tarun_report by keralaguest

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									                    A

    SUMMER INTERNSHIP REPORT
                    ON



SAP SYSTEMS AT RELIANCE INFOCOMM



            SUBMITTED TO

   RELIANCE INFOCOMM Ltd., LUCKNOW




           SUBMITTED BY:
           TARUN GOYAL
           MBA-IT
           IIIT-Allahabad
                ACKNOWLEDGEMENT


I would like to thank my project guide Ms. Vijayshree Tiwari
madam who always helped me. It would have been impossible
to complete this project without her valuable suggestions and
able guidance. It is hard to envisage the problems I would have
faced without her.


I would also like to thank all my friends who helped me on
various occasions and kept my morale up and things going.




                                         TARUN GOYAL
                                               MBA – IT, IIIT-A
                         INDEX

1. About Reliance Group……………………….……………………………….1
2. About Reliance Infocomm……………………………..……………………..1
3. Milestones………………………………………………………………2
4. Infrastructure …………………………………………………………...4
      4.1 Reliance WebWorld………………………………………………4
      4.2 Reliance WebWorld Express…………………………………..…4
      4.3 Retail Shops……………………………………………………....5
      4.4 Payment Location…………………………………………………5
      4.5 Reliance Delivery Centers………………………………………..5
5. Reliance India Mobile (RIM)……………………………………………5
6. Technology Used………………………………………………………..6
6.1 GSM………………………………………………………………6
      6.2 Architecture of GSM network…………………………………….7
      6.3 CDMA…………………………………………………………...10
      6.4 Unique Features of CDMA………………………………………11
      6.5 Advantages of CDMA over GSM……………………………….12
      6.6 Fibre Optics………………………………………………………13
      6.7 Advantages of Fibre Optics……………………………………...14
7. Fibre Optics Network of Reliance………………………………………15
8. Dhirubhai Ambani Knowledge City……………………………………18
9. National Network Operations Centre…………………………………..19
10. Products
      10.1 Postpaid Plan……………………………………………………20
      10.2 Prepaid Plan……………………………………………………..21
      10.3 Calling Cards……………………………………………………22
      10.4 Handsets…………………………………………………………23
      10.5 R- Services………………………………………………………24
11. Porter‟s five Competitive Forces……………………………………...27
12. SWOT …………………………………………………………………28
13. Reliance Prepaid Analysis…………………………………………...…30
14. SAP……………………………………………………………………..44
      12.1 SAP Application Modules………………………………….……46
      12.2 SAP System Architecture…………………………………….….47
      12.3 SAP R/3 System…………………………………………………48
15. SAP System At Reliance Infocomm……….………………………….52
      15.1General Ledger Module……………………………………..…...52
      15.2 Account Payable Module………………………………………59
      15.3 Account Receivable Module…………………………………...75
      15.4 Controlling Module……………………………………………82
      15.5 Sales and Distribution Module…………………………………92
      15.6 Warehouse Management Module………………………………106
16. Recommendations…………………………………………………….109
Reliance Infocomm
Reliance Infocomm (RIC) is India's largest private telecom service provider with a
subscriber base of over 11.5 million. Reliance Infocomm has established a pan-
India, high capacity, integrated (wireless and wireline) and convergent (voice,
data and video) digital network, to offer services spanning the entire Infocomm
value chain - infrastructure, services for enterprises and individuals, applications
and consulting.
RIC is currently offering its wireless services in 1,100 towns and cities across
India. In January 2004, Reliance Infocomm (RIC) acquired 100 per cent of the
undersea cable company, FLAG Telecom for US$ 211 million through Reliance
Gateway Net Limited, a wholly owned subsidiary of RIC.
Reliance has built 80,000 kms of optic fibre backbone that connects over 90% of
India's population. Reliance realised that the main capital investment in building a
fibre optic backbone is the cost of digging. Reliance has put in eight ducts across
the country. Its network is future proof for the next 50 years. When new capacity
is needed it has to only blow the fibre at a very small incremental cost which will
be difficult to match.
The goal of Reliance Infocomm is to progressively expand its optic fibre network
and eventually cover 116,000 km, with the ability to seamlessly connect every
individual, home, and office in all 640,000 villages and 2,500 towns and cities of
India.


Milestones

The Dream, 1999
"Make a phone call cheaper than a postcard and you will usher in a revolutionary
transformation in the lives of millions of Indians" - Dhirubhai Ambani
The Reality, November 15
Reliance Infocomm begins Project Planning

2000
May 10
Optic fibre laying process commences in Gujarat, Andhra Pradesh &
Maharashtra

2001
May 1
First Media Convergence Node made "Ready for Electronics" at Jaipur

2002
January 15
First Base Transceiver Station (BTS) made "Ready for Electronics"
February 25
Obtains International Long Distance License from Govt. of India
December 22
Commissions 1st Optic Fibre Backbone ring
December 27
Hon'ble Prime Minister of India, Atal Behari Vajpayee e-inaugurates Reliance
Infocomm
Hon'ble Union Minister for Parliamentary Affairs, Information Technology and
Communications, Pramod Mahajan, inaugurates NNOC

2003
January 15
Introduces Dhirubhai Ambani Pioneer Offer for Reliance IndiaMobile service
February 14
Launches Reliance WebWorld in top 16 cities
April 25
Introduces colour handsets
May 1
Launches Reliance IndiaMobile Service commercially in top 92 cities
with one million customers.
June 10
Launches India's first wireless Point of Sale (POS)
July 1
Introduces "Monsoon Hungama" Offer: Instant multimedia mobile phone and
connection for just Rs 501.
Sets world record - acquires one million customers in 10 days
September 20
"Navratri" a data service in R-World posts a world record of 10 million downloads
on the first day of the launch.
September 30
R World clocks a phenomenal 1 billion hits in 1 month
October 24
Deploys pilot of Home Netway in Mumbai
October 30
Reliance becomes India's largest mobile service provider within 7 months of
commercial launch
November 3
Customer base touches 5 million
November 21
Launches International SMS to 159 countries launched

2004
January 12
International wholesale telecommunications service provider, FLAG Telecom
amalgamates with Reliance Gateway, a wholly owned subsidiary of Reliance
Infocomm
February 9
Launches RIM Prepaid with attractive offer - For Rs 3500 get a Motorola C131
mobile phone and Rs 3240 worth of re- charge vouchers instantly and stay
connected for 1 year
February 17
Reliance subsidiary Flag Telecom announces FALCON Project - a major new
Middle East Loop Terabits Submarine Cable System with links to Egypt and
Hong Kong via India
March 22
Reliance Infocomm launches multi-player gaming on RIM handsets - a first in
India
June 8
Reliance Infocomm introduces World Card - a Prepaid International calling card
for affordable and convenient ISD calls from India.
September 9
Introduces Railway Ticket booking from R World data applications suite of
Reliance IndiaMobile

2005
January 04
Reliance introduces first e-recharge facility in CDMA in India.
January 24
Reliance IndiaMobile announces mega rural plan to cover 4 lakh villages and 65
crore Indians by December 2005.
January 27
Post Offices to sell Reliance Prepaid Vouchers
March 11
Reliance Infocomm to provide connectivity for Diamond Jubilee Dandi March
March 21
Reliance Infocomm join hands with LG Electronics to accelerate Internet
penetration in India
April 12
Reliance Infocomm flags off India's largest Retail chain - WebWorldExpress
May 18
Reliance launches "zero rental" plans with lowest call rates
June 01
Reliance launches 'incoming only' RCV
June 07
Reliance Infocomm ties up with SBI for RIM Bill payment
June 16
Reliance mobile's R World bags international award
June 26
Anil D. Ambani appointed Chairman of Reliance Infocomm
Infrastructure
Reliance WebWorld

Reliance WebWorld is the retail interface initiative of the Reliance Infocomm and
a part of Reliance's strategy of vertical integration.

To service & support customers of Reliance IndiaMobile is the genesis of
Reliance WebWorld, the largest retail chain in the history of India and Indian
retailing.

Reliance WebWorld is a world-class nationwide chain of retail outlets for all
Infocomm products and services, digital information, entertainment and
communication in Real Broadband. Each store has three modules - a Customer
Convenience Centre, a JAVAGREEN, and a Broadband Centre (BBC). While
JAVAGREEN is a gourmet coffee bar, at the broadband centre one can enjoy
video chat and conferencing, multiplayer online gaming, Digital Electronic News
Gathering (DENG), digital photo imaging, virtual office and high-speed Internet
surfing - about 100 times faster than a dial-up.

Reliance Webworld Express

Reliance 'Webworld Express' is the retail and customer service outlet of Reliance
Infocomm.

Reliance Webworld Express is franchised store in the neighborhood of customer
providing service & support to customers of Reliance 'IndiaMobile' and Reliance
'IndiaPhone'.

Retail Shops
Retail shops of Reliance are located in every cities and towns. Retail shop offers
Reliance IndiaMobile Services. These retail shops are connected online so
information can be obtained on the Internet.

Payment Location

To help the customers to pay monthly bills, Reliance Infocomm has installed drop
boxes at various locations through out the city. The drop boxes are located at
Webworlds, retail shops, Vimal showrooms and various bank branches.

Reliance Delivery Centers

Reliance Delivery Centers provide information about accounting transactions and
collection of handsets / recharge vouchers to Reliance POS (point of sale), ISA
(Independent Sales Agent), DSA (Direct Sales Agent) or Distributor.
Reliance India Mobile (RIM)

PAN India network and town coverage

      80,000 kms of optic fibre backbone that connects over 90% of India's
       population

      Wireless network covering over 2400 cities/towns; to expand to over 5700
       cities and 4,00,000 villages by the end of year 2005.

      4300 Base Transceiver Stations (BTSs) across the country, to increase to
       nearly 8500 by the end of year 2005.

      Network with superior reliability

      All this managed from our state-of-the-art national network operations
       centre in Mumbai.

The coverage of Reliance includes following states: Andhra Pradesh, Bihar,
Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya
Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamilnadu, Uttar Pradesh
(East), Uttar Pradesh (West), West Bengal




Technology Used
Reliance Infocomm is using both CDMA and GSM technology currently. Because
of the advantages of CDMA technology Reliance Infocomm started with CDMA
technology, but now it is also using GSM technology for international roaming.
Reliance Infocomm is using GSM technology because of the lack of
infrastructure available in some countries for CDMA technology. In India,
Reliance Infocomm has built 80,000 km of fibre optics backbone that covers
almost 90% of Indian population. Because of the advantages of CDMA
technology and capacity of fibre optics cables to carry data Reliance Infocomm is
able to provide high quality service at a lower rate to its subscribers. Comparison
of both GSM and CDMA technology is given below that show how better is
CDMA technology.

GSM
Short for Global System for Mobile Communications, one of the leading digital
cellular systems. GSM is a form of multiplexing which divides the available
bandwidth among the different channels. GSM is a combination of time and
frequency division multiplexing. The FDM part involves the division of frequency
of 25MHz bandwidth into 124 carrier frequencies. Each of these carrier
frequencies is then divided in time, using the TDM scheme.

GSM uses narrowband TDMA, which allows eight simultaneous calls on the
same radio frequency. Speech is digitally encoded and transmitted through the
GSM network as a digital stream.

GSM was first introduced in 1991. Now, GSM service was available in more than
100 countries.

From the beginning, the planners of GSM wanted ISDN compatibility in terms of
the services offered and the control signaling used. However, radio transmission
limitations, in terms of bandwidth and cost, do not allow the standard ISDN B-
channel bit rate of 64 kbps to be practically achieved.

Users need a SIM (Subscribers Identification Module) card inside the handset for
GSM service.

A unique feature of GSM, not found in older analog systems, is the Short
Message Service (SMS). SMS is a bi-directional service for short alphanumeric
(up to 160 bytes) messages. Messages are transported in a store-and-forward
fashion. For point-to-point SMS, a message can be sent to another subscriber to
the service, and an acknowledgement of receipt is provided to the sender. SMS
can also be used in a cell-broadcast mode, for sending messages such as traffic
updates or news updates. Messages can also be stored in the SIM card for later
retrieval.

Architecture of the GSM network

A GSM network is composed of several functional entities, whose functions and
interfaces are specified. Figure 1 shows the layout of a generic GSM network.
The GSM network can be divided into three broad parts. The Mobile Station is
carried by the subscriber. The Base Station Subsystem controls the radio link
with the Mobile Station. The Network Subsystem, the main part of which is the
Mobile Services Switching Center (MSC) performs the switching of calls between
the mobile users, and between mobile and fixed network users. The MSC also
handles the mobility management operations. Not shown is the Operations and
Maintenance Center, which oversees the proper operation and setup of the
network. The Mobile Station and the Base Station Subsystem communicate
across the Um interface, also known as the air interface or radio link. The Base
Station Subsystem communicates with the Mobile services Switching Center
across the A interface.
Figure 1. General architecture of a GSM network


Mobile Station
The mobile station (MS) consists of the mobile equipment (the terminal) and a
smart card called the Subscriber Identity Module (SIM). The SIM provides
personal mobility, so that the user can have access to subscribed services
irrespective of a specific terminal. By inserting the SIM card into another GSM
terminal, the user is able to receive calls at that terminal, make calls from that
terminal, and receive other subscribed services.

The mobile equipment is uniquely identified by the International Mobile
Equipment Identity (IMEI). The SIM card contains the International Mobile
Subscriber Identity (IMSI) used to identify the subscriber to the system, a secret
key for authentication, and other information. The IMEI and the IMSI are
independent, thereby allowing personal mobility. The SIM card may be protected
against unauthorized use by a password or personal identity number.

Base Station Subsystem
The Base Station Subsystem is composed of two parts, the Base Transceiver
Station (BTS) and the Base Station Controller (BSC). These communicate across
the standardized Abis interface, allowing (as in the rest of the system) operation
between components made by different suppliers.
The Base Transceiver Station houses the radio transceivers that define a cell
and handles the radio-link protocols with the Mobile Station. In a large urban
area, there will potentially be a large number of BTSs deployed, thus the
requirements for a BTS are ruggedness, reliability, portability, and minimum cost.

The Base Station Controller manages the radio resources for one or more BTSs.
It handles radio-channel setup, frequency hopping, and handovers, as described
below. The BSC is the connection between the mobile station and the Mobile
service Switching Center (MSC).

Network Subsystem
The central component of the Network Subsystem is the Mobile services
Switching Center (MSC). It acts like a normal switching node of the PSTN or
ISDN, and additionally provides all the functionality needed to handle a mobile
subscriber, such as registration, authentication, location updating, handovers,
and call routing to a roaming subscriber. These services are provided in
conjunction with several functional entities, which together form the Network
Subsystem. The MSC provides the connection to the fixed networks (such as the
PSTN or ISDN). Signalling between functional entities in the Network Subsystem
uses Signalling System Number 7 (SS7), used for trunk signalling in ISDN and
widely used in current public networks.

The Home Location Register (HLR) and Visitor Location Register (VLR), together
with the MSC, provide the call-routing and roaming capabilities of GSM. The HLR
contains all the administrative information of each subscriber registered in the
corresponding GSM network, along with the current location of the mobile. The
location of the mobile is typically in the form of the signalling address of the VLR
associated with the mobile station. The actual routing procedure will be described
later. There is logically one HLR per GSM network, although it may be
implemented as a distributed database.

The Visitor Location Register (VLR) contains selected administrative information
from the HLR, necessary for call control and provision of the subscribed services,
for each mobile currently located in the geographical area controlled by the VLR.
Although each functional entity can be implemented as an independent unit, all
manufacturers of switching equipment to date implement the VLR together with
the MSC, so that the geographical area controlled by the MSC corresponds to
that controlled by the VLR, thus simplifying the signalling required. Note that the
MSC contains no information about particular mobile stations --- this information
is stored in the location registers.

The other two registers are used for authentication and security purposes. The
Equipment Identity Register (EIR) is a database that contains a list of all valid
mobile equipment on the network, where each mobile station is identified by its
International Mobile Equipment Identity (IMEI). An IMEI is marked as invalid if it
has been reported stolen or is not type approved. The Authentication Center
(AuC) is a protected database that stores a copy of the secret key stored in each
subscriber's SIM card, which is used for authentication and encryption over the
radio channel.

CDMA
CDMA (Code-Division Multiple Access), a digital cellular technology that uses
spread-spectrum techniques. Unlike competing systems, such as GSM, that use
TDMA, CDMA does not assign a specific frequency to each user. Instead, every
channel uses the full available spectrum. Individual conversations are encoded
with a pseudo-random digital sequence. CDMA consistently provides better
capacity for voice and data communications than other commercial mobile
technologies, allowing more subscribers to connect at any given time, and it is
the common platform on which 3G technologies are built.

Traditionally radio communication systems have separated users by frequency
channels, time slots, or both. More recently several hybrid FDM-TDM digital
systems have been developed, ostensibly to enhance service quality and
capacity. In all these systems, each user is assigned a particular time-frequency
slot. In large systems the assignments to the time-frequency slots cannot be
unique. Slots must be reused in multiple cells in order to cover large service
areas. Satisfactory performance in these systems depends critically on control of
the mutual interference arising from the reuse.

CDMA consistently provides better capacity for voice and data communications
than other commercial mobile technologies, allowing more subscribers to
connect at any given time, and it is the common platform on which 3G
technologies are built.

CDMA is a "spread spectrum" technology, allowing many users to occupy the
same time and frequency allocations in a given band/space. As its name implies,
CDMA (Code Division Multiple Access) assigns unique codes to each
communication to differentiate it from others in the same spectrum. In a world of
finite spectrum resources, CDMA enables many more people to share the
airwaves at the same time than do alternative technologies.

In the CDMA technology, each station is allotted a separate sequence number.
Every station transmits the data in binary form. When it has to send 1, it transmits
the sequence as it is. For 0, it sends 1‟s complement of sequence number. Thus
the receiving channel identifies the intended data by taking dot product of
sequence number with data received.
Unique features of CDMA

Frequency reuse
Each BTS in a CDMA network can use all available frequencies. Adjacent cells
can transmit at the same frequency because users are separated by code
channels, not frequency channels. This feature of CDMA, called "frequency
reuse of one," eliminates the need for frequency planning.

Power control
Power control is a CDMA feature that enables mobiles to adjust the power at
which they transmit. This ensures that the base station receives all signals at the
appropriate power. The CDMA network independently controls the power at
which each mobile transmits. Both forward and reverse links use power control
techniques.
If all mobiles transmitted at the same power level, the base station would receive
unnecessarily strong signals from mobiles nearby and extremely weak signals
from mobiles that are far away. This would reduce the capacity of the system.


Rake Receiver
The rake receiver is a CDMA feature that turns what is a problem in other
technologies into an advantage for CDMA. CDMA's rake receiver is multiple
receivers in one. The rake receiver identifies the three strongest multi-path
signals and combines them to produce one very strong signal. The rake receiver
therefore uses multipath to reduce the power the transmitter must send. Both the
mobile and the BTS use rake receivers.
Handoff
Handoff is the process of transferring a call from one cell to another. This is
necessary to continue the call as the phone travels. CDMA is unique in how it
handles handoff. A soft handoff establishes a connection with the new BTS prior
to breaking the connection with the old one. This is possible because CDMA cells
use the same frequency and because the mobile uses a rake receiver. A hard
handoff requires the mobile to break the connection with the old BTS prior to
making the connection with the new one. CDMA phones use a hard handoff
when moving from a CDMA system to an analog system because soft handoffs
are not possible in analog systems.

Advantages of CDMA over GSM:
Coverage

CDMA‟s features result in large coverage area. Power control helps the network
dynamically expand the coverage area. Also the coding and interleaving provide
the ability to cover a larger area for the same amount of available power used in
other systems.

Capacity

CDMA capacity is ten to twenty times that of analog systems, and it's up to four
times that of TDMA. Reasons for this include:

      CDMA's universal frequency reuse
      CDMA users are separated by codes, not frequencies
      Power control minimizes interference, resulting in maximized capacity.
      CDMA's soft handoff also helps increase capacity. This is because a soft
       handoff requires less power.

Clarity

Often CDMA systems can achieve "wireline" clarity because of CDMA's strong
digital processing. Specifically:

      The rake receiver reduces errors
      The variable rate vocoder reduces the amount of data transmitted per
       person, reducing interference.
      The soft handoff also reduces power requirements and interference.
      Power control reduces errors by keeping power at an optimal level.
      CDMA's wide band signal reduces fading.
      Encoding and interleaving reduce errors that result from fading.

Cost
CDMA's better coverage and capacity result in cost benefits:

      Increased coverage per BTS means fewer are needed to cover a given
       area. This reduces infrastructure costs for the providers.
      Increased capacity increases the service provider's revenue potential.

CDMA costs per subscriber has steadily declined since 1995 for both cellular and
PCS applications.

Compatibility
CDMA phones are usually dual mode. This means they can work in both CDMA
systems and analog cellular systems. Some CDMA phones are dual band as well
as dual mode. They can work in CDMA mode in the PCS band, CDMA mode in
the cellular band, or analog mode in an analog cellular network.

Customer satisfaction
CDMA results in greater customer satisfaction because CDMA provides better:
      Voice quality
      Longer battery life due to reduced power requirements
      No cross-talk because of CDMA's unique coding
      Privacy--again, because of coding.

Privacy
CDMA technology enhances privacy through the spreading of voice signals.
CDMA technology transmits voice signals as a digital sequence. Then only the
intended station is able to access the signals because of code sequence. Every
station has a unique code sequence that is matched with the digital sequence to
get the intended data. Thus enhances privacy.

Use of fiber optics cable

Fiber Optics cables are used in CDMA technology because in CDMA technology
digital signal are transmitted and optical fiber transmits digital signals at a very
fast rate. Thus it takes the advantages of fiber cables.

Fiber optics
Fiber optics (optical fibers) are long, thin strands of very pure glass about the
diameter of a human hair. They are arranged in bundles called optical cables and
used to transmit light signals over long distances.
Basically, a fiber optic cable is composed of two concentric layers termed the
core and the cladding. Core are the thin glass center of the fiber where the light
travels and cladding is outer optical material surrounding the core that reflects
the light back into the core A fiber optic cable has an additional coating around
the cladding called the jacket. The jacket usually consists of one or more layers
of polymer. Its role is to protect the core and cladding from shocks that might
affect their optical or physical properties. It acts as a shock absorber. The jacket
does not have any optical properties that might affect the propagation of light
within the fiber optic cable.
The light in a fiber-optic cable travels through the core by constantly bouncing
from the cladding (mirror-lined walls), a principle called total internal reflection.
Because the cladding does not absorb any light from the core, the light wave can
travel great distances.
Advantages of Fiber Optics:

      Speed: Fiber optic networks operate at high speeds - up into the gigabits
      Distance: Signals can be transmitted further without needing to be
       "refreshed" or strengthened.
      Resistance: Greater resistance to electromagnetic noise such as radios,
       motors or other nearby cables.
      Maintenance: Fiber optic cables costs much less to maintain.
      Higher carrying capacity - Because optical fibers are thinner than copper
       wires, more fibers can be bundled into a given-diameter cable than copper
       wires. This allows more phone lines to go over the same cable or more
       channels to come through the cable into your cable TV box.
      Less signal degradation - The loss of signal in optical fiber is less than in
       copper wire.
      Light signals - Unlike electrical signals in copper wires, light signals from
       one fiber do not interfere with those of other fibers in the same cable. This
       means clearer phone conversations or TV reception.
      Low power - Because signals in optical fibers degrade less, lower-power
       transmitters can be used instead of the high-voltage electrical transmitters
       needed for copper wires. Again, this saves your provider and you money.
      Digital signals - Optical fibers are ideally suited for carrying digital
       information, which is especially useful in computer networks.
      Non-flammable - Because no electricity is passed through optical fibers,
       there is no fire hazard.
      Lightweight - An optical cable weighs less than a comparable copper
       wire cable. Fiber-optic cables take up less space in the ground.
      Flexible - Because fiber optics are so flexible and can transmit and
       receive light, they are used in many flexible digital cameras.

