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BEML Ltd.

BSE: 500048 Sector: Engineering
NSE: BEML ISIN Code: INE258A01016
BSE 00:00 | 06 Oct 1500.60 21.75
(1.47%)
OPEN

1481.05

HIGH

1518.25

LOW

1481.05

NSE 00:00 | 06 Oct 1503.05 22.10
(1.49%)
OPEN

1488.40

HIGH

1518.00

LOW

1487.85

OPEN 1481.05
PREVIOUS CLOSE 1478.85
VOLUME 2228
52-Week high 1659.09
52-Week low 880.82
P/E 43.07
Mkt Cap.(Rs cr) 6,249
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1481.05
CLOSE 1478.85
VOLUME 2228
52-Week high 1659.09
52-Week low 880.82
P/E 43.07
Mkt Cap.(Rs cr) 6,249
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

BEML Ltd. (BEML) - Chairman Speech

Company chairman speech

Dear Shareowners

I am pleased and feel honoured to share the Annual Report for Financial Year 2020-21.

The FY 2020-21 has been a predominantly challenging one for India and its people. Theevents of the last few months have caused unimaginable grief for many who have lost theirfamily members close friends and valued colleagues. It has also put tremendous burden onthe Nation's healthcare infrastructure which is vital for saving lives and reducing theimpact of the pandemic. In these challenging times the most noteworthy and satisfyingfeat of the Company has been its philanthropical efforts in strengthening the nation'sfight against the pandemic. From supplying food packets and drinking water to the needypeople supporting hospitals by manufacturing & supplying Medical Oxygen Plants areone of the few but remarkable support provided by your Company.

Your Company's resilient performance is a testimony to the untiring efforts of ourtalented pool of dedicated workforce who left no stone unturned to bounce back from thecrisis despite all adversities. I am overwhelmed to share that company has accomplishedyet another year of excellent performance and has set new benchmark adhering to theCompany's tagline 'New Frontiers New Dreams'. From managing growth in all businessverticals to managing slowdown your company has steadily strengthened its inherentcompetitiveness as reflected from sustained market leadership and continued focus oninnovation and enhanced customer satisfaction.

The Government's endeavours to accelerate vaccination brings optimism for the future.This undoubtedly is most critical to restore normalcy and collectively all efforts aremade to increase the pace. The crisis however is far from over. The distress caused bythe pandemic continues to be of concern for lives and livelihoods as well as for economicgrowth. Despite near-term uncertainties the Indian economy holds immense promise.

The Hon'ble Prime Minister of India Shri Narendra Modi Ji while giving the clarioncall to 'Aatmanirbharta' said "Self-reliance is the only way forward but also doesnot mean a self-centric approach. We have to be stronger. We have to save ourselves andkeep moving forward at the same time. Also we have been hearing that 21 century willbelong to India but this is not just a dream but our responsibility too. But how toachieve it. The current world situation shows there is only one way: 'Self-ReliantIndia'. Crisis has taught us the importance of local manufacturing local market and localsupply chains. All our demands during the crisis were met 'locally'. Now it's time to bevocal about the local products and help these local products become global. When Indiaspeaks of becoming self-reliant it doesn't advocate a self-centred system. In India'sself- reliance; there is a concern for the whole world's happiness cooperation andpeace."These words capture the crux of the ardour of 1.3 Billion Indians joininghands together to create an 'Aatmanirbhar Bharat'.

I on behalf of the Board of Directors as well as 6053 dedicated human assets of BEMLLimited present to you the Company's Annual Report for the financial year 2020-21 foryour consideration and adoption at the ensuing Annual General Meeting.

Performance Highlights:

Your Company has recorded its highest ever revenue from operations of 3557 croresduring FY 2020-21 with a growth of 17% over previous year.

First time the company has breached the Rs 3500 crores mark.

Mining & Construction Business has also realized its highest ever turnover andregistered a growth of 16.06% over the previous year. Defence Business has registered animpressive growth of 23.61% over the previous year. Rail & Metro Business registered agrowth of 16.91% over the previous year. This achievement becomes more significantconsidering the fact that the pandemic forced total shutdown of operations in the initialone and half months.

With increased business and continued focus on cost control Your Company registereda Profit before Tax of Rs93 crores as against Profit before Tax of 24 crores inthe previous financial year increased by 285.74%.

Your company is continuously working on options for maximizing profitability. Variousoptimization and technological measures are being taken for resource utilization andkeeping expenses under control.

During the year Rs5125 crores worth orders have been booked. The Order Book of yourCompany ason 1 April 2021 stood at Rs11363 crores highest ever as against Rs9795crores in the previous year a growth of over 16%. Employee strength from 6602 to 6053down by 549 (8.31%) and increased VoP per employee of Rs59 lakhs by adopting systemintegration model through increased outsourcing. Value added per employee is Rs25 lakhs asagainst Rs 22 lakhs in the previous year a jump of 14%.

