It gives me immense pleasure to write to you and share through this letter theachievements and financial highlights of your company during the past year. Your companyhas achieved the growth targets in revenues and profits amidst the challenging businessenvironment. The continued focus on R&D infrastructure and talent in a scenario offast changing technologies facilitated the company to meet its targeted growth. At Rs.3202182 Lakhs (as on 1 April 2016) the order book continues to be healthy. Theprojections for order inflow for next 2-3 years as per our marketing plan are likely toremain robust. Your company has maintained its leadership position in supplying equipments/ systems to Defence forces and is on a steady growth path. I take this opportunity toshare with you the performance highlights during the past year and the future outlook forthe Company.
Highlights of the Year
Your Company achieved a turnover of Rs. 752164 Lakhs during 2015-16 against Rs.669457 Lakhs in 2014-15 thereby registering a significant growth of 12.35%. A steepgrowth of 47% in exports
A Significant Growth of 12.35% in Turnover has resulted in achievingan all time high Export turnover of US$ 85.00 Million compared to US$ 57.85 Millionthe previous year. The indigenously developed Naval Air Surveillance Radar was exported toMyanmar for the first exported during the year include Ship borne EW System ThermalImaging based Fire Control System Communication Equipment Electronic Voting Machinesetc.
R&D expenditure at 9.36% of turnover All the 9 manufacturing Units of thecompany have performed well. The Profit After Tax for 2015-16 was Rs. 135767 Lakhsagainst Rs. 116724 Lakhs last year an increase of 16.31% over previous year. The NetWorth of the company has grown from Rs. 788503 Lakhs to Rs. 873383 Lakhs in year2015-16.
R&D has been the main focus area of your company for increasing indigenisation andvalue addition in our products / systems. The total expenditure on R&D as a percentageof turnover during the year was 9.36% which is one of the highest among the defence PSUs.It is our constant efforts on indigenous developments that have led us to achieve 86% ofour turnover from indigenous products. Only 14% of our revenues came from productsmanufactured through Technology transfer from foreign OEMs. Defence
Revenue from defence business is 82% being the mainstay of the company hascontributed 82% of sales revenue with the balance 18% coming from the civilian sector.
Some of the major products / systems introduced during 2015-16 are 3D SurveillanceRadar L-Band 2D Air Surveillance Radar for Navy Coastal Surveillance Radar SatcomTerminals Software Defined Radio (Naval Version-NC) Tactical Access Switch AdvancedComposite Communication System (ACCS) Versatile Media Secrecy Device CitizenVerification Devices Integrated Sonar Suite for Submarines IAC MOD O/C Ref SystemIntegrated EW System for Mountainous Terrain Laser Warning System Gunner Sight for T90Driver Sight for MBT Arjun etc.
Filed applications for 12 Patents Major Orders received during the year includeIntegrated Air Command and Control System Weapon Locating Radar HHTI with LRF Groundbased Mobile ELINT Integrated Communication System USHUS Electronic Ammunition FuzeArmoured Engineering Reconnaissance Vehicle and Shakti System for P71.
I have the privilege to inform you that during this year your company has filedapplications for 12 Patents in the areas of Networking RF and Microwave ImageProcessing Avionics etc. As many as 98 technical papers were published by scientists andR&D engineers of BEL in various national and International journals / seminars/conferences.
Some of the performance highlights of your company are :
Foundation stone laid for setting up of Defence Systems Integration Complex inAnantapur district of Andhra Pradesh
Successfully completed supply of all systems for 6 Squadrons of Akash to Indian AirForce.
Supplies for Project L-70 Gun Upgrade program commenced.
An all time high Export turnover of US$ 85 Million.
State-of-the-art Additive Manufacturing facility set up at Bengaluru Unit
Near Field Test Range and EMI/EMC Test Facilities set up for testing of modern Radarsat Ghaziabad Unit.
Procurements from MSMEs has increased from 8% in 2014-15 to 20% during 2015-16
Procurement from MSMEs : 20%
Long term Vendor Development and Outsourcing policy has been released.
"Make in India Cell" has been setup to implement BELs outsourcingpolicy.
