Your Board of Directors has pleasure in presenting the 55th Annual Report along withAudited Financial Statements for the Financial Year 2018-19 of the Company for the yearended 31.03.2019.
|Financial results: || || |
| || || |
|Particulars ||2018-19 ||2017-18 |
|Revenue from Operations (net) ||3481 ||3246 |
|Value of Production (net) ||3467 ||3227 |
|Profit before Depreciation Interest and Tax ||260 ||276 |
|Finance costs ||59 ||48 |
|Depreciation and amortization expense ||70 ||64 |
|Profit Before Tax ||131 ||164 |
|Tax Expense ||67 ||34 |
|Other Comprehensive Income ||13 ||71 |
|Total Comprehensive Income ||50 ||59 |
|Profit available for appropriations ||267 ||280 |
Turnover & Profitability:
Your Company achieved all time high revenue from operations of 3481 crores as against3246 crores in the previous year registering a growth of 7.24%. The increase in sales ismainly on account of increase in the turnover from Rail & Metro Business.
The Value of Production is 3467 crores as against 3227 crores registering a growth of7.44% over previous year. The Profit before Tax was 131 crores as against Profit beforeTax of 164 crores recorded in the previous financial year.
There was no change in the nature of business of the Company during the year. Furtherthere was no material change / commitment occurred affecting the financial position of theCompany subsequent to the financial year ended 31.03.2019 till the date of this report.
The Ministry of Corporate Affairs vide Notification dated 21.02.2019 amended theCompanies (Incorpora-tion) Rules 2014 w.e.f. 25.02.2019 requiring the Companies to filethe particulars of the Company and its registered office in e-Form
ACTIVE-22A (Active Company Tagging Identities and Verification) on or before 15.06.2019by the companies incorporated on or before 31.12.2017.
Accordingly the Company has filed the said e-Form ACTIVE-22A on 25.04.2019.
Performance vis--vis MoU:
Performance of your Company in terms of the Memorandum of Understanding (MoU) signedwith the Department of Defence Production Ministry of Defence (MoD) Government of Indiawas rated as "Excellent" for the financial year 2017-18 and the rating for thefinancial year 2018-19 is under self-evaluation.
Your Board of Directors had approved an interim dividend of 4.50/- per equity sharei.e. 45% on equity shares of 10 each on 21.03.2019 which was distributed among theeligible shareholders during March 2019. Further the Board of Directors has recommendeda final dividend of 2.50/- per equity share i.e.25% on equity share of 10 eachaggregating to a total dividend of 7.00/- for FY 2018-19 keeping in view the futureprospects of the Company and at the same time meeting the aspirations of the shareholders.
In terms of Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements)
Regulations 2015 your Company has formulated a Dividend Distribution Policy'which includes the parameters and circumstances in determining the distribution ofdividend to its shareholders and/or retaining profits earned by the Company. The saidPolicy is posted on Company's website www. bemlindia.in.
Order Book Position:
The Order Book of Company as on 01.04.2019 is 9125 Crores the highest ever as against6700 Crores in the previous year a growth of 36%. The Order book comprises of threebusiness verticals i.e. Mining & Construction Defence and Rail & Metro.
During 2018-19 your Company made exports aggregating 19.49 crores (physical exports of19.20 crores and export incentive of 0.29 crores) as against 28.53 crores (physicalexports of 28.13 crores and export incentive of 0.40 crores) during the previous year.Exports were low due to delay in finalisation of tenders by customers.
Ministry of Defence (MoD) vide its letter dated 01.12.2016 communicated that CabinetCommittee on Economic Affairs (CCEA) had accorded "in-principle" approval forstrategic disinvestment of the Company. The Department of Investment and Public AssetManagement (DIPAM) vide its O.M. dated 19.12.2016 communicated that an Inter-MinisterialGroup (IMG) had been constituted by the competent authority for the purpose of appointingintermediaries such as Asset Valuer (AV) Transactional Advisor (TA) and Legal Advisor(LA) for the strategic disinvestment of 26% equity in the Company out of Government ofIndia shareholding of 54.03%. confirmationthe After
Company vide letter dated 06.01.2017 intimated NSE and BSE about thein-principle' approval of CCEA and also posted on the web-site of the Company interms of Regulation 30 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 [hereinafter referred to as Listing Regulations'].
As per the terms DIPAM has appointed M/s. SBI Capital Markets Limited as TA and M/s.Crawford Bayley as LA and MoD has appointed M/s. RBSA Valuation Advisers LLP Ahmedabadas AV respectively.
Further based on the advice of DIPAM due diligence has been completed and the matteris under consideration of DIPAM / MoD.
Your Company views quality improvement as a business strategy and hence remainsproactive in the areas of product and service quality. At BEML Corporate Quality Policyemphasizing Total Quality Management (TQM) ensures that products services and processesmeet stringent standards and requisite performance criteria. Quality Department spearheadsthe thrust towards TQM.
All manufacturing divisions have been certified for Quality Management System (QMS) andcompleted upgradation to ISO 9000-2015 standard during the year. KGF Complex BengaluruComplex and Mysuru Complex are also certified for Environmental Management System (EMS)and upgraded to ISO14001-2015 standard.
