It is a proud moment for me to inform you that your Company has crossed yet anothermilestone and achieved an all time high Net Sales of Rs.2983.72 Cr during 2015-16sustaining the tough business environment and conditions that prevailed in the capitalgoods sector. The Annual Report brings you the audited accounts and other relateddocuments for the year 2015-16 for your consideration and adoption at the ensuing AnnualGeneral Meeting.
The assessment of the Company's performance for the financial year ended 31.03.2016 hasbeen completed.
In Mining & Construction sector despite a de-growth in capital goods industry andslow down in global market the Company was able to maintain its market share and achievedgross sales of Rs.1807.58 Cr which is higher compared to previous year gross sales ofRs.1803.02 Cr. The Rail & Metro vertical achieved gross sales of Rs.1250.35 Cr with agrowth of 7.55 % over previous year gross sales of Rs.1162.60 Cr. The Defence business isback on track and achieved gross sales of Rs.368.09 Cr. which is more than doublecompared to previous year gross sales of Rs.l 64.04 Cr. Your Company generated 88% of itssales achieved from orders obtained through competition mode.
With the above performance your Company made a Profit before Tax of Rs.64.27 Cr during2015-16. The Company has closed the year with a healthy order book position of Rs.6430 Cr.
R&D is a continuous effort being pursued in your Company. The design developmentand up-gradation efforts through in-house R&D resulted in the following fournewproducts besides up-gradation of several products. In-house developed R&D productscontributed to 54% of sales turnover in the year 2015-16.
Mining & Construction:
> Compact Loader-cum-Excavator BL120H for Construction Sector.
> 117HP Dozer BD50 with Hydrostatic Transmission.
> SMERCH8x8& lOxlOHighMobility Vehicle with additional Steerable Rear Wheel.
Rail & Metro:
> Catenary Maintenance Vehicle for Navi Mumbai Metro Corporation.
It is a matter of pride that our R&D product 180T Electrical Excavator-BE1800E isrunning successfully at the customer's place. With the thrust for 'Make in India' thisindigenously developed pollution-free Excavator will help to increase productivity inmining operations both in domestic and global markets. Towards self-reliance yourCompany has achieved over 90% indigenisation in the mainline M&C products RailCoaches and EMU's. All out efforts are underway to reach higher level of indigenisation inHeavy Duty High Mobility Vehicles and Metro Cars.
On HR front your Company has undertaken the 'Skill Development' initiatives in linewith Government of India's 'Skill India' initiative. Continuous technical trainings arebeing organised to train Employees through in-house Centre for Excellence Schools and atreputed technical training Institutes. To hone-up skills in-house training is alsoimparted to ITI/NAC Diploma/Engineering Graduate apprentices. Further variousorganizational development initiatives such as Employee Satisfaction Survey Developmentof Competency Assessment Framework & Leadership Pipeline formalization of valuestatement of the Company; rBEML FIRST' have been carried out to effect thecultural enhancement aligned with our organizational growth.
On CSR & SD front your Company has taken forward various initiatives viz. SwachhBharat campaign Rain Water Harvesting Installation of Wind Mills Planting of treesacross campuses not withstanding undertaking other CSR ongoing projects being sensitiveand responsible to the Society.
Towards Green Energy the Company has so far commissioned wind energy of 14 MW. Furtherthe Company is in the process of commissioning additional 9 MW to become self sufficientand a Green Company.
During the year 2015-16 your Company was recognized with the following major awards;
> "Raksha Mantri's Award for Excellence" under the Institutional Awardcategory for Best Performance in Exports during 2012-13.
> Won the "SCOPE Award for Excellence and Outstanding Contribution to thePublic Sector Management-Special Institutional Category (Turnaround)" for the year2013-14.
Plan for the year 2016-17
As per the ICRA report demand growth during CY2016 is expected to firm up driven byincreased road construction activity execution of Railway proj ects (awarded in thecurrent fiscal) and work on the Dedicated Freight Corridors. Further the Union Budget of2016-17 provides additional insights into the budgetary allocations for futureinfrastructure activity. Demand in CY2017 will improve as work in other segments such asPorts Airports etc. join the infrastructure development fray. This is a positive signalfor business in the M&C segment. With continued focus on quality customer demandsafter-sales- service combined with concerted efforts we are confident of capturingmaximum out of available business in the domestic and increased sales in export market.
With respect to Defence vertical the business is back on track and we are putting ourbest foot forward to maximize sales and contribute significantly to Company's turnover.Plans are in place to execute available orders on hand and also improve the performance ofDefence Business segment by generating business for supply of Mine Clearing SystemsRecovery Vehicle aggregates for Missiles Systems and F ighting Vehicles.
In the Rail & Metro Business Medium/High Speed Coaches Light Rail Metro CarsMaintenance Equipment are emerging as business opportunities. We will pursue orders forthe same and continue to progress and be a major player in the Rail Transportation Segmentof the Country.
In this projected positive scenario and keeping in view ofthe present Order Book wehave set ourselves aNet Sales target of Rs.3300 Cr. for the year 2016-17.
On HR front we have tied up with highly reputed institutes for Capability Building ofour Engineers to address the requirements of all the three business verticals. Furtherpro-active initiatives like outbound training for the Executives are being taken up todevelop various skills of leadership team building inter-department cohesiveness etc.among the Executives.
In order to focus on 'National Skill Development Programme' building the requisiteskills which are of critical importance to the Company's operations various technicaltrainings for specific Skill-sets through 'Centres of Excellence' at each Division/Complexare undertaken.
Various competency and leadership development initiatives are taken up to drive the'Development of Leadership Pipeline' initiated last year.
As a part of 'Swachh Bharath' Campaign we have taken various initiatives and plans arein place to make it successful.
As a Corporate Citizen your Company has complied with all rules and regulationsdealing in a transparent fair and corruption free operational environment and a detailedreport on compliance of the guidelines on Corporate Governance under the SEBI ListingRegulations and the guidelines issued by the Department of Public Enterprises for CPSEsform part ofthe Board's Report.
Thus BEML has put in place appropriate strategics and actions to counter all businesschallenges and scale new benchmarks.
I am confident that with continuous dedicated efforts commitment and hard work and aconducive business environment around BEML shall move to achieve greater heights in2016-17 and I assure you that your Company is committed for enhanced value creation toits Stakeholders and Society at-large by taking up activities and initiatives forsustainable growth with environmental concern.
To conclude on behalf of Board of Directors of the Company I would like to express mygratitude to our shareholders valuable Customers and all other stakeholders for theirtrust and support and my deep appreciation to all Employees and Executives for theiruntiring efforts and contribution.
I wish to take this opportunity to thank all my fellow Directors on the Board for theirinvaluable guidance and support rendered for running the operations of your Company.
I also gratefully acknowledge the support and encouragement extended by ourAdministrative Ministry Ministry of Defence and in particular Department of DefenceProduction in steering the Company and other Administrative Departments of Government ofIndia and co-operation from partners in progress.
With warm regards