Because of these advantages, Reliance is using optical fiber cables for
broadband services to transmit digital signals. Reliance is using CDMA
technology with is far better than GSM. In CDMA technology, digital signals are
transmitted through fiber optics cables.

Reliance Infocomm uses Qualcomm Inc.‟s Code Division Multiple Access
(CDMA) 2000 1 X technology. This technology handles better voice quality &
higher data rates as compared to GSM.

Reliance Infocomm has tied up with Kyocera for supply of high end PDAs.
Reliance has procured around 50,000 PDAs. The PDAs will be focused for high
end users whereby one can use it both as a phone as well as a PDA.

The phone will be used for making voice calls whereas PDA will be utilized to
provide wireless data access for web clippings, HTML, SMS and e-mail. Using
speakerphone facilities one can use PDA while one is making voice call.
Fiber Optics Network of Reliance
Reliance Infocomm has built a nationwide optic fibre based network infrastructure
that covers 90% of the population in the country. It is a 100% digital state-of-the-
art network capable of carrying terabits of data per second across the country.
This is the largest private information and communication network in the country
and leapfrogs India from megabit to terabit capacities.
The network infrastructure spans 80,000 kilometres of optic fibre cable, 250,000
kilometres of high density Polyethylene ducts, 30,000 kilometres of other cables
and 2,588 BTS towers.

The network is designed to provide high quality service to the remotest parts of
the country and has provisions for international gateways to connect with the rest
of the world. It offers unprecedented voice quality; secure communication and
high- speed peak data rates of 153 kbps at an affordable cost.

Optic fibre was chosen as the preferred transport network for Reliance
Infocomm, given its low transmission loss, wide bandwidth, low cost, low
maintenance, small size and weight, immunity to interface, electrical isolation and
signal security. Wherever optic fibre could not be used due to difficult terrain,
digital microwave towers (15 to 42 m), with equipment shed to house multiplexing
and radio equipment, have been used.

Network
Telecommunication networks are the infrastructure for provisioning infocomm
services. All businesses today are dependent on telecom to continue their day-
to-day operations. The range and quality of services that can be provisioned is
determined by the quality of the network deployed.

The Reliance Infocomm network consists of 80,000 kilometers of optical fibre
cables spanning the length and breadth of India. These cables can carry
thousands of billions of bits per second and can instantly connect one part of the
country with another. This physical network and its associated infrastructure will
cover over 600 cities and towns in 18 of the country's 21 circles, 229 of the
nation‟s 323 Long Distance Charging Areas (LDCAs) and broadband connectivity
to over 190 cities. This infrastructure will be backed by state-of-the-art
information management systems and a customer-focused organization.

An interesting aspect of the network is the manner in which these fibres are
interconnected and deployed. Reliance's architecture is so fault-tolerant that the
chances of failure are virtually nil. Reliance's ring and mesh architecture topology
is the most expensive component to implement, but assures the highest quality
of uninterrupted service, even in the event of failure or breakage in any segment
of the network. Reliance has 77 such rings across the country with at least three
alternative paths available in metros. Connected on this topology, the service has
virtually no chance of disruption in quality performance.
Reliance's objective is to create value for our customers. Reliance will innovate
ceaselessly so that state-of-the-art technology can be leveraged to create
products and services that are affordable.

Access networks determine the services that can finally be delivered to
customer. Our network has wireline access technologies based on fibre as well
as copper. Fibre in the access network makes broadband services easy to
deploy. The wireless access network deployed for CDMA 1X is spectrum efficient
and provides better quality of voice than other networks and higher data rates.
CDMA 1X also provides an upgradation path to future enhancements.

Architecture
The Network Architecture consists of Nodal Functional Elements and Transport
Layers in a ring and mesh topology.
The Nodal Functional Elements are Media Convergence Nodes (MCN), Building
Access Nodes (BAN) and Building Nodes (BN).
The Transport Layers assemble these functional elements on three functional
transport layers - the Backbone, Main Access Ring and Building Access Ring.
Each transport layer, along with their nodal elements, performs specific functions
supporting customer traffic services and connection to the National Network
Operations Centre (NNOC) and Operations Support System (OSS).
Transport Network
The transport layers carry information from one city to another. The National
Backbone interconnects major cities throughout India. It consists of a survivable
optic fibre network configured as several interconnected rings and mesh.
The design is two-tier. An Express Ring reduces pass through nodes and
improves reliability for traffic between major metros and all major node cities. The
Collector Ring transports traffic from other Short Distance Calling Areas (SDCA).
The ring topology provides necessary protection to traffic in terms of alternate
path in case of breakage of optic fibre or equipment failure, thus ensuring smooth
and uninterrupted operation of the network.
Access Network
The Fibre to the Building (FTTB) architecture is achieved through the Access
Network. It enables end users to connect to the larger telecommunication
network.
Access Network consists of Metro Network and Building Access Network.
Metro Access is deployed in a three-layered approach - the backbone (MCN),
Main Access Ring (MA ring) and Building Access ring (BA ring) - in order to
provide both narrow band as well as broadband requirements on wire line.
Building Access rings aggregate Building Nodes and associated traffic up to the
MCN (which interconnects to the National Backbone), except for intra city traffic,
which is handled by the BAN-to-BAN network.
Network Protection and Redundancy
Network redundancy has been built to protect the network from cable cuts.
Network redundancy is also required to avoid loss of traffic due to equipment
failures. The ring and mesh topology achieves this.
Use of Synchronous Digital Hierarchy (SDH) within the city and Dense Wave
Division Multiplexed (DWDM) for the national backbone ensures reliability, fast
restoration from failures and low probability of outages. Use of several self-
healing rings enables a high quality of service.


Network Management System
A stringent Fault, Configuration, Accounting, Performance and Security (FCAPS)
requirement has been taken care of in the Network Management System (NMS),
as per guidelines of Telecommunications Management Network. The NMS is a
fail-free centralized facility to manage the entire network.
Built on multiple software modules, the service delivery platform supports service
order management, service delivery, service/network activation, network
inventory management, resource and workforce management. Service
assurance package includes fault management, performance management,
trouble ticketing management, SLA management, test and maintenance
management, SS7 management and traffic management. The configuration
management module enables service creation, provisioning, test and
maintenance. The fault management module enables detection, isolation and
correction of abnormal operation. The NMS carries out real time alarm
surveillance, fault location and fault correction through testing and trouble
administration.
It performs several functions:
1. Performance Management
The goal of performance management is to measure and make available various
aspects of network performance so that internetwork performance can be
maintained at an acceptable level. Management entities continually monitor
performance variables. When a performance threshold is exceeded, an alert is
generated and sent to the network management system.
2. Configuration Management
The goal of configuration management is to monitor network and system
configuration information so that the effects on network operation of various
versions of hardware and software elements can be tracked and managed.
3. Accounting Management
The goal of accounting management is to measure network utilization
parameters so that individual or group uses on the network can be regulated
appropriately. Such regulation minimizes network problems (because network
resources can be apportioned based on resource capacities) and maximizes the
fairness of network access across all users.
4. Fault Management
The goal of fault management is to detect, log, notify users of, and (to the extent
possible) automatically fix network problems to keep the network running
effectively. Because faults can cause downtime or unacceptable network
degradation, fault management is perhaps the most widely implemented of the
ISO network management elements.
Fault management involves first determining symptoms and isolating the
problem. Then the problem is fixed and the solution is tested on all-important
subsystems. Finally, the detection and resolution of the problem is recorded.
5. Security Management
The goal of security management is to control access to network resources
according to local guidelines so that the network cannot be sabotaged
(intentionally or unintentionally) and sensitive information cannot be accessed by
those without appropriate authorization. A security management subsystem, for
example, can monitor users logging on to a network resource and can refuse
access to those who enter inappropriate access codes.
Security management subsystems work by partitioning network resources into
authorized and unauthorized areas. For some users, access to any network
resource is inappropriate, mostly because such users are usually company
outsiders. For other (internal) network users, access to information originating
from a particular department is inappropriate. Access to Human Resource files,
for example, is inappropriate for most users outside the Human Resources
department.
Security management subsystems perform several functions. They identify
sensitive network resources (including systems, files, and other entities) and
determine mappings between sensitive network resources and user sets. They
also monitor access points to sensitive network resources and log inappropriate
access to sensitive network resources.
Dhirubhai Ambani Knowledge City
A brainchild of Nita Ambani, President of the Dhirubhai Ambani Foundation, the
Dhirubhai Ambani Knowledge City, or DAKC, is a world class campus that
reflects a new age spirit in its layout, architecture and character.
Set amidst a picturesque 140-acre plot in Navi Mumbai, DAKC is the heart of
Reliance Infocomm Limited. DAKC houses the National Headquarters, Internet
Data Centers, Call Centers, Applications Development Laboratories and the
National Network Operations Centre of Reliance Infocomm.
The highlight as well as the nerve center of DAKC is a spectacular 110,000 sq. ft.
National Network Operations Center (NNOC). From here the entire network of
Reliance Infocomm, covering 80,000 kilometres of optic fibre that connects 90%
of India's population and reaching 600 towns and cities, is monitored and
controlled.


National Network Operations Centre
The National Network Operations Centre (NNOC) is the nerve center of the all-
India network of Reliance Infocomm covering 80,000 kilometres of optic fibre that
connects 90% of India's population, reaching 600 towns and cities.
The concept of one control center for an entire network is unique and is
unprecedented in the world. Unlike most other network operations centers
around the world, which are designed to support a specific product, service or
geography, the NNOC of Reliance Infocomm is unique in the sense that it
controls a range of products, services and geographies. The main control room
with a seating capacity for 200, has two large video walls, each 100 feet long and
with 80 screens each. A hanging bridge running across the control room is part of
the visitors' experience and an integral part of NNOC.
NNOC monitors the pan-India network on a 24/7/365 basis. NNOC employs a
state-of-the-art digital system to track, display and maintain the complex network.
NNOC is designed to handle new connection provisioning, proactively detect
network faults and network degradations and initiate remedial measures of
restoration or diversion depending on the situation, even before a customer
comes to know of the problem. The rationale behind this functionality is that the
customer will never have to complain.
Thus, NNOC plays a vital role not only in terms of operations monitoring and
control, but also in terms of supporting a high level of customer service.
Specific functions of NNOC are:
Switch Control - Remote monitoring and analysis of switches, support routing
and trunking translations.
Transport Maintenance - Remote monitoring and analysis of network transport
infrastructure including national and state backbones, feeder routes and
distribution routes.
Administration and Business Support - On matters related to administration of
network, security and business operations.
Resource Facility - On-site Resource Facility for use by NNOC technicians
containing representative network elements for those used in the network.
Products

1. Postpaid plans:

   i. Joy plans:
     Postpaid plans have been specifically designed to help you save on costs.
     Depending on your usage and your budget, you have a choice of plans with
     economical tariff rates. The new Joy 99 plan gives you the flexibility of being
     postpaid at the most affordable monthly rent.
     Subscribers also enjoy:

         Value Roaming: No Roaming rentals. Outgoing calls/SMS as per home
          tariff plan rates. Receive incoming calls at RIM-to-RIM STD rates also as
          per your home tariff plan.

         R Connect: Surf the net on the move at amazing speeds of upto 144
          kpbs.

         R World: Access a world of information, Communication, Entertainment
          & Commerce at the press of a button.

         Unlimited SMS Pack: Send unlimited SMS to any Reliance phone across
          India. And SMS worth Rs. 25 to other phones for free.


  ii. Unlimited talktime pack:
     With this scheme, subscribers can enjoy the benefit of making Unlimited
     Calls to other Reliance Phones within the circle, Absolutely Free! RIM
     postpaid customer can make calls to Reliance Fixed Wireless
     Phones/Terminals (FWP/T) at just 40 paise per minute within the circle

  iii. Handset payment options:

                   Handset Option                       Payment Options (Rs.)
Kyocera 7135 - PDA Colour Phone                                  35001
Telson TWC 150 - Colour Watch Phone                              23900
Samsung SCH A603 - Rotating Colour Camera
                                                                 10995
Phone
LG RD 7230 - Smart Video Colour Camera
                                                                  9999
Phone
GTRAN– Premium (With Camera)                                      6999
GTRAN- Standard (Without Camera)                                  5999
LG RD 5130                                                       4999
LG RD 2130 - Moonlight Phone                                     3499
Samsung 356 Slim                                                 2999
LG RD 2030                                                       2999
Nokia 2280                                                       2999
LG RD 2230                                                       2499

  iv. Get Started Kit
     With this scheme, users can choose handset and phone number of their
     choice. Postpaid Get Started Kit is available at an MRP of Rs. 550 and a
     Prepaid Get Started Kit is available at an MRP of Rs. 220.
   v. Handset Change Card
     This scheme allows users to change their existing RIM handset without
     getting phone number changed. The users can get the new Handset
     Change Card from RIM for Rs. 22 only, and follow the simple instructions
     given on the back of the card to activate new handset.

2. Prepaid plans:
   i. Prepaid at 99
    Talk non-stop at 99 paise per minute on RIM Prepaid. Also have:
     Latest B/W data enabled handsets at Rs. 2499/
     Advanced, colour multimedia handsets with speaker at Rs. 4999/-
     Talk at just 99 paise per minute. With the Reliance family fast nearing 1
      crore people, there'll be plenty of talking to do.
     Roam at home tariff rates and at zero rentals.
     Enjoy advanced data application with R World and R Connect.

   ii. E – Recharge
      For its prepaid users, it started e-recharge scheme. Now users can
      recharge their prepaid connections electronically.

  iii. Recharge Vouchers

  MRP        Rs 165          Rs 199       Rs. 330      Rs. 550       Rs. 1100
Value of        74             50            149         349            848
Talk Time
(In Rs.)
Admin         75.73          130.58        150.45        150            150
Fee (In
Rs.)
Service       15.27           18.42         30.55         51            102
Tax
(In Rs)
Validity        15               30        30           45           60
(In Days)




    MRP                 Rs 220               Rs 440          Rs. 55 (SMS)
Value of Talk             50                    100                Nil
Time (In Rs.)
Admin Fee               149.64                299.27             49.91
(In Rs.)
Service Tax             20.36                   40.73             5.09
Validity                  15                     30                30
(In Days)



  iv. SMS Top - up card
     Users can use this scheme for prepaid connection with the new SMS top-up
     Card for Rs. 55 only, and send free unlimited SMS (local and national) to
     any Reliance phone across India.

  vi. Get Started Kit
     With this scheme, users can choose handset and phone number of their
     choice. Use the PIN number given in the Get Started Kit card, follow the
     simple instructions given on the card to activate your handset and get
     started.

Calling Cards

   Reliance World Card
   With the new Reliance World Card available in two denominations - Rs. 110
   and Rs. 220, users can make ISD calls from any Reliance phone, be it
   postpaid (Reliance IndiaMobile/Fixed Wireless phone) or RIM prepaid even
   without a pre-activated ISD facility.
   The Reliance World Card also gives exceptional voice clarity and superior
   calling experience to the users, all at exceptionally attractive rates.
Handsets
Reliance IndiaMobile service is available on handsets compatible with CDMA
network. It includes a variety of handsets:

1. Black and White Handsets

LG RD 2030, LG RD 2130, Nokia2112, LG RD 2230,Samsung 356, LG RD 2330,
Nokia2280.

2. Color Handset
  Nokia3125, Nokia6012, LG RD 5130, Motorola V730, Nokia3105, Nokia6585

3. Color Handset with camera
   LG RD 6000, Nokia3205, Nokia6225, LG RD 6130

4. Video Camera Phone
   LG RD 7230

5. Camera Watch Phone
   Telson TWC 1150

6. PDA colour phone
   Kyocera 7135


R-Services

1. Itemised Billing
Bills are made with details of all Local/STD/ISD and roaming voice calls. New
customers who subscribe after February 4, 2004 will get details of only Inter
circle STD/ISD calls free in the first billing period. Thereafter, only a summary of
the entire bill will be sent. However if any customer wants a detailed bill then he
can subscribe the facility for a fixed charge of Rs.25 per month by sending an
SMS. The customer can cancel the subscription at any time by sending an SMS.
2. Value Roaming
Value Roaming lets the customers roam the length and breadth of India, at
unbelievably low rates. Reliance Value Roaming lets the customers make and
receive calls without any Roaming airtime charges, send and receive SMS,
retrieve Voicemails from anywhere outside home circle all at home tariff plan
rates. The customers can roam with a single number on a single network across
India. The customers can experience the same 24-hour Customer Care Service
with a single toll-free number, from anywhere in the country.
3. Reliance International Roaming

Reliance Infocomm offers GSM International Roaming through the use of a GSM
handset and a GSM SIM card or a Removable User Identification Module card
(RUIM card). A RUIM card can be used on the Reliance IndiaMobile network with
a RUIM Compatible handset - GTRAN or Telson handset.
With 325 operators in 170 countries Reliance IndiaMobile ensures that
customers stay connected anywhere. However, the coverage with a RUIM Card
is currently available in 21 Mobile operators in 18 countries.
The user can subscribe International Roaming service by visiting the nearest
WebWorld. User has to fill-up the International Roaming Application Form along
with payment of the applicable deposit. User shall be provided a GSM SIM card
& a Mobile Number on which user can enjoy this service while traveling abroad.
If the customer is a RUIM Card user, he do not need any separate GSM SIM,
only a Mobile Number will be given for his RUIM Card on which International
Roaming service will become available.

4. Call Waiting

This service allows the users to receive an incoming call while already engaged
in one call. When this feature is activated, the user will be able to attend all
incoming calls without missing any. While the user is talking, a beep and the
mobile number of the called party will indicate that a second incoming call is
waiting. The (second) caller will get an announcement for 30 seconds: "The
Reliance customer you are trying to contact is busy on another call. Please stay
online". When a second call is waiting, the user can: reject the incoming call or
ignore the incoming call. If the user has activated the voice mail & set the
condition for diverts, the incoming call will be diverted to the voice mailbox.

If the call wait feature is de-activated, the caller will receive a busy tone.

5. Call Hold

Allows the users to put the first call on hold and perform any one of the following
functions from the handset:

      Make a second call,
      Receive a second call, which is waiting,
      Check or send a Text message,
      Check the Voice Mail,
      Use any other feature of the phone

Once a new call has been made or received:
      The user can switch between the two calls by pressing the CALL key
      The user will maintain two call simultaneously, but will only be able to talk
       with one a point of time
      The party on hold will hear beep tones periodically



6. Call Divert

In case users are unable to take the calls, this service enables the users to divert
the calls to another phone number or voicemail box (VMS) within the SDCA.
When this feature is activated the incoming call will land at that particular number
(or voicemail box). This feature allows the users to make sure that all incoming
calls are handled, without missing any. The following configurations for the call
divert feature are available:
      Immediate call divert (unconditional): all incoming calls will be diverted to
       the requested number
      Call-divert busy divert: calls are diverted when user is busy on another call
      Not reachable / No reply divert: calls are diverted when mobile is off, out of
       battery, out of coverage, or if user do not reply within a specified time (i.e.
       within 60 seconds)

When Call divert is activated, Not reachable / No reply feature is not activated, by
default incoming calls will be diverted to the Voicemail. This is called the Call
Divert-default. In all divert cases the caller will hear a message "Your call is being
forwarded". The user can benefit from this feature when he is:

      Busy in a meeting
      Traveling
      In an area where there is no coverage like basement and elevator
      Driving to work
      Out of battery

7. Call Conference
A subscriber can connect with two (1+2) persons simultaneously and set up a
conference with them using this service. The service can include a maximum of
three people including caller in a conference at one point of time. Any party can
disconnect to drop-off from the conference. However, if the initiator of the
conference disconnects then all the parties are disconnected and the conference
call ends. Call conference can be done with any number (any service provider).
A call conference is set up by following steps:

      Call the first person and wait until the call is connected
      Put the call on hold by pressing the CALL key
      Initiate the second call by dialing the desired number
      Wait until the second call gets connected
      Once the second call gets connected, you have following options
         a. Swap between the calls: Press 2 + CALL key
         b. Drop the person currently connected and connect to the party on
             hold: Press 1 + CALL key
         c. Establish the three-way conference: Press 3 + CALL key

Once a conference has been set up, the initiator cannot split the participants into
2 separate calls.

8. CLIP (Caller Line Identification Presentation)
This feature enables the users to view the number of the caller on your phone. If
phone number of the person who has called is stored in the phone book, then the
name associated with the number will be displayed on the screen. This service
also allows the subscriber to identify missed calls and redial previous calls.
CLIP will be provided automatically to all customers. It will be free for existing
customers till 15th March 2004, and for new customers who subscribe after 4th
February 2004, it will be free for the first billing period. After this period, CLIP will
be a charged service. The users have to pay Rs.25per month as CLIP charges.
To cancel this feature user can send an SMS request “CLIP NO” to 3733. for
resubscription, user has to send SMS “CLIP YES”.

9. CLIR (Caller Line Identification Restriction)
This feature enables the users to hold their number from being displayed on the
phone screen of the person they call. This restriction is required when user want
to remain anonymous. When CLIR is activated, instead of phone number, a
message like "Restricted Number" or "Incoming call" will be displayed.
Availability of this facility is governed by Government of India regulations. Users
who wish to get this facility may please contact their nearest Web World. This
facility will not be granted automatically and the organization reserves the right to
grant this facility only to certain subscribers based on certain fixed criteria.

10. International SMS
International Short Messaging Service is now available to all Reliance
IndiaMobile subscribers. Subscribers can send, receive, reply and forward simple
text messages to friends, relatives and business associates across the world.
Messages can be sent to over 400 operators, in more than 150 countries and to
all Networks types i.e. CDMA, GSM, TDMA and IDEN. The service is available at
a most affordable price of Rs. 3 per SMS. For Dhirubhai Ambani Pioneer Offer
subscribers the old rate of Rs. 2/- per SMS will continue.
Subscriber just need to type '00' before the country code, followed by the phone
number. International Short Messaging Service is in addition to the SMS facility
for all local destinations, which is already available on Reliance IndiaMobile.
PORTER’S FIVE COMPITITIVE FORCES

     Threat of New Entrants:

     Many new entrants like Tata Indicom, Hutch, Airtel etc. are becoming major
     concern for thought. These companies are providing threats to Reliance
     Infocomm. Therefore the Reliance Infocomm has changed its strategy
     accordingly in the past also. Up to now, Reliance has the benefit of less call
     rate and strong brand image. But with the entrance of Tata in this field
     increases the problems of Reliance Infocomm. Reliance Infocomm is
     following the strategy of market penetration by providing low cost service
     but Tata Indicom also adopt this strategy and provide services at cheaper
     rate than Reliance Infocomm. Besides this, Reliance Infocomm has a strong
     customer base which has strong faith in Reliance Group. Thus Reliance is
     able to compete with its competitors easily.

