It is my pleasure to share with you that your Company has delivered a reasonably goodperformance during the year 2016-17 despite severe competition and numerous challenges.The Annual Report brings you the audited accounts and other related documents for the year2016-17 for your consideration and adoption at the ensuing Annual General Meeting.
Your Company has achieved gross revenue of?2837 Crs for the financial year ended31.03.2017.
The Mining & Construction business achieved Gross revenue of ?1713 Crs despitesluggish demand both in Domestic & International markets.
The Rail & Metro segment has- achieved Gross revenue of ?571 Crs. The Company hasdelivered 205 metro cars during the vear- which is an all time high in the Company'shistory.
The Defence business achieved a gross sales of ?553 Crs posting a growth of over 50% asagainst previous year.
Profit before Tax stood at ?98 _ Crs which is the highest in the last five years.
65% reduction in borrowing over last 5 years.
Over last 5 years 48% increase in Value addition per Employee despite 25% reduction inmanpower.
Earnings per Share (EPS) of ^20.28 highest over the last 5 years.
" R&D has taken up initiatives to f launch new products in the three Businesssegments:
Minins & Construction:
Your Company has positioned High End Dump Trucks (BH150E andBH205E) Dozers (BD475-1)Excavators (BE1800E & BE1800D) to compete in the high capacity market needs in Miningsegment.
Your Company is also in the process of finalising the technology partner in other highcapacity products.
Arjun Armoured Recovery and Repair Vehicle (ARRV) has been Designed & Developed.Two prototypes will be delivered during the current year.
Development of aggregates for the Quick Reaction Surface to Air Missile (QRSAM) forDRDL.
Development of T-72 Hull & Transmission to supplement the production of OFB.
Rail & Metro:
IGBT based 3-phase Mainline Electric Multiple Units development is under processagainst a contract from Indian Railways for the first time in India.
Your Company has put in place appropriate strategies and actions to counter allbusiness challenges and scale new benchmarks despite impending Strategic Sale of theCompany reiterating commitment from all of us towards holding "BEML FIRST" as aguiding principle.
Your Company is committed to the success of "Make in India" programmelaunched by the Government of India.
Your Company has achieved " level of indigenisation over 90% in the mainlineM&C products Rail Coaches &
EMU's over 80% in High- Mobility Vehicles (HMVs) and over 67% in Metro Cars. Furtherefforts are underway to reach higher levels.
The new Public Procurement Policy announced by Gol has given a new impetus for LocalManufacturers by way of eligibility to address the surging Metro market in India.
Procurement from MSEs was 29% of the total indigenous procurement which is more than20% stipulated by Gol.
Your Company has undertaken various initiatives on the Information Technology front toenable business operations on an e-mode viz; e-procurement upgradation of SRM datarecovery center video conferencing procurement through government e-portal etc.
To leverage Information Technology and to draw more mileage commercially your Companyhas drawn up a comprehensive IT plan covering Cyber security systems Complaint handlingsystem FLMS amongst others.
Your Company is making all payments / receipts through digital mode. Various trainingseminars were conducted at all Divisions and also at residential townships highlightingthe cashless transactions.
The employees are being provided with opportunities to learn grow and develop throughdevelopmental training programmes in reputed institutions such as IITs IIMs MDI NLSIUetc. in India and abroad.
Empowered to take speedy decisions through revised Delegation of Powers. For manpoweroptimization a study is underway to redefine the roles responsibilities andcompetencies in important functions remove overlapping activities / functions. YourCompany is committed to Government of India's 'Skill India' initiative with employeeshoning their technical skills and competencies for capability building through Centers ofExcellence established in-house at all manufacturing complexes in the areas of StainlessSteel Welding Hydraulics Structural Engineering and Electrical & Electronics.
Service Training Centers at KGF and Mysuru are providing training to employees andcustomer personnel.
Your Company is a major player in M&C equipment market competing with globalplayers and holds a sizeable market share in Dozer and Dumper market. With theGovernment's emphasis on infrastructure projects the demand for construction equipment isgoing up which augurs well for BEML. Keeping in view the future technology trends andchanging business scenario various initiatives were taken to launch new products in theareas of High End Mining equipment with innovative features in line with major globalcompetitors.
