent’ category for

Financial Year 2011-12.

Net Profit for the year is Rs. 4,287 Crore, as against Rs.3,138 crore of last year - a growth of

37%. Profit Before Tax (PBT) surged 31% at Rs.6,353 Crore, during the year. Bharat Heavy

Electricals Limited (BHEL) notched its highest-ever turnover of Rs.34,050 Crore, registering a

growth of 21% over the previous year.BHEL turn over:-

In International Business achieved a physical export order inflow of Rs.3571 Crore during the

year, an increase of 9.4% over that of the previous year. In terms of power plant equipment,

the orders amounted to 16,489 MW. In the Power Sector business segment, BHEL secured

orders worth Rs.41,976 crore.15.

Profit:

* Excluding one time impact of change in policy related to provision for warranty obligations for earlier years.

@ Calculated on post split on number of shares for 2010-11 on like to like basis.

FINANCIAL HIGHLIGHTS

During the year, the company witnessed growth in Turnover by 14.2% to r 49510 crore from 43337 crore in the previous year. The Revenue from operations (Net) increased by 13.6% from r 41566 crore in 2010-11 to 47228 crore in 2011-12. Profit before Tax for the year 2011-12 is placed at r 10302 crore as against 9005 crore during 2010-11, a growth of 14.4% as compared to previous year. Profit after Tax is placed at 7040 crore as against r 6011 crore during 2010-11, a growth of 17.1% over previous year.Excluding impact of change in policy related to warranty obligation for earlier years in 2010-11, the turnover, PBT and PAT were 41299 crore, 8487 crore and 5665 crore respectively, an increase of 19.9%, 21.4% and 24.3% respectively in 2011-12 as compared to 2010-11. The company has registered a significant growth in turnover, profit and other financial parameters during the year 2011-12. During the year company has sub-divided existing equity shares of face value of Rs 10/- into 5 equity shares of face value of r 2/- each and the record date was fixed October 04, 2011.Net worth of the company has gone up from Rs. 20154 crore to Rs. 25373 crore registering an increase of 25.9%. Net asset value (NAV) per share has been placed at Rs 103.67 in 2011-12 as against Rs 82.34 (post-split) in 2010-11.The company had filed Draft Red Herring Prospectus (DRHP) dated 28.09.2011 with Securities and Exchange Board of India (SEBI) on 30.09.2011 for disinvestment of 5% of the paid up equity capital out of Government of India’s shareholding. Consequent upon the receipt of ‘no-objection’ for withdrawal of DRHP for FPO, from Department of Heavy Industry/ Department of Disinvestment, the Board of Directors in its meeting held on April 03, 2012 has approved the withdrawal of DRHP filed by the company with SEBI.

P & L Statement OF BHEL

Employee Engagement:

It is a measure of an employee’s commitment to the organization which reflects his willingness to “go the extra mile‟ to achieve organizational goals as also his willingness to stay with the organization.

Engagement is impacted by the experiences the employee has in his day to day working as also the policies and work culture of the organization.Employee productivity depends on the amount of time an individual is physically present at a job and also the degree to which he or she is “mentally present” or efficiently functioning while present at a job. Companies must address both of these issues in order to maintain high worker productivity, and this may occur through a variety of strategies that focus on employee satisfaction , health, and morale.

The company continued its thrust on official language implementation in line with Govt. of India’s policy. Other important activities undertaken during the year for the compliance of Official Language policy of Govt. of India are as under:

In order to remove hesitation among the employees, and give necessary impetus to work in Hindi, Hindi workshops and Hindi computer training programmes were organised in all the Units/Divisions including Corporate Office.

Apart from the above, an attitudinal shift was made to inculcate greater seriousness in observance of rules / procedures / guidelines. Awareness amongst employees of the organization was generated by organizing training programmes. 83 such programmes

were organized during the year 2011-12 in various Units, regions and offices of BHEL. The Management, Security Staff and the employees of Company are sensitized to the

security needs of Company.