     Bargaining Power of Suppliers:

     Reliance Infocomm purchases handsets from LG, Samsung and Nokia.
     They purchase handset in such a bulk quantity that every supplier want to
     sell their product. Thus the bargaining power of suppliers is very less.

     Bargaining Power of Customers:

     Reliance Infocomm is already providing services at a cheaper rate. also
     Reliance is providing such a vast range of schemes that customers have no
     other option. Therefore the bargaining power of its customer is very less.
     But now Tata Indicom launches its mobile service at very cheaper rate.
     Thus customers have more options now. It would increase the bargaining
     power of customers.

     Threats of Substitute Products and Services:

     Reliance Infocomm is providing mobile services as well as landline
     connections to its customers. Many substitute mobile services are providing
     threats to Reliance Infocomm. It includes BSNL, Hutch, Airtel etc. These
     services are more costly than the Reliance Infocomm mobile service.

     Intensity of Rivalry among competing firms:

     Reliance Infocomm has intense rivalry with BSNL, Airtel, Hutch, Tata
     Indicom. These all are trying to attract the customers by providing more and
     more benefits.
SWOT:

Strength:


   The     state-of-art technology Reliance     Infocomm is offering-CDMA
     technology.
   The strong subscriber base over 10million subscriber‟s in their kitty.
   Mobile with in the reach of common man. Affordable schemes.
   Comprehensive       Network-The     strong   back    bone    high   capacity
     network(terabit capacity) supported by fiber optic cables laid all over the
     country(60,000km)
   Offering Value Added services to it‟s customer‟s almost free of cost or with
    nominal charges.
   Reliance Infocomm was the first service provider to introduce finance
    option on handsets.
   Value Added Services: First Call Center of 2,000 seats in Mumbai
   Aggressive roll out to capture dominant market share and create an entry
    barrier
    CDMA 1x Technology


Weakness:


   Marketing strategy.
   Restricted mobility through its WLL services.
   Hidden Cost- Not able to retain the roped in customers.
   It only catered to the needs of post paid customers.
   Fewer varieties of handsets available offering CDMA technology.
   Lacks Transparency at end user level
   Lacks to spread Technological Awareness
Opportunity:


   Reliance Infocomm has timely and effectively used the technology where
      the Indian Telecom Market was lacking behind-Broad Band technology
      (CDMA) at affordable prices, thus capturing the market significantly.
   Using the CDMA technology, it has revolutionized the data transfer rates
      and low cost tariffs.
   In the area of E-Commerce, Video on Demand, VoIP(Voice over IP),
      Speech Recognition, Interactive Television, Intelligent Homes, Virtual
      Reality.
   Providing instant connection to the customers making a happy and
      satisfied customer base.
   Reliance Signs Amalgamation Agreement To Acquire Flag Telecom
      Group Limited-- Plans to acquire submarine network cables from FLAG
      Telecom($220 million dollars) which will drastically reduce the ISD rates.
   Reliance Infocomm and Microsoft TV to work together on Next-Generation
      IPTV Services - India's Largest Private Sector Enterprise to Prototype and
      Trial Next- Generation TV Services On a New End-to-End IPTV Solution
      from   Microsoft TV.


Threats:
   The threat from BSNL for the calls being blocked or barred at LDCA level.
   Easy convertibility of the mobile handsets and reselling of lithium ion
      batteries.
   Thefts and forgery regarding Handsets provided by company
   To face many legislative barriers form government as well as its
      competitors
   Risk involved in financing the handsets.(Defaulters/Bad debts)
     Threat from operators such as BSNL, Aircel, Tata Tele Services each with
      the expanding networks to sustain the competitive market situation.
              Analysis of Reliance Prepaid Scheme

Reliance Infocomm had launched prepaid scheme on Feb 9, 2004 with the intent
of capturing the number one spot in the prepaid segment. The company came
out with schemes that give customers free recharge vouchers worth nearly the
cost of a Reliance IndiaMobile (RIM) Prepaid handset that they buy.
Under the RIM Prepaid launch scheme a customer will just pay Rs. 3500 for a
Motorola C131 handset and, in return, get a free RIM Prepaid connection and
recharge vouchers worth Rs. 3,240 valid for six months with an additional six-
month grace period. During this grace period the subscriber will be able to
receive incoming calls and SMS without recharging the account.
The tariff for their prepaid scheme is one of the lowest in the industry and has
fewer slabs. All local calls, intra-circle calls and inter-circle calls of less than 50
kms distance to another mobile phone have a flat rate of Rs. 2.49 a minute. All
inter-circle calls of above 50 kms to another mobile phone will cost Rs. 2.99 a
minute. All local calls, intra-circle calls and inter-circle calls of less than 200 kms
to a fixed phone will cost Rs. 2.99 a minute, while all inter circle calls of above
200 kms have flat rate of Rs. 3.99 a minute.
The RIM Prepaid service includes automatic roaming in pan India RIM network at
no extra cost, nationwide recharge facility with any denomination, STD and ISD
facility, call forward and voice message service at local mobile call rates from
anywhere in RIM network. RIM Prepaid customers with Java enabled handsets
will be able to use their phones as modems for R Connect Internet connectivity
and access R World data applications. RIM Prepaid customers will also have
access to call management services like three-way conference call and caller line
identification.


1234 SMS service
Reliance Infocomm had launched the SMS based information service, "1234
SMS service" for Reliance IndiaMobile (RIM) customers on Feb. 12, 2004. Using
1234 services customers get access to latest information on a range of topics
such as News, Entertainment, Lifestyle and Local Information. Over 40 such
services were offered initially.
Customers can send keyword based SMS request from their RIM handsets to
1234 and receive the relevant information in return. These value-added services
will be available to all RIM customers and can be used through the SMS
functionality of RIM handsets. The service is available for all post paid and
prepaid users.
Even though this service is designed specifically for non-Java enabled RIM
handsets, it can be accessed from all RIM handsets. Customers with Java
enabled handsets will be able to access all these services and much more from
R World suite of data applications in a more interactive and intuitive fashion.
The SMS based 1234 services is an attractive alternative for customers who
cannot access R-World, as their handsets are not Java enabled.
 Under the prepaid scheme SMS in local/intra circle would cost Re. 1, while
international SMS cost Rs. 3. Call forward to local numbers would be charged at
application local call rate. Also Voicemail retrieval would be charged at Rs.2.49
per minute and R World content for RIM Prepaid will be free till June 30.


Introduction of multimedia handsets for entry level RIM Prepaid
packages
On April 24,2004 Reliance Infocomm has strengthened its RIM Prepaid
proposition by introducing unbeatable value offers with four new attractive
schemes. The company has added the stylish LG RD 2230 handset from LG
Electronics to its wide range of data enabled handsets besides introducing new
attractive prices for its popular LG RD 2030, Moonlight LG RD 2130, Nokia 2280
models.
Reliance Infocomm has made data enabled handsets more affordable for its RIM
Prepaid customers by introducing an attractive entry pricing of Rs.2,999/- for
Nokia 2280 handsets, Rs.3,499/- for LG RD 2030 handsets and Rs.4,499/- for
Moonlight LG RD 2130 handsets. All the three handsets will be pre-loaded with
one recharge coupon worth Rs.324/- with equivalent talk time of Rs.200/- and 30
days validity.


World Card - a Prepaid International calling card
On June 08,2004 Reliance Infocomm Ltd has launched the World Card, a
prepaid international calling card that will herald a new era of affordable and
convenient international calling experience. The World Card is a prepaid,
rechargeable account-based service that can be used from any Reliance phone -
RIM (Post paid and Prepaid) and Reliance IndiaPhone (Fixed Wireless Phones
and Terminals).
Reliance World Card is designed to provide customers full value for what he/she
pays, with no administration charges. The Card, which costs Rs 108, will carry
Rs 100 worth of talk time and Rs 8 as the mandatory service tax. The card is
valid for 60 days. After 60 days, the balance talk time can be carried forward if
the recharge is made within the next 15 days.
With World Card, RIM Post paid customers need not have to pay ILD security
deposits for making international calls. For RIM Prepaid customers, the
advantage is that they need not recharge with higher denomination recharge
vouchers for making ISD calls.
The call tariff rates for World Card are among the lowest in the country. All calls
to the US, UK and Canada will be charged only at Rs 7.20/ minute, calls to
Europe and South East Asia at Rs 9.60/ minute and calls to all other countries at
Rs 18.00/ minute.
Some of the advantages of World Card are affordable ISD rates, total control of
the customer over his/her ISD call budget, assured voice quality, facility to check
balance talk time and easy availability across Reliance WebWorlds and Prepaid
retail outlets.


Mobile Banking Service
ICICI Bank, India's second largest Bank, in association with Reliance Infocomm,
India's largest mobile service provider, launched (on July14, 2004) a truly
interactive mobile banking service in India.
ICICI Bank customers through their Reliance IndiaMobile handsets can now avail
of a gamut of banking services free of charge. The services can be accessed
directly from R World on the handset. A customer can view their ICICI Bank
account balance, get mini statements and make requests for cheque books.
Apart from viewing presented bills, a customer can also pay bills by direct debit
to the bank account. The service also enables a customer to locate an ATM or
bank branch. On selecting any of these, the customer is connected directly to the
bank and the result is displayed instantly on the handset.


Independence Day special: low prepaid tariff
On Aug 13, 2004 Reliance Infocomm drastically reduced tariffs and roaming
rates for its wireless prepaid service, delivering a body blow to GSM operators.
The new tariffs, which have been brought down around 60 per cent, and were
described as an `Independence Day Special‟. Reliance has introduced a sub-Re
1 tariff (99 paise a minute, down from Rs 2.49) from Reliance IndiaMobile (RIM)
prepaid to any other Reliance India Mobile or Reliance India Phone (fixed
wireless service) subscriber. Calls to GSM operators and landlines will cost Rs
1.79 a minute (down from the Rs 2.49-to-Rs 2.99 range).


Call To                     New                   Tariff Existing              Tariff
                            (Rs./Min.)                   (Rs./Min)
                            Local/Intra   National/Inter Local I Intra National/Inter
                            Circle        Circle         Circle        Circle
RIM      &       Reliance
                            0.99          1.79          2.49          2.99
IndiaPhone
Other Mobiles (GSM /
CDMA)                1.79                 2.49          2.49/2.99     2.99/3.99
and landline
Launch of Railway Ticket Booking
Reliance Infocomm, in association with Indian Railway Catering and Tourism
Corporation Ltd (IRCTC), launched the Railway Ticket Booking service through
Reliance IndiaMobile (RIM) in New Delhi on Sep 9, 2004. Honorable Railway
Minister Shri Lalu Prasad Yadav inaugurated the service.
Easy menu-driven navigation of the application on R World makes train ticket
booking on RIM the most convenient option anywhere, anytime, bringing online
reservations to millions of mobile phones, without the need to look for PCs or
Internet connections. Customers can pick their travel destinations, class of travel,
intermediary stops, without having to remember train numbers, station codes and
reservation codes while booking their rail tickets on this R World application.
R World offers the convenience of PC-like interactivity and easy navigation on
mobile handsets, where all train routes and their corresponding train numbers
can be accessed. It not only displays both availability and fare in real time, but
also offers availability of seats for all 5 days around the desired date of travel.
RIM subscribers can use credit cards to book the ticket.


Introduction of lower denomination recharge vouchers of Rs 199
& Rs 165
In yet another of its launches, Reliance Infocomm is looking to give its customers
value for their money. The company has introduced (on Sep, 2004) two low
denomination recharge vouchers (RCVs) of Rs. 199 and Rs. 165 for customers
whose primary need is to receive incoming calls or recharge in smaller amounts.
The Rs. 199 RCV allows customers to receive unlimited incoming calls for 25
days and the Rs. 165 RCV helps the customer to split his monthly mobile spend
of Rs. 330/- into two installments of Rs. 165 each.
With the use of these vouchers, the Reliance India Mobile users will continue to
have calls rates starting at 99-paise per minute, applicable for calls from RIM to
all Reliance Phones. They also have the choice of making STD and ILD calls,
apart from SMS facility and making data calls.
The Rs. 199 RCV has a talk time value of Rs. 56 and is valid for 25 days, while
the Rs. 165 RCV has a talk time value of Rs. 75 and is valid for 15 days. The
customer can 'carry forward' the unused balance for a grace period of 15 days.


Demolishes Talk-Time Concept with 440 denomination RCV
On Oct 28, 2004 Reliance Infocomm has launched an unprecedented prepaid
Recharge Voucher (RCV) of Rs 440-denomination that allows unlimited local
calls to any Reliance mobile or fixed phone within the circle. It has following
features:
      Local Calls to any Reliance number, absolutely free
      All other calls within circle @ 80 paise only
      Tariff for STD calls remains unchanged
      Recharge Voucher is valid for 30 days from the date of issue

The innovative Reliance Infocomm RCV is aimed at facilitating the large
population of Reliance Infocomm subscribers who have heavy usage for local
calls and wish to stay in touch with other Reliance Infocomm subscribers within
their circle.

The new, value enhanced product will particularly be useful for small business
personnel, entrepreneurs in multiple locations and travelling sales personnel,
apart from families with more than one RIM connection. Also, families of a large
number of students who stay out of the city for higher education could constantly
be in touch with them without having to worry about talk time limitations.


Get Started Kit
On Nov 24, 2004 Reliance Infocomm has indigenously developed a revolutionary
product, named Get Started Kit (GSK), to empower its subscribers with the
flexibility to choose from its wide range of handsets, as well as the choice to
select mobile phone numbers of one's choice. This is first time in the CDMA
space anywhere in the world.
With the new GSK, available for both prepaid and post-paid subscribers in
separate packs, one can purchase any Reliance-approved handsets from the
open market and get them activated, that too with numbers of their choice.
The GSK consists of a pre-allocated ten-digit RIM number and a nine-digit
unique PIN to help activate a handset. The new product is ideally suited for those
who would like to have a number of their choice, those who would like to have
local numbers when they move to new cities or towns and those who would like
to either sell or gift their old handsets and buy new ones.

Introduction of full suite of ISP services
To boost Internet access in its avowed vision of ushering a digital revolution in
India, Reliance Infocomm announced (on Dec 1, 2004) the highly affordable, full
suite of ISP services for its subscribers under the R Connect service platform.
Apart from high Internet access speeds, R Connect users can now enjoy email
service with a 10-MB mailbox, the lowest Internet access charges and hassle
free connection as wireless lines provide instant and constant connectivity. The
new, attractively priced data tariffs offer instant, assured and uninterrupted
Internet connectivity.
With a monthly charge of Rs. 650, the new 'Freedom Plan' offer the subscribers
an unlimited Internet surfing option with maximum data downloads of up to 1GB
Per month. For unlimited data downloads the subscriber can opt for the 'Platinum
Plan' at a monthly rental of Rs. 1500. As part of the default plan subscribers can
access the net at Rs. 0.50/min between 6.00 a.m. to 10.00 p.m. and Rs. 0.25/min
between 10 p.m. to 6 a.m.


New Data Tariff plans in this scheme:
                            Freedom Plan                         Platinum Plan


Monthly Charges             650                                  Rs 1500


Surfing                     Unlimited                            Unlimited


Data Download               1 GB                                 Unlimited


Excess Data Usage           Rs.5 / MB                            -

                              100       frees   domestic   SMS       100     frees   domestic   SMS
Default Voice (incl. SMS)
Usage                         One e-mail ID of 10 MB on SMTP  One e-mail ID of 10 MB on SMTP
                            Server with 2 MB Web Page Space Server with 2 MB Web Page Space
                              Call / SMS charges as per plan   Call / SMS charges as per plan
                            chosen by customer               chosen by customer




Handset Change Card
On Dec 13, 2004 Reliance Infocomm has launched a Handset Change Card
(HCC) to offer its subscribers with the flexibility of changing or upgrading to the
handset of their choice and retaining the old phone number with it.
A Reliance IndiaMobile (RIM) customer can now buy the HCC costing Rs22,
inclusive of services tax of 10.2%, from any WebWorld or the 40,000-strong
channel partner chain across the country to deactivate the old handset and then
transfer the same number to another handset of his choice.
The old handset, which stands deactivated, can be reactivated and reused with a
fresh number with the help of another wonder product called Get Started Kit
(GSK) that Reliance Infocomm has recently launched. Handset Change Card can
be used by both prepaid and postpaid RIM customers.
Unlimited Free Calling plan
On Dec. 27,2004 Reliance Infocomm launched an Unlimited Free Calling plan for
both prepaid and postpaid customers. This will allow making unlimited Free calls
to Reliance phones "Anywhere in India".
Reliance's revolutionary unlimited Free calling plan comes with a Recharge
Voucher (RCV) of Rs770 for prepaid customers.
The Rs 770 RCV for prepaid FWP offers unlimited calls to any Reliance phone
across the country. This scheme carries talk time value of Rs 165 for making
calls to non-Reliance phones with an attractive flat unit rate of Rs 1.10, with
different pulse rates depending on the network and distance bands.


Launch of e-recharge vouchers
Reliance Infocomm had launched an e-Recharge facility for its prepaid
subscribers offering them with the flexibility to opt for denominations ranging from
Rs55 to Rs1100 on Jan 5, 2005.
Now, Reliance IndiaMobile (RIM) subscribers are able to electronically recharge
their prepaid accounts, almost instantaneously, with virtually any amount that
suits their budget. They will also be able to top-up their accounts with micro
recharges beginning with Rs55 without changing the validity of the original
recharge.
The facility is available at all Reliance WebWorld and Web World Express stores
in major cities and will gradually be spread to other places and all the major retail
outlets of the channel partner chain in about 1,500 cities and towns in the
country.
The Reliance e-Recharge works like this:
      The retailer on receiving the recharge request from the subscriber
       forwards the details - such as the denomination, the RIM number - to a
       prescribed number from his phone.
      The amount is then transferred to the subscriber account after the retailer
       authenticates it with his secure password.
      A confirmatory SMS lands on the subscriber's and retailer's phones in a
       matter of seconds.


The advantage for the retailer is that he saves on working capital and inventory
cost on account of keeping a vast range of Reliance RCVs. From the customer's
points of view, he now has the choice of going in for a paperless transaction - a
growing trend in this information age.
Post Offices to sell Reliance Prepaid Vouchers
Reliance Infocomm and the Department of Posts have entered into an
arrangement (on Jan 27, 2005) for the selling of Reliance IndiaMobile (RIM)
Prepaid Recharge Vouchers (RCVs) at post offices. Initially, the RCVs will be
sold at selected post offices in Andhra Pradesh. As Reliance Infocomm's network
coverage in Andhra Pradesh expands rapidly to cover the entire state, post
offices become an ideal additional sales channel for RIM RCVs. The massive
infrastructure of postal department covers the entire state thus it would help
customers of Reliance to get recharge vouchers easily.


Special metro tariff for Reliance pre-paid FWP
On Feb. 1,2005 Reliance Infocomm has announced special tariff structure for its
prepaid fixed wireless phone (FWP) subscribers in the metropolitan cities offering
savings of up to 33%.
Reliance FWP subscribers can now enjoy the benefit of increased pulse rate of
90 seconds, as compared to the old 60 second-pulse, for making local calls to
non-Reliance mobiles. As a result, the new effective rate per minute works out to
just 73 paise, down 33% from the old rate of Rs1.10.
The company has also introduced a special reduced tariff for calls from FWP to
fixed lines between Mumbai and Delhi. The new rate is Rs1.90 with an increased
pulse rate of 60 seconds as against the old rate of Rs1.10 with a 30-second
pulse. The new rate per minute works out to Rs.1.90, down from the erstwhile
Rs2.20


Double talktime bonus on RIM prepaid: Anniversary offer
Celebrating the first anniversary of its RIM Prepaid launch, Reliance Infocomm
had announced a 'double talk time' bonus offer to its subscribers. Offer was valid
from March 14 to March 31.
The double talk time offer is available on recharge of all denominations, except
the top-up vouchers, and valid for any number of recharges the subscriber does
during the offer period. The additional talk time - available for 31 days from the
date of recharge - can be used for making calls to RIM phones in the circle.


Provide connectivity for Diamond Jubilee Dandi March
Reliance Infocomm was the communications partner for the International Walk
for Peace, Justice and Freedom held between March 12 and April 6 to
commemorate 75th anniversary of Dandi March.
Reliance Infocomm provide mobile Internet connectivity along the 385-kilometer
walk that originate from Sabarmati Ashram. Reliance Infocomm provide a mobile
van with 10 Internet connected PCs and PCOs at the 44 halts enroute.
Additionally, the company made available all information pertaining to this
internationally renowned March on R World, its data application suite.


Launch of India's largest Retail chain – WebWorldExpress (WWE)
Reliance Infocomm announced the launch of its WebWorldExpress (WWE) chain
of 1,160 stores across 680 cities, the largest, exclusive retail network from by a
single telecom operator in the country on April 4, 2005. These WWE's will be
supplemented by the existing 240 Reliance Web World stores in operation
across 110 cities, which already have customer care centers thus taking the total
customer care experience to new heights.
The location of each store is meticulously planned in a manner to ensure that a
customer does not have to commute more than two km to visit the nearest WWE
one-stop shop. Over 8,000 personnel, trained and certified by the company for
the purpose will manage these stores.
All WWEs and WebWorlds are linked through the company's wireless Internet
connectivity for instant coordination. The chain of stores is centrally monitored
from Reliance Infocomm headquarters at Dhirubhai Ambani Knowledge City
(DAKC), Navi Mumbai. A national center for monitoring the stores' functioning is
also being set up at DAKC on the lines of the much-acclaimed National Network
Operations Centre that monitors the company's for its wireline and wireless
network throughout the country.


Reliance launches lightest handset with Longest Messaging
Reliance Infocomm has launched a 65-gram handset LG 2330 with a unique
LMS (Long Message Service) facility on May 02, 2005. The lightest handset is
capable of sending text messages up to 480 characters against the standard 160
characters.