Further Bengaluru Complex is certified as per BS OHSAS 18001-2007 IntegratedManagement System standard and Aerospace Manufacturing Division (ASMD) Mysuru Complexgained certification as per AS9100D standard during the year.
Key initiatives / actions taken during the year for continuous improvement towardsQuality Assurance are as under:
Customer Relationship Management System app was launched to enable directon-line logging of complaints through Hand held devices. This enables customers to logtheir complaint and monitor the status through smart phone. System also enables allocationof service resources and is interfaced with ERP system for centralized tracking andgeneration of reports.
Vendor development remains the "focus area" to improve quality ofvendors' supplies. During the year focus was given to upgrade the quality system ofvendors by extending support and encouraging vendors to improve their facilities andimplement qualityforeignsystems which resulted in increase of ISO 9000 certified vendorsin the vendor base from 68% to 84%.
Quality Assurance system was continuously monitored across all the manufacturingdivisions to ensure quality improvements in design processes and systems. Fewinitiatives taken towards quality improvement across the divisions through crossfunctional teams are as under: ?624 Kaizen projects were implemented acrossthe divisions.
?94 quality improvement projects were implemented to reduce rejection andovercome field failures.
?60 design and system improvements to enhance the reliability of theproduct were implemented during the year.
?55 nos. Jigs & fixtures were added and upgraded to improvemanufacturing quality.
Material Testing Laboratory at EM division attained NABL accreditation statusduring the year 2018-19. With these three laboratories in R&D-KGF material testinglaboratory in EM Division and Central Laboratory at Mysuru complex are accredited by NABL.
Make in India Initiative and Indigenization:
Your company has adopted various initiatives under Make in India' conceptlaunched by the Government of India. It is Company's endeavour to achieve self-reliancethrough continuous efforts to reduce import content with increased sourcing from localmanufacturers.
Your Company has nominated a Nodal Officer for
Make in India' drive and list of items for indigenization are hosted on Company'swebsite www.bemlindia.in. A display center is also set-up in Bengaluru Complex whereprospective vendors can have access to samples drawings and technical specifications andexplore opportunities to partner with the Company.
Under this initiative "Make in India" products 150T and 190T Dump Truckswere deployed in Coal mines against trial-cum-sale order from Coal India Limited. Theseelectric drive Dump Trucks were time in designed and manufactured for the first
India and major import substitution for the Mining sector. These products have apotential to save significant for the Country in future. In-house R&D is continuouslyengaged in new product development & up-gradation of existing products to meetcustomer requirements.
Your Company has achieved indigenization levels of over 90% in the mainline M&Cproducts Rail coaches & EMU's over 80% in High Mobility Vehicles (HMV) and over 60%in Metro cars. Further efforts are underway to reach higher levels.
The Ministry of Commerce & Industry Government of India has launched StartUp' concept under Make in India' initiative during 2016.
An entity working towards innovation development deployment or commercialization ofnew products processes or services driven by technology or intellectual property if itaims to develop and commercialize a new product or service or process that will create oradd value for customers or workflow are covered under this Startup.
A Company that has been in existence for less than seven years and with sales revenuesnot exceeding
25 crores will be recognized under Start Ups. Your
Company has relaxed the aforesaid eligibility criteria of prior turnover and experiencefor registration from Start Ups in order to encourage them to participate in supplies forCompany's procurement. Startup Companies duly registered under start up websitewww.startupindia.gov.in will be considered. Further the identified areas of
Start Up are hosted on Company's web-site www. bemlindia.in and vendors need to contactQuality wing of the Company for Start Up activities.
Two start-ups have been identifiedfor development of Soot Control products for Dieselgensets and for
Artificial Intelligence enabled product.
Renewable Energy Development Energy Conser-vation Research & Development andTechnology Absorption:
(i) Renewable Energy Development:
In realizing the goal of Go Green' your Company has installed 23MW Wind MillProjects and 250KWp Solar Power units. With this and other initiatives 75% of energyrequirement of the Company is being met through "Green Energy" resulting inmitigation of 19361 tons of carbons during the year 2018-19.
(ii) Energy Conservation:
Your Company continues to give emphasis on conservation of energy. The energyutilization is closely monitored to attain higher level of energy conservation.
Across all units and offices of BEML all the conventional lighting viz. Bulbs /Fluorescent Tubes / CFL have been switched over to LED Lighting system to conserve energy.
(iii) Research & Development and Technology Absorption:
In-house Research & Development set-up of your Company continues to play a vitalrole in design and development of new products/ aggregates continuous up-gradation ofexisting products and indigenization. Special focus was given to spread the awarenessabout Innovation culture and intellectual property rights in the company and 65
Patents were filed during the year 2018-19.
4 technical papers were published by R&D engineers in national / internationaljournals during the year 2018-19.
R&D centre at KGF Complex ("R&D Facility") is fully equipped withfacilities for design simulation and testing of earth moving and construction equipmentwhich is one of the biggest development centers in India and it is supported by R&Dcenters located at Truck and Engine Divisions in Mysuru. R&D centre is making vitalcontribution towards design and development of new products upgradation of existingproducts identifying alternate sources and indigenization of critical aggregates therebystrengthening the earth moving defence and rail & metro related industries in thecountry. R&D
Division is manned by highly qualified engineers with specialization in advance fieldsof mechanical design engine technology structural engineering material science fluidpower and electronics and have gained significant experience and technology knowhow indesign and development of complete machinery as well as the aggregates.