Besides the above activities, BHEL conducted Training and awareness Programmes on Environment, Health & Safety and Skill Development programmes for employees including contractors' workers etc.

As an organisation committed to people development through motivational measures, BHEL is introducing Child Care Leave for female employees, in addition to the existing Maternity Leave and Creche facilities at factories.

As part of BHEL's persisting end eavour to set a high standard of conduct for its employees, a 'Code of Business Conduct and Ethics' has been laid down for all Board Members and Senior Management personnel.

Employee BenefitsProvident Fund and Employees’ Family Pension Scheme contributions are accounted for on accrual basis. Liability for Earned Leave, Half Pay Leave, Gratuity, Travel claims on retirement and Post Retirement Medical Benefits are accounted for in accordance with actuarial valuation. Compensation under Voluntary Retirement Scheme is charged off in the year of incurrence on a pro-rata monthly basis.

Customer Services/ Satisfaction

BHEL continued its endeavor to render efficient customer service aimed at facilitating

uninterrupted power supply and keeping power plants in good running condition. During the

year, Power Sector overhauled150 utility/captive sets (including Non BHEL sets).

Major services are- First ever capital overhauling of biggest BHEL make Nuclear TG in operation at Tarapur

Atomic Power Station (TAPS) unit-4 (540 MW) was completed in time with all the

precautions, safety measures & procedures at TAPS.

Rehabilitation of Devighat HEP, Nepal (3X5 MW) completed successfully within 247

Days against the planned schedule of 9 months (around 270 days).

Overhauling of JPL RAIGARH Unit-3/250 MW (LP Turbine, Generator, Bearing

Inspection & valves etc) completed in 8 days from barring gear to barring gear against

15 days.

UPRVUNL Rihand HEP Unit-5 (50 MW) synchronized successfully on 02.05.2011 and

touched 55 MW output mark (10% over its original rating).

CUSTOMER APPRECIATIONAppreciations received from many reputed customers (like Maithon power Limited, Andhra

Pradesh Power generation corporation Limited (APGENCO), Korba West Power Company Ltd.,

Bokaro Power supply company Pvt limited, Kerala State Electricity Board, MSPGCL, Abhijeet

Projects Ltd, UJVN Ltd. etc.) for excellent support given by BHEL.

At BHEL, what really matters to people most is that we can satisfy our customers, employees

and other stakeholders all over the world; that we can drive for ward all the technologies needed

to make our equipments and services more energy efficient and environment friendly; that we

provide sustainable business solutions to our customers; and, not least, that we can continue

our broad commitment to education, environment and a responsible society. This is a core

component of our Strategy 2017. Because, we are convinced that this is the only way that your

Company. BHEL can grow sustainably and profitably. And because, this is an integral par t of

becoming the global engineering enterprise - in ever y respect. I look forward for your continued

support and encouragement. It would be our endeavor to continue the growth momentum in

subsequent years to enhance value for our stakeholders.

QUALITY PERFORMANCE HIGHLIGHTS

1. Continuing its tradition of achieving excellence, three Units of BHEL (Hyderabad, PSER &

EDN) have been awarded “Commendation for Significant Achievement” and BHEL-Ranipet

received award for “Commendation for Strong Commitment to Excel” in 2011-12 under CII EXIM

Bank Award Scheme for Business Excellence as per the globally recognized model of European

Foundation for Quality Management (EFQM).

2. Customer Satisfaction Survey conducted in 2011-12 at Haridwar & Trichy units and at Power

Sector Eastern region has recorded an improvement in Customer Satisfaction Index by 5.26%,

5.19% & 7.14% respectively over previous survey establishing company’s sustained

commitment towards quality.

3. As a part of its thrust to ensure cost competitiveness, the company has successfully

completed 32 case studies in respect of process improvement & cost reduction.

4. Three Quality circles of BHEL won gold awards for their case studies presentation in

International Quality Circle Conference (ICQCC – 2011) held at Yokohama, Japan.