To the Members
Your Directors take pleasure in presenting their Report and the Audited FinancialStatements for the financial year ended 31 March 2016 together with the reports of theStatutory
Auditors and the Comptroller and Auditor General of India thereon.
Financial Results and Performance Highlights
A summary of the Companys financial results is given below :
| || ||(Rs. in Lakhs) |
|Particulars ||2015-16 ||2014-15 |
|Value of Production ||778209.47 ||665854.35 |
|Turnover (Gross) ||752164.14 ||669456.53 |
|Profit before tax ||180914.47 ||146668.67 |
|Profit Before Depreciation ||198257.29 ||162203.54 |
|Finance Cost and Tax || || |
|Finance Cost ||450.08 ||138.38 |
|Depreciation ||16892.74 ||15396.49 |
|Profit Before Tax ||180914.47 ||146668.67 |
|Provision for Tax ||45147.88 ||29944.58 |
|Profit After Tax ||135766.59 ||116724.09 |
|Add : Balance brought forward from previous year ||343461.64 ||296682.52 |
|Balance available for Appropriation ||479228.23 ||413406.61 |
|Interim Dividend paid ||6000.00 ||4800.00 |
|Proposed Final Dividend ||34800.00 ||18560.00 |
|Tax on Dividend ||8305.92 ||4738.10 |
|Transfer to General Reserve ||40000.00 ||40000.00 |
|Transfer to Capital Reserve ||2.17 ||- |
|Other appropriation ||1780.22 ||1846.87 |
|Reserves & Surplus ||849383.34 ||780502.89 |
|Net Worth ||873383.34 ||788502.89 |
|Earnings Per Share (in Rs.)* ||56.57 ||48.64 |
|Book Value Per Share (in Rs.)* ||363.91 ||328.54 |
* EPS & Book Value normalised for the previous periods due to issue of Bonus Shares
Distribution of Value of Production for 2015-16 is given below :
|Particulars || || |
| ||Amount (Rs. in Lakhs) ||Percentage |
|Materials ||405120.63 ||52.06 |
|Employee Cost ||130184.94 ||16.73 |
|Other Expenses (Net) ||45096.69 ||5.79 |
|Depreciation & Amortization ||16892.74 ||2.17 |
|Provision for Tax ||45147.88 ||5.80 |
|Profit After Tax ||135766.59 ||17.45 |
|Total ||778209.47 ||100.00 |
Companys turnover for the year 2015-16 has increased to Rs. 752164.14 lakhs fromRs. 669456.53 lakhs in 2014-15 registering a growth of 12.35%. Profit the year is Rs.135766.59 lakhs as against Rs. 116724.09 lakhs in the previous year. Turnover fromindigenously developed products is 86%. Supplies to the defence contributed to 82% ofturnover as against 87% in 2014-15.
During the year 2015-16 your Company had issued bonus shares in the ratio of 2:1 (twofully paid up equity shares of Rs. 10/- each for every equity share held) to allits shareholders. As a consequence the paid up share capital of the company increased fromRs. 8000 Lakhs to Rs. 24000 Lakhs.
The Board has recommended a Final Dividend of Rs. 14.50 per equity share (145%) Rs.34800 lakhs for the year 2015-16. An interim dividend of Rs. 2.5 per equity share (25%)Rs. 6000 lakhs has already been paid for the year 2015-16.
Thus the total dividend for the year 2015-16 is Rs. 17 per equity share (170%) Rs.40800 lakhs (excluding corporate dividend tax) on the enhanced paid up capital afterbonus issue during the year as against 292% (Rs. 29.20 per share) Rs. 23360 lakhs paidin the previous year.
Provision of Rs. 7084.46 lakhs has been made for corporate dividend tax on the finaldividend proposed. Corporate dividend tax of Rs. 1221.46 lakhs has already been paid onthe interim dividend paid for the year 2015-16.
Amount Transferred to Reserves
An amount of Rs. 40000 lakhs is proposed to be transferred to General Reserves for thefinancial year 2015-16.
Major Orders Executed
Major Projects executed during the year for tri services and non-defence customersinclude : Akash Weapon System (Army & Airforce) 3 Dimensional Tactical Control Radarto Army Fire control Systems to Navy Low Level Light Weight Radar (Aslesha) to AirforceIntegrated Sonar Suite to Navy L Band Surveillance Radar for Export (Myanmar) PassiveNight Vision Devices (PNVD) to Army V/UHF Search Receiver to Pipavav and GRSE ElectronicVoting machines (EVMs) to ECI and Export (Namibia) Thermal Imaging Fire Control System(TIFCS) to Elbit Schilka Gun Tank Upgrade to Army Ship Data Network and New GenerationSonars to Navy.
Some of the significant achievements during the year :
? BEL is setting up a Defence Systems Integration Complex in Anantapur District ofAndhra Pradesh. It will be the largest such facility in the country once it iscommissioned covering an area of over 900 acres. This facility will enable BEL to expandits Missile systems business and will carry out manufacturing & integration for theongoing and upcoming projects. It will have state-of-the-art infrastructure such asAssembly Hangars and Hard
Stands for Radars and Weapon integration RF radiation sources for target simulationAutomatic Test Equipment Clean Rooms for electronic assembly Non-Explosive &Explosive Integration Buildings Missile Storage buildings Environmental Test ChambersFire Stations Solar Power Plant Estate and Admin buildings.
? Indigenously developed Surface-to-Air Akash Missiles of Airforce versionsuccessfully test-fired from Integrated Test Range on 28 January 2016 as part of Usertrial. The missile can fly at supersonic speed ranging from Mach 2.8 to 3.5 and can engageaerial targets upto a range of approximately 25 km. The Missile System was formallyinducted into the Indian Air Force in July 2015.
? BEL has successfully completed supply of all systems of Akash Missiles to IndianAirforce.
? Supply for project L-70 Gun Upgrade program commenced. The activity involvesUp-gradation of Gun for improved firing performance in local mode for Air Defenceapplication.
? The e-File Management (FLM) for procurement files has been successful at 5 Units inaddition to 4 Units implemented earlier.
BEL achieved an all time high export sales of US$ 85.07 Million registering a growth of47% over the previous years export turnover of US$ 57.85 million. BEL has an exportorder book of US$ 120 million as on 1 April 2016 which includes offset order book of US$24 million. The targeted export sales for the year 2016-17 is US$ 112 million. The longterm export plan of BEL is to reach sustained export sales to total sales turnover ratioof 10% from the current level of 7.3%.
During this year indigenously developed Naval Surveillance Radars RAWL 02 MK-IIA basedon SSPA was exported for the first time. Other major range of products exported includesTI based Electro Optical Fire Control Systems CoMPASS Electronic Voting MachinesCommunication equipment Radar Warning Receiver Casings Stators Electro Mechanicalparts etc.
BEL is fully geared up to meet the expectations of "Make in India" program inthe field of Professional defence electronics equipment development and manufacturing witha focus on exports.
BEL has a dedicated International Marketing Division for providing an increased thrustfor harnessing the export potential of defence electronics products and systems whichrepresent its core area of business. BEL has been exporting various products and systemsto friendly countries of India. Apart from this BEL is interacting with electoralcommissions of various democratic countries to market Electronic Voting Machines. Havingestablished a coastal surveillance radar system for few neighboring countries BEL isinteracting with Ministry of External Affairs on a regular basis for supply of thesesystems to other friendly countries of India.
BEL has identified the market segments and has a structured market plan for itsproducts and systems. BEL has been visiting customers on a periodic basis to understandtheir requirements acquisition process and to establish long term customer relationshipfor enhancing export business.