R&D centres at KGF Mysuru and Bengaluru are recognized by the Department ofScience and Technology Government of India. During the year 2018-19 R&D testfacilities have been up-graded with addition of Salt Spray Chamber Abrasive CuttingMachine 50T Actuator High Pressure Power Pack 25 kN UTM Air Screw Compressor etc. andDesign CAD/CAE tools like PTC Creo 5.0 ANSYS Mechanical CFD 19R1 Enterprises KissSYSOracle Primavera P6 & Flow master. The R&D set-up in Defence business vertical isengaged in Development of Recovery & Repair vehicles for Battle Tanks Mounted GunSystems Mine Protected Vehicles Futuristic Infantry Combat Vehicles Mine ClearingSystems and indigenization of aggregates / components.
The R&D set-up in Mining & Construction Business vertical is engaged indevelopment of high-end Mining equipment Rope Shovels and Walking Draglines besidesupgradation of existing products to meet customer needs. The R&D set-up in Rail &Metro business vertical is basically involved in design & development of Metro &Railway rolling stock products up-gradation of existing products based on the market needand indigenization of imported aggregates.
In terms of Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 the information on energy conservation and technologyabsorption including the products developed by the Company during the year is placed at Annexure-I.
Foreign Exchange Earnings and Outgo:
During the year the Company's foreign exchange earnings stood at 371 crores and thetotal foreign exchange utilized was 1099 crores.
A sum of 0.58 crores was incurred towards deputation of personnel abroad for business/export promotion after-sales-services and training purposes.
The working capital requirements were met from the internal accruals and creditfacilities availed from banks. There was no overdue installment of principal and/orinterest to the banks. ICRA has reaffirmed the long-term rating of the short-term ratingof [ICRA]A1+ for 2750 Crores limit towards fund based cash credit and non fund based bankguarantee limit for the year 2018-19. The outlook on the long term rating is Stable.
SEBI vide its notification SEBI/HO/DDHS/CIR/P/2018/144 dated 26.11.2018 issued acircular to the listed companies to make an initial disclosure on Large corporate within30 days from the end of financial year to the Stock Exchanges in case the Company has (i)specified securities or debt securities or non-convertible redeemable preference shareslisted on recognized Stock Exchange and (ii) Outstanding Long term borrowing of 100 croresor above and (iii) Credit rating of AA and above'. Since the Company does not complywith the requirement under (iii) above intimated the Stock Exchanges on 22.04.2019 thatthe Company is not a Large Corporate.
Based on the Vision-2018 for Payment and Settlement Systems in India brought by the RBIin June 2016 BEML is being carried out cashless transactions across the Company.
As mandated by the Ministry of Corporate Affairs the financial statements for the yearended on 31.03.2019 has been prepared in accordance with the Indian Accounting Standards(IND AS) notified under Section 133 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014. The estimates and judgements relating to the Financial Statementsare made on a prudent basis so as to reflect in a true and fair manner the form andsubstance of transactions and reasonably present the Company's state of affairs profitsand cash flows for the year ended 31.03.2019.
The Company's contributions to Central and State Exchequers were in the order of 715crores during the year by way of Customs Duty GST Dividend and Tax there on and othertaxes and duties.
Internal Financial Controls:
Your Company has put in place adequate Internal Financial Controls (IFCs) with respectto Financial Statements. The Company has various manuals such as manual for AccountsCost Accounting & Pricing Stores Purchase Audit etc. and the same are beingperiodically updated circulated and also uploaded in BEML Bulletin Board' forviewing and compliance by employees and officers concerned for carrying out variousactivities in a transparent manner and in line with the delegation of powers and noinstances of material weakness in the operations has been observed. The adequacy ofinternal financial controls over financial reporting is covered by the Statutory Auditorsin their Audit Report. In addition the details of the IFCs are included under the headingInternal control systems and their adequacy' in the Management Discussion &Analysis Report which forms part of this report.
The Company did not accept any fixed deposits during the year and there was nooutstanding Fixed Deposits at the beginning / end of the year. Accordingly there was nodefault in payment of deposits / interest thereon.
Enterprise Risk Management:
In terms of Section 134(3)(n) of the Companies Act 2013 regulation 17(9) of theListing Regulations and para 7.3 of DPE Guidelines on Corporate Governance for CPSEs-2010(hereinafter referred to as DPE Guidelines') your Company has formulated "RiskManagement Policy" with the objective to ensure sustainable business growth withstability and to promote a pro-active approach in identifying evaluating reporting andmanaging or mitigating risks associated with the business. In order to achieve the keybusiness objectives the policy establishes a structured and disciplined approach to riskmanagement in order to mitigate the risk related issues.
The Corporate Risk Committee prepares the key risks along with mitigation plans andreport to the Risk Management Committee constituted in terms of Regulation 21 of theListing Regulations for review and apprising the Board.
The Board reviews and monitors the key risks along with mitigation plans and status ofrisk management periodically. The said policy is placed on the Company's websitewww.bemlindia.in.
