Term Paper

On

Reliance Energy

“"Our dreams have to be bigger. Our ambition higher. Our commitment deeper. And our efforts greater. This is my dream for Reliance and for India."

- Dhirubhai H. Ambani Founder & Visionary

INDEX

Reliance Energy Limited (formerly BSES Limited) ACKOWLEDGEMENT ------------------------------------------------------------------------------- 1

History Of Company -------------------------------------------------------------------------------- 2- 4 CURRENT SCENARIO ------------------------------------------------------------------------------ 5-6

Infrastructure and Services -------------------------------------------------------------------------- 6-8 VISION ----------------------------------------------------------------------------------------------------- 8 MISSION – Excellence in Energy--------------------------------------------------------------------- 9 ORGANIZATION -------------------------------------------------------------------------------------- 10

STAFFING AND TRAINING ----------------------------------------------------------------------- 11 MOTIVATION ------------------------------------------------------------------------------------------ 12 SOUND SYSTEM OF CONTROLL ---------------------------------------------------------------- 13 Mega Investment Plans--------------------------------------------------------------------------------- 13

Generation of Power: --------------------------------------------------------------------------------------------13 Distribution of Power:-------------------------------------------------------------------------------------------14 Transmission and Trading:--------------------------------------------------------------------------------------14

ISO Certification ---------------------------------------------------------------------------------------- 14 Reliance Energy has been awarded ISO-9001:2000 certificate for: ---------------------------------------15

Quality Management System: ------------------------------------------------------------------------ 15 Special features of Reliance Energy quality system ---------------------------------------------- 15 SWOT------------------------------------------------------------------------------------------------------ 16 GROWTH STRATEGIES ---------------------------------------------------------------------------- 17

ACKNOWLEDGEMENT

I would like to thank our esteemed faculty Dr. Madhvendra Mishra for

providing me with a rare combination of professional expertise and personal

touch. It would have been impossible to complete our paper on such a big

group without his valuable suggestions and able guidance. It is hard to

envisage the problems we would have faced without him.

I would also like to thank all other persons who helped me on various

occasions and kept my morale up and things going.

VANISHA TIWARI

(MBA200542)

Reliance Energy Limited (formerly BSES Limited)

History Of Company 1929

- The Company was incorporated on 1st October, at Mumbai under the Companies Act, VII of

1913 as "Bombay Suburban Electric Supply Limited". It carries on generation and supply of

electricity.

2002

-Reliance Industries Ltd. increases the stake in the company to 31.54%

-Signs confidentiality agreement for buying out Enron's stake in Dabhol Power Company

-Reliance group increases stake in the company from 38% to 40.29% through creeping

acquisition route

-Reliance Power Ventures acquires 28,28,545 shares of BSES Ltd, increases the stake to

28.30%

2003

- Company becomes part of the Reliance Group, with Mr Anil D Ambani, Vice Chairman and

Managing Director of Reliance Industries Ltd. unanimously being appointed by the Board as

Chairman of BSES.

-The name of BSES Ltd changed to Reliance Energy Ltd.

CURRENT SCENARIO

The power sector is undergoing tremendous changes. New technologies and business opportunities are

redefining the very nature of the business.

Reliance Energy Ltd. stated goal is to emerge as a world class power utility offering uninterrupted,

affordable, quality, reliable and clean power to millions of customers. The company aims at earning the trust

and confidence of all customers and stakeholders by consistently exceeding their expectations. In the

coming future it will emerge as an integrated power utility with interests in businesses from the well head to

the wall socket.

Achieving these large goals requires that the company works with single minded application, keeping the

larger picture in focus.

Reliance Energy Ltd. believes that all this can be made possible in large measure by unleashing the latent

capability of people.

People are the pivot in our planning.Reliance Energy Ltd. firmly believes that empowering people is the best

way to unleash capabilities

Reliance Energy Ltd is India's leading integrated power utility company in the private sector. It

has aggregate estimated group revenues of Rs. 8,100 crore (US$ 1.8 billion), and total assets of

Rs. 9,800 crore (US$ 2.2 billion). The group distributes nearly 16,000 million units of power to

over 5 million consumers in Mumbai, Delhi, Orissa and Goa, across an area covering 1,24,300

sq. kms. One of India's largest conglomerates, Reliance Industries, owns 51% of the company.

It has a significant presence in generation, transmission and distribution of power in Maharashtra,

Goa and Andhra Pradesh.Reliance Energy generates 941 MW of power, through its power plants

located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa.

.

Turn over(2005): 4168.76 crores

Revenue (2004):811.90 M

Revenue Growth (1 yr):38.80% Employees (2003):5,539

Infrastructure and Services

The Reliance Energy Ltd’s Infrastructure and Services has expertise in all areas from Power

Generation to Distribution and undertakes value added Consulting and Installation of power

projects.