BEL is focusing on the opportunities in the areas of helping OEMs to meet their offsetobligations in various RFPs of MOD on account of the "Offset" policyincorporated in Defence Procurement Procedure (DPP). In this regard BEL is closely workingwith various major foreign Aerospace and Defence companies. BEL has also identified (bothbuild to print and build to spec) as one of the areas to address the emergingopportunities with OEMs. Further efforts are being made to establish long-term supplychain relationships with global players.
BEL has participated in three International Exhibitions to showcase its products &capabilities and for creating brand awareness among global supply chain partners. BELpublishes periodic advertisements in international/defense magazines / periodicals /journals to enhance the visibility of BEL. BEL participated in the International FleetReview IFR 2016 conducted by Indian Navy the Make in India Week 2016 Mumbai and Defexpo2016 Goa with a focus on exports.
BEL has been receiving awards for Excellence in Exports under the category"Electronics & Communication (excluding IT/ BT) - Medium and Large" from theGovernment of Karnataka during the last 5 consecutive years.
MoU with Government
Your Company has been signing a Memorandum of Understanding (MoU) every year with theGovernment of India Ministry of Defence. Performance of BEL for the year 2014-15 has beenrated as "Excellent" in terms of the MoU with the Government. The MoU rating for2015-16 is under review by the Government.
Order Book Position
The order book of Company as on 01 April 2016 is around Rs. 3202182 Lakhs. The orderbook comprises mainly major programs like Integrated Air Command Control SystemBattlefield Weapon Locating Radar Hand Held Thermal Imager with Laser Range FinderGround Based ELINT Command Information Decision Support System Fire Control System Gun/ Tank Upgrades Communication Sets New Generation Radars and Sonars etc.
Your company has embarked on several investment proposals which should help inmaintaining a healthy growth rate in the top line. During this financial year the companyhas been able to meet the incremental working capital requirements and additional fundsrequired for capital investments entirely from internal resources without resorting toborrowing. Effective cash management and a healthy Balance Sheet has helped the company toretain the highest rating by ICRA in both short term and long term. As a measure of goodcorporate governance initiative during the year the company has transferred the amountset aside for leave encashment liability to a separate policy managed by Life InsuranceCorporation of India with a view to delineate the amount from the operations of theCompany.
The Inventory position (net) of the company as on 31 March 2016 was Rs. 421324 lakhsas against Rs. 342688 lakhs as on 31 March 2015. This works out to 208 days of value ofproduction (DPE) as on 31 March 2016 as against 188 days as on 31 March 2015. The increasein inventory in the year end will help to meet the sales of 1st two quarters ofthe current financial year.
The position of Trade Receivables (net) as on 31 March 2016 was Rs. 371190 lakhs asagainst Rs. 378614 lakhs as on 31 March 2015. This works out to 180 days as against 206days of turnover for the previous year. This has been possible due to better performancein collection of receivables.
The Company does not have any Public Deposit Scheme at present. However the maturedpast Public Deposit amount with the Company was Rs. 36.95 lakhs as on 31 March 2016. Outof these 34 deposits amounting to Rs. 36.50 lakhs are not claimed or not paid as theseaccounts are frozen on advice by Karnataka Lokayukta remaining mature deposits of Rs.0.45 Lakhs as on 31 March 2016 is unpaid due to in-sufficient documents/records producedby Depositors. The entire amount of Public Deposit outstanding as on 31 March SurveillanceSystem Akash Weapon System 2016 is included in the Current Liability Note of theBalanceSheet.
Research & Development
Research and Development has been the core strength of BEL. Focused attention was givenfor Development of Technology modules and Products during the year 2015-16 by Planning andReview Mechanism. Apart from in-house efforts BEL has close co-operation with DRDO otherNational Research and development agencies and Academic institutions. The R&Dactivities have been carried out in all the business segments namely; Radars MilitaryCommunication Naval Systems Missile Systems Electronic Warfare Avionics C4I systemsElectro-optics Tank Electronics Gun up-grades Civilian equipments & Systems andComponents during this period.
Development & Engineering (D&E) Divisions attached to all the StrategicBusiness Units (SBUs) of BEL concentrated on the development of Products and Systems intheir respective areas of business segments. Central-D&E and two Central ResearchLaboratories (CRLs) of the company supported all the D&E Divisions by way ofdeveloping core technology modules and software required for the development of Productsand Systems. Product Development & Innovation Centre (PD&IC) has startedfunctioning within Bangalore Complex with focus on development of certain new products.
The turnover analysis of the Company for the year 2015-16 indicates that 39% of theturnover is from in-house developed products 47% of the turnover is from productsdeveloped in association with DRDO and other National Labs and remaining14% is fromproducts of foreign ToTs.
Development of New Products
R&D Divisions of BEL have completed development of several new products /system/technology modules during 2015-16. The following are some of the new Products andSystem developed and introduced during 2015-16 :
? 3D Surveillance Radar operates in S-band for deployment in diverse terrainslike Plains Deserts Mountain tops and High Altitude regions. This Radar is used byIndian air force.
? L-band 2D Air Surveillance Radar for Navy has been developed and supplied toMyanmar. The Radar is used for deployment in Large and Medium size Naval Ships and onshoreestablishments which provides video signals for display purposes and tracks for targettrack generation.
? Coastal Surveillance Radar is developed for Coastal Surveillance Phase 2projects with a completely solid state coherent Radar which operates in both X andS-bands.
? Man-pack Satcom Terminal is developed to support Voice/Data SMS services toDefence Services throughGSAT6 Satellite.
? Software Defined Radio- (Naval Version - NC) is a Multimode Multiband Shipborne two channel V/UHF radios supporting secure voice/ data services having networkingcapability.
? Tactical Access Switch provides support to Local / Trunk switching IP/MPLSbased for Voice Video Data as well as aggregation and switching facility for traditional
TDM Voice Switches.
? Advanced Composite Communication System (ACCS) is an IP based Voice and DataIntegrated Communication System to facilitate Ship-to-Ship Ship-to-Shore and Ship-to-AirCommunications using VLF/MF/HF V/UHF bands Radios.
? Versatile Media Secrecy Device is unified single encryption device for VoiceData & Super G3 Fax over IP network.
? Citizen Verification Device is a handheld device designed for Data collectionand Survey by Registrar General of India. This is used for Sample Survey RegistrationSystem.
? Integrated Sonar Suite for S3/S4 Platform consists of Passive Sonar ActiveSonar Intercept Sonar Obstacle Avoidance Sonar Own noise measurement system andUnderwater Communication System. The system is mounted on submarine for underwatersurveillance purpose.
? IAC MOD O/C Reference System is a common reference developed for testing olderversion as well as new IAC MOD C. It has interfaces with sensors like Sonar Radar GPS.This system carries out Contact Motion Analysis and generates fire designated targets.
? Integrated EW System for Mountainous Terrain has COM and Non-COM segments aswell as satellite interception is configured with man portable units for ease ofdeployment on mountainous terrain.
? Laser Warning System can detect incoming laser threat and calculate angle ofarrival to enable the protection counter measure.
? Gunner Sight for T90 is an independent surveillance Sight with Enhanced Rangecapability to facilitate tank gunner to detect acquire and its destruction during dayand night.
? Driver Sight for MBT Arjun/Arjun Cataput Driver Sight is a State-of-the-artreal time Thermal imaging Camera using uncooled IR detector to give Stereoscopic Visionwith depth perception for driver comfort. It provides clear vision and all weather drivingcapability. Scientists from Central Research Laboratories and other R&D divisions ofBEL have contributed 98 TechnicalPapers in the national and international journals duringthe year.