Related Party Transactions:
Your Company has formulated a "Policy on Related Party Transactions" toregulate transactions entered into between the Company and its related parties. In termsof Regulation 46(2)(g) of the Listing Regulations the said policy is placed on theweb-site of the Company at www.bemlindia.in. During the year 2018-19 all transactionsthat were entered into with the related parties were fair transparent and at arm's lengthbasis and also in the ordinary course of business of the Company. The said related partytransactions were also duly considered and noted by the Audit Committee. Information asrequired under section 188 in Form AOC-2 pursuant to Section 134(3)(h) of the CompaniesAct2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 is attached to thisreport as Annexure-II.
Report on the performance and financial position of subsidiaries and Joint VentureCompany
(i) M/s Vignyan Industries Limited (VIL):
VIL has recorded Revenue from Operations
(Net of ED) of 27 crores as against 30 crores declined in the growth by 10%. The valueof production of the Company stood at 25 crores as against 31 crores and the Companyincurred a loss of 0.51 crores as against profit of 0.43 crores in the previous year.
The order book position remained at 1700 MTs as on 01.04.2019. More and more castingrequirements are expected from Holding Company as well as from other customers.
With this VIL is confident of achieving better results for the financial year 2019-20.
MoD vide letter dated 27.02.2019 has constituted Inter-Ministerial Group (IMG) andEvaluation Committee (EC) for disinvestment of BEML shares in VIL. Accordingly in themeeting of IMG held on 19.03.2019 Request for Proposals (RFPs) for engagement ofTransaction Advisor (TA) Legal Advisor (LA) and Asset Valuer (AV) was discussed andrecommended to place before BEML Board for taking further steps to appoint them as per thetimeline. BEML Board in its 351st meeting held on 21.03.2019 approved the said RFPs andthe same were placed on the websites of the DIPAM MoD and Company on 29.03.2019 and alsopublished in Economic times newspaper on 30.03.2019. Appointment of TA LA and AV is underprogress.
(ii) M/s MAMC Industries Limited (MIL):
Your Company entered into a Consortium Agreement with M/s. Coal India Limited (CIL) andM/s. Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s.Mining and Allied Machinery Corporation Limited (under liquidation). The agreementinter-alia provided for formation of a Joint Venture company (JV) with a shareholdingpattern of 48:26:26 among BEML CIL and DVC respectively. The Company has paid theproportionate share of 48 crores towards the total bid consideration of 100 crores for thesaid acquisition based on the order passed by the Hon'ble High Court of Calcutta. Thesaid assets were taken possession by the MAMC Consortium. Further up to 2018-19 theCompany has incurred a sum of 10.51crores (Previous Year- 10.00 crores) towardsmaintenance security and other related expenditure. The expenditure incurred by CIL andDVC on account of this proposal is not ascertained. The total sum of 58.51 crores(Previous Year - 58.01 crores) is disclosed as Advance to MAMC Consortium' pendingallotment of equity shares in the capital of JV company.
In the meantime a company in the name of MAMC Industries Limited' (MIL) wasformed and incorporated by your Company as a wholly owned subsidiary for the intendedpurpose of JV formation. Shareholders' agreement as duly approved by the Boards of allthree members of the consortium has been submitted to MoD for necessary approval.Further MoD has directed to submit Business Plan' and Financial ViabilityReport' of the proposed JV. A meeting of Interim Board of Management of Consortium hasdecided to engage M/s SBI Caps for preparing the "Financial viability & BusinessPlan" report.
The decision of BEML Board to liquidate the assets of erstwhile MAMC acquired throughCourt auction on as is where is and whatever there is basis after taking into confidencethe Board of other IBM Members was communicated to CIL & DVC.
Further a meeting of IBM of Consortium is held in which it was informed that BEML isinterested to acquire two properties in the location of Nagpur and Delhi based on theoperational requirement and locational advantage towards expanding the Rail & MetroDefence and Mining & Construction Business after revaluation of the said properties.If
Company receives firm commitment on assured orders from CIL and report of"Financial viability & Business Plan" the proposal of re-establishing thefactory will be reviewed keeping in view the industrial environment in West Bengal as wellas the Strategic Disinvestment of BEML by Government of India and if found viable the samewill be placed before BEML Board for further directives.
(iii)M/s. BEML Brazil Industrial Ltda (BBIL):
Your Company entered the Brazil market for brand building exercise and local valueaddition for the products to meet local standards in anticipation of good businesspotentials for Freight Wagons and Mining & Construction equipment. As per therequirement under the local laws BBIL was established. Based on the enquiries few miningequipment were also supplied to local customers. In the meantime low cost Chineseequipment flooded the Brazilian market along with their local manufacturing facilities.Further your Company faced stiff competition in high-end equipment segment frominternational players like CAT and Komatsu. In view of these developments it is proposedto handle the Brazilian market directly and to wind up the existing facilities in Brazil.In view of this BBIL is kept under dormant state. BEML has decided to close the officebased on the legal opinion obtained. In this process an amount of USD 55380.87 has beenrepatriated from BBIL account to the account of BEML India. Cancellation of companyregistration number (CNPJ No) has been initiated before Govt. Authority (Junta Commercial)and is under process.