Generation

The power generation plants include:

• 2x250 MW multi-fuel based thermal power station at Dahanu near Mumbai.

• 165 MW combined cycle power station at Kochi, in Kerala.

• 220 MW combined cycle power plant at Samalkot in Andhra Pradesh.

• 7.59 MW wind farm project at Jogimatti in the district of Chitradurga in Karnataka.

The total Installed capacity of the generating units is 892.59 MW.

Transmission

Company has 2x220 KV double circuit transmission line of 105 km and 25 km of multi circuit

transmission lines. REL uses CAD/CAM technology to develop river & railway bridges, power line

crossing etc. The Company has 3 state-of-the-art transmission stations at Versova, Ghodbunder

& Aarey with total installed capacity of 300 MVA, 300 MVA & 400 MVA respectively.

Distribution

Reliance Energy Ltd's network covers an area of about 1,24,300 sq. kilometers. REL has huge

customer base of 5 million with an annual consumption of 15,600 million units. In Mumbai, its network is made of 4124 distribution sub-stations, 2912 km of high tension (HT)

and 2966 km of low tension (LT) cable. REL has an installed distribution transformer capacity of

about 2422 MVA. The network has lowest distribution losses of 13.37% and maintains an uptime

of 99.98%.

Services

The Generation division has expertise in designing, engineering, erection, installation and

commissioning of power projects based on coal, lignite, combined cycle liquid, gas, wind as well

as co-generation projects.

Contracts and EPC Division: The division offers value added services in Engineering,

Procurement and Construction. Some of the prestigious projects executed include:

• 210 MW Gas Based Combined Cycle Power Plant for BSES Andhra Power Limited at

Samalkot

• 24 MW Bagasse fired Power Plant of Godavari Sugar Mills in North Karnataka and the

• 20MW project of Suryachakra Power Corporation Limited at Andaman.

• Development of Electrical System for Nuclear Power Corporation of India.

Creating the Power Capability

The Generation division has proven expertise in designing, engineering, erection, installation,

commissioning, operations and maintenance of power projects.

The division implements project plans for in house power projects and supports ventures

undertaken by other affiliate companies.

The division is fully integrated and has in house capabilities to address every aspect of power

projects including:

• Mechanical

• Civil

• Electrical

• Instrumentation &

• Environmental

VISION

To be amongst the most admired and most trusted integrated utility companies in the world, delivering reliable and quality products and services to all customers at competitive costs, with international standards of customer care - thereby creating superior value for all stakeholders.

To set new benchmarks in standards of corporate performance and governance through the pursuit of operational and financial excellence, responsible citizenship, and profitable growth.

GROWTH

Mission – Excellence in Energy

• To attain global best practices and become a world-class utility.

• To provide uninterrupted, affordable, quality, reliable and clean power to millions of customers.

• To achieve excellence in service, quality, reliability, safety and customer care.

• To earn the trust and confidence of all customers and stakeholders and by exceeding their expectations, make the company a respected household name.

• To work with vigour, dedication and innovation, towards achieving the ultimate goal of total customer satisfaction.

• To consistently achieve high growth with the highest levels of productivity.

• To be a technology driven, efficient and financially sound organization.

• To be a responsible corporate citizen, nurturing human values and concern for society, the environment and above all, people.

• To contribute towards community development and nation building.

• To promote a work culture that fosters individual growth, team spirit and creativity to overcome challenges and attain goals.

• To encourage ideas, talent and value systems.

• To uphold the guiding principles of trust, integrity and transparency in all aspects of interactions and dealings.

CORPORATE GOVERNANCE: • Chairman and Managing Director: Anil D. Ambani • Director Business Development: J. P. Chalasani • Director Finance: K. H. Mankad

ORGANIZATION STRUCTURE OF

STAFFING AND TRANING Reliance believes "Growth is Life" - for Reliance and for all Reliance people. Aspiring to achieve growth rates well above our industry’s average, we clearly have a need to hire, develop and motivate the best people in the world to help us drive that growth. staffing:

. Translating corporate strategies into a manpower plan & developing a long term programme

accordingly, Reliance Energy Ltd. is tracking down people with the combination of knowledge,

experience, skills & behaviour best suited to achieving the company’s objectives.

The focus of Staffing:

• Attract people with multi dimensional experiences & skills

• Induct talent with a new perspective to lead the company

• Develop a culture that attracts people to the company

• Locate people whose personalities fit the company’s values

• Devise methodologies for assessing psychological traits

• Seek out unconventional development ground for talent

• Design entry pay that competes on quality as well as quantum

• Anticipate & find people for positions proactively

To enable our growth, we are putting a great deal of effort behind creating a workplace where

every Reliance employee can reach their full potential and achieve maximum personal fulfillment

and impact.