Following awards have been received by R&D teams during the year :
? SODET (Gold Silver Bronze) Awards for Technology Development and SODET (Gold) forTechnology innovation for the year 2014-15.
? Young Scientist Award from IETE for CRL Scientist and D&E Engineer of MR SBU forthe year 2015.
? RM Awards (2012-13)
a) Indigenization :
? Design & Development of Retrofit Security Solution for SHAKTI
? Indigenization of AK 630 GUN Drive
b) Design Effort :
? L-70 Gun Up gradation
? Systems of IACCS Networks RM Awards (2013-14)
a) Indigenization :
? Configuration Development and Engineering Weapon Control Modules (WCM 176) for AK176 Gun Mount
? Bharani Radar
b) Design Effort :
? EO FCS-U1 for Control and Medium Caliber 76 mm Gun Mount and High Rate of Fire AK 630Gun mounts
New facilities established during the year
Company has been continuously modernizing its infrastructure to be in tune with thechanging needs of the technology / products. Specific groups in all the units scan thetechnology changes that are taking place and identify new processes in the world marketfor acquisition. This enables the company to maintain its infrastructure on par withinternational standards. During the year 2015-16 company has spent Rs. 525 Crores oninvestments (including Rs. 362 as part of CAPEX investment towards Modernization of Plant& Machinery Test Instruments R&D investments infrastructure up-gradation etc).The expenditure is fully met through internal accruals. Following are some of the majorfacilities established during the year.
? Additional Integrated Test Bed Facility at Bengaluru Unit for Missile & WeaponSystem Integration.
? Near Field Test Range and EMI/EMC Test Facilities for High Tech Radars at GhaziabadUnit.
? State-of-the-art Additive Manufacturing Facility set up at Bengaluru Unit for productdevelopment with reduced cycle time.
? X-Ray Inspection facility at Chennai Unit for Testing/ Troubleshooting ofhigh-end/complex Printed Circuit Boards (PCBs).
? Environmental Stress Screening (ESS) Chamber at Chennai Unit used for TestingHigh/Low Temperature Damp Heat for various projects.
Your Company is focussing on its fundamental principles of enhancement in QualityTechnology and Innovation. The Quality being first and foremost principle of businessplays a vital role in all areas of operations. Quality initiatives are being taken forimprovement in operational and business performance parameters related to product designon-time-delivery process cycle time etc. The control on these factors result inenhancement in product quality and services rendered to the customer.
The regular customisation of SAP ERP system for programming new transaction codes touse data as per the requirements of stakeholders is playing an important role in managingprocess parameters resulting in growth of the company. The dedicated Customer RelationModule (CRM) and Supplier Relation Module (SRM) in SAP are enabling to enhance customerservices and procurement efficiencies.
The Company is committed for improvement through process approach in line withworld-class Quality Systems. All Units / Strategic Business Units / Common Services Groupsare certified to ISO9001 Quality Management System (QMS) since early nineties. SevenUnits/SBUs are certified forAerospace standard AS 9100.
All Units of Company are committed to Environment Management System through ISO 14001Certification. The Ghaziabad Unit and Engineering Services of Bengaluru Unit areaccredited to OHSAS (Occupational Health Safety andAssessment Series) 18001.
The ISO 9001:2008 version for QMS and ISO 14001:2004 version for EMS have been revisedto 2015 versions in September 2015. In order to upgrade these certifications in BEL theawareness training programmes conversion programme and Lead Auditor training programmesare being conducted for various SBUs/Units personnel.
The calibration and maintenance departments of Bangalore Complex Ghaziabad andPanchkula Units are certified by National Accreditation Board for Testing and CalibrationLaboratories (NABL) in accordance with the standard ISO/IEC 17025 standards. The Pune unitmanufacturing
X-ray tubes is certified for ISO 13485 standard for medical devices. The BharatElectronics Software Technology Centre (BSTC) at Bangalore Complex is CMMI level 5certified. The D&E NCS and CRL of BEL Ghaziabad are certified for CMMIlevel 3.
The EFQM (European Foundation of Quality Management) model for Business Excellence isbeing followed since year 2002 in BEL as another process approach for overall strategicand operational excellence leading to enhancement in competitiveness in meeting andexceeding needs & expectations of stakeholders. Its deployment status was assessed inthe company through participation in CII-EXIM Bank Award for BusinessExcellence. All Unit/SBU of BEL have Commendation for Strong Commitment toExcel status. The Bengaluru and Ghaziabad Unit are at next higher level of Awardi.e. Commendation for Significant Achievement
The continual improvements in product and processes are brought out through variousapproaches. One of such approaches is through Six Sigma methodology. Middle and seniorlevel executives select Six Sigma projects from different areas of concern related toproduct and processes and bring about breakthrough improvements. In order to effectivelyimplement Six Sigma methodology and to bring culture of improvement through analyticalapproach selected senior executives (14 numbers this year) from each Unit are regularlytrained as Black Belt by Indian Standard Institute Bengaluru. These BlackBelts guide other executive (Green Belts) in their Six Sigma projects. Around 380 SixSigma projects were completed in financial year 2015-16. Forty two Six Sigma projects werenominated for national level competitions/seminars and have won various categories ofawards. One of the Six Sigma case studies represented BEL at the International Conferencefor Quality Control Circle(ICQCC) 2015 held at South Korea and was conferred with"Gold Award Certificate".
The organization creates impetus towards involvement of non-executives in the qualitymovement through Quality Control Circles (QCC). In the year 2015-16 738 presentations forimprovement in product and processes were made by various QCCs. Twenty Five QC circleswere nominated to participate in national competitions/conventions and all were adjudgedfor higher category awards. One of the QCC who is CMDs Rolling Shield Winner inInter Unit QCC competition represented BEL in international convention ICQCC 2015 heldat South Korea and bagged "Gold award".Another approach for Quality Improvementis through Suggestion Scheme wherein employees from non executive to executive level (upto manager) are eligible to apply for suggestion and are suitably awarded onimplementation of suggestion. Around 3000 suggestions were given by employee this year.Selected BEL employees participated in national contest "Excellence in SuggestionScheme Contest 2015" conducted by Indian National Suggestion SchemesAssociation (INSSAN) and bagged Second Place also won prizes in "Slogan contest inHindi English" and "Poster Contest". The Awards were distributed during 26Annual National Convention of INSAAN held on 8 & 9 January 2016 at Pune.
BEL has put in special programs for enhancement of competency of its executives inprofessional fields. BEL had nominated its engineers for programs like CertifiedReliability Engineer (CRE) (11 Nos.) Certified Quality Engineers (CQE) (39 Nos.) andCertified Manager for Quality and Organisation Excellence (CMQ-OE) (17 Nos.). Theseprograms were conducted by American Society for Quality (ASQ). Similarly training onProject Management Programs (PMP) (84Nos.) was also conducted by the Project ManagementInstitute (PMI). Besides this customised training programs on Quality were also conductedduring the year.
During the year Company has adopted "Components Conditional Process for LaserApplications" and "Soldering Process for Advanced Radar Application" inorder to meet theInternational Standards.To assess the customer satisfaction anindependent Customer
Satisfaction Survey was organised through an external agency M/s. Market InsightConsultants (MIC) NOIDA to capture the customers perception on quality of BELproduct. Sixteen products from various Units/SBUs were offered for survey. The customersatisfaction index of 83% has come out in survey.