Joint Venture Company M/s BEML Midwest Limited (BMWL):
BMWL was formed and registered with the Registrar of Companies at Hyderabad on18.04.2007. BEML holds 45% share and M/s Midwest Granite Pvt. Ltd. (MGPL) and P T SumberMitra Jaya of Indonesia as partners holding the balance 55% share. The Company has beenestablished to capitalize on the growing business opportunities in the contract miningsegment. However due to certain unauthorized transactions and the oppression andmismanagement by the nominees of MGPL your Company had filed an application beforeHon'ble Company Law Board (CLB) seeking for suitable relief. As a counter measure MGPLhad also filed a petition on the matter. CLB vide its common order dated 01.06.2012directed the Central Government to appoint an inspector to investigate the affairs of BMWLand take appropriate action. Based on the legal advice your Company preferred two appealsbefore Hon'ble High Court of Andhra Pradesh at Hyderabad against the said common order ofCLB. The Hon'ble High Court passed the order on 19.08.2013 thereby setting aside the saidcommon order and directing CLB to proceed with a fresh enquiry and decide the issue inaccordance with law and merits also taking into consideration the report of investigationas directed by CLB and pass appropriate orders without getting influenced by the impugnedcommon order of CLB. The Company has filed an application with CLB praying for necessarydirections to Regional Director (RD) Ministry of Corporate Affairs Hyderabad for timebound completion of investigation so that the matter could effectively be heard by CLB. Inthe meanwhile the Government has constituted National Company Law Tribunal (NCLT) bydissolving CLB and notified that the jurisdiction is shifted to Hyderabad from Chennai.The case files were transferred to NCLT. Regular hearings are taking place at NCLThowever RD MCA is yet to submit the investigation report for deciding the matter. In themeanwhile based on the order of NCLT dated 22.12.2017 consequent to the request from thelandlord to vacate the premises of Registered Office (RO) of BMWL for his bonafide use ithas been shifted to a suitable place in the city on 30.03.2018 and the communication inthis regard has been sent to MCA NCLT & MGPL.
There was no company which became or ceased to be a subsidiary joint venture orassociate of the Company during the year under review.
A separate section on report on the performance and financial position of each of thesubsidiaries Joint Venture Company are placed under Form AOC-1 provided in theconsolidated financial statement of the Company in terms of section 129(3) of theCompanies Act 2013 read with rule 5 of Companies (Accounts) Rules 2014.
Particulars of Loans Guarantees or Investments:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statement.
Consolidated Financial Statement:
Consolidated Financial Statement of your Company and its subsidiaries and Joint VentureCompany prepared in terms of Section 129(3) of the Companies Act 2013 is attached tothis report.
The Company has an independent Vigilance Department headed by a full-time Chief
Vigilance Officer. The Vigilance Activities were carried out in a holistic manner andcovered prevention detection and enforcement. Vigilance is basically and admittedlya managerial function and therefore it is an integral part of the duties of anexecutive'. The Vigilance Department headed by the CVO provided aid and advice to theexecutives of the Company on all matters pertaining to Vigilance as an extension of theCVC in its exercise of superintendence over Vigilance Administration of the Company andprovided the link to the Administrative Ministry and the CBI.
Complaints received by the Vigilance Department were handled as per ComplaintHandling Policy of the Company. Such received complaints were registered and investigatedonly after determining Vigilance Angle'. The registered complaints are disposedafter detailed investigation.
After due verification/investigation recommendations were made to theManagement for initiating Disciplinary action against Executives/ Employees who were foundresponsible for the irregularities.
Surprise checks periodical checks purchase order checks reimbursement claimsannual property return checks 07 CTE type of in-house inspections and 06 System Studieswere conducted during the fiscal year. Based on the outcome of these 25 SystemicImprovements were recommended to Management which mainly pertain to Process improvementsManagement of Procurement activities Contract Stores Attendance through newlyintroduced Bio-metric System Canteen services etc.
Since April 2018 processing of Vigilance Clearance for Executives and Employeesof BEML has been taken up on-line on the Sampark' Portal and more than 366 Vigilanceclearances processed online.
New CCTV Cameras were installed to augment the surveillance of sensitive points.The introduction of CCTV surveillance in new area has also helped the organisation toreduce the daily manpower requirement and thereby accrue annual savings directly besidesenhancing vigilance effectiveness.
BEML Vigilance Department is striding fast ISO 9001:2015 certification forvigilance department at all BEML locations. Internal Audits have been successfullycompleted by March 2019.
Keeping in view the changing Business scenario after risk assessment exercisethe sensitive areas list was reviewed and fresh areas were notified as sensitive.
The Vigilance Awareness Week-2018 with the theme "Eradicate Corruption -Build a New India" was observed in BEML Limited from 29th October 2018 to 3rdNovember 2018. Citizens Integrity pledge was also administered to the Staff of BEMLLimited as well as Students & Staff at Schools and Colleges where the company hadorganised events as part of Observance of Vigilance Awareness Week 2018.
Vendors meet was organised at Corporate Office on 26.10.2018 wherein vendorsfrom all over India were invited to share business prospects of BEML and also to addresstheir Grievances. Video conferencing was arranged to connect with the local vendors whowere invited to BEML Divisions at Mysore KGF Palakkad and Bengaluru.
