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HEAVY ELECTRICAL INDUSTRY IN INDIA
Heavy Electrical Industry covers power generation, transmission, distribution and
utilization equipments. These include turbo generators, boilers, various types of turbines,
transformers, switchgears and other allied items. Majority of the products manufactured
by heavy electrical industry in the country, which includes items like transformers,
switchgears etc. are used by all sectors of the Indian economy. Some major areas where
these are used are the multi core projects for power generation including nuclear power
stations, petrochemical complexes, chemical plants, integrated steel plants, non-ferrous
metal units, etc.
India is the only other developing country besides China,which produces a full range of
electric power generation and transmission equipment. In fact,the history and growth of
(Bharat Heavy Electricals Ltd.), a public sector enterprise under in the country,
symbolizes the overall growth pattern of heavy electrical industry in the country.BHEL
has the unique distinction of being one of the very few companies in the world,
manufacturing all major power generating equipment under one roof.
The industry has been upgrading the existing technology and is now capable of taking up
turnkey contracts also for export markets. The industry has been delicensed. Foreign
collaborations are allowed with 100 percent FDI.The country is planning to add 150,000
MW power generation capacity in the the next 10 years.This will generate substantial
demand for heavy electrical equipments.
The heavy electrical industry is capable of manufacturing transmission and distribution
equipment upto 400 KV AC and high voltage DC. The industry has taken up the work of
upgradation and transmission to the next higher voltage system of 765 KV and have
upgraded their manufacturing facilities to supply 765 KV class transformers, reactors,
CTS, CVT, bushing and insulators, etc.
The investments in R & D by the electrical industry are amongst the largest in the
corporate sector in India.Large electrical equipment used in steel plants, petrochemical
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complexes and other such heavy industries are also being manufactured in the country.
The domestic heavy electrical equipment manufacturers are making use of the
developments of the global market with respect to product designs and upgrading of
manufacturing and testing facilities.The heavy electrical industry has established its
reference in the global arena also.These encompass thermal, hydro and gas based power
plants, substation projects, rehabilitation projects, besides a wide variety of products like
transformers, photo voltaic equipments, insulators,switchgears, motors,etc.
Turbines and Generator Sets
The capacity established for manufacture of various kinds of turbines such as steam &
hydro turbines including Industrial turbines is more than 7000 MW per annum in the
country. Apart from BHEL, the public sector unit that has the largest installed capacity,
there are units in the private sector also manufacturing steam & hydro turbines for power
generation and industrial use. The manufacturing range of BHEL includes steam turbines
upto 660 MW unit rating and the facilities are available for 1000 MW unit size. They
have the capability to manufacture gas turbines upto 260 MW (ISO) rating and gas
turbine based Co-generation and Combined Cycle Systems for the industry and utility
applications. Custom built conventional hydro turbines of Kaplan, Francis and Pelton
types with matching generators are also available indigenously.
AC Generators manufactured in India are on par with international AC Generators and
consistently deliver high quality power with high performance. Domestic manufacturers
are capable of manufacturing AC Generator right from 0.5 KVA to 25,000 KVA and
above with specified voltage rating.The imports and exports of turbines and generators
during 2005-06 were Rs. 2420 crore and Rs. 565 crore respectively.
Boilers
Bharat Heavy Electrical Ltd.(BHEL) is the largest manufacturer of boilers in the country
(with more than 60% share) and has the capacity to manufacture boilers for Super
Thermal Power Plants apart from utility boilers and industrial boilers. The industry has
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the capability to manufacture boilers with super critical parameters upto 1,000 MW unit
size. The domestic industry has the capacity to meet the indigenous requirement / demand
for boilers.The imports and exports of boilers during 2005-06 were Rs.160 crore and
Rs.242 crore respectively.
Transformers
The domestic transformer industry is well established with capability to provide state of-
the-art equipments. The industry has the capacity to manufacture whole range of power
and distribution transformers including the REC rating of 25,53,100 KVA and also the
extra High voltage ranges of 400 kV, 600 MVA. Special types of transformers required
for furnaces, rectifiers electric tract etc. and series and shunt reactors as well as HVDC
transmission upto 500 kV are also being manufactured in the country.The imports and
exports of transformers during 2005-06 were Rs.1800 crore and Rs.1640 crore
respectively.
Switchgear and Control Gear
In India, the entire range of circuit breakers from bulk oil, minimum oil, air blast, vacuum
to SF6 are manufactured to standard specification for the benefit of customers. The
ranges of products produced cover the entire voltage range for 240V to 800KV,
switchgear and control gear, MCBs, air circuit breakers, switches, rewireable fuses and
HRC fuses with their respective fuse bases, holders and starters. The industry is
competitive in the field of design and engineering as the skill sets available in the country
are relatively less expensive.The imports and exports of the above equipments during
2005-06 were around Rs.1690 crore and Rs. 1108 crore respectively.
Electrical Furnaces
Electrical Furnaces are used in Metallurgical and Engineering industries like forging and
foundry, machine tools, automobiles etc. Adequate capacity for production of these
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products has been established.The imports and exports of electrical furnances during
2005-06 were aound Rs.186 crore and Rs. 108 crore respectively.
Shunting Locomotives
Shunting Locomotives for localized/ internal transport facilities are used in railways,
steel, plants, thermal power plants, etc. BHEL’s Jhansi unit among others is
manufacturing such locomotives. The installed capacity is adequate to meet the domestic
demand.
HEAVY ELECTRICAL INDUSTRY IN BHEL
BHEL is the largest engineering and manufacturing enterprise in India in the energy-
related/infrastructure sector, today. BHEL was established more than 40 years ago,
ushering 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. The
company has been earning profits continuously since 1971-72 and paying dividends since
1976-77.
BHEL manufactures over 180 products under 30 major product groups and caters to core
sectors of the Indian Economy viz., Power Generation & Transmission, Industry,
Transportation, Telecommunication, Renewable Energy, etc. The wide network of
BHEL's 14 manufacturing divisions, four Power Sector regional centres, over 100 project
sites, eight service centres and 18 regional offices, enables the Company to promptly
serve its customers and provide them with suitable products, systems and services --
efficiently and at competitive prices. The high level of quality & reliability of its products
is due to the emphasis on design, engineering and manufacturing to international
standards by acquiring and adapting some of the best technologies from leading
companies in the world, together with technologies developed in its own R&D centres.
BHEL has acquired certifications to Quality Management Systems (ISO 9001),
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Environmental Management Systems (ISO 14001) and Occupational Health & Safety
Management Systems (OHSAS 18001) and is also well on its journey towards Total
Quality Management.
BHEL has Installed equipment for over 90,000 MW of power generation -- for
Utilities, Captive and Industrial users.
Supplied over 2,25,000 MVA transformer capacity and other equipment operating
in Transmission & Distribution network up to 400 kV (AC & DC).
Supplied over 25,000 Motors with Drive Control System to Power projects,
Petrochemicals, Refineries, Steel, Aluminum, Fertilizer, Cement plants, etc.
Supplied Traction electrics and AC/DC locos to power over 12,000 kms Railway
network.
Supplied over one million Valves to Power Plants and other Industries.
BHEL's operations are organised around three business sectors, namely Power, Industry -
including Transmission, Transportation, Telecommunication & Renewable Energy - and
Overseas Business. This enables BHEL to have a strong customer orientation, to be
sensitive to his needs and respond quickly to the changes in the market.
BHEL's vision is to become a world-class engineering enterprise, committed to enhancing
stakeholder value. The company is striving to give shape to its aspirations and fulfill the
expectations of the country to become a global player.
The greatest strength of BHEL is its highly skilled and committed 42,600 employees. Every
employee is given an equal opportunity to develop himself and grow in his career.
Continuous training and retraining, career planning, a positive work culture and
participative style of management – all these have engendered development of a committed
and motivated workforce setting new benchmarks in terms of productivity, quality and
responsiveness.
CASH MANAGEMENT IN BHEL
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The Corporate Office of BHEL governs cash position in the BHEL, HARIDWAR. The unit
is dependent on the Corporate Office for the procurement of the cash. The Corporate Office
fulfills all the cash requirements of the unit. The unit prepares cash budget for the whole
year. A copy of the cash budget is sent to the Corporate Office. The Corporate Office
examines the cash budget and sanctions the funds accordingly. The unit keeping its
expenses in view makes a request to the Corporate Office for the issue of the cash. The
Corporate office then sends an Advice Note of the amount, requested by the unit, for the
withdrawal of cash. After this the unit can withdraw the amount as specified in the advice
note.
All the cash procured by the unit, through external sources is deposited in the bank account
of the Corporate Office, which is, then transferred to the Corporate Office. At the end of
each day the units do not hold any cash.
The unit makes all the payments to the suppliers and contractors through the cheque. The
cash section takes the decision regarding the payment to the supplier itself. The decision is
basically based on the seniority of the payment, the amount to be paid, the period lag in the
payment. Analyzing all these facts the cash section issues cheques to the suppliers and
contractors for the payment.
In short, it can be said that the BHEL has a centralized control of cash. The Corporate
Office transfers the cash to any individual unit, according to their day to day operational
requirements.
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BHARAT HEAVY ELECTRICAL LIMITED: A CORPORATE
GIANT
BHEL is the largest Engineering and Manufacturing Enterprise in India in the energy-
related infrastructure sector, today. BHEL was established more than 40 years ago, ushering
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. The Company
has been earning profits continuously since 1971-72 and paying dividends since 1976-77.
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NEW DELHI
BARODA NAGPU
R
PATNACALCUTTAAAAA
VARANASI
GOINDWAL
HARIDWARRUDRAPUR
JAGDISHPUR
JHANSI
BHOPAL
HYDERABAD
BANGALOREE RANIPE
TTIRUCHIRAPALLY
CORPORATE OFFICE
MANUFACTURING LOCATIONS
SERVICE CENTRES
BHEL Corporation - An Introduction
Net sales stood at Rs 32880 crore in 2009-10
Establishment of its references in over 60 Countries of the world
Announced a dividend of Rs 1,141 crore for 2009-10.
14 Manufacturing divisions
4 Power Sector regional centres
8 service centres and 16 regional offices
Major Units/Divisions are Certified with ISO 9001(2000), ISO 14001 and OHSAS 18001
Continuous Profits since 1971-72
Caters to Core Sectors viz., Power, Industry, Transportation, Telecommunication, Renewable Energy etc.
Manufactures over 180 products under 30 major product groups
BHEL manufactures over 180 products under 30 major product groups and caters to core
sectors of the Indian Economy viz., Power Generation & Transmission, Industry,
Transportation, Telecommunication, Renewable Energy, etc. BHEL has acquired
certification to Quality Management System (ISO:9001), Environmental Management
System (ISO:14001) and Occupational Health & Safety Management System
(OHSAS:18001) and is also well on its journey towards Total Quality Management (TQM).
The company inherent potential coupled with its strong performance over the years has
resulted in it being chosen as on of the Navratna PSUs which enjoy the support from the
government their endeavors to become global players. with its prudent financial
management. BHEL occupies an all-important niche as evident by its ranking by CII
amongst top eight PSUs based on financial performance. Recently in survey conducted by
business India, BHEL has been rated as seventh Best Employer in India.
BHEL has
Installed Equipment for over 90,000 MW of power generation – for utilities, captive
and Industrial users.
Supplied over 225000 MV transformer capacity and other equipment operating in
transmission & distribution network up to 400 KV (AC & DC).