Your Company employed 9848 persons as on 31 March2016 as against 9703 persons as on31 March 2015. Of these employees 4594 were engineers / scientists and 2019 were womenemployees as on 31 March 2016. A total of 492 executives and 173 non-executiveswere inducted during the year. 117 employees belonging to SC 30 employees belonging toST 220 employees belonging to OBC and 23 employees belonging to the minority communitywere recruited during the year.
Your Company has been implementing the Government Directives on Reservation. Theparticulars of SC/ST and other categories of employees as on 31 March 2016 are as under :
|Category of Employees ||Executives ||Non-Executives |
| ||Group A ||Group B ||Group C ||Group D |
|Scheduled Caste ||972 ||25 ||745 ||50 |
|Scheduled Tribe ||320 ||1 ||147 ||21 |
|OBC ||1142 ||34 ||833 ||44 |
|Ex-Servicemen ||96 ||7 ||283 ||72 |
|Physically Challenged ||95 ||3 ||126 ||14 |
Various Training programs were conducted during the year to enhance competencies inTechnical Functional Managerial and leadership areas. Structured Executive DevelopmentPrograms were conducted regularly with premier Institutes to meet the evolving trainingneeds of executives as they progress through various grades.
The training programs are designed to enhance competencies in various areas likeTechnical Functional and Managerial/Leadership.
A detailed write up on Companys HR philosophy and specific HR initiatives duringthe year is provided separately in the Management Discussion and Analysis Report attached.
Disclosure under Sexual harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of SexualHarassment of Woman at Workplace (Prevention prohibition and Redressal) Act and Rulesframed thereunder the Company has implemented the policy on prevention prohibition andredressal of sexual harassment at the workplace which has been uploaded on theCompanys intranet portal. All women permanent temporary or contractual includingthose of the service providers are covered under the policy.
An internal Complaints committee has been constituted in each of the nine constituentunits including Corporate
Office to redress complaints relating to sexual harassment. During the year theCompany received 2 complaints on sexual harassment. The complaint has been investigatedand appropriate action has been taken. There were no complaints pending for more than 90days.
Awareness programs were conducted across the Company to sensitize the employees anduphold dignity of their colleagues at workplace particularly with respect to preventionof sexual harassment.
Awards and Recognitions
Your Company continues to be a highly trusted for the quality of its productsinnovation and renovation of its products based on strong consumer insights and theability to engage with consumers across the country. During the year your Company hasreceived various Awards and Recognitions. Some of the important accolades received duringthe year by your Company include :
? 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 theyear 2015 under the category of Best Electronic System Design & Manufacturing (ESDM)in the Government Sector. The award was conferred by "Mentor Graphics and SiliconIndia" on 6 November 2015 at Bengaluru."Gold Award" in the ICQCC(International Convention of Quality Control Circle) held at Changwon Korea for the casestudy on "Testing of Tx/Rx Sub-Modules".
BEL won Four Awards instituted by Society of Defence Technologists (SODET) for the year2014-15 in the categories of Technology Development and Technology Innovation.
BEL had been conferred with the Dun & Bradstreet Indias Top PSUs Award2015 in the Electrical & Electronics Sector by Dun & Bradstreet (D&B)the worlds leading provider of global business information knowledge and insight.
Your Company has long been integrating sustainability in its operations systematicallywith best practices. On the lookout for sustainable development sets in clean and greensurroundings. All the Units of the Company have committed for maintaining an environmentalfriendly work processes and strongly believes that environmental sustainability results indesigning economically viable and reliable products. BEL sets objectives in compliance toDPE guidelines further approaches towards adopting breakthrough technology for enhancingenvironmental performances of the products right from design to disposal. BEL looks beyondits boundary for compliance to environmental impacts. In all the Units of BEL practicingof conservation of natural resources like energy conservation water conservation andreduction in waste generation is inculcated as a routine approach. BEL looks beyondobvious opportunities available for improvising the performance against environmentalcommitments.
The Sustainability Report annexed to this report contains further details onenvironment management and sustainable development initiatives.
Subsidiaries and Joint Ventures
BEL Optronic Devices Ltd (BELOP) engaged in the business of manufacturing of ImageIntensifier Tubes has become wholly owned subsidiary of BEL during the year onacquisition of the remaining shares from M/s. Specified Undertaking of the Unit Trust ofIndia (SUUTI). Your Company has made further investment to the tune of Rs. 44.88 Crores(1951385 equity shares of Rs. 100/- each at a premium of Rs. 130/- per share) in theequity shares of BELOP by subscribing to rights issue made by BELOP.
During the year BELOP acquired the upgraded XR-5 technology under ToT agreement toupgrade the technology for manufacturing Image Intensifier Tubes. BELOP achieved aturnover of Rs. 10663.55 lakhs for the year as against Rs. 10264.93 lakhs in theprevious year.profitafter tax The(PAT) for the year was Rs. 242.77 lakhs as against Rs.366.69 lakhs in the previous year.
The Joint Venture Company (JVC) with General Electric USA viz. GE BE Pvt Ltd.continues to perform well. This JVC manufactures CT Max and other latest version X-RayTubes. BEL supplies some parts required for the products manufactured by this JVC. GE BEPvt Ltd recorded a turnover of Rs. 79523 lakhs for the year as against Rs. 72564 lakhs inthe previous year. The profit after tax (PAT) wasRs. 12669 lakhs for the year as againstRs. 11752 lakhs in the previous year. The JVC declared 200 % dividend for the year2015-16 and BEL will receive Rs. 5200 lakhs as dividend from this JVC on BELs shareof investment for the financial
M/s. BEL-THALES Systems Limited (BTSL) a subsidiary was formed for designdevelopment marketing supply and support of civilian and select defence radars forIndian and global markets. Your Company holds 74% of the equity capital of BTSL. YourCompany has made further investment to the tune of Rs. 9.47 Crores by subscribing to947200 equity shares of Rs. 100/- each during the year. During the second year of itsoperation it incurred a loss of Rs. 247.16 Lakhs.
In pursuant to provisions of section 129(3) of the Companies
Act read with Rule 5 of Companies (Accounts) Rules 2014 the statement containingsalient features of the financials statement of Subsidiaries / Associate / Joint Venturesis attached to the financial statements.
Consolidated Financial Statements
Consolidated Financial Statements of your Company and its Subsidiaries and JointVenture Companies are attached to thisReport.
The Companys Vigilance Organization is headed by a Chief Vigilance Officer (CVO)an IAS Officer. Permanent Vigilance Officers were posted in each of the Units and in theSBUs. Vigilance Committees were formed in each of the Units to look after the VigilanceAdministration in the Units and SBUs and the Unit/SBU heads are also designated asChairman of the Vigilance Committee. Apart from this there exists a Vigilance Committeeat the Corporate where Chairman & Managing Director is the Chairman the Committee andthe CVO is the Member secretary. Preventive Vigilance has been the thrust area of theVigilance Organisation and the same received focused attention during the current year.The Vigilance Department examines procurement contracts/ sub-contracts and processes oncontinual basis conducts regular and surprise inspections and investigates instances ofany suspected transactions referred to it. Any employee or third parties can refer anysuspected transaction to the notice of CVO for investigation which are examined as per theComplaint Handling Policy of the Company. Online complaint management system has been madeoperational and online complaints can be filed through accessing the Vigilance Portal inBEL web site.
During the year 2663 Purchase Orders/ Contracts have been reviewed. CTE Type intensiveexamination has been restructured with the formation 5 IE teams. Intensive Examination of17 High value Procurements and 20 Works Contracts has been taken up during the year.Regular and surprise checks/inspection has also been conducted by the fieldVigilanceOfficers. During the year 82 Complaints including the 11 Complaints referred byCVC/MOD/CBI were received and 69 Complaints including 8 Complains referred by CVC/MOD/CBIwere disposed. Disciplinary action and System/ process Improvement has been recommended insome cases where lapses were observed. Two Complaints are pending with CBI forinvestigation.