At Bengaluru the staff of BEML BEL HAL ITI Corporation Bank and SyndicateBank jointly participated in a 2 km Walkathon "Vigithon" on 28.10.2018.The theme of VAW- "Eradicate Corruption Build a New India" was theemphasis during the Vigithon. Almost 300 staff from all of the above organisations puttogether participated in the Vigithon. Walkathon was also organised at all the Complexesof BEML during the week. Vig-Kiran 7 version was released highlighting the achievementsand actions taken during vigilance awareness week and Vigilance articles and prize winningessays.
Due to consistence & System Improvements there is substantial increase inOpen Tendering percentage in Total procurement.
During 2018-19 CVO inspected various Regional / District offices of BEML Limitedand recommendations on systemic improvements were made such as improving stores activitiesincluding Quality clearance and clearing of bills streamlining supplies to DGBRimproving stores activities as well as inventory management and management of BEML Estate.
Other Innovation/Initiatives were also reviewed with respect to payment systemto vendors increasing transparency in dealing with public / stakeholders trainingprogrammes on vigilance awareness meetings on preventive vigilance SAP-FLM (FileLifecycle Management) imple-mented for paperless office throughout BEML and Linking ofSAP ERP system and SAP SRM e-Procurement system was launched during VAW.
Whistle Blower Policy
Your Company has formulated "Vigil Mechanism / Whistle Blower Policy" fordirectors and employees to report genuine concerns in terms of the provisions of Section177(9) of the Companies Act 2013 Regulation 22 of the Listing Regulations and Para 4.3of the DPE Guidelines. In terms of Regulation 46(2)(e) of the Listing Regulations thesaid policy is placed on the Company's website www.bemlindia.in. The said policy providesfor adequate safeguards against victimization of director/s or employee/s or any otherperson who avail the said mechanism and also provides for direct access to the chairpersonof the Audit Committee in appropriate or exceptional cases. Further pursuant to ScheduleII (A)(18) of Listing Regulations and as per 4.2.12 of DPE Guidelines the Audit Committeereviews the functioning of the whistle blower mechanism periodically. As per the saidpolicy none of the employees have been denied access to Audit Committee.
Pursuant to the directives from Central Vigilance Commission and Ministry of DefenceIntegrity Pact is being adopted with all vendors / suppliers / contractors/ serviceproviders for all orders / contracts of value 1 Crore and above. Two Independent ExternalMonitors (IEMs) have been appointed to review the cases on bi-monthly basis/ quarterlybasis. The pact essentially envisages an agreement between the prospective vendors /bidders and the Company committing the persons/ officials of both sides not to resort toany corrupt practices in any aspect / stage of the contract. Only those vendors / bidderswho commit 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 completion of contract.Any violation of the same would entail disqualification of the bidders and exclusion forfuture business dealings. During the year 831 crores worth of contracts were covered underIntegrity pact.
BEML Supplier Relationship Management (SRM) is aiming to establish web based seamlessrelationship and collaboration of procurement process with its global business partners.Your Company endeavours to procure materials and services through e-procurement platformon ERP system. The Company upgraded the e-procurement software i.e. SRM version fromSRM-5 to SRM-7 which is having encryption facility for better security. During the yearabout 89% of the total requirements were sourced through e-procurement.
Micro and Small Enterprises:
Your Company is procuring materials required for production and for otherrequirements through Micro & Small Enterprises (MSEs). As per the Govt directive 358items which are reserved are being procured exclusively from MSEs.
As per the directive of Government minimum 25% (notified from 09.11.2018) ofprocurements have to be procured from MSEs (amended from 20% earlier) out of which aminimum 3% reservation for women owned MSE's and 4% for SC/ST Enterprises.
In order to encourage MSEs vendor meet had been attended and list of componentsthat could be sourced from MSEs are placed on Company's website www.bemlindia.in for theinformation of MSE Vendors. Further MSE procurement data is uploaded on "MSMESAMBANDH" portal on monthly basis.
In terms of the Notification S.O. 5622(E) dated 02.11.2018 issued by theMinistry of Corporate Affairs all companies who get supplies of goods or services fromMicro and Small Enterprises (MSEs) and whose payments to MSE suppliers exceed forty-fivedays from the date of acceptance or the date of deemed acceptance of the goods or servicesshall submit an initial disclosure in MSME Form No.1 by 30.05.2019 stating (a) the amountof payment due; and (b) the reasons of the delay and also a half yearly return in thisregard. It is hereby confirmed that there is no such payments due to MSMEs beyond 45 daysand accordingly necessary form will be filed the due date.
During the year 2018-19 Company has procured 322.27 crores out of 1549.44crores local procurement which constitutes 21% from MSEs.
Vendor development is a continuous process to identify and develop new vendors to bringin competition among the vendors and to reduce costs. The methods generally followed toidentify potential new vendors are publication of Expression of Interest (EoI) in BEMLWebsite participation in exhibitions and seminars and organize Vendor meets.
In order to increase vendor base open ended EoI is published and available onCompany's website. During the year 2018-19 91 vendors have responded. The procurementsfrom single source are being reviewed bi-monthly by Audit Committee and at Board Level.The objective of Outsourcing & Vendor Development policy is to achieve costeffectiveness and improved competitiveness of Company in global market.