Reliance launches 'incoming only' RCV
Reliance Infocomm has launched (on June 01) a unique 'incoming only' recharge
voucher - RCV 149 - for subscribers who do not have much outgoing call needs.
The voucher costs Rs 149--administration fee of Rs 135.21 and service tax of Rs
13.79-, and is valid for 30 days. Though talktime is zero, subscribers can use top-
up vouchers to make calls or send text messages.
Monthly Sales of Handsets (under Prepaid scheme) in Lucknow
Cluster
Month                      Sales
Feb 2004                   6,111
March 2004                  7,504
April 2004                  4,850
May 2004                    5,194
June 2004                   4,521
July 2004                   4,457
Aug 2004                    3,762
Sept 2004                   3,356
Oct 2004                    4,229
Nov 2004                   10,423
Dec 2004                   10,556
Jan 2005                    9,193
Feb 2005                   13,334
March 2005                 11,871
April 2005                 12,086
May 2005                   15,578


   16000
   14000
   12000
   10000
    8000
    6000
    4000
    2000
       0
             Feb      A       J     Au    O      De    F     A
                     pr-     un-    g-    ct-    c-   eb-   pr-
                     04      04     04    04     04   05    05

                   Monthly sales in Lucknow Cluster
Analysis

     RIM prepaid was launched on Feb. 9, 2004. In the very first month of
      launch it shows very good response and register sales of over 6100
      handsets in the Lucknow cluster only.
     In the month of March 2004, it registered the sales of over 7500 handsets
      in Lucknow cluster only. Thus it was able to attract and satisfy its
      customers. The increase in sales of handsets means customers accepted
      the prepaid scheme.
     During April to Oct 2004, Reliance Infocomm launched several schemes
      and offers: multimedia handset, world card, mobile banking service,
      independence day offer, railway ticket booking scheme etc. But the sales
      of handsets showed a steady trend of around 4000-5000 per month. Thus
      through new offers and schemes, Reliance was able to attract new
      customers continuously. Reliance Infocomm‟s subscriber base for prepaid
      service reach upto 45000 in Lucknow cluster.
     In Nov 2004, Reliance launched attractive scheme of Get Started Kit
      (GST). By this scheme customers are able to buy any Reliance approved
      handset of their choice and get that activated with the number of their
      choice. Reliance launched another scheme of free unlimited local calls on
      Oct 28, 2004. Reliance and Hero Honda joins hands and Hero Honda
      offers free Reliance handset on the purchase of any two-wheeler vehicle.
      Reliance was able to attract its customers through these schemes and the
      sale of Reliance handsets cross the 10000 mark in Lucknow cluster in Nov
      2004. Now the customers are able to buy handset of their choice and get
      that activated with the number of their choice. With the freedom of handset
      choice and number, many new customers are attracted towards Reliance
      Infocomm scheme and its sales increased. The offer of Hero Honda also
      provides benefit for both the companies and the sales of Reliance
      Infocomm handset increased (more than 6000 handsets are sold through
      this scheme). Thus with these schemes, Reliance is able to increase its
      subscriber base rapidly.
     In Dec 2004, Reliance Infocomm launched Handset Change Card to allow
      its existing customers to change their handset. Reliance launched an
      unlimited calling plan in which calls to Reliance phone are absolutely free.
      These schemes attracted the customers by providing more and more
      benefits to them. Thus the sales of Reliance handset under prepaid
      scheme show a very good response with the sale of over 10500 handsets
      in Lucknow cluster. The handset change cards allow its customer to
      change their existing handset with a new one or interchange the handset
      with some friend. Thus customers are free to change their handset at any
      time just like in GSM service. Thus many new customers are added which
      want handset of their choice. The unlimited calling plan scheme is also
    very attractive in which calls to Reliance phone are absolutely free. This
    scheme suit to those persons who have to call to the Reliance phones
    frequently. With the introduction of Handset Change Card customer can
    change their existing handset thus it lead to the market for secondhand
    handsets. Many customers who want cheaper handset, now able to
    purchase secondhand handset from the market. This led to the increase in
    the sales of Reliance handsets and thus increases the customer base of
    Reliance subsequently.
   At the end of year 2004, Reliance Infocomm‟s subscribers base for
    prepaid scheme reached upto 65000 in the Lucknow cluster. It shows the
    confidence of users in the Reliance schemes.
   In Jan 2005, Reliance was able to attract more than 9000 new customers
    in Lucknow cluster. This is a very good response. This is possible
    because of the schemes launched in Dec 2004 and e-recharge vouchers
    launched in Jan 2005. Reliance Infocomm and Department of Posts (DoP)
    entered into an agreement for the sales of Reliance recharge vouchers at
    post offices. The Handset Change Card and Hero Honda offer are able to
    attract new customers in Jan also, thus led to high number of new
    subscribers. The e-recharge scheme also attracts customers to recharge
    their phone without any paperwork. The e-recharge scheme is beneficial
    for the Reliance WebWorld and other retail shop of Reliance Infocomm
    because it reduces investment in the recharge vouchers. Now the retail
    shop of Reliance Infocomm are able to maintain minimum inventory and
    fulfill recharge request through e-recharge facility.
   In Feb 2005, Reliance Infocomm complete one year of its prepaid
    scheme. In just one year from its launch, this scheme got huge success.
    In one year, Reliance Infocomm is able to reach over 80000 subscriber of
    prepaid in Lucknow cluster.
   In Feb 2005, Reliance registered the sale of over 13000 handsets for
    prepaid schemes in Lucknow cluster. Reliance Infocomm is able to
    register such a high sale due to new schemes like reduction in tariff rates
    and some schemes of previous months. Thus Reliance is able to get the
    benefits of schemes launched and attract new customers continuously.
   In March and April 2005, Reliance records sales of more than 10000
    handsets per month. In March, Reliance started an “Anniversary offer” of
    double talk time bonus to attract customers. The additional talk time is
    available for 30 days from the date of recharge and use for calls to any
    RIM phone. In April, Reliance launched WWE (Web World Express) to
    help the customers. These schemes show very good response, as the
    sales of Reliance handset are high in these months.
   In May 2005, sales of handset break all previous records and cross 15000
    mark in Lucknow cluster. Now subscribers are free to change their
    handset and choose the number of their choice. Thus they show very
    good response.
Comparative Analysis Between the schemes Launched and new Subscribers




    In this Parito Chart months are described as follows:


    A     Feb 2004
    B     March 2004
    C     April 2004
    D     May 2004
    E     June 2004
    F     July 2004
    G     Aug 2004
H     Sept 2004
I     Oct 2004
J     Nov 2004
K     Dec 2004
L     Jan 2005
M     Feb 2005
N     March 2005
O     April 2005
P     May 2005



From the chart it is clear that maximum no. of subscribers are attracted by the
schemes launched in month May 2005(P) which is 12%, next is the month Feb
2005(M) which attract around 11% subscribers. Similarly, in the month of Aug
2004(G) minimum no. of subscribers attracted thus the schemes launched in the
month of Aug 2004 are unable to attract customers.
This chart shows percentage customers attracted in every month in the
decreasing order.
SAP
SAP stands for Systems Applications and Products in Data Processing. SAP is
made up of individual, integrated software modules that perform various
organizational system tasks. It incorporates the concepts of enterprise resource
planning (ERP) and business process reengineering (BPR) into an integrated
solution for business applications.
SAP is a product developed and marketed by the German company SAP AG.
SAP AG is an international provider of comprehensive, enterprise class
information systems with proven success supporting large, global manufacturing
and distribution enterprises. In 1979, SAP released SAP R/2 into the German
market. This product ran on mainframe computers, as did most large programs of
that era. SAP R/2 was the first integrated, enterprise-wide IT infrastructure in one
product. Towards the end of the 80's, client-server architecture became popular
and SAP responded with the release of SAP R/3 in 1992.

SAP R/3 is SAP's third generation highly integrated software solution for
client/server and distributed open systems. SAP's R/3 is the world's most-used
standard business software for client/server computing. R/3 meets the needs of
a customer from the small grocer with 3 users to the multi-billion dollar
companies The software is highly customizable using SAP's proprietary
programming language, ABAP/4. R/3 is scalable and highly suited for many
types and sizes of organizations.

SAP is a tightly integrated software solution that links an entire organization
together with one comprehensive system. That means that SAP can handle a
wide range of tasks, from keeping track of manufacturing levels to balancing the
books in accounting, and then tie it all together, effectively streamlining the data
flow between different parts of a business. The scope of functionality is
enterprise-wide: SAP includes Financial Accounting (such as general ledger and
accounts receivable), Management Accounting (such as cost centers and
profitability analysis), Sales, Distribution, Manufacturing, Production Planning,
Purchasing, Human Resources, Payroll, and more. All these modules are
integrated i.e., they look at the same data when queried. Thus data redundancy
can be eliminated. SAP is a real time system. Users always look at current data
and not historical data.

SAP allows businesses to share information in real-time with employees,
suppliers, and distributors, no matter how large the organization is. SAP has a
large customer base and a long record of streamlining operations in large
organizations. It has proved effective for improving productivity, customer
service, overall quality, and ultimately the profitability of the company.

SAP R/3 is delivered to a customer with selected standard process turned on,
and many other optional processes and features turned off. At the heart of SAP
R/3 are about 10,000 tables, which control the way the processes are executed.
Configuration is the process of adjusting the settings of these tables to customize
SAP for the organization.

The SAP R/3 code is written in an interpretive language called ABAP (Advanced
Business Application Programming). ABAP is very similar to COBOL in its
syntax. Use of the ABAP language allows SAP customers to extend the
functionality of the base product.

SAP can be run with many different database products, nearly 85% of SAP
customers now choose Oracle because of its dominance in the database
marketplace. SAP software has become very popular in the U.S., and the
company is now the world's leading application package vendor. SAP competes
directly with Oracle Applications products and PeopleSoft products in the ERP
marketplace.

What Makes SAP different?

Traditional computer information systems used by many businesses today have
been developed to accomplish some specific tasks and provide reports and
analysis of events that have already taken place. Examples are accounting
general ledger systems. Occasionally, some systems operate in a "real-time"
mode that is, have up to date information in them and can be used to actually
control events. A typical company has many separate systems to manage
different processes like production, sales and accounting. Each of these systems
has its own databases and seldom passes information to other systems in a
timely manner.

SAP takes a different approach. There is only one information system in an
enterprise, SAP. All applications access common data. Real events in the
business initiate transactions. Accounting is done automatically by events in
sales and production. Sales can see when products can be delivered. Production
schedules are driven by sales. The whole system is designed to be real-time and
not historical.

SAP structure embodies what are considered the "best business practices". A
company implementing SAP adapts it operations to it to achieve its efficiencies
and power.

The process of adapting procedures to the SAP model involves "Business
Process Re-engineering" which is a logical analysis of the events and
relationships that exist in an enterprise's operations.

The traditional SAP R/3 ERP system offers transaction and reporting functionality
in the areas of financial, logistics, and human resource applications, enabling the
exchange of data between a company‟s various business units or divisions. The
standard business process fits all approach of SAP R/3 often required business
process reengineering to meet the business needs. Because this could only
address a limited portion of the market‟s needs, SAP began offering industry-
specific solutions and extended ERP solutions, including managing supplier
relationships with supply chain management (SCM) solutions, managing the
distributors, resellers, and customers with customer relationship management
(CRM) solutions, and managing the knowledge-assets with business intelligence
(BI) solutions.

SAP Application Modules

SAP has several layers. The Basis System is the heart of the data operations
and should be not evident to higher level or managerial users. Other customizing
and implementation tools exist also. The heart of the system from a manager's
viewpoint is the application modules. These modules may not all be implemented
in a typical company but they are all related and are listed below:

      FI (Financial Accounting)--designed for automated management and
       external reporting of general ledger, accounts receivable, accounts
       payable and other sub-ledger accounts with a user defined chart of
       accounts. As entries are made relating to sales production and payments
       journal entries are automatically posted. This connection means that the
       "books" are designed to reflect the real situation.
      CO (Controlling)--represents the company's flow of cost and revenue. It is
       a management instrument for organizational decisions. It too is
       automatically updated as events occur.
      AM (Asset Management)--designed to manage and supervise individual
       aspects of fixed assets including purchase and sale of assets,
       depreciation and investment management.
      PS (Project System)--is designed to support the planning, control and
       monitoring of long-term, highly complex projects with defined goals.
      WF (Workflow)--links the integrated SAP application modules with cross-
       application technologies, tools and services
      IS (Industry Solutions)--combine the SAP application modules and
       additional industry-specific functionality. Special techniques have been
       developed for industries such as banking, oil and gas, pharmaceuticals,
       etc.
      HR (Human Resources)--is a complete integrated system for supporting
       the planning and control of personnel activities.
      PM (Plant Maintenance)--In a complex manufacturing process
       maintenance means more than sweeping the floors. Equipment must be
       services and rebuilt. These tasks affect the production plans.
      MM (Materials Management)--supports the procurement and inventory
       functions occurring in day-to-day business operations such as purchasing,
       inventory management, reorder point processing, etc.
      QM (Quality Management)--is a quality control and information system
       supporting quality planning, inspection, and control for manufacturing and
       procurement.
      PP (Production Planning)--is used to plan and control the manufacturing
       activities of a company. This module includes; bills of material, routings,
       work centers, sales and operations planning, master production
       scheduling, material requirements planning, shop floor control, production
       orders, product costing, etc.
      SD (Sales and Distribution)--helps to optimize all the tasks and activities
       carried out in sales, delivery and billing. Key elements are; pre-sales
       support, inquiry processing, quotation processing, sales order processing,
       delivery processing, billing and sales information system.

SAP R/3 System Architecture

The SAP R/3 system is structured in a three-tier client /server architecture from a
software perspective, with each tier having a distinct function. In this architecture,
the presentation tier provides the interface to the user, the application tier
processes the business logic, and the database tier stores the business data.
The SAP system architecture supports heterogeneous environments and
provides a high degree of system scalability and flexibility. With the introduction
of the Internet middleware, SAP systems are now considered to be structured in
a multi-tier architecture.




The presentation tier, typically installed on a PC, provides the SAP Graphical
User Interface (SAPGUI). The interface is also available through a web browser.
In this case, an additional middleware tier transforms the SAPGUI DIAG protocol
into HTTP. The access is via TCP/IP and consumes very little network
bandwidth.

The application tier executes the business logic, responsible for processing client
transactions, print jobs, running reports, coordinating access to the database,
and interfacing with other applications—the heart of the SAP R/3 system.
Because the application logic can be executed in parallel, the workload can be
distributed between multiple servers if the system load exceeds the capacity of a
single machine.

The database stores both the business-generated data and also the SAP
application programs, which are loaded into the SAP application servers from the
database at runtime. SAP supports several database platforms, so the customer
is free to determine the vendor. The database license is part of the SAP contract,
although price differences exist between each database. The database software
is delivered with the SAP installation media. In general, each SAP system can
deploy only one database instance. All business and application data associated
with a single SAP system is located in one database. Therefore, the server
executing the database is the component with the highest demands on reliability,
availability, and performance and ultimately determines the scalability of the
entire SAP system.
Depending on system workload and available computing power, the software
tiers are executed on separate servers or consolidated onto fewer ones. The
presentation tier is always considered distributed to the user‟s workplace.
Development and test systems, as well as small production systems, commonly
consolidate database and application instances onto one server (central system
or two-tier). Large productive installations typically deploy a separate database
server and multiple application instances on separate servers for increased
scalability. For demo purposes, however, it is possible to combine all of the SAP
software tiers onto one laptop computer.


SAP R/3 System —The ERP Backbone
The SAP Enterprise Resource Planning (ERP) system, SAP R/3, is built as an
integrated system where all functionality necessary to run an enterprise is
provided by one system. The main benefits of this approach are the workflow and
seamless integration of the different business processes within an enterprise.
The integration is what ensures the consistency of the business information. The
functionality within SAP R/3 is split into modules dedicated to the business
functions in an enterprise. The core modules include hundreds of business
processes to address the needs of an enterprise. They can be categorized under
financials, logistics, and human resources management. Each of these, in turn,
consists of multiple sub-modules. For instance, logistics includes general
logistics, material management, plant maintenance, and production planning,
among others.

These application modules support all of a company's business transactions and
are integrated in real time. A change in one application module results in an
automatic update of the data in the other application modules. All application
modules have the same "look and feel". The brief description of the main
modules is as follows:

SAP Financials

Every company must care about and manage money to survive. Therefore, most
enterprises start their SAP implementation with SAP Financial Accounting (FI)
and SAP Controlling (CO), the fundamental bookkeeping modules. SAP financial
modules give enterprises the whole array of accounting functionality with
extensive reporting support, especially with the controlling module. An important
aspect of the financial accounting system is the real-time generation of the
current balance. The needs of globalization are addressed with support for
multiple currencies, units, and languages, as well as national tax and legal
regulations. The related modules are SAP Enterprise Controlling (EC) providing
an executive management system (EIS), as well as financial consolidation for
subsidiaries in countries with different legal regulations, and the SAP Treasury
(TR) module. Documents generated by the financial modules have a relatively
low performance impact on the SAP system.

The primary SAP R/3 application modules that support financial activities are:
    Financial Accounting
    Controlling
Financial Accounting is broken down into the following submodules:

      General Ledger accounting
      Accounts Receivable
      Accounts Payable
      Legal Consolidations
      Special Purpose ledger
      Asset Accounting

Controlling is broken down into the following submodules:

      Overhead Cost Controlling
      Product Cost Controlling
      Sales and Profitability Analysis
      Activity Based Costing



SAP Logistics

Logistics and production is the most extensive area of SAP R/3 and contains the
largest number of modules. The logistic modules manage all processes involved
in the internal supply chain, from raw material procurement to final customer
delivery and billing. These functions interact with virtually every SAP R/3 module,
from financial to human resources (considered work-flow). The main logistic-
related modules are Sales & Distribution (SD), Production Planning (PP), and
Materials Management (MM).
SAP Sales & Distribution (SD) is the second most deployed module. SD covers
the complete sales cycle from ordering and quotations over shipping and
transportation to billing and customer payment processing. SD supports EDI, fax,
mail, and so on. Other useful features include immediate product availability and
delivery schedule information by integration with MM and PP. Due to seamless
integration with FI and CO (and connections with bank accounts), receivables
and revenues are immediately updated. SD generates a much higher load than
FI because of the many steps to process a business case and the data exchange
necessary with other modules. Depending on the functionality in use, high
performance load can quickly arise. Prominent examples of such performance
hot spots are online availability check and online price finding. To help keep the
response times on the remaining application servers acceptable, it is possible to
set up a dedicated server to perform the availability to promise (ATP) calculation
within the standard SAP R /3 system.
SAP Material Management (MM) comprises all activities related with material
acquisitions (purchasing) and control (inventory, warehousing). The warehouse
management (LE-WM) module manages complex warehouse structures, storage
areas, and transportation routes. Stock is always controlled because every
material movement is immediately recorded.
SAP Production Planning (PP) provides a whole palette of production methods
ranging from make-to-order production to repetitive manufacturing/mass
production for discrete, batch-oriented, and continuous production. This business
area is a very complex part of SAP R/3, extensively integrated with SD and MM.
The capacity requirements planning (CRP) and material requirements planning
(MRP) batch-processing runs create a significant load on the system (hot spots).
Related modules are Plant Maintenance (PM), Quality Management (QM), and
the Project System (PS).


SAP Human Resources

The SAP human resources (HR) area includes business processes for personnel
administration (applicant screening, payroll accounting, travel expenses, etc.)
and personnel development (workforce planning, seminar management, etc.).
The business processes associated with the HR modules are very country-
specific to adhere to national laws concerning employment, tax, benefits, and so
forth. Because these laws are subject to change frequently, many enterprises
deploy a dedicated HR system separate from the other systems to restrict the
downtime necessary when implementing legal patches to the HR department.
The SAP R/3 application modules that support most of the human resource
activities are:
     Human Resources: used for administrative and personnel management
        activities.
     Financial Accounting: used for payroll and cost accounting, time reporting
        and travel expenses.
     Controlling: used for payroll and cost accounting, time reporting and travel
        expenses.
     Sales and Distribution: used for sales personnel commission related data.
     Production Planning (PP): used for time management and shift planning.
     Plant Maintenance (PM): used for time management and shift planning.
     Project System
     Workflow: used as a process enabler for routing tasks to the proper staff.
SAP System At Reliance Infocomm

General Ledger Module:
Automatic postings to the General Ledger (GL) are made from the Sales and
Distribution (SD), Materials management (MM) and Asset Accounting (AA)
modules, and the Accounts Payable (AP) and Accounts Receivable (AR) sub-
modules. Reconciliation (control) accounts in the general ledger provide the
integrity between modules and ensure correct ledger postings. User can also
make manual postings directly to the general ledger, provided the settings in the
GL Master Data permit manual postings to the selected account.

When certain transactions are posted to the general ledger, they are also
recorded in the Controlling (CO) module. The general Ledger is used to extract
trial balances and statutory reports such as the Profit & Loss Account and the
Balance Sheet. Management reports are mainly generated through the
controlling module.

General ledger journals can be posted directly, or parked and then checked and
posted at a later date. Journals can be processed using transactions that require
details of each line item to be entered on a single screen. If many line items are
to be added to a journal, the fast entry transaction can be used to speed up the
process.

Chart of Accounts

A group chart of accounts for Reliance (REL) has been designed for accounting
in SAP taking into consideration the following:

      business requirements and policies of the individual companies within the
       group
      statutory requirements as per Schedule VI of the Companies Act, 1956
       and the Accounting Standards of the Institute of Chartered Accountants of
       India
      budgeting and internal reporting requirements

Individual companies within the group inherit only the GL accounts relevant to
their business requirements from the group chart of accounts.

The rights for creation of any new GL account are vested with the Corporate
Consolidation Cell at Mumbai and the maintenance of the GL master data at
individual locations is vested with a GL Master Guardian.

The chart of accounts REL uses a 7-digit account number comprised of three
levels of 2+2+3 digits respectively. The first level signifies the main account
classification, the second level represents further classification of the main
accounts based on different types and the third level identifies the individual
accounts within a type.

The chart of accounts has been structured to follow the following broad sequence
of account classification, i.e.:

      liabilities
      assets
      income
      expenditure

Ranges of accounts have been blocked for individual account groups and the
account numbers fall within the following broad sequence:

0000000 - 0009999 Balancing accounts
0010000 - 0010999 Inter Company Clearing Accounts
1000000 - 1199999 Capital & Reserves Accounts
1200000 - 2299999 Loan Accounts
2300000 - 2499999 Bank Cash and credit Accounts
2500000 - 2999999 Unsecured Loan Accounts
3000000 - 3999999 Current Liabilities & Provisions
4000000 - 4499999 Fixed Assets
4500000 - 4999999 Investments
5000000 - 5099999 Other Current Assets
5100000 - 5299999 Inventory
5300000 - 5399999 Sundry Debtors Accounts
5400000 - 5599999 Cash and Bank Accounts
5600000 - 5999999 Loans, Advances and Deposits
6000000 - 6999999 Income
7000000 - 7125999 Material Consumption Accounts
7126000 - 8799999 Expenses
8800000 - 8999999 Appropriation Accounts
9990000 -9998999 Statistical / Noted Accounts
9999000 - 9999999 Transitional Accounts

FI Documents

Each journal processed in SAP is stored as a document that has a unique
identifying number. This number must be recorded on the source document used
for data input.

SAP documents have two parts:
   the header which controls the posting period, company code, currency
     etc., and
   line items which are the individual account postings
Every journal document in SAP must have at least two line items representing a
debit and credit posting. The document cannot be posted unless the total of the
debit line items equals the total of the credit line items and all the mandatory
fields are entered.

The entry fields appearing for each line item depends on the nature of the GL
account selected and the characteristics attached to it through the field status
group.

General Ledger Transactions:

      Process Recurring Journals
      Process Fund Transfers
      Process Tax Deposits
      Maintain Sample Documents
      Maintain FI Documents

Process Recurring Journals

Recurring journal documents are created whenever a journal posting is made on
a regular basis. This can be a monthly posting, bi-monthly posting, quarterly
posting etc. It is also possible to specify the run schedule whereby postings can
be done on different dates as required. A recurring journal document is simply a
template containing the journal line items to be posted. No accounting entries are
made at the time of creation. When the recurring journals are posted periodically,
accounting documents are generated.

The posting frequency is maintained in a posting schedule header attached to
the recurring journal document. The posting schedule header also contains
details relating to the life of the journal, so journal postings take place within the
start and end dates specified in the posting schedule. The end date can be
altered at any time but once reached; SAP automatically sets a deletion indicator
that prevents further postings taking place.