During the year 322 Probationary Engineers at the induction level 307 Executives and662 Non Executives were given Basic awareness program on Vigilance. Apart from this 360Senior Executives were given Customised Training Program on Vigilance Cyber Crimes andPreventive Vigilance measures. 64 Executives & 29 Non Executives working in sensitiveareas for more than 3 years have been job rotated and the percentage coverage is 95%.
In lines with the CVCs guidelines on Leveraging Technology to ensuretransparency through effective use of website the following information has been madeavailable on Companys website :
E-Procurement-about 92% of the procurements excluding the ToT procurement long termrate contract and repeat orders were procured under e-procurement mode.
Online registration of Vendors.
Vendor Payment Information System.
E Payment to Vendors.
Details of awarded contracts / Purchase Orders valuing more than Rs. 10 lakhs inrespect of works contracts service contracts capital items and non-production items.
Details of awarded Contracts/Purchase Orders issued on nomination / single tender basisvalue exceeding Rs. 5 lakhs.
Purchase procedures sub contract procedures and works manual.
Complaint handling policy and Whistle Blower Policy.
Corruption Risk Management Policy is framed and issued for implementation.
Vendors Directory after removing defunct vendors.
File Life cycle Management System has been implemented across the company and thecoverage is about 52% of the total files generated in the Company.
On line filing APRs is implemented for all the Executives and the Executives have filedtheir Annual declaration of Assets and Liabilities (APR) in SAP for the year 2014 and
Vigilance setup in BEL has been continuously endeavoring to bring transparencyfairness and equity in all transactions and processes of the company through creatingsense of awareness on System and Procedures through awareness campaign and trainingprogram. Some of the key activities that have been carried out during the year are :
1) Vigilance Awareness Week 2015 was marked with special address by eminentpersonalities including Justice
M N Venkatachalaiah former Chief Justice of India and Shri A S Kiran KumarChairman ISRO.
2) Vigilance awareness week 2015 was observed during October 2015. The observance ofthe Week was marked with Walkathon and Cycle rally by BEL School Children Treeplantations and distribution of saplings unveiling of Vigilance Slogan Boards Screeningof Inspirational films for the School Children and series of lecture by distinguishedpersonalities and Competitions.
3) Training programs were organised for Vigilance Officers through Guest lectures byfaculties from CBI Bengaluru Cyber Security Council of India Data Security CouncilofIndia.
4) Two days training program on "Promoting Transparency in Public Procurement andIntegrity Pact" was organized by Vigilance in association with TransparencyInternational India which was inaugurated by CMD of BEL and the key note address wasdelivered by R Srikumar formerVigilance Commissioner Vigilance Commission.
5) About 2600 BEL employees have successfully completed the Online Certified Program onPublic Procurement organized by World Bank.
6) The Vigilance News letter "JAGRITI" was revived with the fourth volumereleased on 30-06-2015. The Improvised 9 Volume of "JAGRITI" was released on 31March 2016.
One of the recent initiatives of the Central VigilanceCommission (CVC) to eradicatecorruption in procurement activity is introduction of the Integrity Pact in large valuecontracts in Government Organizations. In line with the directives from Ministry ofDefence and the Central Vigilance Commission your Company has adopted Integrity Pact withall vendors / suppliers / contractors / service providers for all Orders / Contracts ofvalue Rs. 2000 lakhs and above initially. This threshold value was reduced to Rs. 1000lakhs from March 2013 and further reduced to Rs. 500 lakhs from May 2014. The Pactessentially envisages an agreement between the prospective vendors / bidders and thePrincipal (BEL) committing the Persons / officials of both sides not to resort to anycorrupt practices in any aspect / stage of the contract. Only those vendors/bidders whocommit themselves to such a Pact with the Principal would be considered competent toparticipate in the bidding process. Integrity Pact in respect of a particular contractwould be operative from the stage of invitation of bids till the final completion of thecontract. Any violation of the same would entail disqualification of the bidders andexclusion from future business dealings.
The tenure of Mr N K Sinha IAS (Retd) former Secretary Planning Commission andformer Chairman PESB as an Independent External Monitor (IEM) expired on 12.04.2015. Asrecommended by the CVC the Company has appointed Mr M D Paliath IDAS (Retd) and MrShankar Narayan Dy CAG (Retd) for monitoring implementation of Integrity Pact in theCompany. During the financial year 2015-16 theIEMs reviewed 98 contracts and heldstructured meetings with the Chairman & Managing Director.
Procurement from MSMEs
Your Company has been providing increased thrust on enhancing procurement from MSMEsand is implementing
Public Procurement Policy for Micro Small & Medium Enterprises (MSMEs) as per theguidelines / notification issued by the Ministry of MSMEs. Out of the total procurementduring 2015-16 20.17% was sourced from MSME vendors.
In order to facilitate MSMEs the company is deploying all efforts to classify theexisting vendors into Micro Small & Medium Enterprises in the companysprocurement system through web-based real time centralized ERP System (SAP). Online Vendorregistration forms are available in the Companys official website(www.bel-india.com). Industry Promotion and Nodal Officers are nominated to assist vendorsregarding Procedure for Registration understanding the requirements of BEL reportgrievances if any etc. Some of the other initiatives include uploading of companysprocurement plan for MSMEs based on the production plan with periodic update and detailsof Unit / SBU specific Industry Promotion Officers in the companys official websiteparticipation in various vendor development programmes like exhibitions workshopsestablishment of industrial estate to give maximum encouragement to ancillaries etc.During the year Five Training programmes were conducted for MSME and 782 new indigenousvendors were added.
Implementation of Official Language Policy
Your company is committed to adhere to the OL policies of the Government of India.During 2015-16 efforts made towards implementation of Official Languages include :
Committee of Parliament on Official Language conductedOL inspections of CRL/GAD(20.05.2015) and Bangalore Complex (20.01.2016). MoD officials conducted OL inspections ofChennai Unit (20.11.2015) and CRL/BG(14.03.2016). Corporate OL Audit team conducted OLinspections at Panchkula Chennai Machilipatnam Pune
Units and Regional Offices at Vizag and Mumbai. CMD attended Hindi Salahkar SamitiMeeting of Dept. of Defence
Production MoD under the chairmanship of Raksha Mantri held on 17.02.2016.Company hasachieved the targets prescribed in the Annual Program 2015-16 issued by Dept. of OL MHAGoI to transact official work in Hindi. Hindi Month was observed in all the Units andOffices of the Company. During Hindi month employees and officers participatedenthusiastically in various programs / competitions. Employees of various Units / Officesand Corporate Office bagged prizes in the Inter Organization TOLIC Competitions. Hindiworkshops for those having working knowledge in Hindi were conducted during the year.Training on Unicode is being imparted for all Executives and Employees. A program onProfessional Papar Presentation in Hindi was organized by BEL/CO under the agies of TOLIC(Undertakings) Bengaluru on 25.02.2016.
During the year CRL/BG was notified by GoI under rule 10(4) of OL rules indicatingthat 80% or more staff have working knowledge in Hindi and individual orders were issuedunder rule 8(4) of OL Rules for those having proficiency to do their Official work inHindi. Thus number of notified Units/Offices of company reaches to 14. OL Portal is inplace to facilitate OL implementation across the company and to provide latest inputspertaining to OL and is being updated. Hindi language has been enabled in SAP. Most of theUnits have uploaded data pertaining to OL Training Roster on SAP. Companys websiteis available in Hindi and English and efforts are on to progressively have the entirewebsite in bilingual. Efforts are on to ensure the progressive use of Hindi in all spheresof activities of the Company.