Your Company recognizes outsourcing as one of the strategic tools to achieve costbenefits and also complement the strengths of private sector to build a strong industrialbase. Your Company is outsourcing a substantial part of manufacturing activities fromIndian vendors enabling the Company to enhance the capacity attain cost effectivenessimprove competitiveness in the global market and build a manufacturing eco system in thecountry to attain self-reliance. To facilitate outsourcing the Company has wellestablished Outsourcing and Vendor Development Policies procedures and guidelines.
Your Company has a Vendor Development Cell to work as a single window help deskfor new vendors.
New vendors can register through Online/ Manual.
New vendors are supported by way of imparting knowledge on manufacturingprocesses specifications quality plans etc.
Company also extends its testing facilities to its vendors wherever required.
To attract new vendors Company resorts to publishing of open ended EoIparticipation in all vendor development programs organized by MoD MSMEs CII FICCICODISSIA NSIC PIA NSSH and other agencies.
To enhance transparency in all its procurement processes Company has wellestablished e-Procurement Portal.
Compliance under the Right to Information Act 2005
The information required to be provided to citizens under Section 4(1)(b) of RTI Act2005 is placed on Company website www.bemlindia.in. It contains general information ofthe Company and its functions and duties powers and duties of employees/executivesdecision making process rules regulations manuals and records held by the Companydirectory of the Company's executives pay scales of executives / employees etc. andprocedure for seeking information and inspection of records. The Company has nominated aCentral Public Information Officer Transparency Officer and six Central Assistant PublicInformation Officers representing Complex / Divisions to attend to the queries andappeals. Further during the year 2018-19 the Company received 164 applications seekinginformation pertaining to human resources recruitment contracts tenders businessrelated matters etc. and the same were disposed of.
Hindi Section is functioning in the corporate office of the Company and also in allComplexes and
Divisions. It is responsible for ensuring the compliance of the Official Languages Actthe Rules made there under and the administrative instructions regarding use of Hindireceived from the Ministry of Defence and the Department of Official Language from time totime under its manufacturing complexes and Regional/District Offices. Some of theactivities undertaken by Hindi section are:
Official Language Implementation Committee is constituted under the Chairmanshipof CMD to review the status of the use of Hindi across the Company. The said Committee metquarterly during the year and reviewed the implementation status.
Hindi Fortnight was observed across the Company from 14.09.2018 to 29.09.2018.
560 executives/employees were trained in various courses of Hindi under HindiTeaching Scheme of Government of India during the period under review.
18 Hindi workshops have been convened and 412 executives/employees were trained.
Official language inspection was carried out in DO-Bhilai RO-Hyderabad RO-NewDelhi and RO-Kolkata.
World Hindi day was celebrated by the Company and in this connection a twodays' Official Language conference was held on 20.01.2018 to 21.01.2018 at RegionalOffice Singrauli and a total of 82 participants took part in the conference.
Bilingual Equipment Manuals were made for BD80 Bulldozer O & M Shop andEngine Manuals & Parts Catalogue of BD50 Bulldozer B(S) 6D 105 Engine Shop ManualSarvatra ProjectAppellate ManualAuthority and Sanjay Project - Tatra Drivers Handbook.
Bhilai District Office has been awarded with Rajbhasha Vishist SevaSamman-2017 by TOLIC.
The newly revamped website of your company is made available in Hindi also andthe contents are updated periodically.
Committees of the Board
The following statutory Committees required under Companies Act Listing RegulationsDPE guidelines/
MoD Directives are constituted by the Board to function according to their respectiveroles and defined scope:
Nomination and Remuneration Committee
Stakeholders' Relationship Committee
Risk Management Committee
Corporate Social Responsibility and Sustainability Committee.
Share Certificate Committee
The details of the Committees along with their composition number of meetings held andattendance at the meetings are provided in the Corporate Governance Report.
Composition of Audit Committee
In terms of Section 177 of the Companies Act 2013 Regulation 18 of the ListingRegulations and Chapter 4 of the DPE Guidelines your Company has constituted the AuditCommittee. The Committee comprises of Shri B P Rao Independent Director as Chairman ShriSudhir Kumar Beri Independent Director Shri B R Viswanatha Director (Mining &Construction Business) and Dr. Gurmohinder Singh Independent Director as its members. Allthe recommendations made by the Audit Committee were accepted by the Board.
Compliance of applicable Secretarial Standards:
Section 118(10) of the Companies Act 2013 stipulates that the Company shall observesecretarial standards with respect to Meetings of Board of Directors (SS-1) and GeneralMeetings
(SS-2) as specified by the Institute of Company Secretaries of India. Further theStandard 9 of SS-1 stipulated that the Report of the Board of Directors shall include astatement on compliances of applicable Secretarial Standards. Accordingly your Companyhas complied with the provisions of applicable standards of SS-1 and SS-2 issued by theInstitute of Company Secretaries of India in letter and spirit.
Corporate Governance Report:
In terms of Para 8.2.3 of the DPE Guidelines of CPSEs grading is done by DPE on thebasis of compliance with Corporate Governance guidelines/ norms. Accordingly your Companyis graded as Excellent' for the year 2018-19. Further in terms of Regulation 34 ofthe Listing Regulations and Chapter 8 of the DPE Guidelines a report on CorporateGovernance along with Compliance Certificate is placed atAnnexure-III.