Recurring journals can be created for any document type, although vendor
invoices, customer debit notes and standard general ledger journals are the most
common.

Recurring journals differ from other reference documents in that the amounts in
recurring journals cannot be altered from month to month. If changes are
required to the posting amount in a recurring journal, the journal has to be
deleted and a new journal document is to be created for the correct amount.
Changing Recurring Journal Documents

Limited changes can be made to a recurring journal document once created. For
example, the amount to be posted cannot be altered. For recurring journals that
refer to customer or vendor accounts it is possible to change payment terms and
payment methods in the document. However, it is not possible to change key
fields such as the account number, document type or currency. To change key
fields, the recurring journal document must be deleted and a new journal
document containing the correct information must be created.

Previously posted documents are not affected by any changes made to the
recurring journal document.

Changing a posting schedule

A posting schedule controls the frequency with which a recurring journal
document is posted. The life of a document or the number of times a journal can
be posted is also controlled by the posting schedule. Once posting of a journal
has commenced, it is not possible to change the start date but the end date can
be changed at any time before the actual end date. The posting frequency can
also be changed at any time. Changes to the posting schedule will take effect in
the next posting run.

Marking a recurring journal document for deletion

Documents that have been marked for deletion are excluded from any future
posting run. Once the end posting date for a recurring journal document is
reached, SAP automatically sets the deletion indicator. The deletion indicator can
also be manually set before a document's end date is reached, preventing further
postings of the document.

To extend the posting life of a journal, the deletion indicator can be removed and
the end date extended. If several postings of a journal have been missed
because the end date was not extended in time, these must be created and
posted as normal journals. It is not possible to backdate postings of a recurring
journal.

A document cannot be deleted unless the deletion indicator has been set.

Posting Recurring Journals

Creating a recurring journal does not update any balances in the general ledger
or sub-ledgers. It is simply a template or model. Periodically the recurring
journals must be posted. All recurring journals due for posting in the related
period month and which have not been marked for deletion are selected.
Documents based on the recurring journal data are created and held in a batch
session. A separate document is created for each recurring journal. Once the
batch session is processed, the documents are posted and relevant ledger
balances updated. The posting schedule data maintained in the recurring journal
document is updated with the date of the posting. The counter representing the
number of times the journal has been posted is incremented by one.

Process Fund Transfers

Funds are transferred on a regular basis between Central Banking Division
(CBD) and other locations. For an outflow of funds from CBD's perspective - an
Outflow Payment Summary must be received before a funds transfer can be
initiated. Similarly for an inflow of funds a Recovery Statement must be received
from the locations prior to a funds transfer. The fund request is raised at the
locations after analysis of liquidity forecasts and available credit limits.

Funds Transfer is divided into two sections - Funds Inflow and Funds Outflow.
The locations from which the funds are received may or may not be on SAP. If
the transferor/transferee bank is on SAP then the transaction on both ends can
be carried out on the system. If the transferor/transferee bank is not on SAP, an
entry hitting a wall account needs to be passed to effectively complete a funds
transfer. This is true for both Inflow and Outflow of Funds.

Process Tax Deposits

TDS is deducted through the Accounts Payable sub-module and the Country
India Version in the (CIN) module. Only the final outgoing payment is processed
through the General Ledger (GL). Prior to processing the outgoing payment, a
report is run from Accounts Payable to identify the total amount to be remitted.

Once the amount of the remittance has been determined, a payment journal is
processed for the required amount. After posting the journal a manual cheque
must be created for the amount of the remittance.

Tax deposits are split into the following categories:

      TDS deposits
      other tax deposits

TDS Deposits

TDS Deposits in the General Ledger must be confirmed with TDS postings made
in the CIN module prior to processing the outgoing payment. This ensures that all
postings have been carried out up to the period end in CIN. Once all TDS
postings have been made the TDS Deducted report can be executed for the
period. This report is compared to the TDS liability balance in the General
Ledger. Any discrepancies must be investigated and corrected before the TDS
payment outgoing payment can be processed.

Other Tax Deposits

Prior to processing the outgoing payment, the relevant General Ledger balance
is displayed for the relevant liability account to determine the tax amount to be
remitted.

Once the amount of the remittance has been determined, a payment journal is
processed for the required amount. After posting the journal a manual cheque
must be created for the amount of the remittance.

Maintain Sample Documents

If similar documents are regularly posted with the same data, time is saved and
mistakes avoided if a reference document is created. There are two kinds of
reference documents:

      documents
      assignment models.

Both types of document are used as templates, and are copied into a journal
when required. No accounting entries are made in SAP when creating or
modifying reference documents.

Sample Documents

Sample documents are created as reference documents to journals that are
regularly posted. A sample document is simply a template containing the
necessary journal line items to be posted. No accounting entries are made in
SAP at the time of sample document creation. This means that the document can
be created to include account and cost centre assignments, but exclude amounts
that might change from month to month. Sample documents can be created for
any document type.

Unlike a recurring journal, the amount field of a sample document can be
changed as often as necessary. Changes made to sample documents do not
affect documents already posted that were based on the sample documents. The
changes will only affect future documents.

Account Assignment Models

An account assignment model is very similar to a sample document. It is a
template that can be used to simplify data entry when creating journal entries.
Account assignment models do not have to be complete or in balance.
An account assignment model can be changed if required. Unlike a sample
document, it is possible to change almost every field. Account assignment details
and values can be changed, and line items can be added or deleted. Similarly,
changes made to account assignment models do not affect documents already
posted that were based on the account assignment model. The changes only
affect future documents.

Equivalence numbers can be assigned to account assignment models. A total
amount is entered that is distributed to other items within the model, according to
set ratios. For example, total costs are to be allocated between three assets with
half the total costs to be allocated to one asset and the other half of the costs to
be distributed equally between two other assets. The proportion for the first asset
is 2; each other asset is allocated 1 portion.

Maintain FI Documents

Each transaction processed in SAP is stored as a document that has a unique
identifying number. This number should be recorded on the source document
used for data input.

SAP documents have two parts:

      The header that controls the posting period, company code, currency etc.
      Line items which are the individual account postings

Every accounting document in SAP must have at least two line items
representing a debit and credit posting. The document cannot be posted unless
the total of the debit line items equals the total of the credit line items.

Changing FI Documents

Posted documents can be amended to correct errors. However, key fields such
as account numbers, posting period and values cannot be changed. Changes
can only be made to text fields.

Reversing FI Documents

Limited changes can be made to a posted financial document. To enable a clear
audit trail, any changes to key fields such as posting period, account or value
cannot be made via the change transaction. Instead, it is necessary to reverse
the incorrect document and create a new document with the correct information.

Reversing a financial document creates a new document that is linked by the
header to the original document. The net effect of the two documents when
combined is zero.
Documents can be reversed either individually or by the mass reversal function.
The mass reversal function enables multiple documents to be reversed at one
time. Care must be taken when specifying the documents to be reversed to avoid
errors.

These transactions can only be used to reverse non-clearing financial
documents. To reverse a clearing document, the reset and reverse transaction
must be used. This reverses the document and resets the cleared items back to
open items.

Displaying Changes to FI Documents

A full audit trail is available for any document created in SAP. All changes made
to a document are tracked and the person responsible for making the changes
can be identified.

Account Payable Module
It consists of processes:

    Scroll vendor Invoice
        o Scroll Incoming Invoices
        o Monitor Scrolled Invoices
    Verify / Process Vendor Invoices
        o Verify / Process Vendor Invoices - For Materials
        o Verify / Process Vendor Invoices - For Services
        o Recover Outstanding Advances
        o Post TDS
        o Release Invoices
    Schedule Process Vendor Payment
        o Record Updation
        o Date Updation
        o Advance Payments
        o Process Manual Payments
        o Process Automatic Payments
        o Cheque Management
    Reporting


Scroll Incoming Invoices

This process covers the scrolling of vendor invoices at Reliance sites and
forwarding the same to the respective Certification or Accounts Payable
Department. Scrolling vendor invoices includes the receipt, logging and
monitoring of invoices received by Reliance. Vendor invoices are received at
centralized Reliance scrolling departments. These are logged and
acknowledgement is handed or forwarded to the vendor. When the invoices are
logged in SAP, a unique scroll number for each invoice is generated. This
enables the monitoring of the invoice status through various stages, until
settlement of the invoice.

The following are the possible processing stages through which an invoice may
pass:

1. Scrolled - Invoices have been scrolled in SAP and are pending further action
from the relevant Accounts Payable User Department.

2. Pending Certification - Scrolled invoices are pending further action from the
Certification Department.

3. Certification Complete - Scrolled invoices have been certified by the
Certification Department and are pending further action from the relevant
Accounts Payable Department.

4. Pending Clarification - Scrolled invoices require clarification and have been
referred to the concerned department by the Accounts Payable Department. The
Clarification department is usually the same as the Certification Department,
however a distinction is made in SAP to differentiate between the two scrolled
invoice processing stages, based upon the reason for holding up the invoice.

5. Clarification Complete - Scrolled invoices have been clarified by the
Clarification Department and are pending further action by the Accounts Payable
User Department.

6. Passed by Accounts - Scrolled invoices have been fully verified and posted
for payment by the relevant Accounts Payable User Department.

7. Adjusted / Paid - Scrolled invoices have been paid or adjusted (i.e., cleared
from SAP open invoice items) and the SAP transaction "YINC" (update adjusted /
paid status) has been executed.

8. Rejected - Scrolled invoices have been rejected for posting / payment.



Scroll Incoming Vendor Invoices

All the invoices received by the Scrolling Department are scrolled through the
entry option from the scroll menu. This enables a central record of receipt of a
vendor invoice to be kept by Reliance. Monitoring and updation of scrolling is
facilitated only after invoices have been scrolled
Generate Acknowledgement Slip

Acknowledgement slips are generated through the scroll menu to pass
confirmation of receipt of an invoice from Reliance to a vendor. Multiple invoices
can appear on a single acknowledgement slip, however, only one vendor can be
referenced on a single slip.

Generate Daily Scroll List

The daily scroll report provides a list of scrolled invoices to be forwarded to the
Certification Department or the Accounts Payable Department. As the name
suggests, this report is run on a daily basis.

Record Invoice Certification

Certified invoices are received from the Certification Department and the
certification is recorded in SAP. The invoices are then forwarded to the Accounts
Payable Department for processing. This transaction is also used to correct any
errors that were made at the time of invoice scrolling.

Monitor Scrolled Invoices

This process covers the monitoring of scrolled invoices. Monitoring the status of
a scrolled invoice is a constant process to ensure that invoices are settled in a
timely manner. Monitoring also allows users to follow invoices through every
stage of the invoice cycle and report on progress as required. It monitor all the 8
stages through which an invoice pass.

Perform Ageing Analysis

Run the ageing analysis report to analyse the process of bills which are pending
release from one scrolling stage to another. The report allows access to
information on the time (in days) that a bill spends in any one scrolling stage. Drill
down functionality is available from the bill quantity number, which displays more
detailed scroll information (such as invoice scroll numbers, scroll dates, vendor
numbers etc).

Verify / Process Vendor Invoices

Invoice verification provides the link between the purchasing and account
payment processes. Invoice verification tasks include:

      entering invoices and credit memos received from vendors
      checking the accuracy of invoices with respect to contents, prices, and
       arithmetic
      executing the account postings resulting from an invoice
      updating certain data in the SAP system, for example, open items and
       material prices
      checking invoices that were blocked because they varied too greatly from
       the purchase order
      checking the quantity of goods received on the excise invoice against the
       quantity of goods on the material document, and posting the excise
       invoice in SAP

Invoice verification does not include the payment or analysis of invoices.
However, the information required for these processes is passed on to the other
departments.
Invoices are received from the Scrolling Department for verification and
processing. If any clarification or purchase order amendment is required before
processing, the invoices are sent to the Clarification Department for necessary
action.
When an invoice from a vendor is entered into SAP for verification, SAP
proposes default values based on the goods receipt(s) and purchase order(s).
The default data proposed by the system needs to be accompanied by the
invoice and, if necessary, the variances should be corrected. Where there are
variances between the purchase order or goods receipt and the invoice, SAP
issues a warning for invoices that are over the order quantity but within pre-set
tolerance limits. In such cases the invoice can be posted but it will be
automatically blocked for payment. For invoices that exceed both the order
quantity and the pre-set tolerance limits, no posting will be allowed.
Blocking the invoice means that the accounting entries are posted, but that a
payment block prevents payment until the invoice is released. Invoices are also
blocked if the goods have not yet been released from quality inspection.
Invoices can also be blocked for retention. An additional line item is created in
the document as a vendor credit for the amount to be retained. Blocking for
retention can be due to the following:

      penalty
      delayed delivery
      retention as per purchase order
      excise invoice defective

Invoice verification serves the following purposes:

      takes over from the Materials Management Process, which starts with the
       purchase requisition, continues with the purchase order and goods receipt
       and ends with the invoice receipt
      allows invoices that do not originate in materials procurement (for example
       services, administrative expenses etc) to be processed
      allows vendor credit memos to be processed
Invoice documents, including both invoices and credit memos, can be cancelled.
The amount and quantity for a credit memo / invoice is copied from the document
to be cancelled. This avoids variances between the original document and the
reversal document.

Verify / Process Vendor Invoices - For Materials
Invoice verification for material supplies is a process of matching the vendor's
invoice with the related purchasing documents, i.e., the Purchase Order (PO)
and / or the Goods Receipt Note (GRN). Reliance follows goods receipt based
invoice verification, wherein there is a three-way match between the vendor's
invoice, PO and GRN.
An invoice is ready for processing after all required certifications and
clarifications are listed through the YSCR (Generate Scroll List) transaction. For
verification the MRHR transaction is called by clicking on the scroll type. In no
circumstances should the Post Vendor Invoice transaction (MRHR) be called up
by it's transaction code. All data entered during Invoice scrolling is defaulted on
the main screen.
There are four variants to consider when posting vendor invoices for materials:
Process Subsequent Invoice for Debit / Credit
This sub-process is required for invoice verification for any subsequent
adjustment where a further invoice or credit memo is received after a transaction
has been settled. When posting a subsequent debit / credit, the value of the PO
is updated, however, the invoice quantity does not change.
Please Note: It is essential that the Withholding Tax code (if applicable) is
properly selected and the Withholding Tax Base amount is also included.
Process Credit / Debit Notes with Quantity Adjustment
This sub-process involves verification / posting of credit notes received from a
vendor or debit notes raised on a vendor involving quantity adjustments. This
sub-process for debit notes is similar to the main Verify / Process Vendor
Invoices - For Materials process, except that reverse entries are being passed.
Please Note: It is essential that the Withholding Tax code (if applicable) is
properly selected and the Withholding Tax Base amount is also included. The
original document number(s) of the invoice(s) against which the credit / debit
note is being processed should be correctly entered. If the payment of TDS on
the invoice has already been made , the credit memo against that invoice is not
considered at all for TDS processing. If the TDS payment has not been made,
withholding tax is calculated on the memo amount ant that amount is debited
from the TDS payable account.
Process Invoices with Planned Delivery Costs for Main Vendor
This variation involves invoice verification for material supplies where the PO
also includes freight conditions either on the main vendor, or planned on another
vendor, but to be processed on the main vendor.
SAP displays information messages if the Excise Part II posting has not been
made, or if an excise invoice has not been accepted for capital goods. Where the
excise duty amount has to be withheld, an additional line item must be created
(with the appropriate payment block). The additional line item is not picked up for
payment processing until the block is released.

Process Invoices with Planned Delivery Costs for Other Vendor
A supplier's invoice for material supplies is processed separately to the delivery
charges, when a vendor different to the supplier invoiced the planned delivery
costs for the purchase.

Verify / Process Vendor Invoices - For Services
Invoice verification for services is also based on the goods receipt concept. For
every service rendered by a vendor, the service receiver creates a service entry
in system. Based upon the SAP service and vendor codes, the service can be
called off from an outline agreement / purchase order, wherein the quantity and
rates for the service are maintained. The service entry created by service
receiver will be accepted with various levels of release authorization. Invoice
verification for services relies upon a process of matching a vendor's invoice with
an acceptable service entry. An invoice for services is ready for processing once
all required certifications and clarifications are listed through the YSCR
(Generate Scroll List) transaction. For verification the MRHR (Post Vendor
Invoices - For Services) transaction is called up by clicking on the scroll type in
the YSCR transaction.

Process Subsequent Invoice for Debit / Credit
This sub-process is required for invoice verification for any subsequent
adjustment where a further invoice or credit memo is received after a transaction
has been settled. When posting a subsequent debit / credit, the value of the PO
is updated, however, the invoice quantity does not change.

Process Credit / Debit Notes with Quantity Adjustment
This sub-process involves verification / posting of credit notes received from a
vendor or debit notes raised on a vendor involving quantity adjustments. This
sub-process for debit notes is similar to the main Verify / Process Vendor
Invoices - For Materials process, except that reverse entries are being passed.

Verify / Process Vendor Invoices - Without Purchase Order
In certain instances, goods or services are purchased without a purchase order.
Usually this is for items such as power or telephone charges. Some low value
items can also be purchased without a purchase order.
The Certification Department must certify invoices received from vendors that do
not have reference to a purchase order. In such cases the expenditure is directly
debited to the GL account with the cost centre reference. Additionally, the GL line
item must be entered.


Recover Outstanding Advances
This process is used to recover outstanding advances to vendors. If any down
payments have been made to a vendor, SAP issues a message that a down
payment exists. SAP does not enforce adjustment. Where an existing down
payment requires adjustment against an invoice, a manual transfer posting is
necessary to clear the down payment with reference to the invoice. The clearing
of the down payment must occur immediately after invoice verification.

Allocate down payments to the specific invoice with which is to be cleared. SAP
notes the document number of the invoice in the line item of the down payment.
The payment program subtracts the down payment only when the corresponding
invoice is paid.

Down payments can be partially cleared. This occurs when a down payment is
cleared with several invoices that are paid at different time. In such cases the
down payment amount must be cleared manually.

Post TDS

The Tax Deducted at Source (TDS) on processed invoices is not deducted at the
time of invoice verification. As a result of this, it is essential that the Post
Withholding Tax (YTD2) transaction be executed.

The TDS posting should be scheduled and performed at regular daily intervals to
(i.e., every night or every morning) to capture invoices processed each day. If
TDS on an invoice is required for posting immediately, individual invoices can be
selected for immediate TDS posting.

Invoices can be selected using one or more of the following selection criteria:

      Posting Date
      Document Type
      Document Number

If the TDS is on provisions (made based upon goods receipt or service receipt
entries) the TDS on subsequent invoices posted on the goods receipt or service
receipt is deducted after adjustment is made to the TDS on provisions. SAP
displays a message to run the TDS program in the "actual" mode (i.e., TDS on
such invoices is not displayed in the test run). In the `actual" the differential TDS
postings for the provisions are made.


Release Invoices

Releasing invoices makes payment available for vendor invoices. This is a
necessary function in accounts payable in order to facilitate payment processing.
The business process for the release of invoices is currently under development,
and a full description and overview will be available online, in the near future. In
the meantime refer to the system task overview for information on the
functionality of this process.

Schedule Process Vendor Payment

Record Updation

The record updation process involves the recording of correct house bank
information for payments due to vendors. The record updation ensures that the
payment method suppliment is in line with the payment method for each payment
and payment document.

The business process for the release of invoices is currently under development,
and a full description and overview will be available online, in the near future. In
the meantime refer to the system task overview for information on the
functionality of this process.

Date Updation

Date updation involves two specific system tasks that update the baseline date
calculation and the average due date calculation for Reliance payments to
vendors.

The business process for the release of invoices is currently under development,
and a full description and overview will be available online, in the near future. In
the meantime refer to the system task overview for information on the
functionality of this process.

Advance Payments

Use this business process overview to make advance payments to vendors.
Advance payments to vendors (also referred to as down payments) are partial
payments made before receipt of any materials or services. Down payments are
triggered upon receipt of a proforma invoice from a vendor or upon request from
the procurement department. The purchase order or contract must allow for
advances to be made to the relevant vendor for a down payment to proceed. In
some cases, the vendor will require advance payment for materials or services in
conflict with the terms and conditions of the purchase order or contract. In such
an event, the vendor's proforma invoice must be certified by the Certification
Department, before any further processing can proceed.

A down payment is a payment made to a vendor before the goods or services to
which the payment relates have been received. Because no liability exists for the
goods at the time of raising the down payment, it is recorded as a prepayment in
the balance sheet. Down payments are considered as special GL transactions
and the down payment is recorded in a different reconciliation account other than
normally used for creditors.

Accounting for vendor down payments has the following steps:

      request the vendor down payment
      post the down payment to the vendor
      clear the vendor down payment
      reverse the vendor down payment request

Request Vendor Down Payment
A down payment request does not update any account balances. The payment
program uses the down payment request document created to generate a
payment to the vendor.
A down payment request is entered in the vendor account without any offsetting
entry. Consequently, SAP does not check whether the debits equal the credits.
The request does not update the debit and credits in the vendor account,
however it is displayed as a special line item in the vendor account.
When the down payment request is posted, SAP records the line item in a
special G/L account. This account can be used to get an overview of all the down
payments that need to be made. When entering a down payment, a purchase
order number must be specified. The down payment request must also be
blocked for payment until it has been checked and authorised.
Post Vendor Down Payment
Normally a down payment request is entered into the system and posted. When
the automatic payment run processes the request, the cheque is produced.
However, sometimes a cheque is required before the next automatic payment
run is scheduled. In this case, the down payment request is posted to enable a
manual cheque payment to be processed.
When the down payment is posted, SAP posts the down payment amount to the
bank account and to the vendor with a special G/L indicator. Any additional
postings, for example tax or cash discount, are also carried out automatically.
The selected down payment request is automatically marked as cleared.
Withholding Tax on Down payments
When the payment for a down payment is processed, either manually or
automatically, the withholding tax on the payment is automatically deducted,
provided the vendor is subject to withholding tax.
To record the withholding tax in SAP, a general ledger payment must be made to
the bank. Once this has been processed and the cheque for the withholding tax
presented to the bank along with Challan for paying into the Government
account, a Challan certificate must be printed and sent to the vendor.
Clear Vendor Down Payment (general)
Down payment clearing only transfers the clearing amount from the Special GL
to the open items in the vendor account. The actual clearing of the open item is
made by the automatic payment run, at the time of processing invoice payments.
The invoice amount is paid net of the down payments cleared, with reference to
the particular invoice. However, if manual payments are to be, SAP does not
automatically net off the invoice amount with the down payments made,
adjustments must be made manually.
Clear Vendor Down Payment (local currency)
Access down payment clearing through the Accounts Payable menu. This
displays the initial screen. Enter the document header data and the vendor
account number. Enter the document number of the invoice with respect to which
the down payment has to be cleared. This ensures that the line item with the
down payment is cleared when the invoice is paid.
SAP displays the possible down payment items. Select a down payment line
item, either fully or partially, by entering the relevant amount in the transfer
posting column against the line item. The payment terms and other details of the
referred invoice document is copied onto the transfer posting document.
Where the invoice amount and the down payments against the order match
exactly, both amounts are not picked up at the time of automatic payments. Clear
amounts that match exactly through he Account clear functionality.
Clear Vendor Down Payment (foreign currency)
Clear foreign currency down payments in the same manner that local currency
down payments are cleared, with the following variations:

      Enter the foreign currency in which the down payment was made as the
       currency for the clearing amount
      SAP uses the same exchange rate at which the down payment was made
       when clearing the document (i.e., not the exchange rate on the date of
       clearing).