Implementation of RTI Act
The information required to be provided as per Section 4(1)(b) of the Right toInformation Act 2005 has been posted on the website of the Company www.bel-india.com.The Information posted on the website contains general information about the Companypowers and duties of employees decision making process rules regulations manuals andrecords held by BEL a directory of the Companys officers pay scales procedure forrequesting additional information about the Company by citizens and associated requestformats.
During the year 2015-16 the Company received and attended 1070 requests for informationunder RTI Act. Most of the requests were for information related to recruitment servicerelated matters third party and commercial secrets information.
Board Meetings / Change in Directors and Key Managerial Personnel
During the year 5 Board meetings were held the details of which form part of theCorporate Governance Report.
Following are the details with regard to the Directorate and Key Managerial Personnelof your Company during the financial year :
|Sl. No. ||Name of the Director ||Desig- nation ||Date of appointment ||Date of cessation |
|1 ||Mr J Rama Krishna Rao ||Director ||03.11.2014 ||26.08.2015 |
|2 ||Mrs Kusum Singh ||Director ||26.08.2015 ||NA |
|3 ||Dr Bhaskar Ramamurthi ||Director ||02.12.2015 ||NA |
|4 ||Dr R K Shevgaonkar ||Director ||02.12.2015 ||NA |
|5 ||Mrs Usha Mathur ||Director ||23.12.2015 ||NA |
|6 ||Mr Sharad Sanghi ||Director ||07.01.2016 ||NA |
|7 ||Mr S M Acharya ||Director ||NA ||25.03.2016 |
|8 ||Lt Gen V K Mehta (Retd) ||Director || |
NA in Hindi 25.03.2016
|9 ||Mr Vikram Srivastava ||Director ||NA ||25.03.2016 |
There was no change in the Key managerial Personnel of the Company viz. Mr S K SharmaChairman & Managing Director Mr P R Acharya Director (Finance) & Chief FinancialOfficer and Mr S Sreenivas Company Secretary.
The following Additional Directors are being appointed as
Directors on terms as set-out in the Notice of the 62 Annual General Meeting ;
Mrs Kusum Singh Dr Bhaskar Ramamurthi Dr R K Shevgaonkar Mrs Usha Mathur MrSharad Sanghi Mr Girish Kumar and Mr Nataraj Krishnappa.Mr M L Shanmukh Director(HR) retires by rotation at the ensuing Annual General Meeting and being eligible offershimself for reappointment.
Directors Responsibility Statement :
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors in terms of Sections 134(3)(c) & 134(5)of the Companies Act 2013 state that :
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company as at 31 March 2016 and of the profit of theCompany for the year ended on that date; c) the directors have taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; d) the directors have prepared the annual accounts on agoing concern basis; e) proper internal financial controls were in place and suchfinancial controls were adequate and were operating effectively f) systems to ensurecompliance with the provisions of all applicable laws were in place and same were adequateand operating effectively.
Significant and material orders
There are no significant regulators or courts or tribunals impacting the going concernstatus and Companys operations in future.
Material changes and commitments affecting the financial position of the company whichhave occurred between 31 March 2016 and date of signing of this Report are NIL.
Related Party Transactions
There were no materially significant related party transactions with the CompanysPromoters Directors Management or their relatives which could have had a potentialconflict with the interests of the Company. Transactions with related parties that wereentered into during the financial year were on an arms length basis and were in theordinary course of business. All Related Party Transactions are placed before the AuditCommittee as also the Board for approval if required. Members may refer to the notes tothe accounts for details of related party transactions. The policy for related partytransaction has been uploaded on the Companys website www.bel-india.com. Informationpursuant to Section 134(3)
(h) of the Companies Act 2013 read with rule 8(2) of the Companies (Accounts) rules2014 is attached to this report as Annexure 1.
Corporate Social Responsibility
Pursuant to the provisions of Section 135 of the Companies Act 2013 and The Companies(Corporate Social Responsibility) Rules 2014 read with various clarifications /amendments issued by Ministry of Corporate Affairs & DPE guidelines the Company hasundertaken various activities as per the CSR Policy. The programmes / initiatives /projects are taken up in line with the Schedule-VII of the Companies Act-2013 which areduly incorporated in CSR policy and forms the guiding principle for all our programmes.
The Corporate Social Responsibility policy of the Company is posted on theCompanys website www.bel-india.com
Pursuant to the requirement under the Companies (Corporate Social Responsibility)Rules 2014 as amended a report on CSR activities for financial year 2015-16 is reportas "Annexure 2".
Pursuant to Section 139(5) of the Companies Act 2013 the Comptroller andand materialorders passed by the Auditor General of India appointed
M/s. Badari Madhusudhan & Srinivasan Chartered Accountants Bengaluru asStatutory Auditors for the financial year 2015-16 for audit of accounts of BengaluruHyderabad Chennai Units and Corporate Office. M/s. Ved & Company CharteredAccountants Ghaziabad were appointed as Branch Auditors of Ghaziabad Panchkula andKotdwara Units for the financial year 2015-16. M/s. Malani Somani Chandak &Associates Chartered Accountants Pune were appointed as Branch Auditors for Pune andNavi Mumbai Units for the financial year 2015-16. M/s. Rao & Narayan CharteredAccountants Vijayawada were appointed as Branch Auditors for Machilipatnam Unit forfinancial year2015-16.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 (as amended) the cost records maintained by the Company inrespect of its Manufacturing activities are required to be audited by the Cost Auditor.Your Directors had on the recommendation of the Audit Committee appointed M/s. PSV &Associates Cost Accountants Bengaluru as Cost Auditors of the Company for the financialyear 2015-16 for conducting the audit of cost records of the Company.
Pursuant to the provisions of Section 204 of the CompaniesAct 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr Thirupal G Practicing Company Secretary (PCS Registration No. 6424) for thefinancial year 2015-16 to undertake the Secretarial Audit of the Company. The SecretarialAudit Report is annexed to this report as
The Secretarial Auditor in his Report observed that the Company is yet to appoint theadequate number of Independent Directors as per the requirements of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015. During the Audit period the Company was required to appoint a women Director on theBoard w.e.f 1 April 2015. However the said appointment was made w.e.f 26 August 2015. Itis informed that the appointment of Directors is done by Govt. of India and filling up ofvacancies of the saidIndependent Directors is also pending with the appointing authoritynamely Government of India.
Auditors Report on the Annual Accounts for the financial year 2015-16 and "Nil"Comments of the Comptroller &Auditor General of India under Section 143(6)(b) of theCompanies Act 2013 on the Annual Accounts are appended to this report.
Extract of Annual Return
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the form MGT-9 is annexed to this report as "Annexure 4".
Pursuant to the Reg. 21 of SEBI (LODR) Regulations 2015 the Company has constituted aBusiness Risk ManagementCommittee. The details of Committee and its terms of referencerisk management policy etc. are set out in the Corporate Governance Report and a detailednote on Risk Management is provided in the Management Discussion and Analysis Report.
Remuneration Policy and Board Evaluation
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration Board Evaluation etc. The details are set out in the Corporate GovernanceReport.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism named Whistle Blower Policy to deal with instance offraud and mismanagement if any. The details of the policy are set out in the CorporateGovernance Report.