Supplied over 25000 motors with Drive Control System to Power projects,
Petrochemicals, Refineries, Steel, Aluminum, Fertilizers, Cement plants, etc.
Supplied Traction electrics and AC/DC locos to power over 12000kms Railway
networks.
Supplied over one million valves to power plants and other Industries.
BHEL’s operations are organized around three business sectors, namely Power, Industry-
including Transmission, Transportation, Telecommunication & Renewable Energy and
Overseas Business. This enables BHEL to have a strong customer orientation, to be
sensitive to his needs and respond quickly to the changes in the market.
BHEL’s Vision is to become a World-Class Engineering Enterprise, committed to
enhancing Stakeholder value. The greatest strength of BHEL is its highly skilled and
committed 44,000 employees. Every employee is given an equal opportunity to develops
himself and grow in his career.
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BHEL offers over 180 products and provides systems and conventional energy sources and
telecommunication. A wide spread network comprising 14 manufacturing units. With an
export presence in more than 60 countries. BHEL is truly India’s Industrial Ambassador
to the World.
MAJOR COMPETITORS OF BHEL
1. Ansaldo Italy
2. Asea Brown Boueri Switzerland
3. Beehtel USA
4. Block & Neatch USA
5. CNMI & EC China
6. Costain UK
7. Electrim Poland
8. Energostio Russia
9. Electro Consult Italy
10. France Tost France
11. Fuji Japan
12. GEC Alsthom UK
13. General Electric USA
14. Hitachi Japan
15. LMZ Russia
16. Mitsubishi Japan
17. Mitsui Japan
18. NEI UK
19. Raytheon USA
20. Rolls Royee Germany
21. Sanghai Electric Co. China
22. Siemens AG Germany
23. Skoda Czech Republic
24. Technopromoshexport Russia
25. Toshiba Japan
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26. Westinghouse USA
CUSTOMERS OF BHELs PRODUCTS
DOMESTIC:-
1. Punjab State Electricity Board(Pseb)
2. Uttar Pradesh State Electicity Board(Upseb)
3. National Thermal Power Corporation(Ntpc)
4. Appolo Tyres
5. Abb
6. National Hydel Power Corporation(Nhpc)
7. Andhra Pradesh State Electricity Board(Apseb)
8. Balco
9. West Bengal State Electricity Board(Wbseb)
10. Bihar State Electricity Board(Bseb)
11. Indian Oil Corporation(Ioc)
12. Madhya Pradesh State Eletricity Board(Mpseb)
13. Sail
14. Bccl
15. Orissa State Electricity Board(Orseb)
16. Karnataka State Electricity Board(Kseb)
17. Birla Cement
18. Birla Tyres
19. Bokaro Steel Plant
20. Grasim Industries
21. Goa Ship Yard
22. Haryana State Electricity Board(Hseb)
23. Himachal Pradesh State Electricity Board(Hpseb)
24. Dlw, Varanasi
25. Indian Navy
26. Delhi Vidyut Board
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27. Deptt. Of Atomic Energy
28. Essar Oil
29. Siemens, New Delhi
30. Ongc
31. L&T
32. Kirloskar
33. Jk Cement
34. Scooter India Ltd
INTERNATIONAL
1. M/S EBARA CORPORATION, JAPAN
2. M/S ZEECO INCORPORATION, USA
3. SIMMCO INTERNATIONAL
4. SIEMENS, GERMANY
5. SIEMENS, SINGAPORE
6. BAIJI PROJECT, IRAQ
7. KYCR COIL INDUSTRIES LTD., BANGLADESH
PRODUCT RANGE
This list is intended as a general guide and does not represent all of BHEL’s products and
systems.
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GAS BASED POWER PLANTS
Gas turbines of up to 225 MW (ISO) rating.
Gas turbines based co-generating and combined-cycle system for Industry and utility
applications.
THERMAL POWER PLANT
Steam turbines and generation of up to 500 MW capacity for utility and combined-
cycle application, capacity to manufactures steam turbines with super critical steam
cycle parameters and matching generators up to 1000 MW unit size.
Steams turbines for CPP applications; capacity to manufacture condensing,
extraction, back pressure, injection or any combination of these types.
HYDRO POWER PLANTS
Custom-built conventional hydro turbines of Kaplan, Francis and Pelton types with
matching generators, pump turbines with matching motor-generators.
Mini/micro hydro sets.
Spherical, butterfly and rotary valves and auxiliaries for hydro station.
DG POWER PLANTS
USD, LDO, FO, LSUS, natural –gas/biogas based diesel power plants, unit rating up
to 20MW and voltage up to 11kv, for emergency, peaking as well base load
operation on turnkey basis.
INDUSTRIAL SETS
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Industrial turbo-sets of rating from 1.5 to 120MW.
Gas turbines land matching generators ranging from 3 to 225MW (ISO) rating.
Industrial stream turbines and gas turbines for drive applications and co-generation
applications.
BOILERS
Steam generators for Industrial application, ranging from 40 to 450 t/hour.
Pulverized fuel fired boilers.
Atmospheric fluidized bed combustion boilers.
Waste heat recovery boilers.
Chemical recovery boilers for paper industry ranging from capacity of 100 to 1000
t/day of dry solids
BOILERS AUXILLIARIES
Fan
Axial reaction fans of a single stage and double stage for clean air application, with
capacity ranging from 25 to 800 m3/s and pressure ranging from 120 to 1,480 m of
gas column.
Axial impulse fans for both clean air and fuel gas application, with capacity ranging
from 7 to 600 m3/s and pressure up to 700m of gas column.
Single and double-suction radial fans for clean air and dust-laden hot gases
application up to 400 deg centigrade, with capacity ranging from 4 to 600 m 3/s and
pressure ranging from 150 to 1,800 m of gas column.
Air-pre-heaters
Ljungstrom rotary regenerative air-pre-heaters for boilers and process furnaces.
Large regenerative air-pre-heaters for utilities of capacity up to 1000 MW.
Pulverizes
Bowl mills of slow and medium speed of capacity up to 100 t/hour.
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Tube mills for pulverizing low-grade coal with high-ash content.
Electrostatic precipitators
Electrostatic precipitators of any capacity with efficiency up to 99.9% for utility and
industrial applications.
Soot Blowers
Long retractable soot blowers (travel up to 12.2m), wall deslaggers, rotary blowers
and temperature probes and related control panels operating on pneumatic, electric
or manual mode.
Swivel arm type soot blowers for regenerative air-pre-heaters.
Valves
High-pressure and low-pressure bypass valves for utilities.
High and medium-pressure valves, cast and forged steel valves of gate, globe, non-
return (swing-check and piston lift-check) types for steam, oil and gas duties up to
600 mm diameters, 250kg/cm2 pressure and 540 degree centigrade temperature.
High capacity safety valves and automatic electrical operated pressure relief valves
for set pressure up to 200kg/cm2 and temperature up to 565 degree centigrade.
Piping systems, constant load hangers, clamp and hanger components, and variable
spring hangers for power stations up to 850 MW capacities, combined cycle plants,
Industrial boilers and process Industries.
HEAT EXCHANGERS AND PRESSURE VESSELS
CS/AS/SS/Non ferrous shell and tube heat exchangers and pressure vessels.
Air-cooled heat exchangers.
Surface condensers.
Steam jet air ejectors.
Columns.
Reactors, drums.
LPG/propane storage bullets.
LPG/propane store mounded vessels.
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Feed water heaters.
PUMPS
Pumps for various applications to suit utilities up to capacity of 660 MW.
Boilers feed pumps (motor or steam turbine driven).
Boilers feed booster pumps.
Condensate pumps.
Circulating water pumps.
Emergency water pumps.
Lubricating oil pumps.
Stand by oil pumps.
POWER STATION CONTROL EQUIPMENT
Microprocessor-based distributed digital control systems.
Data acquisition system.
Man-machine interface.
Sub-total control with SCADA.
Static excitation equipment/automatic voltage regulator.
Electro-hydraulic governor control.
Turbines supervisory system and control.
Furnace safeguards supervisory systems.
Controls for electrostatic precipitators.
Controls for HP/LP bypass valves.
SWITCHGEARS
Switchgears of the various types for indoor and outdoor applications and voltage
ratings up to 400 kv.
Minimum oil circuit breakers (66 kv-132kv).
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SF6 circuit breakers (132kv- 400kv).
Vacuum circuit breakers (3.3 kv-33kv)
Gas insulated switchgears (36kv).
BUS DUCTS
Bus-ducts with associated equipment to suit generators power output of utilities of
up to 500 MW capacities.
TRANSFORMERS
Power transformers for voltage up to 400kv.
HVDC transformers and reactors up to +500kv rating.
Series and shunt reactors of up to 400kv ratings.
Instrument transformers.
Current transformers up to 400kv.
Electro-magnetic voltage transformers up to 220kv.
Capacitor voltage transformers up to 10 MV & 33kv.
Special transformers: earthing, furnace, rectifier, electrostatic precipitator, freight
loco and traction transformers.
INSULATORS
High-tension ceramic insulators.
Disc/suspension insulators for AC/DC application, ranging from 45 to 300kv
electro-mechanical strength, for clean and pollute atmospheres.
Pin insulators of up to 33kv.
Post insulators suitable for application of up to 6 units.
Hollow porcelains of up to 400kv.
Solid core insulators of 25kv rating for railways.
Disc insulators for 800kv AC and HVDC transmission lines
(BHEL is the first Indian manufacturer to supply such insulators).
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CAPACITORS
Power capacitors for industrial and power system of up to 250kv.
Coupling/CVT capacitors for voltage up to 400kv.
Low Tension Thyristor Switched Capacitors (LTTSC) for dynamic factor correction.
ENERGY METERS
Single phase, poly phase and special-purpose electro-mechanical and electrical
meters.
B.H.E.L. IN INDIA
# REGIONAL OFFICES (POWER SECTORS)
*********************************
1. NEW DELHI (NORTHERN REGION)
2. CALCUTTA (EASTERN REGION)
3. NAGPUR (WESTERN REGION)
4. CHENNAI (SOUTHERN REGION)
# BUSSINESS OFFICES
*******************
1. BANGLORE
2. BARODA
3. BHUBANESHWAR
4. MUMBAI
5. CALCUTTA
6. CHANDIGARH
7. GUWAHATI
8. JABALPUR
9. JAIPUR
10. LUCKNOW
11. CHENNAI
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12. NEW DELHI
13. PATNA
14. RANCHI
15. SECUNDRABAD
# MANUFACTURING UNITS
1. BANGALORE
2. BHOPAL
3. GOINDWAL
4. HARIDWAR
5. HYDERABAD
6. JAGDISHPUR
7. JHANSI
8. RUDRAPUR
9. RANIPET
10. TIRUCHIRAPALLY
# SERVICE CENTRES
1. BANGLORE
2. BARODA
3. CALCUTTA
4. CHANDIGARH
5. SECUNDRABAD
6. NEW DELHI
7. NAGPUR
8. PATNA
9. VARANASI
MAJOR MILE STONES
1975 Job Redesign concept launched for FIRST time in India.
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1978 well documented Suggestion Scheme launched.
1982 Launched Productivity Movement & Quality Circle. Concept
1993 Accreditation of ISO 9001 Quality System
1994 Accreditation of ISO 9001 quality System.
1995 Adopted EFQM model of TQM for achieving Business Excellence.
1997 BHEL one of the 9 PSE’s declared “Navratna” by Govt. of India.
1997 National Productivity Award for HEEP by the President of India.
1998 Certificate of Merit by National Productivity Council for Outstanding
performance for 2nd consecutive year.