Reverse Vendor Down Payment Request
Down payment requests are cancelled automatically when a down payment
referencing that request is paid. This is done regardless of whether the payment
program carries out the down payment or whether it is posted manually. Down
payment requests can also be cancelled manually at any time, without posting a
down payment.
Recover Outstanding Advances
Where down payments have been made to a vendor for whom an invoice is
being processed, SAP issues the message Down payment exists (however,
adjustment is not enforced). Immediately after invoice verification, manually
execute a transfer posting to clear the down payment with reference to the
invoice. Allocate a down payment to a specific invoice for clearing. SAP records
the document number of the invoice in the line item of the down payment. The
payment program subtracts the down payment only when the corresponding
invoice is paid.
Partial clearing can be made (i.e., clear a down payment with several invoices at
different times), however, clearing for each down payment must be done
manually.
Process Manual Payments

This process is used to process and schedule manual payments. Processing
payments involves clearing open items from a vendor account. After processing
the open items including cheques and bills of exchange, SAP posts a clearing
document. Post a partial or residual payment when the full amount still requires
payment.

The manual payments in this business process fulfil the requirement for
immediate payment to a vendor. Other such manual payments include statutory
dues.

Manual Payment Processing

Process vendor payments manually whenever the need arises for urgent,
unplanned payments to vendors.

The following data is entered on the initial screen of the post payment (manual)
transaction:

      GL account number of the bank payment account
      Total amount (including any bank charges)
      Amount of bank charges
      Value date

For vendor payments, SAP displays the list of all open items of the vendor.
Select the open items for which the payment is being made. Debit items such as
down payments, TDS or vendor credit notes are adjustable at the time of
payment. If the payment difference lies within the tolerance limit, SAP posts the
difference to the payment difference account. If the difference is outside the
tolerance limit, a difference posting generates in the vendor account. After saving
the payment posting, the vendor line items clear (except in the case of difference
postings).

Manual Cheques
Using the transaction code FCH5, register a manual cheque for the payment
document. Enter the details of the payment document, house bank, bank ID and
the next available cheque number. Vendor details default for vendor payments
(overwrite / modify if necessary). For non-vendor payments, enter the name for
the cheque recipient. For example, enter the name of the bank to pay for tax
payments on the cheque(s).

Demand Draft Payment
Print cheques in the name of the bank issuing the demand draft. Include a
covering letter to the bank requesting a demand draft (transaction YF17). Include
the following essential information for the demand draft transaction:
      Company code
      House bank
      Bank ID
      Cheque number
      Location for issue of demand draft payment

Bank Payment Voucher
Register a manual cheque for the payment document using the transaction code
FCH5. Manually enter the details of the payment document, house bank, bank ID
and the next available cheque number. The vendor details, currency and the
amount in foreign currency default. Ensure the following:

      The currency is Indian Rupees (INR).
      The total local currency amount of the document (including bank charges)
       exists in the Amount column
      The payee name changes from the name of the vendor to the name of the
       bank making the foreign remittance

Print the Bank payment voucher using transaction code YFBP.
Invoice Payments in Foreign Currency
Use this process to make manual payments to vendors in a foreign currency.
Enter that the following information in the initial screen of the Post Payment
(Manual) Transaction (transaction code F-53):

      Payment currency
      Exchange rate
      Total amount (in foreign currency) including all bank charges
      Total amount of bank charges (in either foreign or local currency)
      GL account code of the bank payment account

Enter the vendor code for payments to a vendor. Select the appropriate account
type and account number for manual payments required to be debited directly to
an account other than a vendor account.
For vendor payments, SAP displays the list of all open items of the vendor.
Select the open items for which the payment is being made. Debit items such as
down payments or vendor credit notes are adjustable at the time of payment. If
the payment difference lies within the tolerance limit, SAP posts the difference to
the payment difference account. If the difference is outside the tolerance limit, a
difference posting generates in the vendor account. Post partial and residual
payments when the full amount still requires payment. After saving the payment
posting the vendor line items clear (except in the case of difference postings).
SAP automatically generates exchange difference entries for items originally
booked in a foreign currency, upon posting the document.
Register a manual cheque for the payment document using the transaction code
FCH5. Manually enter the details of the payment document, house bank, bank ID
and the next available cheque number. The vendor details, currency and the
amount in foreign currency default. Ensure the following:

      The currency is Indian Rupees (INR).
      The total local currency amount of the document (including bank charges)
       exists in the Amount column
      The payee name changes from the name of the vendor to the name of the
       bank making the foreign remittance

Print a cheque or bank payment voucher and ensure that the relevant signatures
are received and forwarded to the Central Banking Department.

Manual Down Payments in Foreign Currencies
Manually process down payment requests in foreign currency for payments. Use
the down payment posting option (F-48) for this purpose. Enter the following
information in the initial screen:

      Vendor number
      Special GL indicator
      Currency
      Exchange rate
      Total amount (in foreign currency) including bank charges
      GL account code of the bank payment account

Select the option for processing the requests and select the down payment
request for which the down payment is being made. Any further amendments
must be made here. Make any adjustments to currency amounts in the Foreign
Currency and Local Currency columns. Simulate and post the document.
Gain approval for the payment and forward to the Central Banking Division for
funding. The Central Banking Division confirms the exchange rate at which
payment is made.


Process Automatic Payments

Processing payments involves clearing the open items from a vendor account.
After processing the open items including cheques and bills of exchange, SAP
posts a clearing document. A partial or residual payment can be posted.

The automatic payment program enables the processing of a large number of
vendor/ customer payments at once.

After defining payment parameters, create a payment proposal. The payment
proposal contains details of the vendor / customers requiring payment and the
invoices for payment. Edit the payment proposal and where necessary, block
individual payments.
After editing the payment proposal, schedule the payment run. Scheduling the
payment run posts payments for all unblocked line items on the payment
proposal. SAP updates accounts. The automatic payment program begins after
scheduling the payment printing.

If problems occur during the printing of cheques, delete the cheque information.
In this case, reassign the cheque information to the payment line items when
rescheduling the printing. After deleting the cheque information, void the
damaged cheques in SAP.

Process Automatic Payments

The automatic payment program enables automatic payments of open line items
and the down payment requests for vendors. SAP includes all due and
unblocked line items in the automatic payment run.

There are several prerequisites for the automatic payment process:

      Clear down payments made against the invoices
      Deduct ITDS on the invoices (where applicable)
      Update the baseline date for both the invoice document and the down
       payment clearing document
      Calculate the average due date (if applicable)
      Update house banks for the documents
      Release invoices for payment.

Identify each automatic payment run by a run date and a suitable identification
for the run (generated by the user).

Payment Parameters
Use the payment parameters as criteria to select open items for settlement in the
payment run. Enter the following parameters:

      Company code
      Vendor accounts
      Payment methods for which the payment run is being scheduled (enter the
       payment method in each vendor line item at the time of document entry.
       SAP includes only those line items with the specified payment method for
       payments).
      Posting date of the current payment run
      Expected date of the next payment run (SAP includes all line items due
       before this date for payments).
      Documents entered "upto" date (the limit date for invoice processing. SAP
       does not process open items entered after this date.)
In addition to above mandatory criteria, enter certain additional selection criteria.
Schedule the payment run only for payments due for payment from a particular
house bank. Enter this condition in the additional selection criteria. Enter the
table and field name of the payment method supplement and the value
representing the respective house bank.
For example:

Schedule Payment Proposal
Schedule the payment proposal once the specification for the payment run is
complete. Specify either a particular start date and time or execute the run
immediately. SAP generates a proposal list and an exception list in the schedule
proposal. View the overview of payments proposed displaying or printing the
payment proposal list (the option to edit the proposal and / or to view more
details information is available by selecting a particular line item). SAP picks up
all documents due for payment based upon the payment parameters previously
set. Include blocked for payment (or for which no suitable payment method could
be identified) in the exception list. SAP adjusts credit memos, cleared down
payments and ITDS deducted from the respective invoices.
The exception list displays blocked items and all open items that SAP did not
propose for payment. Use the exception list to evaluate any changes that need to
be made in the original invoice and / or payment documents.

Edit Payment Proposal
The edit payment proposal function is used to block any items incorrectly
suggested for payment. Additionally, correct the payment method for incorrect
items that require payment. All changes affect only the payment proposal and no
amendments occur to the source documents. Ensure that the proposal is
checked thoroughly before sending the final proposal for approval. Forward the
final (approved) proposal to the Central Banking department for funding.

Schedule Payment
Schedule the payment run after ensuring that the payment proposal is free from
errors. Scheduling the payment run posts payments for line items on the
payment proposal. SAP generates a payment list showing all the line items
cleared and posted documents.

Schedule Cheque, payment Advice and Payment Summary Printing
Schedule the print programs for payment advice, payment summary and
cheques. Select and / or maintain the variant for printing cheques. Check the
maintained parameters for the variant previously selected and amend if required.
This may include:

      Payment method.
      House bank.
      Bank ID.
      Cheque lot number.
      Printers for cheques, payment advice and summary. Do not activate the
       check box for printing immediately (this enables printing of the spool
       request after making the settings on the printer).
      Cheque form.
      No form summary selection. If this checkbox is not activated, an additional
       cheque number is utilised for printing the summary.

Cheque Management

Use the maintaining cheque information business process to deal with the
complexities, errors, or other irregularities associated with issuing cheques.

Display Cheque Information

Display the cheque register to provide an overview of all cheque information
stored in SAP. The cheque register provides an audit trail of all payments and is
therefore the heart of payment processing. SAP displays all the details for the
cheques, such as the user and the reason codes for voiding transactions.

Display specific cheque details, such as the cheque recipient and issuer details,
accompanying documents, and the payment document details. If necessary,
change the encashment date and payee address of a payment document.

Additionally, use the display option to view the cheque register for a house bank
and / or an account ID. SAP displays all issued cheques, segregating manually
issued cheques from automatically printed cheques, listing information such as
cheque number, payment document number, payment document date, cheque
currency, cheque amount, cheque recipient and details of any voided cheques.

Create Manual Cheque

Create a manual cheque for immediate payment to a vendor. Manually issued
cheques need to be dealt with separately in order to create a link between the
cheque number and the payment document. Update the cheque register
immediately after the payment document is posted and before the manually
issued cheque is drawn. SAP prevents the issue of manual cheques from a bank
different from the one specified in the payment document.

Renumber Cheque

Renumber cheques to match misprinted cheques to the payment document and
cheque register. For example, if the wrong batch of cheques has been loaded
into the printer and printed on, the cheque numbers will not match the cheque
number recorded against the payment. The renumber function updates the
payment document and the cheque register with the correct cheque numbers.
Reprint Cheque

Reprint cheques if, for example, a cheque is lost or damaged. This process voids
the original cheque and prints the new cheque using the next cheque number
within the lot. SAP allocates the cheque number to the payment document, which
otherwise remains unchanged. The cheque register displays the void cheque
details, while the payment document records only the new cheque number.

Void and Cancel Cheques

Void unused cheques if they have been accidentally damaged, stolen, or
rendered unusable before use. SAP does not allocate the cheque number to the
payment document the next time a cheque is printed.

After voiding cheques, reverse the associated payment document. This is
necessary if, for example, a cheque payment was not blocked when processing
the payment document, the wrong invoice was selected for the cheque print run
or for stale cheques (i.e., older than 6 months). To void an issued cheque by
mistake, reverse this transaction. This data reset revalidates the cheque and
enables it to be presented to the bank.


Account Receivable Module:

Post Dated Cheques (PDC)

Any Instrument received from customer that is not likely to be deposited with the
bank in the next bank clearing date is called PDC.

PDC is accepted from customers before the goods / services are rendered to
them. PDC given by customers are classified into the two broad types viz., PDC
with value and PDC's without value.

Record Incoming PDC Instrument

PDC received from the customer is scrolled and details such as Instrument
number, Instrument date, Instrument type, customer code, financier code, bank,
branch and amount are recorded in SAP. If a blank PDC is issued, then the PDC
type is considered as PDC without value.

SAP generates a memorandum accounting document by debiting the PDC in
Hand account and crediting the PDC contra account, if the PDC type is `PDC
with value'. No memorandum entry is made in case of PDC without value.

Modify PDC Details
The PDC details recorded can be modified in SAP before reversing the PDC
document. This may be required when the PDC details originally entered were
found to be incorrect or the PDC type gets changed or its due date of deposit
gets revised.
Reverse PDC Document
The PDC document is reversed when the instrument has to be returned to the
customer or an error has been made while entering the PDC number. SAP
generates the reversal document by debiting the PDC Contra account and
crediting the PDC in hand account, whenever a PDC with value is reversed.
PDC Replacement
This transaction is used to replace an existing PDC with a new PDC. In this case
the existing PDC is reversed and a new PDC entry is made.
Convert PDC to CIH
This transaction is used to convert a PDC to CIH. Through this transaction a
PDC is reversed and a CIH entry is created for that.
PDC Reports
The following are the RIL specific customized PDC Reports:
PDC's in Hand Report
This report contains information about list of PDC's in Hand for a division and/or
location.
Instrument - Inquiry
This report contains information of about the instrument selected.


Handle CIH From Customers:

CIH definition: Any instrument received from customer that is to be deposited
with the bank in the next bank clearing date is called collection in hand (CIH).
They are of the type Cheques, Demand Draft, Pay Order, Banker's Cheque, etc.

The regular collection instruments are received for any of the following outcomes:

      goods and services provided to customers
      advance received from customers for providing goods and services
      security deposit received from customers for transactions related to goods
       and services.

CIH Entry
Reliance office staff will receive the regular collection instrument from the
customer and records the collection instrument details regarding customer, bank,
currency value, and date of realization and instrument number in SAP.
The transaction type reflects that regular instruments are received for the one of
the following outcomes:

      transaction type PIS is assigned for goods and services provided to
       customers (PIS)
      transaction type PISA is assigned for advance received from customers
       for providing goods and services (PISA)
      transaction type PISO is assigned for security deposit received from
       customers for transactions related to goods and services(PISO)

If the transaction type for the collection instrument is PIS then additional
information regarding the invoice / debit note reference number is captured for
automatic clearing after the deposit of the instrument.
For each collection instrument details recorded in SAP, a scroll number is
internally generated by SAP. SAP also generates memorandum accounting
documents by debiting the Collection in Hand A/c to Collection in hand contra
A/c.
Print Acknowledgement Slip
Acknowledgement slip for the receipt of regular collection instrument is printed by
the Account assistant or the Front office staff.
If necessary, the acknowledgement slips can be previewed in SAP before
printing the same.
Print Acknowledgement slip in SAP in the following ways:

      Print the acknowledgement slip immediately after saving the CIH record in
       SAP.
      Print a consolidated acknowledgement slip for a customer at the end of
       the day (Whenever more than one instrument is received on a single day).

Give the printed Acknowledgement slip to the concerned customer.
Modify CIH Details
The CIH details recorded can be changed before generating the pay-in-slip for
the same. This may be necessitated to rectify errors that might have occurred
while recording CIH details.
CIH Return
The CIH details may be required to be reversed, if the customer has requested to
take back the instrument or if the original recording of CIH is factually incorrect.
This activity must be performed before the Pay-in-Slip is generated.

Print Pay-in-Slip/Pay-in-Form
Pay-in-slip is generated based on selection of regular collection instruments that
have been scrolled for a division. Pay-in-slip is printed upon execution of
selected instruments. SAP internally generates a Pay-in-slip number.
Pay-in-slip are generated and printed to serve the following purpose:

      to serve as an authenticated covering slip for collection instrument
       deposited in the bank
      to identify the collection instruments deposited in the bank for further
       processing in SAP via pay-in-slip numbers.
The generated pay-in-slip can be reprinted in SAP, if the collection instrument
deposited is not accounted for in SAP.

Accounting of Instrument Deposited
When the collection instrument received is deposited in the bank for realisation,
the instrument details are posted in SAP. SAP generates a reversal document by
debiting the CIH contra account to collection in hand account and debiting bank
account to customer account.

Process Bank Reconciliation Statement (BRS)
The bank entries must be in sink with accounting entries made at RIL bank book
relating to collections. To facilitate this, the bank statement is entered and posted
in SAP. SAP generates a batch file and is run either in background or in
foreground. When the batch file is executed, the entries of the bank statement
are matched with the entries available with the RIL bank book. Mismatches are
captured in the RIL bank book to facilitate follow up and reconciliation.

Cheque Bounce
If the instrument deposited in the Reliance bank is dishonoured or bounces back,
then the same will be reversed in SAP. If the matching invoice was cleared
originally against that instrument, then the incoming collection is reset to make
the invoice as an open item. All dishonoured collections are then reversed to
debit the customer and credit the Reliance bank account. After reversing the
document, the reason for reversal is also captured in the reversal document so
that tracking of dishonoured cheques is facilitated. The customer is levied a
penalty, as per the prevailing rate, for each dishonoured instrument provided the
customer is responsible for dishonour. A debit note is issued for this penalty.


Process Customer Down Payments

Down payments are payments received from customers as advances against
goods or services. Down payments are received in the form of regular or
postdated cheques, demand drafts, pay orders or by direct deposit. Incoming
down payments are recorded in the same way as regular receipts, with the
exception of one additional internal down payment transfer transaction.

The Receipt Clerk is responsible for handling all incoming regular and post-dated
instruments. Direct deposits are dealt with by the Accountants.

When a regular payment is received, the Receipt Clerk parks the payment
without clearing. The Bank account is debited and the customer account
credited. When a post-dated cheque is received the Receipt Clerk parks the
incoming payment.
All instruments received are verified and posted to the appropriate bank account
when the instruments are deposited into the banks. When down payments are
received from customers, they are recorded separately from the normal credits in
the customer account. This is because payment has been received and posted
even though no goods or services have been delivered. The incoming down
payment represents an obligation of Reliance to deliver goods or services. A
transfer from the customer account to the customer down payment account is
therefore required.

When Reliance has delivered the goods or service for which the down payment
was received, the down payment is cleared with the invoice. It is then no longer
reported as a down payment.

Down payments received are reversed if they are dishonoured, provided no
down payment clearing has been effected. If the down payment received has
already been cleared, then the dishonoured incoming collections are reset and
reversed. If the matching invoice was cleared (i.e., receipt of a full down
payment), the incoming collection is reset to change the status of the invoice to
an open item. All dishonoured full and partial collections are reversed to debit the
customer account and credit the Reliance bank account. The customer is levied
a penalty, as per the prevailing rate, for each dishonoured collection. For this
penalty, a debit note is created.

Process Customer Bills of Exchange

A bill of exchange (BoE) is drawn for a delivery made against a Letter of Credit /
Hundi. A BoE is either a sight or usance bill. A sight bill is payable on demand,
whereas a usance bill is payable after a period of time. By paying an invoice by a
usance BoE, the customer receives a longer credit period (for example three
months). A usance bill can either be discounted at a bank or sent for collection.
A sight bill is always sent for collection.

When the customer has accepted the BoE, they are legally committed to pay the
amount on the due date stipulated in the request. On acceptance of the request,
a BoE is created in SAP. The customer's account is credited and a bills
receivable special general ledger account (B/R Sp G/L account) is debited.

Alternatively, the BOE can be created in a regular manner without a BOE request
for acceptance. As and when the BOE is posted, the customer account is
credited and a B/R Sp. G/L account is debited.

Generation of BOE

BoE's are generated for the combination of division currency and customers.
They can be generated under different scenarios viz. Against LC, stale LC,
foreign/adjustment BOE of clean BOE. Each of these, options all explained
below. BDC session for the specified customer and range of invoices.

BoE Discounting

A BoE can be discounted at a bank in advance of its due date. Reliance's bank
buys the BoE from Reliance and since it does not receive the amount from the
customer until the due date of the bill, it deducts a discounting charge.

When the bank sends Reliance a credit advice note indicating that they have
credited Reliance for the BoE, the entries for BoE discounting must be passed.

The bank has recourse for recovery of the bill proceeds from Reliance in case
the customer fails to pay on the due date. So when discounting a BoE, a liability
for bills discounted is created in Reliance's general ledger until the bank collects
the full amount from the customer. The bank account is debited and a liability for
bills discounted is credited.

When the bank receives payment from the customer on the due date, Reliance
must reverse the liability as there is no longer a risk that the customer will default
on payment. This transaction debits the liability for bills discounted account and
credits the B/R Sp G/L account.

Dishonoured discounted BoEs must be reset to change the status of the invoice
from cleared to an open item. Dishonoured discounted BoEs are reversed to
debit the customer account and credit the Reliance bank account. The customer
is levied a penalty, as per the prevailing rate for the dishonoured collection. For
this penalty, a debit note must be created.

BoE Collection

Reliance can choose to hold the BoE until maturity and collect payment from the
customer on the due date. When the BoE is presented to the customer for
collection, the customer is required to deposit BoE collections directly into
Reliance's bank account.

Upon receiving payment from the customer, the bank account is debited and the
B/R Sp GL account is credited.

Dishonoured BoEs are not collected and must be reset and reversed. Resetting
and reversing debits the customer account and credits the special GL account.
The customer is levied a penalty, as per the prevailing rate for a dishonoured
collection.
Handle Receipts from Customers:

Receipt and scrolling of all incoming instruments are handled at each Reliance
location. Incoming receipts are in the form of cheques, direct deposits, demand
drafts and pay orders. The type of receipts are, e.g., regular payments,
advances, deposits, post-dated cheques etc.

When a regular payment is received, the front office staff parks the payment
without clearing. This is done to estimate the total bankable collection for each
day, and for management control over all instruments received. The bank
account is debited and the customer account is credited. The date of credit to the
customer account is the date of deposit of the instrument into Reliance's bank
account. When a post-dated cheque is received, the Receipt Clerk parks the
incoming payment. SAP generates an acknowledgement slip for issuing to the
customer.

All instruments received are verified and the parked document is posted when
the instruments are deposited into the banks. After the funds are deposited, the
customer's open invoice is cleared against the receipt.

In the case of incoming partial collections, the receipt is matched to the
customer's open invoice. The customer's open invoice is not cleared until the full
payment has been received for the invoice.

Dishonoured incoming collections must be reset and reversed. If the matching
invoice was cleared (i.e. receipt of a full payment), the incoming collection is
reset to return the invoice to an open item. All dishonoured full and partial
collections are reversed to debit the customer and credit the Reliance bank
account. The customer is levied a penalty, as per the prevailing rate, for each
dishonoured collection. A debit note is issued for this penalty.

Direct Deposits

A direct deposit is an incoming payment received from a customer who deposits
a payment directly into Reliance's appropriate bank account. When a direct
deposit is received, Reliance receives a credit advice note from the bank
confirming that funds have been directly deposited.