Declaration from Independent Directors
The Company has received necessary declaration from each Independent Director of theCompany under Section149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of theirIndependence laid down in Section 149(6) of theCompanies Act 2013.
Management Discussion and Analysis Report
Management Discussion and Analysis Report required under SEBI (LODR) Regulations 2015as also under the Government (DPE) Guidelines on Corporate Governance for Central PublicSector Enterprises (CPSEs) is attached to thisReport as "Annexure 5".
Particulars of Loans Guarantees & Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to the Financial Statements.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial statements. A detailed note on Internal Financial controls is provided in theManagement Discussion Analysis Report.
Composition of Audit Committee
The Audit Committee comprises of Independent Directors viz. Mrs Usha Mathur Chairmanof the Committee Dr R K Shevgaonkar Dr Bhaskar Ramamurthi and Government Director MrsKusum Singh as its members. All the recommendations made by the Audit Committee wereaccepted by the Board.
Corporate Governance Report
DPE guidelines on Corporate Governance for CPSEs provide that CPSEs would be graded onthe basis of their compliance with the guidelines. DPE has graded BEL as"Excellent" for 2014-15. In terms of Regulation 34 of the Securities ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and DPEGuidelines a Report on Corporate Governance along with Compliance Certificate issued byStatutory Auditors of the Company is attached to this report as "Annexure 6".
The DPE guidelines on Sustainable Development for CPSEs mandate CPSEs to disclose theirSustainable Development efforts in a Standalone Report or as a separatechapter in the Annual Report. Pursuant to this requirement a Report on yourCompanys efforts on "Sustainable Development" is attached to this Reportas "Annexure 7".
Business Responsibility Report
The Securities and Exchange Board of India (SEBI) has mandated inclusion of BusinessResponsibility Report ("BR report") as part of the Annual Report for top 500listed entities based on market capitalization. This SEBI mandate is also inserted asRegulation 34(2)(f) of SEBI (LODR) regulation 2015. The SEBI (LODR) Regulations 2015provide a format for BR reports. It also contains a list of nine Key Principles andvarious core elements under each principle to assess compliance with Environmental Socialand Governance norms. Listed companies are required to prepare policies based on thesenine Key principles and core elements put in place a framework to integrate and embed thepolicies into business activities and a mechanism to measure and report the achievementsas BR report.
Your Company has prepared a comprehensive policy framework for BR report afterstudying the SEBI (LODR) Regulations 2015 requirements and keeping in view the businessand governance environment in which BEL as a Defence PSU operates. Highlights of thispolicy are posted on the Companys website www.bel-india.com. The Companys BRreport for the year is attached to this Report as
Information required to be disclosed in accordance with Section 134(3)(m) of theCompanies Act 2013 read with the Companies (Accounts) rules 2014 regarding conservationof energy technology absorption and foreign exchange earnings and outgo is given at
Your Directors place on record their deep appreciation and gratitude for the valuablesupport received from all the customers particularly the Defence Services and theparamilitary forces and look forward to their continued support and co-operation infuture. Your Directors also place on record their gratitude for the support received fromvarious Ministries of the Government of India especially the Ministry of DefenceDepartment of Defence Production. Your Directors express their gratitude to the DefenceResearch and Development Organisation and the various Research Laboratories under DRDO forthe support it received particularly in the joint development programmes and new productsbrought out with the help of them. Your Directors express their sincere thanks to theComptroller and Auditor General of India Chairman
Members and employees of the Audit Board Statutory Auditors Branch Auditors CostAuditors Secretarial Auditor Companys Bankers collaborators and vendors. YourDirectors appreciate the sincere efforts put in by the employees at all levels whichenabled the Company to achieve the good performance during the year. Your Directorsexpress their appreciation and gratitude to all the shareholders/investors for the trustand confidence reposed in the Company and look forward to their continued support andparticipation in sustaining the growth of the Company in the coming years.
| ||For and on behalf of the Board |
|Bengaluru ||Sunil Kumar Sharma |
|28 July 2016 ||Chairman & Managing Director |
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act 2013and Rule 8(2) of theCompanies (Accounts) rules 2014)
Form for disclosure of particulars of contracts / agreements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third provisothereto:
1. Details of contracts or arrangements or transactions not at arms length basis(a) Name(s) of the related party and nature of relationship : Not Applicable (b) Nature ofcontracts/arrangements/transactions : Not Applicable (c) Duration of thecontracts/arrangements/transactions : Not Applicable
(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Not Applicable (e) Justification for entering into such contracts or arrangementsor transactions: Not Applicable (f) Date(s) of approval by the Board : Not Applicable (g)Amount paid as advances if any : Not Applicable (h) Date on which the special resolutionwas passed in general meeting as required under first proviso to section 188 : NotApplicable
2. Details of material contracts or arrangements or transactions at arms lengthbasis (a) Name(s) of the related party and nature of relationship : Not Applicable (b)Nature of contracts/arrangements/transactions : Not Applicable (c) Duration of thecontracts/arrangements/transactions : Not Applicable
(d) Salient terms of the contracts or arrangements or transactions including the valueif any : Not Applicable (e) Date(s) of approval by the Board : Not Applicable (f) Amountpaid as advances if any : None
| ||On behalf of the board of directors |
| ||Sd/- |
|Bengaluru ||S K Sharma |
|28 July 2016 ||Chairman & Managing Director |
REPORT ON CSR ACTIVITIES
1. A brief outline of the companys CSR policy including overview of projectsor programs proposed to be undertaken and a reference to the web-link to the CSR policyand projects or programs.
The Companys CSR policy has been uploaded in the website of the Company under theweb-link : Weblink : www.bel-india.com/CSR Sustainability/pdf/CSR Policy
2. The Composition of the CSR Committee.
Mr S K Sharma Chairman (Chairman & Managing Director) Mr M L Shanmukh Member(Director Human Resources) Mr Amol Newaskar Member (Director Other Units) Mr P RAcharya Member (Director Finance)Lt Gen V K Mehta (Retd) Member (Independent Director)(upto 25/3/2016) Dr R K Shevgaonkar (from 26/03/2016 onwards)
3. Average net profit of the company for last three financial yearsRs.126146.76 Lakhs.
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above) Rs.2522.94 Lakhs.
5. Details of CSR spent during the financial year. a. Total amount to be spentfor the financial year; Rs. 789.27 Lakhs + (Rs. 1780.22 Lakhs)* b. Amount unspent ifany;
Nil c. Manner in which the amount spent during the financial year is detailed below.
* In line with DPE guidelines Project wise Provision has been made in the books foramount yet to be spent against the respective project.