At Reliance we offer world of opportunities to employees by giving them more freedom and

responsibility to chart their own course within the company. We offer comprehensive world-class

training and development resources. Networking, coaching and mentoring provide additional

opportunities for people to grow personally and professionally throughout their careers.

People can prepare themselves for future opportunities by creating and executing employee

development plans that will make them stronger candidates for positions they would like to move

into within the Organisation. Many of our Employees change roles several times during their

career, many moving within and across different businesses and functions. So you can change

jobs and move into new career areas without changing companies.

This could open doors to valuable experience within your chosen field, but it could also give you

opportunity to try something completely new. Want a chance to grow and develop throughout a

long-term career in a global company? Think about Reliance...

LearningandStaffing Reliance believes that continuous learning, constant training and development, is necessary not

only for self enrichment but also for ensuring retention of the best talent, besides providing

Reliance with a sustainable platform for growth in the business environment. Training programs

have been devised to develop cross-functional skills. The objective is to provide Reliance’s

people with an opportunity to address areas, not immediately relevant to their job profile, but

important from the perspective of all-round development and for holistic view. During the year,

336 training programs covering ove

Motivation

• Design human resource programs to support strategy, achievement and business performance

with focus on results with the HR Department encompassing the entire gamut of roles,

administrative to business partner to change agent.

• Scientific Management Planning combined with merit based recruitment and selection systems

leading to optimum sizing and right placement of the right person.

• Transparent Performance and potential assessment to bring out the training needs both on a

systemic and individual basis.

• Impart Technical or Managerial Training - leading to skill upgradation and enrichment, validating

performance enhancement and improvement paradigm.

• Provide a healthy system of compensation, rewards and incentives to recognize individual brilliance

and encourage team building and team efforts.

• Design career growth/development plan for employees with organizational growth earmarked by

generation of synergistic competencies.

• Provide a continuous learning and performance based culture.

• Achieve, preserve and enhance the reputation of Reliance Energy Ltd. being the 'Best place to

work' supplemented by a continuous never ending focus on "Employee Safety and Comfort."

• Ensure employee participation in Management through Shop/Plant Councils, Quality Circles and

Suggestion Scheme.

• Establish a free flowing information network of communication through exclusive use of Company's

newsletters, formal/informal forum of employees' association.

Sound system of internal control To establish and maintain a system of internal control, the Company has drawn up a policy which

includes a review of the risk management system and maintenance of a risk profile (both financial

and non-financial risks). Reliance Energy Ltd. has set up an effective internal audit function,

independent of the external auditor, to review the effectiveness of the risk management system.

Audit Committee of the Board oversees the risk management and internal control systems. This

system is designed to:

o Identify, assess, monitor and manage risk.

o Inform investors of material changes to the Company's risk profile.

Mega Investment Plans

Generation of Power:

The proceeds of the proposed offering will be utilized by Reliance Energy for financing its various

projects in generation, transmission, distribution and trading of power.

The Company is setting up the world's largest grassroots gas based mega power project at Dadri,

Ghaziabad district, western UP, about 40 kms from Delhi.

The gas feedstock for the project will be sourced from Reliance's Dhirubhai fields in KG - D6

basin off the Andhra Pradesh coast, the largest gas discoveries in the world in the year 2002-03.

The project is being implemented by a new company, Reliance EGen P. Ltd., with Reliance

Energy as the lead equity sponsor.

Distribution of Power:

Reliance Energy's 2 power distribution companies in Delhi (Discoms) propose to incur

substantial capital expenditure for systems development to meet load growth, minimize technical

and commercial losses. The total outlay is estimated to be around Rs. 3,500 crore (US$ 773

million).

Reliance Energy will be investing significantly in automation and systems improvement in its

Mumbai distribution area, to further bring down loss levels to global standards.

Reliance Energy has applied for licences for building new networks in various cities, such as

Bhandup, Vashi, Pune, Nasik, Nagpur, Aurangabad, the BEST area in Mumbai, the NDMC area

in New Delhi, and 12 areas under franchise in Gujarat.

Reliance Energy also intends to participate in the privatization process of distribution assets of

SEBs in select states, as opportunities arise.

Transmission and Trading:

In addition, Reliance Energy proposes to deploy substantial resources in emerging opportunities

in the areas of transmission and trading of power.

The aggregate capital investment by Reliance Energy and its affiliates over the next 5 years in

projects for generation, transmission, distribution and trading of power, is estimated at

approximately Rs. 20,000 crores (US$ 4,420 million)..