All incoming collections by direct deposit are posted with clearing. Direct deposits
are not handled by the front office staff, but are dealt with by the accountant.
Partial direct deposits are partially cleared against the customer's invoice. When
the final partial payment is received, the customer's invoice is cleared.
Sales Tax Forms Tracking

Sales Tax (ST) Forms are received from customers towards the sale of goods
that took place against a commercial ST form. This will be applicable even when
the unit / plant is covered under a ST Incentive Scheme that the company may
be enjoying. In certain scenarios, ST Forms are also issued (like E1 Form) to
customers. ST Forms are tracked and monitored to ensure timely receipt and
issuance. The ST Forms tracking module in SAP can be used to handle the
following activities:

      Monitor the ST Forms that are to be received from customers
      Record the receipt of the ST Forms from customers
      Monitor the ST Forms that need to be issued to customers
      Record the issue of the ST Form to customers

Form Receipt
ST Form that is received from a customer against the sale of goods is recorded
in SAP by linking the Invoice(s) concerned.
Form Issue
ST Form is issued to a customer against the sale of goods from SAP after
flagging the invoice(s) concerned.



Controlling Module:
It consists of following processes:

    Cost Centre Accounting
         Master Data Maintenance
         Planning
         Reporting
    Product Costing
         Product Cost Planning: Current Cost Estimate
         Product Cost Planning: Future Cost Estimate
         Product Cost Planning: Costing Run
        
    Profit Centre Accounting
    Profitability Analysis
         Profitability Analysis: Master Data
         Profitability Analysis: Planning
         Profitability Analysis: Actuals
Manage Master Data - Cost Centre Accounting

Master data determines the structure of the Cost Centre Accounting application
component and essentially remains unchanged for a long period. Master data is
maintained before putting the CO-CCA application component into operation.

Cost centers are the areas of responsibility where costs are collected and
reported on. Costs are transferred between cost centers within the same
controlling area. At Reliance the cost centers are maintained centrally by the
Central Budget Department.

Cost Center Groups are created to group similar cost centers together to
facilitate planning, reporting, allocations, reporting and analysis for processing on
a higher level than the individual cost center. Cost center groups may contain
multiple nodes, but the cost centers can only be attached to the lowest node.

The Standard Hierarchy in Reliance describes the structure in which all the Cost
Centers are placed in the nodes. The standard hierarchy is a cost center group
which is attached to the controlling area.

Manage Master Data - Primary Cost Element

Master data determines the structure of the Cost Centre Accounting application
component and essentially remains unchanged for a long period. Master data is
maintained before putting the CO-CCA application component into operation.

Primary Cost Elements are equivalent to the profit and loss accounts in FI. At the
time an expense is posted in FI, a matching posting is made in CO via the
primary cost element. Costs are also allocated in CO to a cost center by posting
through a primary cost element. The Primary Cost Element exists as an account
in the Chart of Accounts. The length of the primary cost element is 7 significant
digits.

CCA Planning

This process relates to entering planned values for primary and secondary costs
at the beginning of each fiscal year.

Each cost centre manager provides the planned values. The Central budget
team then enters the planned data into SAP.

Before any planning is done, it is important to ensure that planning is done in the
correct controlling area and version. Reliance maintains separate controlling
areas for each company code. For more information on setting a controlling area,
refer to. Reliance maintains three versions for cost planning:
Version 2 - for Initial Plan
Version 1 - for Annual Business Plan
Version 0 - for Plan and Actuals

Actuals are captured only in version 0.

There are 4 major categories of cost centers for which primary cost planning is
done:

      production cost centres
      utility cost centres
      common cost centres
      other cost centres for Support Services.

The major heads of cost planning are:

      fixed catalyst consumed
      fuel consumed
      stores, spares, consumables and non-stock items consumed
      utilities consumed
      repairs and maintenance
      other overheads, e.g., employee related expenses, admin expenses
      finance overheads
      depreciation.

The following is a breakdown of the costs planned for each of the 4 cost centre
categories:

1. Production Cost Centres (only Fixed Costs and Stores & Spares):

      stores and spares consumed
      consumables consumed
      non-stock items consumed
      fixed catalyst and chemicals
      utilities consumed
      repairs and Maintenance
      depreciation
      insurance.

2. Utility Cost Centres:

      fixed catalyst and chemicals consumed
      fuel consumed
      stores and spares & Non-stock items consumed
      utilities consumed
      repairs and maintenance
      depreciation
      insurance
      other overheads, i.e., all costs related to costing of a utility.

3. Common Cost Centres:

      repairs and Maintenance contracts at a complex level
      other overheads, e.g., employee related expenses, admin expenses
      any other expenses identified for the complex as a whole and not for an
       individual complex.

4. For all other cost centres, costs are planned directly on them, whatever the
nature of the expense.

Activities are allocated to utility distribution cost centers at plants and are then
settled on process orders. The return stream from processes are taken back
through the process cost centers.



Product Cost Planning - Current Cost Estimate

This process relates to estimating the current cost of manufactured material in
SAP, at Reliance.

Current costs are estimated based on:

      prevailing online prices of variables such as raw materials and chemicals
       and catalysts
      current per ton / per kg norms specified in the first recipe for the
       manufactured material in the master recipe group, that is valid on the
       costing date

The master recipe for manufactured material may involve, externally procured
material, internally procured material (manufactured in the same plant or in other
plants), co-products, by-products, utilities and overheads.

Cost of the procured material used in the recipe, is determined as the standard
cost or the moving average price based on the price control data in the
accounting view of the material master record.

Cost of material, manufactured in other plants are calculated first in the plants
where they are manufactured and used in the costing of the higher-level
products.
Cost of co-products, intermediates and materials manufactured in the same plant
and used in the main product are estimated before the cost of the main product is
estimated.

Current cost, can be estimated anytime during the fiscal year and is valid for the
period specified (usually from the current date to the end of the current posting
period).

The current cost is used for the following:

      calculate the latest cost
      make or buy decisions

Product Cost Planning - Future Cost Estimate

This business process relates to estimating the future cost of manufactured
material in SAP, at Reliance.

Future costs are estimated based on:

      projected future prices of variables such as raw materials and chemicals
       and catalysts
      current per ton / per kg norms specified in the recipe for the manufactured
       material in the master recipe group, that is valid on the costing date

The master recipe for manufactured material may involve, externally procured
material, internally procured material (manufactured in the same plant or in other
plants), co-products, by-products, utilities and overheads.

Recipes are released for product costing only for co-products whereas by-
products do not have recipes existing in SAP.

For example, in the master recipe for Ethylene, Propylene is a co-product and
C4, C5, etc., are by-products. Ethylene has a master recipe released for
production entered in SAP. Propylene has a recipe released only for product
costing entered in SAP. C4, C5, etc., do not have a recipe entered in SAP.

Future costs can be estimated for different norms stored in the alternative recipes
and used in the what-if analysis.

Cost of the externally procured material used in the recipe, is determined as the
planned price 3 in the costing view of the material master record, if it is specified
and is valid on the valuation date specified.
If no value is entered in the planned price 3 field the standard cost or the moving
average price is determined as the cost of the material based on the price control
data in the accounting view of the material master record.

Credit for by-products is given as per the standard costs entered in the material
master.

Credit for co-products are as per the standard cost estimated based on their
master recipe.

Cost of material, manufactured in other plants are calculated first in the plants
where they are manufactured and used in the costing of the higher-level
products.

Cost of co-products, intermediates and materials manufactured in the same plant
and used in the main product are estimated before the cost of the main product is
estimated.

Future costs can be estimated anytime during the fiscal year and is valid for the
period specified (usually from the current date to the end of the current posting
period).

The future cost is used for the following:

      make or buy decisions
      what-if analysis



Product Cost Planning - Costing Run

This business process relates to creating, selecting materials and estimating
budgeted / standard / current / future costs of manufactured material in SAP, at
Reliance. The business process also covers marking and releasing the standard
cost estimates of the manufactured material.

Costing runs are created to collectively estimate budgeted / standard / current /
future costs of more than one manufactured material.

The materials are selected from the material master record first and the quantity
structures are determined.

The materials to cost are selected from the list of existing materials in the costing
run and costs are estimated.
Costing run for standard costs are to be run at the end of a posting period for the
next posting period.

Costing run for budgeted costs are to be run at the end of a fiscal year for the
next fiscal year separately for each posting period.

Costing runs for current / future costs are estimated any time during the fiscal
year as required.

The estimated costs are then verified and corrected.

Standard cost estimates are then selected and marked as the future planned
price in the material master costing view.

Marked standard cost estimates, are then selected and released as current
planned price in the material master costing view at the beginning of the posting
period.

Logs are created at each level and should be checked at the end of each
session.
The estimated costs are valid for the periods identified in the date control of the
costing run.

Product Costing - Period-end Processing

This process relates to the period-end processing carried out on the process
orders created during the period in SAP, at Reliance. The business process
covers calculation of work-in process, overheads, variances and settling the
process orders.

Work-in process is calculated for all process orders which are open at period-
end. Overheads are calculated for the finished products produced in other plants
and used as raw material in the fully delivered and technically complete process
orders. Variances are calculated on fully delivered and technically complete
process orders which have variance calculations enabled.

WIP calculated for open process orders debit the `Variation in stock - WIP' and
credit the `Stock in process' accounts.

Variances calculated for fully delivered or technically complete process orders
debit the `Variance In Stock -FG Stock' and credit the `Production Variance'
accounts. The total variance is grouped into the variance categories such as
price variance, quantity variance, etc., and settled on the profitability analysis
segment.
Manage Master Data - Profit Centers - PCA

The key process associated with Profit Center Accounting is Master Data
Maintenance. This is the area of controlling where the master data relating to the
structure of the organization is defined.

The profit center is an area of responsibility within Reliance for which a separate
operating statement is calculated. It is an organizational unit in Profit Center
Accounting that is part of the Controlling component. The Profit Center master
data is maintained before putting the CO-CCA application component into
operation.

Reliance has designed profit centers according to product group (product lines,
divisions), geographical factors (regions, offices or production sites) and plants at
particular locations. All profit-relevant business transactions are updated in the
profit center hierarchy according to G/L account at the same time they are
processed in the original module of the R/3 System. All the flows of goods and
services within Reliance are represented as deliveries and transfers between
profit centers. This is true for Actual Data as well as in Profit Center Planning.

The Profit Center is a 5-digit number. The first 2 digits represents Product Group,
the second 2 digits denote the Location and the last digit represents the Plant.

The Standard Hierarchy in Reliance describes the structure in which the various
Profit Centers are placed in the nodes and includes a Common Profit Center and
a Dummy Profit Center. The purpose of the Common Profit center is to collect
costs and revenues not identifiable to the designated Profit Center and which
require an allocation rule for distribution. The Dummy Profit Center is a system
requirement. This helps in identifying the system lapse in collecting costs to the
proper cost centers. Data rarely flows into the Dummy Profit Center.

In addition to the standard hierarchy for profits centers in the controlling area,
alternate hierarchies called Profit Center Groups can be used for allocation and
planning. In contrast to the standard hierarchy, these profit center groups do not
contain all the profit centers in the controlling area. On the contrary, with profit
center groups certain profit centers can be selected to allow more flexibility.

Manage Master Data - Account Groups - PCA

The key process associated with Profit Center Accounting is Master Data
Maintenance. This is the area of controlling where the master data relating to the
structure of the organization is defined.

Account Groups are any numbers of hierarchical structures of General Ledger
accounts for use in the information system, allocations and planning in profit
centre accounting. Multiple accounts are assigned to account groups to facilitate
planning, reporting, and on-line analysis.

Profitability Analysis - Master Data

Master data determines the structure of the Profitability Analysis application
component and essentially remains unchanged for a long period. Master data is
maintained before putting the CO-PA application component into operation.
Master data in CO-PA are mostly defined during customizing. The CO-PA
application offers two forms of Profitability Analysis: costing-based and account-
based.

The costing-based profitability analysis facilitates analysis of profits quickly for
the purpose of sales management. Costing based profitability analysis method
uses cost and revenue element groups, and automatic valuation of quantities
using costing methods and hence provides data that is always current. This
facilitates effective controlling of sales.

The account-based profitability analysis enables reconciliation of cost and
financial accounting at any time using accounts. Account-based profitability
analysis uses cost and revenue elements, which provides a unified structure for
accounting.

At Reliance the costing-based profitability analysis is being implemented.

The characteristics and value fields defined in CO-PA determine the structure of
profitability analysis.

Characteristics identify the profitability segments. Characteristics can be from the
pre-defined characteristics (fixed) for the operating concern. Up to 30 more
characteristics can be defined from the proposed field catalogues, SAP tables or
by creating them manually.

Value fields represent cost and revenue element groups such as sales revenues,
sales deductions, costs, quantities, etc. Value fields are defined for all the
quantities and values that need to be posted to the operating concern and for
values that are to be used in the operating concern for automatic calculation of
values. Value and quantity fields can be defined from the proposed field
catalogues or by creating them manually.

The characteristics and value fields are defined in customizing. Values are
defined for characteristics in the operating concern and stored in tables in the
SAP database. These tables are used to verify characteristic values posted to
CO-PA. Values for characteristics such as sales office which already exists in
SAP are defined in CO-PA automatically at creation. Values for the
characteristics which were created manually in CO-PA are entered manually and
exist in PA only.

Profitability Analysis - Planning

This process relates to sales and profitability planning for various business
segments in SAP, at Reliance.

CO-PA planning facilitates creation and processing of plan data.

Plan quantities for sale is entered manually based on the annual business plan
by various businesses for the profitability segments, such as customer, product,
region, etc., at the beginning of every year, in SD. Plan data is uploaded from
SOP to CO-PA. Planning can be for any level and for any no of different levels.

The monthly rolling plan is entered month wise for the profitability segments,
such as customer, product, region, etc., at the beginning of every month.

The planned sales revenue is automatically valued based on the prices defined
in the sales and distribution module of SAP.

Planning can be performed at multiple levels. For example, individual products
can be planned and the data can be automatically rolled up to product group
level.

Profitability Analysis - Actuals

This process relates to the actuals in sales and profitability analysis for various
business segments in SAP, at Reliance. Profitability analysis captures actual
revenues from sales orders / invoices posted online to the relevant profitability
segment.

The cost / revenue elements such as revenue, discounts, surcharges, taxes and
duties specified in the sale order / invoice are posted based on the quantities and
the rate specified in the sale order / invoice. The basic price and sales tax from
the sales order are posted to the sales in profitability analysis and any discount
offered is posted to discounts in profitability analysis.

The profitability segment for posting is determined from the details specified in
the sales order such as product / product group, customer details such as
customer code, region, sales district, industry sector, etc., and sales specific
details such as form of packaging, mode of transport, shipping point, etc.

Profitability analysis calculates actual cost of manufactured goods sold based on
the standard cost estimated at the beginning of the month in CO-PC for the
material sold.
Production costs are posted to profitability analysis in two parts.

The cost of finished goods sold is posted online to profitability analysis based on
the standard cost of quantity sold and used in online profitability analysis during
the month.

Production variances are calculated at period-end in CO-PC and settled in
profitability analysis based on the cause of the variance and are shown
separately.

The actual profitability is thus calculated at period-end when period-end
processing is complete in all other modules.



Sales and Distribution Module:
Maintain Business Partner Master Data

This procedure covers maintaining all customers of reliance in SAP. SAP refers a
customer as a Business Partner. The master record contains all the data
necessary for processing business transactions. Sales and distribution and
accounting departments access and use the data maintained in the customer
master record. SAP divides the customer master record into general data, sales
and distribution (sales area) data, and company code data.

General data - contains general customer information such as address details
and telephone numbers of Reliance customers. General data does not depend
on company code or sales and distribution data; it is identical for both views and
includes:

      Address
      Control data
      Marketing
      Payment transactions
      Contact person
      Unloading Points

However, this information does not always apply in both sales and distribution
and accounting departments. For example, unloading point, which is considered
as general data, is not of relevance to the accounting department. It is
maintained within general data because it is always unique to an individual
customer.

To access customer master record without specifying a company code or sales
and distribution area, then maintain only general data.
Company code data - contains data that is specific to the accounting
department. Company code data records information on:

      Account management
      Payment transactions
      Correspondence
      Insurance

In order to access company code data on the customer master record, you must
specify the customer number and the sales organisation.

Sales and distribution data - contains data that is specific to the SD
department, for example, data on pricing and shipping conditions. To maintain a
customer in more than one sales area, maintain data separately for each
combination of sales organisation, distribution channel and division.

Sales and distribution data consists of:

      Sales
      Shipping
      Billing
      Output
      Partner functions

In order to access sales and distribution (sales area) data on the customer
master record, you must specify the customer number and the sales area.

Partners in the Customer Master Record

A business partner constitutes any company or person involved in business
transactions with Reliance. The following partner functions are defined in the
customer master record:

Sold-to Party - A partner function responsible for placing an order. In most
cases the person who places the order is also the person who receives the
delivery and invoice for the goods. This is not compulsory and it is possible to
have a different Sold-to Party to the Ship-to or Bill-to parties. At the time of
transaction, SAP defaults header level data such as sales office and shipping
conditions from the Sold-to Party master record.

Ship-to Party - A partner function responsible for receiving the goods. Maintain
shipping related information such as unloading points and goods receiving hours
in the Ship-to Party master record. Deliver-to Party and On-account Party are the
partners        that        are         linked       to      Ship-to        Party.
Create a Deliver-to party if the only function the customer performs, is receipt of
delivery on behalf of Ship-to party. Generally Deliver-to party receives the
material for some intermediate processing, e.g., for dyeing of yarn.
On account party is of relevance in sales against stock transport order that is
created by depots. If a customer purchase order triggers stock transport order by
the depot on a plant, customer becomes an on-account party for the plant which
sells material to the depot.

Payer - A partner function responsible for effecting payments. Data that is
required for settlement of invoices, e.g. data on billing schedules and bank data
and payment terms can be maintained in the Payer master record. Create a
payer for every division where a customer is maintained. This is to enable
Reliance to maintain different accounts in different divisions for the same
customer.

Bill-to Party - A partner function responsible for receiving the invoice. Address
and any information concerning electronic communication can be maintained in
the Bill-to Party master record.

As well as creating master records for customers, it may also be necessary to
create other master records, e.g., Commission Agents.

Account Groups

Create master records using account groups. An account group specifies which
partner function is fulfilled, for example, the account group 001 specifies a Sold-
to Party function. However, by default, the customer performs all partner
functions and is the Sold-to, Ship-to, Payer and Bill-to Party. It is possible to
attach additional partners, e.g. a Ship-to Party, to the existing customer account,
thereby allowing multiple delivery points for the customer. The Ship-to partner
must have already been created prior to being attached to the existing customer
master record. If the Ship-to Party can also place orders, it must be created as
account group 001. If the partner is only able to accept deliveries, it is created as
account group 002 as a Ship-to partner only. The account group will also
determine which fields are to maintain or display within the transaction.

Creating a Customer Master Record with Reference

Using an existing customer master record that has similar data as a reference
when creating a new customer master record reduces the effort required in
creating a new master record.

If the only customer number is entered, SAP will copy only the general data into
the new customer master record. If the sales organisation field is also selected,
the sales and shipping data will also be copied. SAP copies only data that is
identical for both master records. For example, address and unloading points are
not copied, while country, language and account group are. All copied data can
be changed.
Blocking / Unblocking Customer Accounts

A block may be placed on a customer master record to prevent further activity on
the customer's account. A customer may be blocked to temporarily suspend the
customer's account or to place a delivery or billing block. When SAP blocks
account at sales level, sales orders cannot process against the customer's
account. A block can be at a single sales area level or across all sales areas.

The following blocks may be placed on a master record:

      sales orders - orders can not be created for the customer
      delivery - orders can be created but delivery is blocked
      billing - orders and delivery can be created but billing is blocked

Deleting Master Records

A customer master record that is no longer required can be deleted, for example,
where a duplicate master record has been created in error. A deletion indicator is
set on the master record and no further sales orders can be processed for the
customer. The master record is only deleted after all dependant data has been
deleted.

Maintain Customer Hierarchy

Customer hierarchy represents customer's organization structure that is relevant
to Reliance. SAP maintains customer hierarchy for the sales operations. Change
the customer hierarchy whenever customer's organization structure changes.
Customer hierarchy is relevant for a customer with large and complex
organization structure.

Maintain Pricing Condition Records

This process covers creating, changing, and displaying pricing condition records.
SAP uses pricing condition records to define price levels for materials and
customers and are automatically applied during sales order processing. The
pricing condition record includes all pricing information required, including prices,
discounts, validity periods, pricing scales and sales deals. Pricing condition
records can be created for:

      Materials applied to a specific contract
      Materials against a customer master record
      Materials within a specific sales area (sales organization, distribution
       channel, division)
      Materials applied to a price list
      Materials within a specific distribution channel
      Materials within a pricing group
Customer Order Management:

It include following steps:

   A.   Maintain Customer Inquiries
   B.   Maintain Customer Quotations
   C.   Maintain Customer Contracts
   D.   Sales Order Processing
   E.   Process Deliveries
   F.   Process Customer Billing
   G.   Process Customer Excise Invoices


Maintain Customer Inquiries

The sales order cycle can begin with an inquiry. This inquiry can then be used as
a reference document to create quotations or contracts.

Inquiries can be created with or without material information such as material
codes and can be created using a description of the customer's material
requirements. This information can then be changed at a later stage in the inquiry
document or updated in the quotation document. When creating an inquiry
without material codes, there is no requirement to enter an order quantity.

Changes can be made to an inquiry after it has been saved provided it has not
been used as a reference document for a quotation or contract. The inquiry can
be controlled by time constraints by entering validity dates. For example, a
customer may be allowed one month to respond to the inquiry

Maintain Customer Quotations

This process covers the creation, display, change, rejection and cancellation of
quotations. This also covers the display of list of executed open and incomplete
complete quotations. Also possible is to process the missing data of incomplete
quotations.

Quotations are created at the request of the customer to provide detailed
information about a particular product. The quotation may contain pricing,
quantity availability and possible shipping dates.

The quotation represents a binding offer to the customer and can be recorded for
the customer in writing or it can be recorded as a sales information document.
Alternative products can be offered to the customer with a quotation. The
quotation, once accepted by the customer, can be copied into a contract or used
as a reference document for a sales order. Quotations are not a mandatory
precursor to a contract or sales order.
In the case of scrap sales, quotations are used to capture bids received from
interested parties. These parties quote a quantity and a price in their bid.
Contracts are created with reference to these quotations based on the highest
bid.

Quotations

Quotations provide the following:

      sales information to the customer about a specific product, i.e., price,
       alternative products, material availability and shipping schedules
      information that can be easily converted into a sales order by copying the
       data from the quotation
      a binding offer and definitive prices
      data that can be used in sales analysis

Quotation Document Types

There are two different document types for a quotation:

      AV which is used if the customer is requesting a quotation for a future
       contract
      QT if the customer is requesting a quotation which will not be used for a
       future contract

Incomplete Quotations

Quotations may be saved even if not all information is available at the time of
document creation. Incomplete details may include for example:

      payment terms
      validity period

The customer's credit limit is automatically checked when creating the quotation.
When saving the incomplete quotation you have the option to edit the missing
data or save it as an incomplete document. Once the missing information is
available, changes may be made to the quotation.

Validity Dates

The quotation can be controlled with time constraints by entering validity dates.
For example, if the quotation is valid for one month from the date of creation, the
customer must accept or reject the quotation within this time limit. It is good
practice to enter validity periods so that increases in prices for materials can be
captured quickly.
In case of scrap sales the quotations are used to capture the bids received from
interested parties. The parties quote the quantity and price in the bids. Then
contracts are created with reference to these quotations. The bids with highest
price are selected. Rest other details are ok.