1998 Accreditation of U stamp.
1999 Accreditation of R Stamp from National Board of Boiler and Pressure Vessel
Inspector, USA.
1999 AD-Merkblatt HPO Recertification by RWTUV for Gas Turbine Combustion
Chambers
1999 INSAAN Award for Excellence in Suggestion for 9th consecutive year
1999 Launching of 5s concept
1999 PCRI recognized as Environmental Lab by Haryana State Board for Prevention
and Control of Pollution
1999 Accreditation of ISO 14001-Enviornment management system
2000 CII Site Visit for CII-EXIM Business Excellence Award-2000
2001 Top Management TQM Workshop at Rishikesh and HRDC
2001 INSAAN Award for excellence in Suggestion for 11th consecutive year
2001 Launching of QTM & RCA at HEEP Haridwar by CMD
2002 Launching of delivery Index, Turnover Index and Manufacturing Index
2002 Accreditation of ISO 9000-2k
2002 JBE Workshop of Apex TQM Group at Tehri to evolve Business policy
2003 Commendation for Strong Commitment to Excel in CII-EXIM
Bank Award.
2004 Commendation for Significant Achievement in CIIEXIM Bank Award.
2005 Award given by Institute of Cost and Works Accountants of India for "Excellent
Work in the field of Management Accounting and Cost Concepts".
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2006 BHEL – A Star PSU – BHEL has been awarded the Business Standard Star Public
Sector Company Award – 2006.
2008 BHEL has been conferred the Engineering Export Promotion Council (EEPC)
Top Export Award for the Seventeenth Year in succession, for outstanding export
performance.
2008 BHEL power generating sets achieved record generation in FY 2007-08, power
stations equipped with BHEL equipment win maximum Productivity Awards.
2009 BHEL further built on the growth momentum achieved in the year before, with a
top line growth of 22% and an all-time high Turnover of Rs.34,154 Crore.
2009 Power Sector-ER bagged Third Prize from the Department of Official
Language,Ministry of Home Affairs, Govt, of India for excellent performance in
the area of Official Language Implementation among the PSUs located in
Kolkata.
2010 BHEL has become the first Public Sector Company in the country, whose six
units participated in the CII-EXIM Business Excellence award scheme and all got
recognition certificates from CII.
2010 BHEL achieves major milestone in the Middle East with the commissioning of
Two Gas Turbine-based Power Plants in UAE and Oman.
AWARDS AND ACHIEVEMENTS –BHEL
1. For third successive year 2005, 2006 and 2007 BHEL Haridwar unit has bagged a
chunk of Prime Minister's Shram Awards in 2010.
2. BHEL, Tiruchi, bagged the ICWAI (Institute of Cost and Works Accountants of
India) National Award for good performance in Cost Management for the year 2009
in the Public-Manufacturing-Large Organization category.
3. BHEL bags EEPC's Top Export Award for the 20th consecutive year in 2010.
4. BHEL employees win 3 Vishwakarma National Awards for 2008, Companys total
tally of Vishwakarma National Awards crosses 100. BHEL also bags 1 National
Safety Award
5. Corporate Power Infra awards EPC Contract for Power Plant to BHEL in Sept., 2010.
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6. BHEL achieves another milestone at Bawana Project; Steam Generator Drum lifted at
Pragati-III Combined Cycle Power Plant in Delhi in Feb, 2010.
7. InOct-2009, BHEL wins India Pride Gold Award for excellence in Heavy Industries.
8. In Apr-2009, CMD, BHEL, Mr. K. Ravi Kumar, honoured with Distinguished
Alumnus Award for Managerial Excellence by IIT Madras.
9. In Dec-2008, BHEL achieves path breaking success in the Middle East region with
the award of 'rate contract' for Gas Turbine Generator packages from Oman.
10. In Nov-2008, CMD, BHEL honoured with ENERTIA Individual Contribution Award
in Thermal Power Sector – 2008.
11. In Sep-2008, BHEL employees win 3 Vishwakarma National Awards for 2007;
Company's total tally of Vishwakarma National Awards crosses 100, BHEL also bags
1 National Safety Award.
12. In Sep-2007, BHEL conferred the SCOPE Meritorious Award for R&D and
Innovation 2005-06.
13. In Apr-2007, BHEL employees win maximum number of Prime Minister's Shram
awards.
14. In Aug-2006, BHEL bags EEPC's Top Export Award for the 16th consecutive year.
15. BHEL wins FICCI Award 2005 for Environmental Conservation & Pollution Control.
16. Also has been honored a number of times with National Safety Awards for the largest
accident free period.
17. British Safety Council Award to the electronic division , Bangalore.
18. “Best Contractors’ Camp Award” at Hubara in Oman for Health, safety and
environmental standards set by Shell.
19. BHEL, Haridwar has won productivity awards at National level, instituted by
National Productivity Council in the field of power generation, transmission &
distribution and equipment manufacturing.
20. A large number of BHEL employees have been honored with the coveted Prime
Minister’s “SHRAM VIR”, “SHRAM SHREE”, “SHRAM DEVI”, and
“VISHWAKARMA” National Awards.
21. Best material handling award by National Material Handling Council, Jamshedpur.
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INFORMATIONS OF BHEL
Sep-2010 BHEL employees win 3 Vishwakarma National Awards for 2008, Companys total tally of Vishwakarma National Awards crosses 100. BHEL also bags 1 National Safety Award
Sep-2010 BHEL pays all-time high Equity Dividend of 233 percent for fiscal 2009-10
Sep-2010 BHEL and Govt. of Kerala form JV for manufacture of products for Railways and Industries. Strategic move to enhance BHELs presence in the Transportation, Industrial and Renewable Energy Sectors
Aug-2010 BHEL achieves milestone in the Middle East market with the commissioning of another Gas Turbine-based Power Plant in Oman
Aug-2010 BHEL signs Rs. 2525 Crore Contract with Abhijeet Infra Limited for setting up a 1,080 MW Thermal Power Plant in Jharkhand
Jul-2010 BHEL synchronises second 490 MW Unit at Dadri Thermal Power Plant having higher Steam parameters ensuring Reduced coal consumption and better performance w.r.t. Environment
Jun-2010 BHEL-built power generating sets record All-Time High generation in 2009-10; Contribute 80 per cent of the country's coal based power generation
May-2010 BHEL records sterling performance in 2009-10; All-time high Sales and Net Profit; 123 per cent Final Dividend declared
Apr-2010 Engineering Excellence: BHEL registers significant increase in Intellectual Capital, files one patent a day
Mar-2010 BHEL signs MoU with Ministry of Heavy Industries and Public Enterprises
Feb-2010 BHEL wins Top Honours for Recruitment Practices.
Feb-2010 BHEL and Toshiba Corporation sign MoU to form JV Company for Transmission and Distribution business in India and other mutually agreed countries
Jan-2010 BHEL and MPPGCL float JV Company for setting up Supercritical Thermal
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Power Project in Madhya Pradesh
Dec-2009 BHEL bags Rs.6,400 Million Repeat Contract for 270 MW Thermal Power Plant in Jharkhand
Dec-2009 BHEL develops India's first High Temperature Superconducting Transformer through in-house Research and Development efforts.
Nov-2009 BHEL continues winning streak; Secures Rs.5,600 Crore Mega Contract for installing 3x660 MW Supercritical Power Plant in UP
Oct-2009 BHEL signs contract agreement with Jindal Power Limited for 4x600 MW extension stage of OP Jindal Super Thermal Power Project
Sep-2009 BHEL achieves another success in the CIS region; Makes an entry in Belarus with an order for a Cogeneration Power Plant
Sep-2009 BHEL DEFIES SLOWDOWN, FORGES AHEAD ON HIGH-GROWTH PATH, Records All-time High Turnover and Orders Inflow, Dividend for FY 08-09 at 170 per cent, International Business surges 41 per cent
Aug-2009 BHEL bags EEPC's Top Export Award for the 19th consecutive year
Jul-2009 BHEL achieves Major Landmark; Boiler columns for BHEL's First Supercritical Boiler flagged off
Jun-2009 BHEL wins Rs.1,700 Million contract for setting up an ecofriendly Cogeneration power plant at Manali Refinery of CPCL
May-2009 BHEL Sales surge 40 per cent in the Fourth Quarter of 2008-09; Quantum jump of nearly 22 per cent in Net Profit
May-2009 BHEL achieves record Turnover of Rs.54,050 Million from Products developed in house; Research and Development spend goes up 40 per cent; Registers significant increase in Intellectual Capital
Apr-2009 BHEL's thermal power generating sets achieve record generation in FY 2008-09; Contribute 79 per cent of the country's total thermal power generation; Power stations equipped with BHEL equipment win Maximum Productivity Awards
Mar-2009 BHEL achieves breakthrough in Nuclear Power segment with First-ever order for Steam Generators for New Rating 700 MWe Nuclear Sets
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Feb-2009 BHEL once again outbids Chinese companies in International Competitive Bidding; Bags Rs.31,500 Million Mega Contract for installing 2 sets of 600 MW each in Madhya Pradesh
Jan-2009 BHEL becomes sole supplier in the world for high-rating Disc Insulators for 800 kV High Voltage Direct Current Transmission Lines
Dec-2009 BHEL bags Rs.50,400 Million Contract for installing 4x600 MW Thermal Sets from Jindal Power Limited
Nov-2008 BHEL and TNEB float JV Company for setting up the first 2x800 MW Supercritical Power Project in Tamil Nadu
Oct-2008 BHEL bags Maiden order for 660 MW Steam Turbine Generator Sets with Supercritical parameters under International Competitive Bidding; Rs.14,740 Million NTPC Contract for 1,320 MW Barh Power Project Stage-II
Sep-2008 BHEL bags Rs.9,900 Million Contract for installing 2 thermal sets of 250 MW each in Rajasthan; Project to add 12 million units every day to the Grid on commissioning
Sep-2008 BHEL and HEC sign MoU to form JV Company for supply of Castings and Forgings; Move to ease supply of critical input material for manufacture of Power Plant Equipment
Aug-2008 BHEL secures Contract for 2 Units of New Rating 270 MW Thermal Sets; GVK Power Ltd. places Order for 540 MW Goindwal Sahib Power Project in Punjab
Aug-2008 BHEL continues winning streak in UAE; Wins another order for Two Gas Turbine Generating Units for barge mounted Power Plants
Jul-2008 BHEL Net Profit Surges 33 per cent in the First Quarter of 2008-09; Quantum jump of 32 per cent in Sales/Income from Operations; Outstanding Order Book at Rs.950,000 Million
Jun-2008 BHEL makes Maiden Entry in the Syrian Power Sector Wins Rs.2,080 Crore Turnkey Contract for 400 MW Thermal Power Plant Highest-value Single Order ever secured in the Overseas Market
May-2008 BHEL wins Rs.11,500 Million Turnkey Contract for a Captive Power Plant, Highest value single order for Captive Power Plant Business Segment
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Apr-2008 BHEL, NTPC JV Company Incorporated, To jointly execute EPC Contracts and Manufacture and Supply Equipment in India and Abroad
Mar-2008 BHEL achieves another landmark in International Busines, Enters a new market - New Caledonia with a Rs.5,500 Million export contract
Feb-2008 BHEL wins EPC contract for 700 MW Combined Cycle Power Plant through International Competitive Bidding
Jan-2008 BHEL creating capacities to meet countrys capacity addition targets, Major Expansion underway at the companys Boiler Plant at Trichy
Dec-2007 BHEL creating capacities to meet country's capacity addition targets
Dec-2007 BHEL to supply 3 Compressor Packages to Kochi Refinery;Wins Rs.1,210 Million contract from BPCL
Nov-2007 BHEL outbids European MNCs and Indian majors; Wins contract for country?s Largest Rating Transformers from Adani Power Ltd.