The Year passed…...

Competition:

Amidst stiff competition 74% of sales was achieved from orders obtained throughcompetition mode. Maintained a major market share in Dozers and Dumpers market of Mining& Construction equipment.

Defence & Aerospace Business bagged highest ever orders worth Rs 2453 croresfrom MoD & Defence Services during the year.

Research & Development:

During the year Company has designed and developed products such as 180 Ton DieselExcavator with new Engine to meet tier 2 norms AI Based 360 Surrounding View MonitoringSystem for Mining equipment Mobile Standby Command Post Vehicle (MSCPV) Mine FieldMarking Equipment Mk-II on BEML HMV 6x6 in Defence Business Mumbai Metro MRS1 contract(Line #2 & #7) 6 car trainset Mainline Electrical Multiple Unit (MEMU) for IndianRailways in Rail & Metro business.

Towards protecting the Intellectual property of the Company the Innovation Cell hassucceeded in filing 55 IPRs during 2020-21covering innovations in product designmanufacturing and operations. Eight patents have been awarded so far.

Company has spent highest ever Rs133 crores on R&D during 2020-21 which is about3.73% of sales turnover.

69% of sales turnover achieved was from in-house R&D developed products.

Self-Reliance:

Your Company has achieved level of indigenization over 90% in the mainline M&Cproducts Rail coaches & EMU's over 84% in High Mobility Vehicles (HMV) and over 65%in Metro cars. Further efforts are underway to reach higher levels.

Continuing journey towards achieving the goal of "Aatmanirbhar Bharat"during the year under this initiative Company has designed and developed products such asIndia's first driverless Metro car Mainline Electrical Multiple Unit (MEMU) in Rail &Metro Minefield Marking equipment MK-II 117 HP HeliPortable Dozer (BD50HST) in Defenceand 150 Ton Dump Truck (BH150E) BE1800D Excavatorin Mining & Construction.

To further enhance indigenization levels in High mobility vehicles ToT has been signedfor manufacture of cabins and one proto type has been developed. Development POs havesince been placed for 214 items for Indigenization under Atmanirbhar Bharat out of which

107 items have been indigenized during 2020-21.

Support to MSME is vital in improving the flexibility cost reduction speedierresponse. Your Company has procured 513 crore out of 1727 crore

Local procurement which constitutes about 30% from MSE's which is the highest ever.

Digital Transformation Initiatives:

IT department has been renamed as DT department (Digital Transformation) in sync withemerging digital implementations across business vertical eco-system and externalcompetitive world. Company is embarking implementing digital transformative initiativesfor the business processes covering all 3 business verticals.

Some of the initiatives viz. Cyber Security Setting up Cyber Security Operation Center(SOC) Implementation of Patching Automation & Asset Management Implementing CSG-MoDGuidelines Implementation of AIRGAP Network Net based in-house Application DevelopmentsRPA (Robotic Process Automation) Solution for Medical direct bill processing CRM Solution(Customer Complaint Management) ANALYTICS Platform with Data Lake AI/ML based BEMLEquipment FLM Improvements SRM Improvements SAP ERP ECC6 Critical ImprovementsIndustry4.0 for manufacturing shop floor etc. were taken during 2020-21.

Human Resources and Administrative Initiatives:

Your Company pioneer of indigenously manufactured equipment & a flag-bearer ofIndia's Engineering Sector supplies global standard products to multi-sectors such asDefence & Aerospace Mining & Construction Rail & Metro is known for itscompetitiveness in-house R&D cost effective & creative solutions to theCustomers. In this journey BEML considers 'Skill Development initiatives' as the key topromote Company's economic growth & competitiveness. Through multi-dimensional SkillTrainings BEML ensures absorption of sophisticated technology in its business areas byits workforce towards making the state-of-the-art Products in-line with the India's needsfor self-reliance ('Atmanirbharata').

During 2020-21 amidst Coronavirus & challenging situation BEML rapidlytransitioned from the traditional class-room based Skill-Training & developmentsessions to the on-line Programmes across the Company locations. In-line with the Covid& Employee safety protocols BEML adapted to the new Learning & collaborationtechnology for virtual delivery of various programmes.

BEML implemented a series of Skill Development Initiatives (SDI) spanning acrossvarious Functions & organizational levels. During the year

104 External and 333 Internal Training and Skill Development Programmes

on various technical functional behavioural areas were conducted covering 6113Executives and 7800 Employees encompassing all manufacturing Complexes Marketing Division& Corporate Office equivalent to 14212 Man-days surpassing the Target by 7% inspite of the Covid scenario.