Defence business is venturing into new platforms viz. Combat Vehicle Segment MountedGun Systems Light / Medium Armoured Vehicles Futuristic Infantry Combat Vehicles(FICVs). As a part of future business prospects and as an alternate source for criticalaggregates for battle tanks like Hull Transmission Running gear items your Company isjointly working with OFB. Further
BEML has signed MoU with OFB for development of Mounted Gun Systems. The Company isalso working with other DPSUs for supply ofLaunching Vehicles and aggregates for variousMissile Programmes. Company has also entered into a Service Agreement with M/sTATRATRUCKS.
Considering the emerging requirements and market scenario Rail & Metro vertical isventuring into new products such as High speed trains Light Metro Cars Medium SpeedTrains 3-phase MEMUs Rail Grinding Equipment Track Clearing Equipment Safety &Maintenance related equipment. Suitable technical tie-ups are planned to address the same.Your Company is also exploring alternate options for supply of rolling stock under leasing/ renting models to cater to the plans of Metro Corporations. To augment the capacityrequirements BEML has established 3rd production line for Metro cars and introducedindigenous manufacture of Metro car bogies which will enable increase production capacityby over 30%.
Your Company has an order book position of over ?7300 Crs including order for supply of300 MEMUs received from Railway Board for the first time since four years. Consideringorder book position and the projected positive scenario we have set ourselves a Net Salestarget of minimum ?3000 Crs for the year 2017-18. Your Company's vision is to emerge as astrong player in each of the three business verticals.
With a view to upgrade and augment the existing production facilities and to meet thefuture requirements the Company has incurred a Capex of ?65 Crs during the year and hasplanned an outlay of ?139 Crs covering additional metro production line and various ITinitiatives.
A comprehensive review was undertaken and all existing manuals were updated. To be moreCustomer Centric' Delegation of Powers was reviewed to reflect the realities of thenew market place and empowering the frontline to improve the efficiency &accountability.
Your Company has introduced new accounting standards(IND-AS)fortheyear2016-17. Alsohadasmooth transition to new regime of GST from 1st July 2017.
As a responsible Corporate Citizen your Company has complied with all rules andregulations dealing in a transparent fair and corruption free operational environment anda detailed report on compliance of the guidelines on Corporate Governance under thelisting regulations and the guidelines issued by the Department of Public Enterprises forCPSEs form part ofthe Board's Report.
Several preventive vigilance activities were undertaken across the Company with theobjective of promoting integrity transparency accountability equity efficiency andproductivity in work areas by leveraging technology and making systemic improvements.
I am confident that with continuous dedicated efforts commitment and hard work and aconducive business environment your Company shall move to achieve greater heights in2017-18.1 assure you that your Company is committed to enhance value creation for itsStakeholders and Society at-large by taking up activities and initiatives for sustainablegrowth with environmental concern.
I would like to inform you that during October 2016 Government of India has initiatedstrategic disinvestment of 26% of its holding along with management control. It isnoteworthy that your Company has achieved a record performance of 46% of its annualturnover during the 4th Quarter.
CSR and Sustainability Development:
Your Company has brought in a wider perspective to Corporate Social Responsibility andSustainability through various programmes on health education Swachh Bharat Campaignetc as under:
Adopted a village near Kolar Gold Fields for facilitating quality education to poorstudents medical facilities to the needy etc.
Sustained sanitation drive by providing toilets to the schools.
Shramdaan for Cleaning drive and also provided cleaning equipment for Brindavan Gardenat Mysuru.
Environmental Park at KGF De-silting of lakes Rain water harvesting planting oftrees etc.
Plastic Free zone and three years Swachh Bharat Plan'.
Contributed Earthmoving equipment and machines to Govt. ITIs / Institutes.
Committed to Go Green' from the current level of 65% from renewable energy toachieve 100% power requirements of the Company.
To ensure reliability of supplied equipment and provide highest customer satisfactionyour Company has initiated various measures for availability of Spare Parts andserviceability 24x7.
Your Company has achieved many accolades and awards and few of them are:
SCOPE Award for Excellence and Outstanding Contribution to the Public SectorManagement.
Raksha Mantri award for the design and development of 180T Class Electric HydraulicExcavator BE1800E.
Best seller in Rigid Dump Truck and Crawler Dozer in the Equipment India Awards.
Hindustan PSU Award under the category Fastest Growing Organisation - Miniratna.
International & National Quality Award on Metro Car quality.
Gold Award for excellence in Training Learning and Development & CSR initiatives.
Star Performer Award in the Export category instituted by EPC India.
On behalf of the 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. I would also like to express my deep appreciation to all UnionsAssociations Employees and Executives for their untiring 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.
D K Hota
Chairman & Managing Director