Oct-2007 BHEL makes its foray in execution of Supercritical Thermal Power Projects; Signs MoU with TNEB to float JV Company for setting up the first 2x800 MW Supercritical Power Project in Tamil Nadu
Sep-2007 BHEL wins Rs.7,650 Million Turnkey Contract for Captive Power Plant
Aug-2007 Prime Minister dedicates to the nation, India?s highest-rating BHEL-supplied 540 MWe Nuclear power generating units at Tarapur Atomic Power Station
Jul-2007 BHEL to set up eco-friendly Co-generation power plant at IOC?s Gujarat Refinery; Wins Rs.4,310 Million EPC contract against International Competitive Bidding
Jun-2007 Union Minister for Heavy Industries and Public Enterprises reviews power projects under execution by BHEL in Maharashtra; Move aimed at expediting commissioning in view of critical power situation in the state
May-2007 BHEL EXCELS ON ALL COUNTS; BHEL's Turnover surges 29%; Net jumps 44% to Rs.24,150 Million in 2006-07
Apr-2007 BHEL identifies overseas business as major growth plank; Targets Seven-fold increase in overseas business by 2012
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Mar-2007 BHEL establishes fourth World-class Centre of Excellence; Aimed at Consolidating Strengths in Crucial Technology Areas
Feb-2007 BHEL outbids European MNCs and Indian majors; Bags World Bank-funded 400 kV Turnkey Substation contract in Maharashtra
Feb-2007 BHEL demonstrates its International Competitiveness; Secures Order for 520 MW Hydro Electric Project in Himachal Pradesh
Jan-2007 BHEL wins mega turnkey contract for 2x500 MW Mejia TPS
Dec-2006 BHEL to set up eco-friendly Co-generation power plant at Haldia Refinery
Nov-2006 BHEL writes another success story; Gets third consecutive Captive Power Plant order from Hindustan Zinc
Oct-2006 BHEL showcases technological strengths at 'Powergen India & Central Asia 2006'
Sep-2006 BHEL wins Rs.12,240 Million contract for 2x250 MW Harduaganj TPS
Aug-2006 Three Manufacturing Plants and Two Power Sector Divisions bag the CII-Exim commendation for business excellence.
Jul-2006 BHEL wins Rs.8,420 Million contracts for two Power Projects in Rajasthan.
Jun-2006 BHEL bags contracts for two Hydro Power Projects from APGenco.
May-2006 BHEL achieves Rs.11,510 Million turnover through products developed in-house.
Apr-2006 BHEL wins Rs.12,000 Million order for Lignite Based Power Project.
SALIENT ACHIEVEMENTS
Played pro-active role in arranging interaction of TBG professionals with UPCL in
the area of Transmission business.
Insured speedier response to customer queries.
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Securing single order of more than Rs 2 crore value after ensuring that BHEL, Bhopal
make 11 kV VCBs are type tested at 95 kVp impulse test. It shall enable new supplies
for hilly areas.
Coordinated erection and commissioning of 2x40 MVA and 1x160 MVA power
transformers within one month of receipt at respective sites.
Total support to manufacturing units from order stage to cash collection and thus
obviating the need for visit of unit representative.
ROD-Haridwar office recommended by DNV for ISO 14001 & OHSAS 18001
certification.
Business support to various units/regions of BHEL for Non ROD products:
Market intelligence
Offer preparation and tender opening
Attending pre-bid meetings
Joint inspection
Verification of bills
Payment follow up
Collection of payment
DIVISIONS OF BHEL
There are 20 Divisions of BHEL, they are as follows:
1. HEEP, HARIDWAR
2. HPEP, Hyderabad
3. HPBP, Tiruchy
4. SSTP & MHD, Tiruchy
5. CFFP, HARIDWAR
6. BHEL, Jhansi
7. BHEL, Bhopal
8. EPD, Bangalore
9. ISG, Bangalore
10. ED, Bangalore
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11. BAP, Ranipet
12. IP, Jagdishpur
13. IOD, New Delhi
14. COTT, Hyderabad
15. IS, New Delhi
16. CFP, Rudrapur
17. HERP, Varanasi
18. Regional Operations Division ARP, New Delhi
19. TPG, Bhopal
20. Power Group (Four Regions and PEM)
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BHEL, HARIDWAR
ORGANISATION
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The Chief Executive (Normally Executive Director/G.M.), who reports to the Chairman and
Managing Director at Corporate office, heads both the plants (HEEP & CFFP). He is
supported by functional Heads (normally General Managers) for various disciplines viz.,
Electrical Machines, Fabrication, Turbines manufacturing, Quality, Engineering,
Commercial, R & D, Human Resources & Administration, Maintenance & Services,
Finance, Material Management, Central planning etc. The company is driven by clear
Vision, Mission and Committed values to sustain and augment its image as a World Class
Enterprise.
VISION
A world-class, innovative, competitive and profitable Engineering Enterprise providing total
business solution.
MISSION
To be the leading Indian Engineering Enterprise providing quality products system and
services in the field of energy, Transportation, infrastructure and other potential areas.
VALUES
Zeal to Excel and Zest for Change.
Integrity and Fairness in all Matters.
Respect for Dignity and Potential of Individual.
Strict Adherence to Commitments.
Ensure Speed of Response.
Foster Learning, Creativity and Teamwork.
Loyalty and Pride in the Company.
Corporate OHS & Environmental Policies
The Corporate OHS and Environmental policy is the principle guiding factor for BHEL
HARIDWAR’s Health, Safety and Environmental Management system.
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Health, Safety and Environmental Management System
BHEL Corporate Management has recognized Health, Safety and Environmental issues as a
major thrust area and has issued guidelines to its various units. This Health, Safety and
Environmental Management systems manual has been formulated in line with corporate
guidelines on OHS and Environmental Management System and OHSAS 18001:1999 &
14001:1996 standards. The HSE manual is further support by 2nd and 3rd level documents
like departmental manuals, SMIs and work instructions.
BUSINESS OBJECTIVES
GROWTH
To ensure a steady growth by enhancing the competitive edge of BHEL defence,
telecommunication and electronics in existing business, new areas and international
operations so as to fulfill national expectations from BHEL.
PROFITABILITY
To provide a reasonable and adequate return on capital employed, primarily through
improvements in operational efficiency, capacity utilization, productivity and generate
adequate internal resources to finance the company's growth.
CUSTOMER FOCUS
To build a high degree of customer confidence by providing increased value for his money
through international standards of product quality, performance and superior services.
PEOPLE- ORIENTATION
To enable each employee to achieve his potential, improve his capabilities, perceive his role
and responsibilities and participate and contribute positively to the growth and success of
the company. To invest in human resources continuously and be alive to their needs.
TECHNOLOGY
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Achieve technological excellence in operations by development of indigenous technologies
and efficient absorption and adaptations of imported technologies to suit business need and
priorities and provide the competitive advantage to the company.
IMAGE
To fulfill the expectations which stakeholders like government as owner, employees,
customers and the country at large have from BHEL.
BHEL, HARIDWAR COMPLEX
Location
BHEL, HARIDWAR Complex is situated in the foot hills of Shivalik Range in
HARIDWAR district of Uttaranchal State.
Address: Bharat Heavy Electrical Limited, Ranipur, HARIDWAR.
A) Area
BHEL, HARIDWAR Complex consists of two manufacturing units, namely Heavy
Electrical Equipment Plant (HEEP) & Central Foundry Forge Plant (CFFP). The
approximate total area of these plants is as follows:
HEEP: 0.845 Sq Km. (approx)
CFFP: 1.0 Sq Km. (approx)
HEAVY ELECTRICAL EQUIPMENT PLANT, HARIDWAR
Heavy Electrical Equipment Plant, HARIDWAR of this Multi-unit corporation with its 7467
strong highly skilled technicians, engineers, specialists and professional experts is the
symbol of Indo Soviet and Indo German Collaboration. It is one of the four major
manufacturing units of the BHEL. With turnover of 1088 crores and PBT of Rs.68 crores,
HEEP added 3000 MW of power to the National grid during 2001-02. HEEP is engaged in
the manufacture of Thermal and Nuclear Sets up to 1000MW, Hydro Sets up to HT Runner
dia 6300mm, associated Apparatus Control gears, AC& DC Electrical machines and large
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size Gas Turbine of 60-200 MW. HEEP HARIDWAR contributes about 44% of India’s
total installed capacity for power generation with total capacity of Thermal, Nuclear &
Hydro Sets of over 45000MW currently working at a Plant Load Factor of 76% and
Operational Availability of 86%. Inspite of acute recession in economy, BHEL
HARIDWAR bagged recent orders worth 1500 Crores including repeat orders for
Suratgarh-5, Kota-6, Raichur-7, Rihand-3&4 and Ramagundam-7 Unit. Additionally, Mejia-
4, Panipat-7&8, Maithon and Bhatinda are in pipeline.
HISTORICAL PROFILE
The construction of Heavy Electrical Equipment Plant commenced in Oct.1963 after indo-
soviet technical co-operation agreement in Sept.1959. The first product to roll out from the
plant was an electric motor in January 1967.This was followed by first 100 MW Steam
Turbine in Dec.1969and first 100MW Turbo Generator in August 1971.The plant’s “break
even” was achieved in March 1974. BHEL went in for technical collaboration with M/s
Siemens, Germany to undertake design and manufacture to large size thermal sets up to a
unit rating of 1000 MW in the year 1976.First 200 MWTG set was commissioned at Obra in
1977.The continuum of technological advancement subsequently saw the commissioning of
500 MW TG Set in 1984 .The technical cooperation of Gas Turbine manufacture was also
signed with M/s Siemens Germany. First 150 MW ISO rating gas Turbine was exported to
Germany in Feb”1995”.Our 250 MW thermal set up at Dahanu Plant of BSES made a
history by continuous operation for over 150 days and notching up a record plant load
factor greater than 100%.
CORPORATE CITIZEN
HEEP HARIDWARs Strategic plans and its policy & strategy are commensurate with
BHEL Corporate / strategic Plan . As first PSU to adopt Corporate Planning as a process .
Board meetings for long –range development , BHEL has always guided other PSU’s in
their Corporate planning process .Board meeting , monthly Management Committee
meetings, Annual Revenue Budget exercise , Mid term reviews , Apex TQ council reviews,
Personnel Heads Meet, Quality Heads Meet , Technology Meets , Product committees
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meetings, Inter-Unit Quality Circle Meets etc. are the some of crore strengths of BHEL
Corporation’s vast network.
KEY COMPETITORS
Power Sector Giant of the World viz. Siemens Germany, ABB, General electric of USA etc.
are the major competitors of HEEP. All these are the MNC’s and enjoy huge financial and
R&D backup.
KEY CUSTOMERS AND SUPPLIERS
The Power supplier of the country National Thermal Power Corporation, NHPC, NPC, and
other IPPs and various State electricity Boards, are the key external customers of HEEP
HARIDWAR. HEEP has a long standing-relationship with its customers. Power Sector-
Regions, Power Sector Technical Services and other sister unit of BHEL are the Essential
Internal customers. Manufactures of Casting and Forging, ETS, Steels including alloy steels,
component of the product non-ferrous and insulating materials, equipment etc. are its
suppliers. Some of the key suppliers are Collaborators M/s Siemens Germany, sister unit
CFFP, SAIL, near by Ancillaries developed by BHEL etc. To further strengthen the
relations, one to one long-term cooperation meetings are being held by BHEL with its 200
major suppliers on regular basis.