ISO Certification

ISO is a generic standard and represents a series of standards in the ISO 9000 architecture -

9001, 9002, 9003 and 9004. There is also the ISO 10000 architecture. ISO certification is

assigned of products and services. ISO is unique in monitoring the effectiveness of compliance to

set norms. A company has to give evidence and demonstrate that it is continually following the

guidelines prescribed. It also has to ensure that there are surveillance visits once every six

months.

ISO standards are as dynamic as our business conditions and changing requirements and the

need for setting higher and better benchmarks is duly recognised. Upgradation to ISO 9001 :2000

was done on 21st December 2003.

Reliance Energy has been awarded ISO-9001:2000 certificate for:

• Generation, transmission and distribution of electricity.

• Service in the field of electrical projects and related construction activities.

• Computer services in the field of electricity billing and related applications.

• Finance, HRD, Secretarial and Investor Service Centre (ISO 9002 certification in March

2001).

• ISO - 14001 certification for environmental management to Dahanu Thermal Power

Station.

Quality Management System:

• Reliance Energy has become the first electric supply utility in the country to establish an

effective and integrated ISO-9001:2000 quality assurance system.

• Reliance Energy has adopted ISO-9001:2000 quality management system in all the five

divisions of the Company for streamlining and continuous improvement of customer

service and internal operations.

• Using ISO-9001:2000 as a base, Reliance Energy had developed its own quality

system which goes even beyond the requirements of ISO Standard. .

Special features of Reliance Energy quality system :

• Involvement of management at all levels with effective creation of policies, vision,

mission, values, goals and support, communicated and implemented throughout the

organisation.

• Emphasis on customer satisfaction, specifying norms for service delivery to customer and

program for surveying customer preferences.

• Setting measurable, attainable and verifiable quality goals and performance indicators by

various divisions.

• Training of senior executives in managing for quality.

SWOT

Strengths of Reliance Energy:

• Diverse workforce

• Implements GIS system to upgrade its operations(customer, asset, environment, or

competitor related data and geography now become the integration framework for all its

databases)

• Loyalty and trustworthiness

• Awarded ISO 9001: 2000 certifications for generation, transmission and distribution of

electricity.

• ISO - 14001 certification for environmental management

• Involvement of management at all levels with effective creation of policies, vision,

mission, values, goals and support, communicated and implemented throughout the

organisation.

• Training of senior executives in managing for quality.

Weakness:

• Bering significant losses

• Limited operations only in metros

Opportunities:

• Setting up a world’s largest 3,300 MW gas-based power project at the Dhirubhai Ambani

Energy City at Dadri in Uttar Pradesh. The gas feedstock for the project will be sourced

from Reliance's Dhirubhai fields in KG - D6 basin off the Andhra Pradesh coast.]

• Various projects in generation, transmission, distribution and trading of power.

• Lowest level of Per Capita power consumption in India.

Threats:

• REL PROJECT UNDER FINANCIAL THREAT

Lenders are not willing to carry out an appraisal of the Rs 11,000 crore project until

Reliance Industries Chairman and Managing Director Mukesh Ambani and Reliance

Industries Vice-Chairman and Managing Director Anil Ambani resolve their dispute. REL has

sought a 90:10 debt-equity ratio for the project against the normal 70:30 ratio for funding

power projects. A 90:10 debt-equity ratio will mean a consortium of lenders will have to

extend loans of as much as Rs 9,900 crore.

• COMPETITION BY TPC

-TPC has been encroaching REL’s consumer base since 1998 leading to revenue loss of

Rs 90 Crore per year.

-REL appealed before MERC claiming TPC’s actions were in violation of its license.

-MERC has now restrained TPC from giving any new connections to customers with

energy requirement is below 1000KVA of maximum demand.

• From the competitors and government controlled organizations

GROWTH STRATEGIES

Strategy is focused on integration

“FROM WELL HEAD – TO WALL SOCKET” Pillars of REL’s growth strategy

- Generation of Power

- Distribution of Power - Transmission of power - Trading of power

Bundled services to maximize customer satisfaction

• Integrate employees' family into a larger "Corporate Family" through a host of welfare measures

like student scholarship scheme and cultural functions, sports and recreational supports, housing

etc.

• Have satisfied and motivated employees proud to be associated with Reliance Energy Ltd. with an

overall feeling of having achieved "Common Goals" through 'shared efforts' and 'participation'.

References

Sites: http://www.bworld.com.ph/current/today.html http://www.ril.com http://www.reuters.com/ http://economictimes.indiatimes.com/? http://www.capitalmarket.com/ http://www.indiainfoline.com/ http://www.equitymaster.com/research-it/ http://www.businessweek.com/

etc…..

Magazines:

Business World Business Today Business India The week

Etc…..