Vigilance Initiatives:

During the year New SOPs have been released for Reverse Auction ProprietaryCertificate conducting negotiation in special cases and Physical Stock Verification atRegional Offices. BEML Vigilance Department has been accredited with ISO 9001:2015Certification after scrutiny of all procedures in the Vigilance department by athird-party agency. This is the first time in BEML that Vigilance department is accreditedwith the latest version of ISO 9001:2015 at all BEML locations.

Corporate Governance:

Your Company always strives to attain highest standard of Corporate Governance practiceand is complying with Government Guidelines on Corporate Governance framed by Departmentof Public Enterprises (DPE) for CPSEs in letter and spirit. A report on CorporateGovernance compliances has been made part of the Board's report. Your company has beengetting

"Excellent" rating from DPE for complying various norms of CorporateGovernance.

Your Company has established systems and procedures to ensure that its Board ofDirectors is well informed about the policies of the Company to enable them to dischargetheir responsibilities and to enhance the overall value of all stakeholders.

CSR & Sustainable Development:

CSR has been synonymous with your Company's core businesses. Your Company's spirit ofcaring and sharing is embedded in its CSR & SD Policy.

In the preface of outbreak of COVID-19 and to support this critical phase of Social andEconomic crisis your Company has taken up the numerous relief activities viz. Contributed50 Lakhs voluntarily to PM CARES Fund frequently conducting awareness campaign on COVIDappropriate behavior norms at all Complex/ Divisions establishment of Covid care centerswith 20 beds at KGF complex and with 10 beds at Bengaluru Complex is planning to set-upone No. of Medical Oxygen Plant at Government General Hospital KGF Kolar District at anapproximate cost of Rs1.10 crore under CSR Activity.

It is heartening to mention that Medical Oxygen Plant (GO 960) was manufactured andsuccessfully rolled out through ToT from DEBEL DRDO for supplying to the hospitals tocater to the rising needs of Covid patients. Full order of 79 oxygen plants have beendispatched to various hospitals across India.

94% of energy requirement of your Company was met through "Green Energy"

projects viz. 23MW Windmill Projects and 250KWp Solar Power resulting in mitigation of25381 tons of carbon during the year 2020-21.

Customer Satisfaction:

Resolving after-sales-service requests by the customer is a continuous process and BEMLhas dedicated service team to attend the same and to make sure that the down time isminimal. Implementation of customer complaint handling system is in progress.

The Year Ahead….

Defence & Aerospace:

In Defence & Aerospace segment major chunk of orders are available for executionduring current year. Further orders are expected for High Mobility Vehicles for variousprogrammes 50T Trailers Overhauling of Tanks and aggregates Aggregates & Structuresfor National programmes etc.

Your Company is taking up new design & development programmes to meet theacquisition needs of the Indian Army such as Development of High Mobility Vehicle (8x8Cross Country Vehicle) Self-propelled mine burrier 8x8 Bar mine layer 8x8 Guided PinakaVariants for Launcher Command post Loader Cum Replenishment (LCR) Replenishment vehicle(RV) Upgrading of Axles for higher load carrying capacity with ABS feature for use onchassis for special projects Indigenous manufacture of cabins for HMV 8x8 and 6x6vehicles Upgradation/Overhauling of ARV WZT-3 pilot project Development of TRAWL Roller& TWMP for de-mining operation and HMV 8x8 chassis with 155 mm / 52 Cal Mounted GunSystem. Your Company is developing India's first High Powered 1500HP Engine for DefenceApplication.

On Export front your Company is exploring opportunities for supply of Bridging Systems(Sarvatra PMS) Medium Bullet Proof Vehicle AI based Medical Health & DiagnosticsSystems (MHDS) Engineering Plant equipment (Dozers & Motor Graders) for friendlyneighbouring countries and other countries under Indian Line of Credit.

In Aerospace segment your Company is supplying structures and aggregates for variousMissile and National programmes. Also plans are afoot for supply of various aerospacecomponents and parts for global requirements from its newly established facilities atBengaluru. Possible tie-ups with renowned OEM's are also underway and will help in addingrevenue and propelling its growth.

Rail & Metro:

In Rail segment supply of Main Line Electric Multiple Units has commenced and it willbe completed during current year. Manufacturing and supply of Rail Grinding Machines willcommence from current year. Maintenance equipment requirements are also increasing forOverhead Inspection Cars Track

Laying Rail Grinding & Track Cleaning Machines. Your Company is confident ofgetting additional orders.

On Metro Cars Supply of Driverless Metro Car for Mumbai Metro has started from FY2020-21. Order for supply of 80 nos. of Metro cars to Delhi Metro will be executed duringcurrent year. Your Company is optimistic about getting orders for upcoming Metro Carprojects. Further Metro Rail is extending to Tier-II cities in the Country. Light RailMetro is also catching up as a revenue line which is expected to emerge from tier-II &tier-III cities.