CRITICAL SUCCESS FACTORS
Increase Orders of Spares/Services to 230 Cr.
Decrease Capital employed by Rs. 120 Cr.
Saving in Material Cost by 16 Cr. i.e. 5%- Rs. 4 Cr.
Decrease in indirect material +miscellaneous expenses by 5%- Rs. 4 Cr.
Effective implementation of QTM/RCA/CTQ
Strengthening Internal customer concept
Development of an Incentive Scheme
Reward Scheme including EXCEL Awards
Effective implementation of PMS
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Effective Contract Management
Technology Upgradation
‘Excellence triangle’ for each Critical Success Factor is now being drawn comprising
improvement projects. These projects will be Centrally registered under On-line Central
Registration system to be developed for it. While CSF Champion will take the total stock of
position in the improvement projects undertaken in his respective CSF, progress of
individual projects will be reviewed by Area TQ Council (ATQC) and Functional TQ
Council (FTQC).
One of the major strengths of HEEP HARIDWAR is its free, open and consistent work
culture for making continuous improvement evident from the participation of employees in
Suggestions and Quality Circles. To recognize their efforts various productivity drives and
competition are organized through out the year and Executive director awards the winners in
the special Award Distribution Functions. National Award for Excellence in Suggestion
Scheme for 11th consecutive year by INSSAN, National Award for excellence in Energy
Conservation as an”Energy Efficient unit” by CII, CMD’s Rolling Trophy for 3rd
consecutive year,’Well known Forge Shop “ by Central Boiler Board etc. are some Vir
Award 2001” and 12 employees honoured with “Vishwakarma Rashtriya
Puraskar”during 2001-02.
The journey to excellence is unending .It is a continuous search with commitment and
belongings. Sky indeed is not the limit for perfection. The transition has strongly
experienced a silent internalization with a blend of commitment of the existing human
resource for creating benchmarks for excellence. The emergence of role models and clear-
cut driving force at the top provide an anvil to unleash the potential, which remain
unexplored in search of “Attitude to perform”. The surge has started and is being
communicated down the. BHEL today through TQM is on March towards excellence.
PRODUCT PROFILE
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HEEP (Heavy Electrical Equipment Plant)
S.No. Products Installed capacity
1 Thermal sets 3000 MW
2 Hydro sets 625 MW
3 Electric machines 450 MW
4 Gas Turbines @
5 Super rapid guns 3 Nos.
@ Capacity installed for manufacturing of gas turbines components like rotor equivalent to 600 MW
Gas Turbines. Balance components for Gas turbines from existing thermal sets facilities.
CFFP (CENTRAL FOUNDRY FORGE PLANTS)
S.No. Products Installed capacity
1 Casting 6000 MT
2 Forging(Heavy/medium) 2410 MT/ 3000 MT
3 Billets & Blooms 4000 MT
4 CI Casting 7180 MT 800 MT
5 Non Ferrous Casting 250 MT
BHEL, HARIDWAR complex has the distinction of having Pollution Control Research
Institute (PCRI) set up under United Nation Development Programme. PCRI is equipped
with most modern monitoring and analytical facilities with respect to air, water, noise, and
solid waste. It is recognized by central pollution control board, ministry of environment &
Forests, Government of India as an Environmental laboratory under the Environment
protection act 1986. On need basis PCRI extends support to all BHEL units as consultants
on environmental issues.
TOTAL QUALITY FOCUS
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To face the increased competition from MNC’s (due to liberalization policy of Government)
in early 90’s and to enter European market we moved towards ISO 9000 Certification.
Concept of Business Excellence through EFQM Model was launched in entire BHEL on
pilot scale in Oct.”1995” In 1997 HEEP launched TQM in the entire Plant and since then
Self-Assessment is done every year in September. Based on feedback Report of Assessment,
critical success factors are identified and TQ action plans are drawn. The philosophy of ISO
9001 ,TQM and ISO 14001 has been integrated BHEL HARIDWAR for ultimately
achieving “BUSINESS EXCELLENCE”.HEEP HARIDWAR plant is accredited for ISO
9001 and ISO 14001 and is now on march towards TQM.5-S was launched in March 1999
in a big way and now it has become a way of life in the organization. In 2000 HEEP applied
for CII-EXIM Business excellence award and site visit was conducted but CII team in
Seot.”2000.Cii feedback has gone a log way in carrying out further improvement plans and
giving a structured thrust to TQM movement
In July 2001, Unit’s TQ Council reviewed the TQ Action Plans 2001-02 for its effectiveness
and impact on accelerating the pace of improvement and consequent TQ Score. Executive
Director laid the challenge of achieving the TQ score of 650.With an objective to bring
awareness about he CII-EXIM Business Excellence Model amongst the Sr. Executives, the
first ‘Top Management TQM Workshop’s held at Rishikesh during oct.2001Executive
Director who is TQ Assessor also, himself steered the Workshop with assistance from some
experienced TQ Assessor of HEEP. It followed by second Top Management TQM
Workshop steered again by Ed was held at HRDC on Oct’29,2001.Subsequantly the third
Top Management TQM Workshop was held in Nov’2001,where-in Sr. Counselor, CII
deliberate the detail on Best practices of TATA STEEL-the winner of ‘CII-EXIM Business
Excellence Award 2000’.Simultaneously ,TQ Assessors training program for the select
group of young managers(to be developed as Think Tanks)was organized in Nov’2001.To
give further boost Apex Group was formed. Apex Group developed “Roadmap to Business
Excellence” based on Criteria Linkage of CII-EXIM Business Model and the initiatives
taken at HARIDWAR was drawn by the group and it was widely circulated amongst the
employees through special issue of HARIDWAR Current in April 2002. To be a responsible
corporate citizen and to meet exacting international standards in occupational health, safety
39
and environment, BHEL continued re-certification of all its units/ divisions for OHAS-
18001 Occupational Health and Safety Management System as well as ISO-14001
Environmental Management System. BHEL' journey in Total Quality Management
(TQM) received a boost when all Four major division of BHEL viz. Trichy, HARIDWAR,
Bhopal and Hyderabad along with Power Sector Northern Region received the coveted CII-
EXIM commendation certificates. Other significant achievements included:
- 'IMC Ramakrishna Bajaj National Quality Award 2004' to BHEL's Ranipet plant
making it the first PSE to win this award.
- BHEL's Hyderabad plant was adjudged the 'Best Organization in promoting
Quality Circles' for the second consecutive year by QCFI chapter convention.
For contribution to the Renewable Energy sector, the SESI2004: PVSEC Award for
Applications', was conferred on BHEL's Electronics Division, by solar Energy Society of
India.
FINANCE FUNCTIONS IN HEEP HARIDWAR
FUNCTIONS OF SALES SECTION
Rasing Invoice On Customers For Despatches.
Reconcilition Of Balances Eith Customer From Time To Time.
Accounting Of Sales And Submission Of Returns Of Sales Tax, Excise Duty.
Claiming Of Various Incentive: Cash Incentive, Duty Drawback
Reconcilition Of Cash Collections Relating To Sales.
Preparation Of Various Mirs Relating To Sales/Debtors/Cash Collection.
FUNCTIONS OF STORE BILL AND FOREIGN PAYMENT SECTION
Payment Of Suppliers Bills For Indegenous And Imported Supplies For Material &
Assets.
Pricing Of Store Receipts Vouchers For Material And Assets.
Opening Of Letter Of Credit And Arrnaging Payments To Foreign Suppliers Under
Foreign Credit/Deffered Payment Agreement.
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Accounting For Purchaseing.
Processing/Settelment Of Insurance Claims.
Maintenance Of Accounts Of Suppliers.
Accounting Of Material Issued To Subcontrators.
FUNCTIONS OF WORKS SECTION
Payment Of Contractors Bills Including Bills For Advances.
Maintenance Of Account Of Contractors With Regard To Security Deposits, Earnest
Money, Progressive Payments Etc.
All Accounting Work Relating To Capital Expenditure In Progres On Erection Of
Plant And Machinery And Buildings.
All Other Miscellaneous Works Relating To Hiring Of Various Facilities.
Payment And Accounting Of All Expenditure Related With Revenue Particularly
With Regard To Expenditure Incurred On Repair And Maintenance Of Plant And
Machinery, Building, Roads Etc.
FUNCTIONS OF COST SECTION
Statement of product wise profitability
Cost sheet of completed works orders.
Weekly and monthly turnover reports.
Utilisation reports relating ot labour and machine.
Monthly rejection reports.
Report relating to inventory.
Estimation guidelines.
Valuation of inventory
Apperisal of caital investment proposals.
Financial concurrence to price proposals.
Vetting of productivity proposals.
FUNCTIONS OF PAYROLL SECTION
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Prepration Of Monthly Wage Bills,Pp,Ex Gratia Payment.
All Account Work Relating To Personnel Payments.
Dealing With Statutory Authorities Such As Pf, Esi (Employee State Insurance).
FUNCTIONS OF CASH SECTION
Accounting Of All Receipts Coming In The Form Of Cash And Bank For The
Companyas Awholr.
Payment To Suppliers, Contractors And Employees.
Coordination With Corporate Office With Regards To Maintenance Of Centalised
Cash Credit System.
Liaison With Bank For Drawl Of Cash Etc.
FUNCTIONS OF BOOKS & BUDGET SECTION
Prepration Of Operating Budget For Company As Awhole.
Coordination With Various Functions Of Organization With Regards To Generation
AndSubmission Of Important Mirs To Corporate Office.
Prepration Of Annual Accounts Of The Company.
Coordination With Company Auditors Eith Regard To Company Accounts.
Accounting Of Fixed Assets And Maintenance Of Assets Ledger.
Prepration Of Budget.
Issue Of Various Mirs Like Monthly Operating Results, Cash Forecast Etc.
LINKAGE OF FINANCE DEPARTMENT WITH OTHER DEPARTMENTS
INTEGRATION MODEL
42
SIGNIFICANT ACCOUNTING POLICIES
1. The Financial statement have been prepared as of a going concern on historical cost
convention and generally on accrual method of accounting in accordance with the
generally accepted accounting principles and the provisions of the Companies Act, 1956
as adopted consistently by the company.
2. Fixed Assets
43
Fixed assets (other than land acquired free from State Government) are carried at the cost of
acquisition or construction or book value less accumulated depreciation.
Cost includes value of internal transfers for capital works, taken at actual/estimated factory
cost or market price, whichever is lower. Effect of extraordinary events such as
devaluation/revaluation in respect of long term liabilities/loans utilized for acquisition of
fixed assets is added to/reduced from the cost.
Land acquired free of cost from the State Government is valued at Re.1/- expect for that
acquired after 16th July 1969, in which case the same is valued at the acquisition price of the
State Government concerned, by corresponding credit to capital reserves.
Interest costs incurred on the funds borrowed specifically for projects and identified
therewith are capitalized up to the time of commissioning of the relevant projects.
3. Investments
Long-term investment, are carried at cost. Permanent decline in the value of such
investment, is recognized and provided for.
Current investments, are carried at lower of cost and quoted/fair value. Unquoted
current investment are carried at cost.
The cost of such investment includes acquisition charges such as brokerage, fees and
duties.