Maintain Customer Contracts

This process covers the creation, changing, displaying and canceling the
contract. A contract is created in response to a customer request for the supply
of material(s). A contract specifies that the customer will order a certain quantity
of product over a specified period. This is known as a Quantity Contract. The
customer fulfils a contract by placing orders, called call-offs against the contract.
These call-off orders are used to initiate deliveries on the appropriate day for
shipping. When call-offs are initiated against the contract, the remaining
quantities are updated.

Creation of a Contract

The following points apply when creating contracts:

      contracts are created for limited time periods
      the customer requests a specific quantity of goods to be delivered at
       specified intervals and has an agreed time frame and price for the goods
      an order is then created against the contract (called a "Call Off") at the
       prescribed time intervals
      the contract must be created with a validity period

Contracts can be created with or without referencing a preceding document. A
quotation cannot be used as a reference document for a contract unless the
quotation is complete. Edit the incomplete data in the quotation before
referencing it to create contracts.

Completing a Contract

A quantity contract is complete when there are no more items to deliver. If there
are still outstanding items in the contract but you nevertheless want to close it,
you can assign a reason for rejection to these items. The system then sets the
status of the contract as complete.

Changing a Contract

As a contract is created for the purpose of supplying specific materials and
quantities, there are restrictions on the type of changes that may be made to a
contract. Once the contract has been accepted by the customer changes cannot
be made to the product or quantity ordered. If the validity dates are changed after
contract acceptance, a warning message is displayed but can be ignored.
Sales Order Processing

Sales-related business transactions are recorded in SAP as sales documents.
There are, broadly speaking, four different groupings of sales documents:

      sales queries, such as inquiries and quotations
      outline agreements, such as contracts and scheduling agreements
      sales orders
      customer problems and complaints, such as returns and credit memo
       requests

All sales transactions occur within a specified sales area. That means, for
example, that all sales activities are allocated to a combination of a sales
organization, a distribution channel, and a division. Orders, inquiries, quotations,
contracts, scheduling agreements and customer master records are all created
for a sales area.

Standard Functions During Order Processing

When a sales order is processed, SAP automatically carries out basic functions,
such as:

      pricing
      availability check (if this function is defined in the material master record)
      transferring requirements to materials planning (MRP)
      delivery scheduling
      shipping point and route determination
      credit limit check

In SAP a sales order is defined as the contractual arrangement between a seller
- in this case Reliance and a customer (referred to in SAP as a Sold-to party).

Sales orders can be created with reference to a preceding document, i.e., a
quotation or contract. Data entered in a preceding document is copied into the
sales order. Referencing reduces both order entry requirements as well as
reducing the opportunity for errors. Orders can also be created without reference
to a preceding document.

When creating the sales order, SAP automatically proposes appropriate existing
data from relevant master records.

      sales, shipping, pricing and billing are obtained from the customer master
       record
      data for each product in the order is obtained from the material master
       records. This includes data for pricing, delivery scheduling, availability,
       taxes, weight and volume
This allows fast entry of information for the sales order and for this reason it is
important to remember that master records should be kept up-to-date and current
at all times.

Stock Transfers using Stock Transport Orders

In SAP it is possible to create for a plant to create purchase order on some other
plant for the supply of materials, e.g., a depot can create a purchase order on a
plant for supply of finished goods. Purchase order in that case is called a stock
transport order. Stock transfers that include SD deliveries and billing
documents/invoices are only possible between plants belonging to different
company codes.

The stock transfer involves:

      Creation of stock transport order by the receiving plant
      Delivery from the issuing plant
      Billing document for the delivery in the issuing plant
      Goods receipt in the receiving plant
      Invoice receipt in the receiving plant

Document Structure

All sales documents have the same basic structure and include a document
header and as many line items as required.

      Document Header - contains general data, which applies to the entire
       document. This can include addresses, sales organization, sold-to party or
       purchase order details
      Document item - is data that applies to the individual items. This data can
       include material number, order quantity or quantity to deliver, as well as
       the net value of the individual items and the price
      Schedule Lines - every item in a sales document can include one or more
       schedule lines that divide the item according to date and quantity. For
       example, if a line item in an order of 100 MT can only be delivered on 4
       dates, then 4 schedule lines are created which display the respective
       quantities and delivery dates

Changing Sales Orders

The type of changes that can be performed will depend on the type of sales order
requiring changes. Standard sales orders and call offs against a contract do not
support the same change functions. In a Call Off order changes can only be
made to the quantity ordered subject to the maximum open quantity in the
contract not being exceeded. The contract is created on the condition that a
specific quantity of material is supplied under specific payment terms. These
conditions cannot be changed once a contract has been accepted. Generally, in
standard orders the following changes can be made:

      material
      order quantity
      delivery date
      blocking the order for delivery or billing functions
      deleting individual line items
      delete the entire order
      rejecting items in the order
      payment terms

Changes can only be performed if the delivery has not been processed. Once the
delivery document has been created, any changes to the sales order should not
be processed without checking the status of the delivery with the warehouse first.
The sales order can only be deleted if subsequent documents do not exist. For
example, if a delivery document exists the order document cannot be deleted.
Any items that are rejected in an order are not copied into the delivery and billing
documents. If a block is placed on the order for delivery or billing functions, no
further processing of the order is possible until the block(s) has been removed.

Incomplete Sales Orders

SAP maintains a log of incomplete sales orders. This log can be accessed at any
time and analyzed to determine which orders still require further processing.
Whilst incomplete sales orders can be saved, subsequent functions such as
delivery and billing cannot be processed until the sales order is complete. For
example, if the order is incomplete for billing, the delivery can still be processed
but billing function cannot be processed until incomplete data has been entered.
These incomplete orders are automatically blocked for further processing.

Blocked Sales Orders

As well as automatic blocking for incomplete orders it is also possible to place a
manual block on an order for delivery or billing functions. A delivery block can be
placed on the order to prevent the shipment of the goods. Once a delivery block
is placed on a sales order a delivery document cannot be created. When
attempting to create the delivery, an error message is displayed advising the
order is blocked for delivery. A billing document cannot be created for a delivery
that is blocked for billing. It is also possible to block sales documents for certain
customers. For example, you can block the creation of sales orders for a
particular customer.

Orders may also be blocked for credit checks. An order blocked for credit
reasons must be released before a delivery can be processed.
A block may be placed at header level, which affects the entire order, or
alternatively, at item level which affects the individual line item only.

It is the responsibility of the sales person to check for blocked orders on a daily
basis. Orders that are blocked for credit reasons should be referred to the Credit
Control Department for authority to release. Once the order is released, the
delivery can be processed.

Cancelling Sales Orders

An entire sales order or individual order items can be deleted, depending on their
status and whether subsequent transactions have been performed. For example,
if an item has already been processed for delivery, it can no longer be deleted in
a sales order.

Delivery Processing

This process covers the procedure for delivery processing. Delivery transaction is
recorded in SAP as delivery documents.

Standard Function during Delivery Processing

When a delivery is processed, SAP automatically carries out basic functions,
such as:

      availability check (if this function is defined in the material master record)
      proposed batch of the material
      delivery scheduling
      shipping point and route determination

Delivery can be created with reference to a preceding document, i.e., order. Data
entered in a preceding document is copied into the delivery. Referencing reduces
both delivery entry requirements as well as reducing the opportunity for errors.

When creating the delivery, SAP automatically proposes appropriate existing
data from relevant master records.

      shipping is obtained from the customer master record
      data for each product in the delivery is obtained from the material master
       records. This includes data for delivery scheduling, availability, weight and
       volume

This allows fast entry of information for the sales order and for this reason it is
important to remember that master records should be kept up-to-date and current
at all times.
Document Structure

All delivery documents have the same basic structure and include a document
header and as many line items as required.

      Document Header - contains general data, which applies to the entire
       document. This can include status of different stage of delivery details
      Document item - is data that applies to the individual items. This data can
       include material number, order quantity or quantity to deliver
      Batch - is data that applies to the individual items. This data include
       different batches with quantity and storage location for a particular item

Changing Delivery

The type of changes that can be performed will depend on the type of delivery
requiring changes. In a Call Off delivery changes can only be made to the
quantity ordered subject to the maximum open quantity in the order not being
exceeded. The order is created on the condition that a specific quantity of
material is supplied under specific payment terms. These conditions cannot be
changed once an order has been accepted. Generally, in delivery the following
changes can be made:

      delivery quantity
      picking quantity
      batch of the particular material
      delete the entire delivery

Changes can only be performed if the billing has not been processed. Once the
billing document has been created, any changes to the delivery should not be
processed without checking the status of the billing document. The delivery can
only be deleted if subsequent documents do not exist. For example, if a billing
document exists the delivery document cannot be deleted.

Reverse Goods Movement

An entire delivery can be reversed, depending on their status and whether
subsequent transactions have been performed. For example, if a delivery has
already been processed for billing, it can no longer be deleted.

Changing Invoice

The type of changes that can be performed will depend on the type of billing
requiring changes. In a Call Off billing changes can only be made to the quantity
ordered subject to the maximum quantity in the order not being exceeded. The
order is created on the condition that a specific quantity of material is supplied
under specific payment terms. These conditions cannot be changed once an
order has been accepted. Generally, in billing the following changes can be
made:

      header condition
      item condition
      header detail
      item detail

The billing can only be deleted if subsequent documents do not exist.

Returns Processing

This process covers the processing of return orders. Create return order when a
customer returns goods due to quality reasons or incorrect delivery. Also create
return order in the event of unloading of material when the vehicle is rejected. It
is not mandatory that the goods be returned to the depot they were originally
delivered from. There may be times when it is more convenient for the customer
to return the goods to an agent's depot that is closer to them.

A return request always refers to a billing document. During the creation of return
request, the Marketing Manager will decide whether the return request is
approved for the full return, partial return or rejected. SAP automatically receipts
the stock into quality inspection when posted. When inspection is complete, the
goods are either released to unrestricted stock or reclassified and down graded
with a new material code. If the goods being returned do not require quality
inspection, the schedule line category can be changed and the goods can be
receipted directly into unrestricted stock. This would be appropriate for example,
if the goods were being returned because of a wrong delivery or quantity and not
because of quality reasons.

There are two document types associated with processing returns for customers:

      return order
      credit memo request

There are very important differences between processing a return order and
processing a credit memo request. Always create return order when there is a
physical return of materials. SAP processes a credit note for the customer when
the return order is released for billing. A credit memo request is not required if a
return order is processed. Process the credit memo request when there is no
physical return of goods however the customer is owed money or a rebate.

Return Orders

      goods return has been approved by the marketing department.
      always created with reference to a billing document. It is not possible to
       create a return order without referring to a billing document
      pricing applied in the original billing document is copied into the return
       order

Credit Memo Request

      created for credit to the customer for reasons other than return of goods.
      pricing is not copied into the credit memo request and must be applied
       manually. If a credit memo is created incorrectly, pricing condition will be
       incorrect

Return Orders

When the goods arrive back at the warehouse, a return delivery is created. This
delivery refers to the preceding return order. The goods issue posted for the
return delivery records the inward movement of the goods into the warehouse.
When the goods have been inspected, they can be released to unrestricted stock
if suitable.

When creating return orders, the most important entries are:

      customer number
      order reason, i.e., the reason for the returns
      material and the quantity for the returns

The return order quantity does not have to be the same as the original order
quantity. For example, it could be that only some of the goods are damaged. In
this case you would enter the quantity the customer is returning only.

Credit Memo Request

Create a credit memo request when a customer is owed money. The credit
memo request may or may not refer to a preceding document. If the credit refers
to only part of the billed quantity, you can adjust the target quantity accordingly.
When you create a credit memo request, an automatic billing block of 08 is set.
This block prevents billing and the release of the credit memo until approved by
the marketing manager. After the request is approved, the billing block must be
removed to enable further processing, or a reason for rejection must be entered.

Rejecting Credit Memo Requests

If a credit memo request is to reject, a reason for rejection code must be entered.
These items are not taken into account during the calculation of the credit memo
value in the billing document. However, they are copied into the billing document
as statistical items. This means that you can see in the invoice which items
require payments and for which items payment has been refused. Reasons for
rejection can be assigned per item if the credit request is for multiple line items or
at header level for the entire document.



Sales Tax Forms Tracking

Sales Tax (ST) Forms are received from customers towards the sale of goods
that took place against a commercial ST form. This will be applicable even when
the unit / plant is covered under a ST Incentive Scheme that the company may
be enjoying. In certain scenarios, ST Forms are also issued (like E1 Form) to
customers. ST Forms are tracked and monitored to ensure timely receipt and
issuance. The ST Forms tracking module in SAP can be used to handle the
following activities:

      Monitor the ST Forms that are to be received from customers
      Record the receipt of the ST Forms from customers
      Monitor the ST Forms that need to be issued to customers
      Record the issue of the ST Form to customers

Form Receipt

ST Form that is received from a customer against the sale of goods is recorded
in SAP by linking the Invoice(s) concerned.

Form Issue

ST Form is issued to a customer against the sale of goods from SAP after
flagging the invoice(s) concerned.



Warehouse Management Module:
Manage Storage Bins

This process covers the management of storage bins within a warehouse. Assign
storage bins to storage types or storage sections. They are the smallest unit
within the warehouse. Group storage bins with similar characteristics, for
example bins for fast-moving goods, within the same storage section or type.

Maintain the following storage bin data in the warehouse master record:

      Storage bin location. This includes the warehouse to which the storage bin
       is assigned, the storage type or storage section.
      Storage bin characteristics. This includes the type of storage bin,
       maximum weight and capacity.
      Inventory information. This includes goods movements' information such
       as the date and time of the last movement and is updated by SAP
       automatically.

Process Transfer Requirements

This process is used to plan stock movements within Warehouse Management
(WM). Use transfer requirements to plan and initiate material movements within
the warehouse. At Reliance do not create transfer requirements manually. SAP
automatically generates transfer requirements when goods movements are
posted in Inventory Management (IM).

Display transfer requirements either individually or grouped by selection criteria
that you specify. User can display transfer requirements by storage type to
generate a list of outstanding requirements for the storage type. After identifying
the transfer requirements, create transfer orders to complete the stock
movements.

Unlike transfer orders, transfer requirements are the medium used to convey
information about stock movements from IM to WM.



Process Transfer Orders

Transfer order is the document that gives detailed information about the
movements of the goods in the warehouse. The information includes the details
of storage bins, storage sections, storage types for the source and destination
locations. Transfer order furnishes quant details and reference details. Wherever
relevant transfer order gives storage unit details also. Confirmation indicator
indicates the actual movement of the goods from source storage bins to
destination bins.

Process Individual Transfer Orders

Transfer order furnishes the details of source storage types and bins and also
destination storage types and bins. So it is necessary to create a transfer order to
move the material from logical storage type to physical storage type. Move the
material from source bins to destination bins using the information given in
transfer order. Once the material movement is complete, confirm the transfer
order to indicate the completion of the movement. It is possible to cancel the
unconfirmed transfer orders. Print the transfer order for physical movement of the
material.
Process Posting Change Notices

This process covers posting change notices within Warehouse Management
(WM). Posting change notices are changes in information about a material and
not a physical movement.

The following are examples of posting changes:

      Releasing inspection stock to available stock
      Releasing blocked stock to inspection stock
      Converting special stock

The posting change notice process starts in Inventory Management (IM) with the
creation of transfer postings. With the creation of a transfer posting in IM, a
posting change notice generates in WM. Simultaneously, an equal amount of
negative and positive quants of the material post to the posting change interim
storage area 999. The positive quant reflects the amount of material for addition,
and the negative reflects the amount for removal.

Use the list display functionality within SAP to identify open posting change
notices and to create transfer orders. There are two ways to create transfer
orders: automatically from the list display transaction or manually.

Creating a transfer order processes the posting change notice and clears the
interim storage area. Verify that the storage area clears by generating the stock
overview report.

Process Physical Inventory for Warehouse Management

This process covers the physical inventory process within Warehouse
Management. Physical inventory involves the physical counting of stocks in a
warehouse. There are different methods of carrying out inventory - for Reliance,
use the continuous and cycle counting methods. For each storage type within the
warehouse, specify an inventory method and carry out the inventory at a storage
bin level.

The inventory process commences with a requirement to count stocks within the
warehouse. Perform the following steps to carry out a physical inventory:

      Select storage bins for the inventory.
      Create a system inventory record to capture information about the storage
       types selected for the inventory.
      Confirm all open transfer records for the storage bins.
      Activate the system inventory record. Block storage bins and set the
       inventory active status for both the storage bins and the system inventory
       record.
   Print a hard copy of the system inventory record for the warehouse worker
    carrying out the inventory.
   Carry out the inventory. The warehouse worker records the physical count
    results on the hard copy of the system inventory record.
   Enter the physical count results in SAP.
   If the inventory is not complete, perform a recount.
   Complete the recount and the inventory process by clearing the inventory
    and returning storage bins into use.
   Process any differences resulting from the inventory. This occurs if
    differences exist between the book amount and the physical count results.
   Clear any differences from the interim storage area for inventory
    differences.
   Record the differences in Inventory Management (IM).
Recommendations:


(1) Compatibility Of Interconnect With SAP
ABOUT INTERCONNECT

InterconnecT Ver 6.0.6 from Intec telecom systems Inc. has been implemented in
Reliance for Interconnect billing. Switch generates Call data records for every call
that enters/leaves the network. Mediation device collects these records and after
converting in specified format sends them to Interconnect for rating. Interconnect
applies the agreed rates on the CDRs and summarizes them based on some
parameters like Network Operator, PoI, Trunk etc. Once billing period is closed
Interconnect also applies agreed discounts and adjustments if any on the
aggregated summaries. This summary report in the form of data files is send to
SAP to populate the SAP tables.

INTEGRATION BETWEEN INTERCONNECT AND SAP

As both the systems (Interconnect and SAP) are different, so they are having
different reference data for their functions. The data from the InterconnecT is to
be sent to SAP in the text format, to understand the same data in the SAP; it is
required to define the mapping between codes of both the systems. To achieve
this we have defined mapping tables, in which we have mapped the
InterconnecT codes and SAP codes.



PROBLEMS IN THE INTEGRATION

     The conversion of data required is very time consuming. This results in
      the delay which is kind of black spot on the real time environment in SAP.
     The conversion also requires extra resources which are certainly
      unaffordable considering the fierce competition which has caused lower
      call charges to become the prime deciding factor.
     The comparatively large number of faulty billings is attributed to the
      incompatibility between the two softwares.

    Therefore, we recommend that a software with better integration with SAP
    should be used or a special module of SAP customized for this very purpose
    should be designed.
HOW IT WORKS

Processing Incoming Call Data

In SAP the unprocessed bills are generated and further processed to create the
sales document and billing document in the background. The billing document
serves as the Commercial invoice to be send to the customer/ operator. This
commercial invoice gives the total invoice amount and not the split ups per call.
The detailed call rates and timings can be had from the InterconnecT.

Any      cancellation/reversal    of   wrong       entries    is     also   possible.
The list of processed bills in SAP can also be listed for details.

Processing Outgoing Call Data

In SAP the unprocessed data is generated to create framework order operator-
wise and service entry sheet in the background. Any cancellation/reversal of
wrong entries is also possible.

Against these documents the invoice verification and payment is done and
payment processed. The list of processed data in SAP can also be listed for
details,

Processing Provisions

Since month end closing of accounts is required in SAP, all data pertaining to the
open billing period in the current month is populated into intermediate tables,
converted into SAP required format and send to SAP.

The JV File (Income) is to be sent to SAP for provisioning of the revenue for
open Billing Period for the current month.




(2) ‘Demand Planning and Forecasting’ process should
be implemented:
       Reliance Infocomm is not using „Demand Planning and Forecasting‟ tool
       for the sale of its handsets and recharge vouchers.
            At Reliance Infocomm, stock is maintained based on the historical
               sales data which is not so accurate. The result is that they have to
               maintain stock for 15 days that costs too much.
           Also because of the inaccurate forecasts, unsold handsets at the
             end of each stock period are sent to other cost centres where the
             handsets are required for sale. This extra transportation cost adds
             to the cost occurred by extra inventory.
           Demand Planning and Forecasting is a good process to
            calculate future demand based on the historical data and market
            forecasts and the information obtained from dealers, internal sales
            organizations, sales partners, and major customers to plan
            accurately and avoid the understock and overstock situations.


(3) Churn Management Process should be implemented:
Another big problem that Reliance Infocomm faces is that of customer loss. In
the current market scenario of cutthroat competition, these frequent losses are
not a good sign. Firstly, it is more expensive to gain a new customer than to
retain an existing one. Secondly, the bad publicity given by customers who leave
due to reasons other than call rates, is very injurious to company‟s health
especially given the recent controversies the company has found itself in.
In the telecommunication market, competition is very high and the products and
offerings are more and more comparable. This leads to reduce customer loyalty.
Losing an existing high-volume customer means losing a lot of revenue. It is
necessary to identify customers that are willing to move to a competitor before
they do so.
We recommend the use of Churn Management process. Churn Management
helps to increase customer loyalty and to leverage existing customer assets. It
include following processes:

    Customer Satisfaction and Loyalty Analysis This uses a customer
     survey to determine how satisfied customers are with the products and
     services offered by the company, and how loyal they are to the company.


    Cost and Revenue Analysis It monitors the profitability of a service
     organization and analyze the sources of revenue, costs, and profit. It is
     possible to analyze the profit generated by customers and their installed
     bases and monitor profitability trends over a period of time.
    Customer Profitability Analysis This business process is used to
     calculate customer profitability, which is one of the most frequently used
     methods for customer valuation. Customer profitability is most easily
     calculated as the difference between revenue and costs. It is more useful,
     however, to perform detailed customer contribution margin analysis
     including different revenue types, product costs, marketing costs, and
     sales costs, to produce a differentiated picture of customer profitability.
 Installed Base Analysis This process shows the monetary business
  volume of all orders referencing to an Installation during a specific time
  period. It enables analysis on costs, revenues, and profit generated by an
  Installation. It provides information about the location of Installations and
  shows the amount of orders for an Installation during a specific time
  period.


(4) A process for determining the reorder point
should be included in the Warehouse Management
module:
  At Reliance Infocomm, Warehouse Management module does not include
  process for determining the reorder point. Reorder point is determined by
  separate program implemented in MS Access. Therefore employees have
  to look for both SAP and MS Access; MS Access for determining reorder
  point and SAP for giving order.This also effects the real time scenario of
  SAP as updations are made in a different software and the use of data is
  done by a different software. If any process for determining reorder point
  is implemented in SAP than orders can be delivered directly by the system
  whenever the stock goes below some specified level. Thus these
  processes should be implemented.


(5) Account Receivable module should be Updated:
  At Reliance Infocomm, employees find difficulties in the payment of bills if
  bills are outdated. Because SAP system records the payment as the
  separate entry showing advance payment and the bills of previous period
  are shown as unpaid. Thus employees have to make cross entries for
  these unpaid bills and advance payment. Thus it is necessary to make
  sufficient changes the SAP system.


  Bibliography:


       Manuals of Reliance Infocomm
      Websites:
       www.ril.com
       www.relianceinfo.com
 www.sap.com


Books:
 ERP Demystified by Alexis Leon
 Using SAP R/3 by Jonathan Blain

								
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