Further prospects:

Chennai Metro Bangalore Metro Bhopal-Indore Metro.

R&D is working towards development of Metro Neo MRTS system which is making headwayin the country working with IIT Kharagpur for Bogie design under the Uchathar AavishkarYojana (UAY) project to develop medium / high speed bogies Chennai Metro (Phase II) andRS17 tender by DMRC.

Your Company is also pursuing tie-ups to cater the requirement of upcoming SemiHigh-Speed Rail Medium / High speed Coaches / LHB Coaches.

Mining & Construction:

On Mining front your Company is executing orders for indigenously designed &developed high end 190 Ton Dumper. Your Company is also working on design &development of 240T Dump Truck and 21 Cum. Rope shovels.

Government plans to reduce the coal imports by increasing the domestic coal productionincreasing coal production of Coal India Limited (CIL) Singareni Collieries CompanyLimited (SCCL) and through commercial coal mining.

To cater the growing demand for coal production in India coal companies are planningfor higher capacity opencast mining projects; which obviously requires deployment ofhigher capacity mining equipment with latest technology. Towards embarking on newtechnologies your Company is developing Autonomous Dozer; huge mining equipment like RopeShovel and Walking Drag Line- trial order from Coal India are expected.

Keeping in view of future technology trends with changing business scenario R&Dhas taken up initiatives to launch new products and upgrade existing products in line withthe latest emission norms as mandated by the government DGMS and safety features as perIS17055 / ISO20474 in the areas of Dump Trucks Dozers Excavators Wheel Loaders andUnderground Mining Equipment apart from up gradation of existing Products with innovativeand new features in line with major global competitors.

Exports:

On export front your Company has bagged major order from Ministry of Economy Planning& Regional Development (MOEPRD) Government of Cameroon for supply of 71 units ofconstruction equipment consisting of Bulldozers Excavators Wheel Loaders Motor gradersand Compactors for their Cassava Farm Project.

Your Company is also working on various business opportunities in Defence Mining &Construction and Rail & Metro segments in SAARC and Africa. Your Company is incontinuous discussion with Indian Embassies / Defence Attaches w.r.t. business promotion /engaging local representative and has already appointed representatives in BangladeshTunisia Cameroon Thailand and is in the process of appointing more representativesacross the globe. Kenya region has been allocated to BEML by MoD. BEML has registered itsbranch office at Kenya during January 2021.

HR and Administrative Initiatives:

Human Resource Management in your Company has been constantly re-inventing the HRpractices policies & procedures to cater to the changing needs of the Workforce.Inline with the philosophy that a dedicated and motivated workforce is the foundation of anyorganization a number of initiatives have been taken towards leadership development reformof performance management system strengthening of internal communication training/retraining for continued learning through e-based platforms simplifying policies formaking them employee centric etc.

With the Covid 3 wave looming large all precautionary measures like social distancingwearing mask vaccination drives in-house for self and family members restriction oninter division movements following of SoPs in case of testing positive etc..arranginglecture sessions from eminent doctors both inhouse and external are put in place.

Awards:

Your Company has achieved many accolades and awards and a few of them are as follow:

Company received awards for 'Best Seller in Crawler Dozers' & 'Best Seller inRigid Dump Trucks' category during 8th Annual Equipment India Awards 2020.

On 28 October 2020 Company received the prestigious SKOCH Award in Gold Categoryfor outstanding work in response to contain COVID-19.

BEML has been awarded with 'Digital PSU Award 2020' in the 7 Governance Now PSU 2020for various digital initiatives implemented by BEML.

Innovation Award for excellence in Research & Development for "Design andDevelopment of Mobile Stand by command Post Vehicle (MSCPV)"

Acknowledgements:

Before I conclude I would like to thank the Government of India AdministrativeMinistry the Ministry of Defence the Department of Defence Production and other alliedAdministrative Departments of the Government of India in steering the Company for itsconstant support and encouragement.

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 would like to extend my grateful appreciation to all unions associations employeesand executives for their untiring efforts and contribution. I am also thankful for ourvaluable customers suppliers and other stakeholders for their trust and support.

Through this message I also assure every stakeholder of our whole-hearted commitmentand efforts towards creating a more self-reliant ecosystem within the country whilecreating more value for our shareholders. Success is the sum of many small efforts. Withrenewed vigour great confidence and relentless determination we look forward to anexciting future ahead.

Let me also take this opportunity to wish you and your families the very best for asafer and healthier tomorrow. I would also urge you to continue following all precautionsbe it proper usage of masks safe distancing or other hygiene protocols. These are stepsthat we can and must take to contribute to this fight against the pandemic.

Stay Safe Stay Healthy.
Amit Banerjee
Chairman & Managing Director
Bengaluru

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