Any reduction in the carrying amount and any reversals of such reduction are
charged or credited to the Profit & Loss Account.
4. Revenue Recognition
Sales are recorded based on significant risks and rewards of ownership being
transferred in favour of the customer. Sales includes goods dispatched to customers
by partial shipment which are billed or unbilled pending formal billing.
Recognition of sales revenue in respect of long production cycle items (Hydro and
Thermal sets including gas based power plants, boilers, boilers auxiliaries,
compressors and industrial turbo sets) is made on technical estimates. When the
aggregate value of shipments represents 30% or more of the realisable value or in its
absence, quoted price. Otherwise, they are considered at actual/estimated factory
44
cost or 97.5% of the realisable value, whichever is lower. The balance 2.5% is
recognized as revenue on completion of suppliers under the contract.
Income from erection and projects management services is recognized on work done
and billed based on :Percentage of completion; or
The intrinsic value, reckoned at 97.5% of contract value, the balance of 2.5% is
recognized as income when the contract is completed.
Income from engineering services rendered is recognized at realizable value based
on the certified percentage of work completed and billed.
Income from supply/erection of non-BHEL equipment/systems, and civil works is
recognized based on dispatches to customer/work done at project site.
5. Accounting for Finance Lease Transactions
In respect of assets manufactured and given on finance lease, the normal sale price/fair
value/contracted price is accounted for as cost of ‘Fixed Assets on Lease’ with
corresponding credited to Profit & Loss Account treating it as turnover.
Lease rentals are recognized 0n accrual. Finance income which is part of lease rentals is
recognized by applying implicit interest rate on the value of net investment in lease. Against
lease rentals, matching annual charge representing recovery of net investment over the
primary lease is made by the operation of Lease Equalization Account, net of depreciation.
Depreciation on same is charged at the rate applicable to similar type of fixed assets as per
accounting policy no.8.Depreciation as also Lease Equalization Account are taken to Profit
& Loss Account with corresponding adjustment in the net book value of lease assets.
6. Inventory valuation
Inventory expect as indicated here under, are valued at lower of actual/estimated cost
or realizable value; in respect of valuation of finished goods in plant and work-in-
process, cost mean factory cost; actual/estimated factory cost includes excise duty
payable on manufactured goods.
Finished goods in plant and work in progress involving Hydro and Thermal sets
including gas based power plants, boilers, boilers auxiliaries, compressors and
45
industrial turbo sets are valued at actual/estimated factory cost or at 97.5% of the
realizable value, whichever is lower.
Raw material, components, stores and spares are valued at weighted average cost.
Loose tools costing Rs.10,000 or less and those whose book value at the beginning
of the year is Rs.10,000 or less are charged off to revenue. Loose tools whose
original value is more than Rs.10,000 are valued at the year end by reducing
annually at a flat rate of 20% irrespective of the date of acquisition.
Where current estimates of cost and selling price of an individually identified
projects forming part of a contract indicates loss, the anticipated loss in respect of
such project on which the work had commenced, is recognized. In arriving at this
loss, total income from the project including incentives on exports/deemed exports is
taken into consideration.
The components and other materials purchased/manufactured against production
orders but declared surplus are charged off to revenue retaining residual value based
on technical estimates.
7. Terminal Benefits
Provident Fund and Employees’ Family Pension Scheme contributions are
accounted for on accrual basis. Liability for gratuity, half pay leave, leave
encashable at the time of retirement are accounted for in accordance with actuarial
valuation. The actuarial liability is determined with reference to employees at the
beginning of each calendar year.
Post retirement medical benefits are accounted for on the basis of eligible claims.
8. Depreciation
(i) Depreciation on fixed assets (other than those used abroad under contract) is charged on
straight line method as per the rates prescribed in schedule XIV of the Companies Act,
1956, expect where depreciation is charged at rates shown hereunder:
single shift double shift triple shift
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General Plant & Machinery 8% 12 16%
Automatic/semi-automatic machines 10% 15% 20%
Erection Equipment,
Tools & Tackles 20%
Township Buildings
-second class 2.5%
-third class 3.5%
Railway sidings 8%
Locomotive & Wagons 8%
Electrical Installations 8%
Office & Other Equipments 8%
In respect of additions to/deductions from the fixed assets, depreciation is charged on pro-
rate monthly basis.
(ii) Fixed assets used outside India pursuant to long term contract are depreciated over the
duration of the initial contract.
(iii) Fixed assets costing Rs.10,000/- or less and those whose written down value as at the
beginning of the year is Rs.10,000/- or less, are depreciated fully. In so far as Township
building are concerned, the cost per tenement is the basis for the limit of Rs.10,000/-.
(iv) At erection/projects sites: The cost of roads, bridges and culvers is fully amortized over
the tenure of the contract, while sheds, Railway sidings electrical installation and other
similar enabling works (other than purely temporary erections, wooden structures) are so
depreciated after retaining 10% as residual value.
(v) Purely Temporary Erection such as wooden structures are fully depreciated in the year of
construction.
(vi) Leasehold land and buildings are amortized over the period of lease. Buildings
constructed on land taken on lease are depreciated over their useful life or the lease period,
whichever is earlier.
(vii) Where the carrying cost on any fixed assets has undergone a change in accordance with
the policy for Foreign Currency Transactions, the depreciation on the unamortized
depreciation assets is spread over the residual useful life of the assets.
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9. Research and development Expenditure
Research and development expenditure is charged to profit and loss account in the year of
incurrence. Fixed assets acquired for purposes of research and development are capitalized.
10. Claims by/against the company
(i) Claims for liquidated damages by/against the company are recognized in accounts on
acceptance.
(ii) Claims for export subsidy, duty draw back, refund of customs duty and insurance are
taken into account on accrual.
(iii) Amounts due in respect of price escalation claims and/or variations in contract work are
recognized as revenue only when there are conditions in the contracts for such claims or
variation and/or evidence of the acceptability of the same from customers. However,
escalation is restricted to intrinsic value.
11. Accounting for Foreign currency Transaction
Exchange differences arising out of Foreign Currency Transaction are recognized as income
or as expense in the period in which they arise.
Adjustment of exchange differences to the carrying amount of fixed assets are made as
under:
For any increase/decrease in the liabilities related to fixed assets acquired in the
foreign currency due to translation;
On repayment of liabilities incurred for the purpose of acquiring fixed assets.The
effect of past extraordinary and permanent fluctuation in the exchange rate including
on devaluation/revaluation other than those related to fixed assets, are treated as
deferred revenue charge and adjusted over the residual period of such liabilities.
12.Translation of Financial statement of Foreign Branches
Items of income expenditure are translated at average rate expect depreciation,
which is converted at the rates adopted for the corresponding fixed assets.
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Current assets and current liabilities are translated at the closing rate, while fixed
assets are translated at the rates in force when the transactions take place.
All translation variances at the end of the year are taken to Profit & Loss Account
expect in case of gain on current assets and liabilities in a country from which
remittances of profit/funds is not possible or in case of gain on long term liabilities,
the gain is treated as a reserve and subsequent loss is adjusted there against.
13. Provision for Warranties
(i) Provision for contractual obligation in respect of contract under warranty at the year end
is considered at 2.5% of the value of contract. In the case of contract for supply of more than
a single product, 2.5% of the value of each completed product is provided.
(ii) Warranty claims/expenses on rectification work are accounted for against natural heads
in the year of actual incurrence.
14. Government Grants
Government Grants are accounted when there is reasonable certainty of their realization.
Grants related to fixed depreciable assets are adjusted against the gross cost of the relevant
assets while those related to non-depreciable assets are credited to capital reserves. Grants
related to revenue, unless received as compensation for expenses/losses, are recognized as
revenue over the period to which these are related on the principle of matching costs to
revenue.
Grants in the form of non-monetary assets are accounted for at the acquisition cost, or at
nominal value if received free.
RESEARCH AND DEVELOPMENT
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BHEL has a corporate R & D center supported by R & D groups at each of the
manufacturing divisions. The dedicated effort of BHEL's R & D engineers have produced
several new products like automated storage retrieval system automated guide vehicles for
material transportation etc. Establishment of Asia's largest fuel evaluation test facility at
Tiruchy was high light of the year. This facility will enable evaluation of combustion, heat
transfer and pollution parameters in boilers.
Major R & D achievement include:
Design manufacture and supply of countries first 17.2 MW industrial steam turbines.
Development of 4700 HP AC / DC loco for Indian Railways.
Development of largest capacitor voltage transformers of 8800 PF 400 KV rating.
Development and application low cost ROBOTS for job loading/unloading.
According to ex- CMD Mr. R.K.D. Shah, "BHEL is spending Rs. 60 Crores on Research
and Development. Earning from product which has been commercialized has gone up 26 %
to Rs. 760 Crores."
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MANAGEMENT OF CASH
It is the duty of the finance manager to provide adequate cash to all segments of the
organization. At the same time, he /she has also to ensure that no funds are block in idle
cash as this will involve cost in terms of interest to the concern. A sound cash management
scheme has to maintain the twin objective of liquidity and cost.
MEANING OF CASH MANAGEMENT
The term cash management refers to the management of cash and ‘near cash assets’ while
cash includes coins, currency notes, cheques, bank drafts, and the demand deposits, the near
cash assets include marketable securities and time deposits with banks. Such securities and
deposits are easily convertible into cash.
MOTIVES FOR HOLDING CASH
In spite of the fact that cash does not earn any substantial return for the business, it is held
by the concern with the following motives.
1. Transaction motive
A Company enters a variety of business transactions resulting both inflow and outflow of
cash; at times the cash outflow exceed the cash inflow. In order to meet the business
obligations in such situation, it is necessary to maintain adequate cash balance. Thus, a firm
with the motive of making routine business payments maintains cash balance.
2. Precautionary motive
A firm holds cash balance to meet sudden cash needs arising out of unexpected
contingencies such as floods, strikes, obsolesces, sharp increase in prices of raw materials,
presentation of bills for payment earlier than expected date.more amount of cash will be
kept by the firm if there is more possibility of such contingencies.
3. Speculative motive
BHEL also keeps cash balance to take advantage of unexpected business opportunities.
Such motive is there of speculative nature.
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4. Compensation motive
Banks provide certain services to their customers free of charge. So they usually require the
customers to keep minimum cash balance with them which enables them to earn interest and
compensate for the free services rendered.
REASONS OF CASH MANAGEMENT
Cash management involves the following four basic problems.
1.Controlling level of cash. One of the basic objectives of cash management is to
minimize the level of cash balances with the firm. This objective is sought to be achieved by
means of the following:
1. Preparing cash budget. Cash budget is the most important device for planning and
controlling the use of cash. It involves the future receipts and payments of the firm. On the
basis of this information the finance manager can determine the future cash needs of the
firm.
2. Providing for unpredictable discrepancies. Cash budget shows discrepancies
between cash receipts and payments on the basis of normal business activities.
3. Availability of alternative source of funds: A firm may need not keep large
cash balance. If it has arrangements with banks for borrowing money in times of
emergencies.