You will be happy to know that your company has received several accolades the mostnoteworthy being :
Raksha Mantri Award in the category of institutional best performing divisionindigenization design effort for the years 2012-13 and 2013-14.
ELCINA-EFY award for excellence in Electronic hardware manufacturing and services inQuality and Exports category.
"Leadership Award Embedded/VLSI Industry" for the year 2015 under thecategory of Best Electronic System Design & Manufacturing (ESDM) in the GovernmentSector. The award was conferred by "Mentor Graphics and Silicon India" on 6November 2015 at Bengaluru.
"Gold Award" in the ICQCC (International Convention of Quality ControlCircle) held at Changwon Korea for the case study on "Testing of Tx/RxSub-Modules".
Won Four Awards instituted by Society of Defence Technologists (SODET) for the year2014-15 in the categories of Technology Development and Technology
Conferred with the Dun & Bradstreet Indias Top PSUs Award 2015 inthe Electrical & Electronics Sector by Dun & Bradstreet (D&B) theworlds leading provider of global business information knowledge and insight.
Governments greater emphasis on Make in India initiative in Defencesector provides a great opportunity for the Company to enhance its indigenisation effortsand to address the opportunities in Indian Defence sector.
Backed by a healthy order book and orders in pipeline we are targeting a turnovergrowth of 12-15% during 2016-17.
Segments like Radar and Missile systems Communication and Network Centric SystemsTank Electronics Gun upgrades & EO systems and Electronic Warfare & Avionicssystems will continue to drive the Companys growth in the coming 4 to 5 years.Capacity enhancements and creation of new test facilities help the Company in achievingthe targeted growth. Sensing growth opportunity in the civil segment we are pursuingbusiness in the field of Homeland Security Telecom and Smart City elements.
The future looks promising as well as challenging. The
Defence Sector is increasingly being opened up for private sector participation withevolutions of Defence Procurement
Procedure. All this has pushed the company towards much higher competitiveness andproductivity through initiatives for enhancing value addition. It is extremely importantfor BEL to stay abreast of technology and develop new products regularly. Thrust onR&D across the company will continue with roadmaps drawn for future productsacquisition of key technologies and filing of patents. The company is also laying greateremphasis on working closely with DRDO labs other research institutions and academicinstitutions as well as niche technology companies for development of new products andsystems. The important projects planned for execution this year are Akash Weapon System3D TCR Weapon Locating Radar Schilka Upgrade Communication Equipment
Night Vision Devices L70 upgrade IACCS etc. On the export front your Company hasacquired orders worth US$ 25.1 Million this year. The export order book as on 1 April 2016is US$ 120 Million including Offset orders of US$ 24 Million.
New Strategic Initiatives
Your company is working on new strategic areas like Electronic Ammunition FuzesHomeland Security Solutions Navigational Complex Systems and Inertial
Navigation Systems in line with the emerging needs of the Customers.
Governance and Sustainability
Your company takes pride in constantly adopting and maintaining the highest standardsof values and principles. A detailed report on compliance of the guidelines on
Corporate Governance as per the Listing Agreement with Stock Exchanges / SEBI (LODR)Regulations 2015 and the guidelines issued by the Department of Public Enterprises forCPSEs forms part of the Directors Report.
The corporate performance of BEL measured in terms of the economic environmental andsocietal parameters augers well to reinforce the image of BEL as a socially responsiblecorporate entity. Sustainability in BEL is the continuing commitment to behave ethicallyand contribute towards economic development while improving the quality of life of itsworkforce their families and the local community and society at large.
I am grateful to the Board of Directors and members of management committee for theirunwavering support and guidance. Ministry of Defence and Defence Services have beencontinuously providing valuable guidance and support. I also deeply appreciate ourshareholders esteemed customers and business associates for providing the opportunitiesto earn their confidence.
The dedication and commitment of our employees and officers at all levels continues tobe the major strength of our company. We shall make continuous efforts to build on thesestrengths to face future challenges and sustain the momentum for profitable growth.
|Best wishes || |
| ||Sincerely |
|Bengaluru ||S K Sharma |
|28 July 2016 ||Chairman & Managing Director |