| || || || || || || ||(Rs. in Lakhs) |
|Sl. No. ||CSR Project or activity identified ||Sector in which the Project is covered. ||Projects or programs 1) Local area or other (2) Specify the State and projects or Programs were undertaken ||Amount outlay (budget) Project or programs wise ||Amount Spent on the projects or programs Sub-heads: (l) Direct expenditure on projects or programs. (2) Overheads : ||Cumulative expenditure upto the reporting period ||Amount spent: Direct or through implementing agency |
|1 ||Construction of Medical Ward etc. & Supply of Medical Equipment. Status : Ongoing ||Promoting Health ||Other : Wenlock Hospital Mangalore Karnataka State & Local Area : MH Kirkee Pune & Kidwai Cancer Hospital Bengaluru ||383.00 ||100.00 ||100.00 ||Direct |
|2 ||Construction of Classrooms; Augmentation and Infrastructure Facility maintenance in Educational Institutions. Status : Ongoing ||Promoting Education ||Other : Ballupet Hassan District; Sompura & Devanahalli Bengaluru Rural District; Magadi Town Ramanagar District; Kadeburu Kandavara & Bagepalli Chikkaballapura District; Karnataka. Local Area : Bengaluru City; Karnataka; Machilipatnam City Krishna District AP State ||364.30 ||250.08 ||250.08 ||Direct |
|3 ||Construction of CC Road under AP Govt plan for improving Smart & Heritage Village Kuchipudi Status : Completed ||Restoration of Buildings & Sites of Historical importance ||Kuchipudi Village Movva Mandal Krishna District Andhra Pradesh ||20.00 ||16.92 ||16.92 ||Direct |
|4 ||Construction of Classrooms Science Block Library Kitchen and Toilet Blocks at Govt. Schools Status : Ongoing ||Promoting Education Preventive Healthcare & Sanitation ||Other : Ballupet Sakleshpura Taluk Hassan District; Mallimakanapura & Cheemasandra Villages of Hoskote Taluk Bluru Rural District; Ronur Village Srinivaspur Taluk Kolar District; Kumasi Village Kalburgi (Gulbarga) District; Hosapete Magadi Town; Ramanagara District Devanahalli Town Bluru Rural District; Karnataka. ||439.28 ||48.03 ||48.03 ||Direct |
|5 ||e-Sagu-IT driven Personalized Agri-facilitator Status : Ongoing Improving Adopted Villages in ||Rural Develop- ment project Promoting ||Other : Rangareddy District Telengana State In 7 States : Krishna Dist. AP; ||35.00 591.55 ||18.82 68.51 ||18.82 68.51 ||Direct Direct |
|6 ||7 States under the Honble PMs "Swachh Bharat Abhiyaan" Status : Ongoing ||Preventive Healthcare & Sanitation ||Thiruvallur & Kancheepuram Dist. TN; Rangareddy Dist. Telengana; Raigad & Pune Dist. Maharashtra; Kasganj & Mathura Dist. UP; Pauri Garhwal Uttarakhand & Panchkula Dist. Haryana || || || || |
|7 ||Providing Skill Training Programme for 57 Trainees in the backward districts of Amravati Maharashtra State Status : Completed ||Enhancing Vocational Skills ||Other : Amravati Maharashtra State ||44.00 ||30.48 ||30.48 ||Direct |
|8 ||Contributing to "Asian Shooting Olympic Qualifying Games New Delhi during Jan-Feb 2016. Status : Completed ||Promoting Olympic Sports ||Local : New Delhi ||65.00 ||65.00 ||65.00 ||Direct |
|9 ||Improving Road Safety environment Cleanliness and empowerment of Communities. Status : Ongoing ||Environmental Improvement Safety education on public roads etc ||Local : Jalahalli Bengaluru City; Nandambakkam Chennai City Machilipatnam City & Mallapur Hyderabad. ||430.00 ||49.08 ||49.08 ||Direct |
|10 ||Green Initiative at INS Valsura Jamnagar & in Villages around Bhadohi Town UP Status : Ongoing ||Ensuring Environmental Sustainability ||Other : Jamnagar Gujarat State & in Villages surrounding Bhadohi Town (Near Varanasi) UP ||75.00 ||19.99 ||19.99 ||Direct |
|11 ||CSR Admin Overheads ||- ||- ||122.36 ||122.36 ||122.36 || |
| ||TOTAL || || ||2569.49 ||789.27 ||789.27 || |
6. In case the company has failed to spend the two percent of the average net profit ofthe last three financial years or any part thereof the company shall provide the reasonsfor not spending the amount in its Board report : The unspent amount relates to identifiedprojects for which the funds have been set apart and would be spent as the projectprogresses.
7. The implementation and monitoring of CSR Policy is in compliance with CSRobjectives and Policy of the Company.
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016
[Pursuant to section 204(1) of the Companies Act 2013 and rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
BHARAT ELECTRONICS LIMITED
Outer Ring Road
Nagavara Bengaluru- 560 045Karnataka.
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by BHARAT ELECTRONICS LIMITED(hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.
Based on my verification of the Companys books papers minute books forms bythe company and also the information provided by the Company its officers agents andauthorized representatives during the conduct of secretarial audit I hereby report thatin my opinion the company has during the audit period covering the financial year endedon 31 March 2016 complied with the statutory provisions listed hereunder and also thatthe Company has proper Board-processes and compliance-mechanism in place to the extent inthe manner and subject to the reporting made hereinafter : I have examined the bookspapers minute books forms and returns filed and other records maintained by the Companyfor the financial year ended on 31 March 2016 according to the provisions of :
(i) The Companies Act 2013 (the Act) and the rules made there under ;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder ; (iii) The Depositories Act 1996 and the Regulations and Bye-laws framedthereunder ;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings ;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act) :
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011 ; (b) The Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015 ;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 ;
(d) SEBI (Share based employee benefits) Regulations 2014 ; (Not applicable duringthe audit period) ;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; (Not applicable during the audit period) ;
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client ;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 ; (Not applicable during the audit period) and
(h) The Securities and Exchange Board of India (Buy-back of Securities) Regulations1998 (Not applicable during the audit period).
I have also examined compliance with the applicable clauses of the following : (i)Secretarial Standards issued by The Institute of Company Secretaries of India.
(ii) The Listing Agreements / the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 entered into by the Companywith Stock Exchange(s) as applicable.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines and Standards etc. as mentioned above.
I further report that having regard to the compliance system prevailing in the Companyand on examination of the relevant documents and records in pursuance thereof ontest-check basis the Company has complied with the following laws / guidelines/rulesapplicable specifically to the Company : (i) Department of Public Enterprises Guidelines ;(ii) Guidelines issued by Ministry of Defence ; (iii) Order/Regulations issued by theGovt. of India from time to time ; (iv) E-Waste (Management & Handling) Rules 2011 ;
I further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The Company hadappointed adequate number of Independent Directors as per the Companies Act 2013; Howeverthe company is yet to appoint the adequate number of Independent Directors as per therequirements of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. During the Audit period the Company wasrequired to appoint a women Director on the Board w.e.f 1 April 2015. However the saidappointment was made w.e.f 26 August 2015. It is informed that the appointment ofDirectors is done by Govt. of India and filling up of vacancies of the said IndependentDirectors is also pending with the appointing authority namely Government of India. Thechanges in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members views arecaptured and recorded as part of the minutes.
I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
I further report that during the audit period the company has issued bonus shares toits Members in the ratio of 2:1 (Two Equity Shares for One Equity Share held).
| ||Name and Signature : Thirupal Gorige |
|Bengaluru ||Designation : Practicing Company Secretary |
|27 May 2016 ||Stamp : FCS No. 6680; CP No.6424 |
Note : This report is to be read with my letter of even date which is annexed as AnnexureA and forms an integral part of this report.
BHARAT ELECTRONICS LIMITED OUTER RING ROAD NAGAVARA Bengaluru- 560045 KARNATAKA
My report of even date is to be read alongwith this letter.
(1) Maintenance of secretarial record is the responsibility of the management of thecompany. My responsibility is to express an opinion on these secretarial records based onmy audit.
(2) I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification are reflected in secretarial records. I believe that the processes andpractices I followed provide a reasonable basis for my opinion.
(3) I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company. (4) Where ever required I have obtained the Managementrepresentation about the compliance of laws rules and regulations and happening of eventsetc.
(5) The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis.
(6) The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
| ||Name and Signature : Thirupal Gorige |
|Bengaluru ||Designation : Practicing Company Secretary |
|27 May 2016 ||Stamp : FCS No. 6680; CP No. 6424 |