1. Controlling of cash inflow: In order to prevent fraudulent diversion of cash receipt
and speeding up collections of cash, an adequate control on cash inflow is necessary. A
properly installed internal check system can, to a great extent, a minimize the possibility
of fraudulent diversion of cash. Speedier collection of cash can be made possible by
adoption of the following two techniques:
a) Concentration banking system
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It is a system of decentralizing collection of account receivables. According to this system,
BHEL’s branch offices are authorized to collect the payment from the customers, and
deposit in the local bank accounts. This system facilities fast movement of funds. This
system is good in case of the firms having their spread over a large area.
b)Lock box system
This system is more popular in the U.S.A. and is further step in speeding up collection of
cash. This system has been devised to element delay arising in cash of the concentration
banking system on account of a time gap between actual receipt of cheques by the regional
collection centers and its deposits in the local bank account. under this system BHEL hires a
post office box and instruct its customers for there remits to the box. It also reduces the
chances of frauds in the cash collection process and controls the cash inflows better. In order
to avoid the unnecessary pockets of idle funds, the company should maintain minimum
number of bank accounts.
2. Controlling outflows of cash: An efficient control over cash outflows is equally
important for conserving cash and reducing financial requirements. Control over cash
outflows signifies slow disbursement.in order to control the outflows of cash efficiently,
a firm should keep in view the following considerations:
i) Centralized system for cash payments
ii) Should be followed as compared to decentralized system in cash of collections. All
payments should be made from a single control account, i.e., from the central office of the
company. However, the local office of the company may pay local expenses.
iii) Payment should be made on the due dates, neither before nor after. The company
should neither lose cash discount nor its prestige on account of delayed payments. The
company should, there fore, made payments within the terms offered by the suppliers.
iv) Playing float, technique should be used by the company for maximizing the
availability of funds. The term ‘float’ means the account tied up in checks which have been
issued by BHEL but not have been yet been presented for payment by the creditors. As a
result of a time lag between issue of a cheque and its actual presentation, the actual bank
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balance of a firm may be more than the balance shown in the books. The difference is called
‘payment of float’. The longer the ‘float period’ the greater would be the benefit of the firm.
TOOLS OF CASH CONTROL
1. Cash Budget: It is the most significant tool of controlling the use of cash. It
provides a comparison between actual and budgeted cash receipts and disbursements
locating the points of deviations, if any. The financial manager, after ascertaining the
reasons for deviations between the actual and budgeted figures, can take the necessary
action to remove.
2. Inflows and outflows of cash: in order to check the change in cash position of
the firm from one period to another, a cash flow statement is prepared. It helps management
in controlling inflows and outflows of cash.
3. Ratio analysis: Ratio analysis is also an important tool of cash control. Different
financial ratios are used for this purpose. These ratios include current ratio, liquidity ratio,
receivables turnover ratio, and inventory turnover ratio and cash position ratios.
ANALYSIS OF CASH MANAGEMENT WITH THE HELP OF
CERTAIN RATIOS
CURRENT RATIO
It is the best ratio to find relationship between the current assets and current liabilities of
BHEL. We can easily calculate the current ratio with the help of the following formula:
Current ratio = current assets/current liabilities
years Calculations Ratio
2 2006-2007 20979.96/14337.09 1.5:1
2007-2008 27906.18/20022.30 1.4:1
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2008-2009 36901.07/28332.90 1.3:1
Interpretation: - As we know that the current ratio of any company may be 2:1 but
according to the U.S.A. Accounting standard any company should maintain a ratio of
1.33:1. Moreover, as we can see from the above table the current ratio of BHEL is and in
2006-07 is 1.5:1 In 2007-08, the current ratio goes down to 1.4:1 due to increase in the
current Liabilities and decrease in current assets as compared to previous year. In 2008-09
the ratio is going down to 1.3:1 due to decrease in current assets and current liabilities.
LIQUIDITY RATIO
This ratio establishes a relationship between quick assets and current liabilities.
The major objective to compute this ratio is to measure the ability of the firm to meet its
short-term obligations as and when due without relying upon the realization stock.
We can easily calculate this ratio with the help of the following formula:
YEARS CALCULATIONS RATIO
2008-2009 29064.05/28332.90 1.02
2007-2008 22169.78/20022.30 1.10
2006-2007 16762.29/14337.09 1.16
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Liquidity ratio= liquid assets/current liabilities
Graph showing comparison on the basis of liquidity ratio
Interpretation
Liquid ratio indicates that what amounts of liquid assets are available for each rupee of
current liability. We know that the liquid ratio of any company may be 1:1, is considered to
be satisfactory. Now comparing the company's position according to the liquid ratio. In
2006-07 the ratio is 1.16:1 and in 2007-08 the ratio is 1.10:1 and in 2008-09 the ratio is also
decrease to 1.02:1
CASH FLOW STATEMENT
A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of
cash during a particular period. In other words, it is a summary of sources and applications
of cash during a particular span of time. It analyses the reasons for changes in balance of
cash between the two balance sheet dates. The term ‘cash’ here stands for cash and cash
equivalents.
It shows the following for the period covered by it:-
1. Net cash flows from Operating Activities;
2. Net cash flows from Investing Activities;
3. Net cash flows from Financing Activities;
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4. Net change in Cash and Cash Equivalents.
The term ‘Cash Flows’
1. Cash flows are inflows and outflows of cash and cash equivalents.
2. Cash flows exclude movements between items that constitute cash or cash equivalents
because these components are part of the cash management of an enterprise rather than part
of its operating, investing and financing activities.
3. Cash management includes the investment of excess cash in cash equivalents.
4. Some of the transactions which represent movements between items of cash or cash
equivalent, are given below:
1. Cash deposited into Bank;
2. Cash withdrawn from Bank;
3. Purchase/Sale of Short-term Marketable Securities (neither held as Current Assets nor
held as investments). These transactions do not form part of cash flows.
CASH & CASH EQUIVALENTS
Cash: - It comprises cash in hand and demand deposits with bank.
Cash Equivalents: - These are short-term, highly liquid investments that are readily
convertible into known amounts of cash and which present insignificant risk of changes in
their values. Normally, an investment will be termed as cash equivalent only if it has a short
maturity period, say three months or less, from the date of its acquisition. Examples of cash
equivalent are treasury bills, commercial papers etc. which are purchased with cash that is in
excess of immediate needs.
CLASSIFICATION OF CASH FLOW
According to AS-3 (Revised), a cash flow statement should be presented in a manner that it
reports inflows and outflows of cash by classifying them into thee categories, namely:
operating, investing and financing activities. Classification of all activities into these
three categories helps the users of cash flow statement to assess the effect of these activities
on the cash and cash equivalents of the enterprise. Such information will be helpful in
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evaluating the relationship among these three activities. These three activities are explained
as below:
1.CASH FLOW FROM OPERATING ACTIVITIES
Operating activities are the main revenue of an enterprise. As such, they include cash flows
from those transactions and events which enter into the ascertainment of net profit or loss of
the enterprise. Examples of Cash Flow arising from operating activities are:
Cash receipts from the sale of goods and rendering of services.
Cash receipts from royalties, fees, commissions and other revenue.
Cash payments to suppliers for goods and services.
Cash payments to and on behalf of employees.
Cash receipts and Cash payments of an insurance enterprise for premiums and
claims, annuities and other policy benefits.
Cash payments or refunds of income taxes unless
2.CASH FLOW FROM INVESTING ACTIVITIES
Investing activities are the acquisition and disposal of long-term assets and other
investments not include in cash equivalents.
Cash flow from investing activities is ascertained by analyzing the changes in Fixed Assets
and Long-term investments in the beginning and at the end of the year.
Examples of Cash Flow arising from investing activities are:
Cash payments to acquire fixed assets (including intangibles). These payments
include those relating to capitalized research and development cost and self-
constructed fixed assets.
Cash receipts from disposal of fixed assets (including intangibles).
Cash advances and loans made to the third parties (other than advances and loans
made by a financing enterprise).
Cash receipt from the repayment of advances and loans made to third parties (other
than advances and loans of a financing enterprise).
3. CASH FLOW FROM FINANCING ACTIVITIES
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Financing activities are activities that result in changes in the size and composition of the
owners’ capital and borrowings of the enterprise.
Cash flow from financing activities is ascertained by analyzing the changes in Equity Share
Capital, Pref. Share Capital, Debentures and other borrowings.
Examples of Cash Flow arising from financing activities are:
Cash proceeds from issuing shares or other similar instruments.
Cash proceeds from issuing debentures, notes and bonds.
Cash payments for Redemption of Pref. Shares.
Cash payments of amounts borrowed.
Cash payments for equity dividend & Pref. Dividend.
Cash payments for Interest on Debentures and Loans.
OBJECTIVES OF CASH FLOW STATEMENT
Basically the purpose of Cash Flow Statement is to ascertain the reasons for the net flow
and not simply the net flow which is already known.
The objectives of Cash Flow Statement are as follows:
To ascertain the specific sources from which Cash & Cash Equivalents were
generated by an enterprise.
To ascertain the specific uses for which Cash & Cash Equivalents were used by an
enterprise.
To ascertain the net changes in Cash & Cash Equivalents indicating the difference
between total sources and total uses between the dates of two Balance Sheets.
LIMITATIONS OF CASH FLOW STATEMENT
The major limitations of cash flow statement are summarized below:-
Ignores Non-cash transactions – it ignores the non-cash transactions. In other
words, it does not take into consideration those transactions which do not affect the
cash e.g., is shares against the purchase of fixed assets or Stock-in-trade, conversion
of debentures into equity shares.
Secondary Data Based Statement – It is a secondary data based statement. It
merely rearranges the primary data already appearing in other statement viz.,
Income Statement and Balance Sheet.
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Historical statement – It is basically historical in nature unless projected Cash Flow
Statements are prepared to plan for the future.
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Interpretation
After study this cash flow statement we can interpret that in the operating activity there is a
cash outflow from operating activities of Rs. 311301000 in 2008 but in 2009 there is a cash
inflow of Rs.1840584000.In investing activity there was cash outflow of Rs.5509000 in
2008 and but in 2009 there is cash outflow of Rs. 2231000 which is less in comparison to
2008 and the cash flow from financing activity in secured loan in 2008 is increased by Rs
8033000 but decrease in 2009 up to Rs. 2181524000 it means company got the secured
loan in 2008 but in 2009 they paid their loans and in the case of unsecured loans: In 2008
company got the loan of Rs.220808000 and in 2009 they paid their loans of Rs.1919350000
CASH MANAGEMENT IN BHEL
The Corporate Office of BHEL governs cash position in the BHEL, HARIDWAR. The unit
is dependent on the Corporate Office for the procurement of the cash. The Corporate Office
fulfills all the cash requirements of the unit. The unit prepares cash budget for the whole
year. A copy of the cash budget is sent to the Corporate Office. The Corporate Office
examines the cash budget and sanctions the funds accordingly. The unit keeping its
expenses in view makes a request to the Corporate Office for the issue of the cash. The
Corporate office then sends an Advice Note of the amount, requested by the unit, for the
withdrawal of cash. After this the unit can withdraw the amount as specified in the advice
note.
All the cash procured by the unit, through external sources is deposited in the bank account
of the Corporate Office, which is, then transferred to the Corporate Office. At the end of
each day the unit does not hold any cash.
The unit makes all the payments to the suppliers and contractors through the cheque. The
cash section takes the decision regarding the payment to the supplier itself. The decision is
basically based on the seniority of the payment, the amount to be paid, the period lag in the
payment. Analyzing all these facts the cash section issues cheques to the suppliers and
contractors for the payment.
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In short, it can be said that the BHEL has a centralized control of cash. The Corporate
Office transfers the cash to any individual unit, according to their day to day operational
requirements.
CASH SECTION IN BHEL
Achievements of Cash section during 2008-09
1. Bank reconciliation completed up to 28.02.2009
2. Very Very Old outstanding cheque/DD’s have been recovered
1.65+2.45+.15+3.11=7.36 lac.
3. Interest on delayed credits recovered.
4. Reversal of Excess debit by bank.
5. 65000 DD’s deposited in Bank and success to avail the credits in time.
6. No o/s cheque/DD as per agreement is pending with bank.
7. To accommodate with change in format of SBI & HDFC e-payment system.
8. To accommodate with Oracle system establish in SB section.
9. Clubing of vouchers of same vendor in SB to ensure man hour saving
10. Establishment of internal check on e-payment.
11. Development of updation system & accurate JV preparation .
12. Service tax/I.TAX payment/Excise duty payments are being made on due dates
through on-line SBI system.
13. Disposal of All Coins except amounting to Rs. 0.14 lacs containing 0.50 paise &
0.25 paise for which efforts Are being made
14. 100% despatch of forwarding letters to vendors
15. 100 % e-payment to employees with learn & establish process.
Cash Section Activities
(A) Cash Receipt:- Proposed Activity
a: at plant counter
b : at main admn.counter Pay-in-slips should be computerized
c : issue of Cash receipt by concerned depositing section based on
d : handing over of cash to Head Cashier which cash Receipt shall
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e : entry in Cash book be generated on line. As such Point
f : preparation of bank pay-in-slip c, e, h, i & j at (A) shall be -
g : deposit in Bank discontinued.
h : reconciliation of receipt
i : segregation of all receipt section wise
j : sending of cash receipt to concerned section
k : receipt of coins from canteen
(B) Cash Payments:-
a: receipt vouchers from various section of finance
b : handing over of cash by head cashier for payment at counter
c : at plant counter
d : at main admn.counter
e : entry in petty Cash book
f : balance of cash handing over of cash to Head Cashier
g : online Cash control numbers on paid vouchers
h : reconciliation of paid vouchers with reference to petty cash books
i : sending of paid vouchers to record room
j : disposal of coins through Banks & at counters
(C) Cash withdrawal:-
a : from SBI for daily routine payment
b : for salary/supplementary payments
(D) Disbursement of Salary & Supplementary payment
a : preparation of group wise sheets.
b : group wise boxing
c : reconciliation of boxing It is proposed that, salary/suppl.payment
d : pay packeting by cashiers should be made through ATM, by approaching
e : disbursement of salary/suppl. Bank For installation of ATM Facility-
f : collection of unpaid amount in BHEL Factory Premises.
g : preparation of unpaid sheets
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h : reconciliation of cash
(A) PAYMENT THROUGH BANK & CHEQUES
Receipt of vouchers from various sections
Receipt of LC payments advices from F.P. Section
Receipt of LC payments advices from Store bills Section.
PAYMENT:-
(A) Direct Supplies
1 All vouchers are allotted cash control nos online.
2 Vouchers are segregated category wise
3 Again segregated amount wise i.e. <20000/- , >20000/- to <100000/- & >100000/-.
4 Online preparation of cheques ..
5 Printing of cheques.
6 Printing of cheques register as per C & B Manual.
7 Signature of first signatory on cheques.
8 Signature of second signatures on cheques.
9 Segregation of cheque forwarding memo from vouchers .
10 Recording of cheque no. on forwarding memos.
11 Printing of dispatch list.
12 Sending cheques alongwith list to admn.for dispatch.
13 Printing of daily JV on line.
14 List of vouchers for sending to record room.
(B) Through Bank Supplies
All vouchers are allotted cash control nos online.
Vouchers are segregated category wise
again segregated amount wise i.e. <20000/- , >20000/- to <100000/- & >100000/-.
Online preparation of DA for challan & demand drafts..
Printing of debit authority/cheques.
Printing of debit authority register as per C & B Mannual.
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Signature of first signatory on debit authority.
Signature of second signatory on debit authority’s.
Segregation of debit authority for draft/challan and lsc’s.
debit authority for lsc’s sent to SB Section & draft/challans sent of bank
collection of draft/challans from banks
Segregation of draft forwarding memo from vouchers
Recording of draft no. on forwarding memos.
Sending drafts to admn.for dispatch.
Printing of daily JV on line.
List of vouchers for sending to record room.
(C) Payment through LC
Segregation of LCs into interest bearing & collection basis
Further segregation into Bankwise Reconciliation to be-
Sending of documents to Banks computerized.
Online feeding of retired LCs documents On daily basis updation
Online feeding of debit amount. Shall be made.
Sending Indiginious LCs for payment to Bank.
(D) Payment through E- Banking.
Receipt of vouchers
Payment to DGFT through ICICI Bank.
Payment of Excise duty through SBI
Takes longer time to access the site.
Cheque’s/DD’ Receipt
Receipt from Sales/others
Preparation of list as per Cash & Bank manual
segregation of local/outside Cheque’s/DD’s
bank wise segregation of cheque’s/DD’s
preparation of bank pay-in-slip Bank wise,cheques,dd’s & a/c wise
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issue of cash receipt
entry in cash book
segregation of all receipt section wise
sending of cash receipt to concerned section
reconciliation of receipt
CDR/FDR/Bank Guarantee’s
Receipt of CDR/FDR/Bank Guarantee’s from various section of finance & recording
in register thereof.
Release of CDR/FDR’s as release orders of concerned section
Return of matured Bank Guarantee’s to concerned section.
Bank Reconciliation of A/Cs:-
Taking of daily statements from SBI, HDFC, ICICI Bank.
Searching of unidentified Dr/Cr with Bank.
Matching of figures instrument-wise with reference to daily receipts and payments.
Preparation of outstanding w.r.t. Dr/Cr of Banks.
Preparation of weekly and monthly D.B.T.(Dr/Cr) of all Banks and its reporting to
Corporate Finance.
Monthly reconciliation of all Banks and its reporting to I.A. and other concerned
Sections of Finance through J.Vs.
Preparation of A/Cs adjustments and JVs for monthly General Ledger.
Review/ reconciliation with PNB, Canara Bank from time to time.
MIRs
Fund requisition to Corporate Finance on daily and weekly basis.
Daily reporting of receipts/ payments w.r.t. funds allocated.
Weekly report of expenditure in the form CF-4
Weekly pending report.
CF -5 for Corporate Finance.
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OPPORTUNITIES & CONSTRAINTS
During this summer training I got the following opportunities & constraints:
Opportunities
• To work in Friendly Environment.
• Helpful staff of the Company.
• To interact with more MBA’s guys of different Institutes.
• To enhance the knowledge.
• Team Spirit.
Constraints
Working hours for trainees were allotted from 1.00 PM to 4.00 PM only, according
to BHEL policy. Increase in the allotted hours could have further improved the
quality of the project.
Due to non-availability of concerned executives during the allotted hours the time of
interaction available was limited.
CORRELATION OF THE CONCEPTS OF MANAGEMENT WITH
REAL-LIFE SITUATION
There are so many important concepts of Management, which are directly applicable on
real life situations such as: -
LEADERSHIP
During my Summer Training, I had found that what an effective leader could do for any
firm. How an effective leader with good communication skills and excellent motivation
techniques can improve the performance of the group leading to an overall development
of the organization.
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I have also found that markets scenario the near participative style of leadership is the
best one, as it allows every staff member from top to bottom to lead.
COORDINATION
The coordination also plays an efficient role in the development of any organization.
Any organization is set to be successful when its entire staff coordinates together and
work as one. The coordination applied during my Summer Training, students of different
institutes shared their views in-group discussions. I have learnt so many concepts by
them and the coordination between us was really good.
MOTIVATION
As we have learnt in the First Semester that Motivation plays an important role in the
development of any organization. I was motivated with the sincerity and hard working of
my reporting officer Shri Vivek Goel and other finance personnel. In Finance Department
of HEEP HARIDWAR, everybody appreciated Shri Vivek Goel for his excellent role
especially in Economic Value Added.
COMMUNICATION
For being an effective leader the basic need is effective communication skills. I had seen
that our training in charge had excellent communication skills with top to bottom. The
Communication also helped me in communicating the senior officials and employees of
BHEL, when I went for an Interactive Session regarding my Project
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After study this cash flow statement we can interpret that in the operating activity
there is a cash outflow from operating activities of Rs. 311301000 in 2008 but in
2009 there is a cash inflow of Rs.1840584000.In investing activity there was cash
outflow of Rs.5509000 in 2008 and but in 2009 there is cash outflow of Rs. 2231000
which is less in comparison to 2008 and the cash flow from financing activity in
secured loan in 2008 is increased by Rs 8033000 but decrease in 2009 up to Rs.
2181524000 it means company got the secured loan in 2008 but in 2009 they paid
their loans and in the case of unsecured loans: In 2008 company got the loan of
Rs.220808000 and in 2009 they paid their loans of Rs.1919350000
As we know that the current ratio of any company may be 2:1 but according to the
U.S.A. Accounting standard any company should maintain a ratio of 1.33:1 .
Moreover, as we can see from the above table the current ratio of BHEL is and in
2006-07 is 1.5:1 In 2007-08, the current ratio goes down to 1.4:1 due to increase in
the current Liabilities and decrease in current assets as compared to previous year. In
2008-09 the ratio is going down to 1.3:1 due to decrease in current assets and
current liabilities.
Liquid ratio indicates that what amounts of liquid assets are available for each rupee
of current liability. We know that the liquid ratio of any company may be 1:1, is
considered to be satisfactory. Now comparing the company's position according to
the liquid ratio. In 2006-07 the ratio is 1.16:1 and in 2007-08 the ratio is 1.10:1 and
in 2008-09 the ratio is also decrease to 1.02:1
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CONCLUSION
From the above finding we can say that B.H.E.L is in good financial position. Above
analysis of Cash Management shows that company has effective & sufficient level of Cash.
There obtained some weak and strong points of the company during the analysis of the
financial statements which are follows:
As just only the analysis of the financial statement is not only mean to reach our
conclusion we can substitute it for sound judgement.
This performance is significant in the backdrop of the delay deferment of orders in
BHEL`s business areas. The company achieves this due to its strong basics and
continues focus on strong strategies.
On seeing the liquidity position of BHEL, I conclude that it is not very good as the
current assets are in the form of inventories and debtors.
The company has also drawn up a new vision, mission and Values statements.
On seeing the profitability of the BHEL its overall performance is very good. A
continuous increase in the values of EPS (except year 1999) and DPS results,
investors feel safe to invest money in BHEL
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SUGGESTIONS
From the above finding we can say that B.H.E.L is in good financial position. Above
analysis of Cash Management shows that company has effective & sufficient level of Cash.
Company has adopted sound policies. It should improve its investment climate due to
positive impulses in the power sector like the on- going reforms, thrust on accelerated power
development programme, extension of accelerated generation & supply programme.
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LIMITATIONS OF THE STUDY
Time Constraint: Less time available for training period.
Hectic Schedule of Staff: Due to less time available with the staff.
Practical Knowledge: Due to risky task the staff could not be able to handover
some of their task to the trainees.
Less interaction with the manager of books and budget department: We
could not be able to collect the needed information up to the mark.
Step by step cost of production is not calculated that’s why it is not possible
to recognize the factors going to hike the cost.
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BIBLIOGRAPHY
Periodicals and magazines brought out by BHEL at company and plant (HEEP)
levels.
Data collected from various Department of HEEP.
www.bhel.com - Financial Information.
http://www.appliedlearninglabs.com/solutions/vbm.html
Website of BHEL - http://hwrnet/
Personal discussions with concerned executives of Finance Department of HEEP,
Haridwar.
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ANNEXTURE
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Balance Sheetas at March 31, 2007
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