Management Discussion and Analysis Report:
In terms of Regulation 34(2)(e) of Listing Regulations and Para 7.5.1 of the DPEGuidelines a report on Management Discussion and Analysis Report is placed at Annexure-IV.
Business Responsibility Report:
In terms of Regulation 34(2)(f) of Listing Regulations a Business ResponsibilityReport (BRR) for FY 2018-19 describing the initiatives taken by the Company onenvironmental social and governance perspective in the format as specified by SEBI fromtime to time is placed at
Awards & Recognitions:
On 06.09.2018 Company bagged PSE Excellence Award 2017' from IndianChamber of Commerce (ICC) for outstanding contribution in steering the Company to greaterheights.
On 13.09.2018 CMD was felicitated by Orissa Pooja Committee in recognition ofhis outstanding contribution in the field Sector particularly BEML.
From 22-25.10.2018 Company has won "International Quality Gold Award 2018" for case study on Minimizing Weld distortion in Metro Bogie FrameManufacturing'.
On 24.10.2018 Company received Top Challengers Award 2018' for excellentperformance during FY2017-18 and "Best Mining Equipment Seller Award" in CrawlerEquipment- Dozers and Rigid Dump Truck segment for mining sectors.
On 23.11.2018 Company bagged "CII Design Excellence Award 2018" forDesign and Development of BD65 Torque Converter'.
On 19.01.2019 Company received Governance Now' 6th PSU Award underResilient Growth (Miniratna-1) category for its achievement and commitment to raise thestandard in the public sectors.
On 15.02.2019 CMD was awarded the prestigious World HRD Congress Award'for CEO with HR Orientation Award from ET NOW for his excellent services rendered in thearea of Human Resource Development.
The number of employees of the Company as on 31.03.2019 stood at 7185 as against 7722of the previous year resulting in 6.95% reduction. The category-wise number of SC/ST andEx-Servicemen employees as on 01.01.2019 and recruitment made are as under:
|Cate- gory / Group || || |
No. of SC/ST and Ex-servicemen
| || |
Total Strength As on
| ||1.1.2019 ||1.1.2018 ||1.1.2019 ||1.1.2018 ||1.1.2019 ||1.1.2018 ||1.1.2019 ||1.1.2018 |
|Group-A ||2083 ||1824 ||387 ||394 ||107 ||109 ||23 ||13 |
|Group-B ||77 ||383 ||13 ||5 ||5 ||5 ||0 ||8 |
|Group-C ||5115 ||5619 ||1157 ||1286 ||263 ||279 ||238 ||246 |
|Group-D ||18 ||19 ||10 ||10 ||3 ||3 ||0 ||0 |
| || || || || || || || || |
|Total ||7293 ||7845 ||1567 ||1695 ||378 ||396 ||261 ||267 |
The Company has recruited 20 candidates in Group A 49 under Fixed Term Employment(FTE) in Group B and 1 candidate in Group C during the year under review as under:
13 from General category
3 from OBC category and
2 from Scheduled Caste and 3 from Scheduled Tribe category
Out of 49 FTEs 11 from Scheduled Caste and 1 from Scheduled Tribe
Human Resource Development & Industrial Relations:
Human Resource has always been the central focus at BEML. The emphasis on the people ofthe organisation stems from the belief that human resource is the key factor in achievingsuccess in business.
During 2018-19 HR as Strategic Business Partner continued its endeavour to leveragethe Talent and Technology to build the organizational capabilities towards sustainedperformance and value for all stakeholders.
Your Company made significant investments to create a robust leadership pipelinethrough Assessment Development Centres (ADC) and Post-ADC Workshops. During the year 295senior Executives have undergone ADC and Post-ADC workshops. This process has in-builtIndividual Development Plan (IDP) with a focus on Action-Learning Projects for eachexecutive. Simultaneously the Coaching Initiative was also launched in December 2018 asa part of Leadership Development.
As a continued endeavour your Company also deputed its executives to various specificand leadership development programs and seminars at premier institutes including IIMs/XLRIand overseas.
With the recent emphasis on Cyber Security by MoD IT executives of the Company weretrained on Cyber Security areas. Also as per the directive from MoD 678 executives andemployees were trained on Intellectual Property Rights (IPR). Besides executives werealso deputed to the latest technology areas including programmes on "Industry4.0" Artificial Intelligence and its application Robotic Process Automation (RPA)3-D Printing etc. To remain abreast of latest development in various domains BEML ensuredparticipation of its executives and employees in various national/ internationalcompetitions summits and interactive platforms.
To further strengthen project management capabilities of its Executives a SeniorLeadership Team was deputed to the "Project Management" Training Programme inIndia and USA.
Taking the employee development agenda forward across Complexes/Divisions and Officesregular training programmes equivalent to 20135 man-days (122% actualization) wereconducted encompassing behavioural functional and technical training areas.
During 2018-19 HR Audit was institutionalized towards ensuring compliance and reviewof HR Strategies Polices and Processes by a Cross Functional Audit Committee (CFAC). Therecommendation of HR Audit Committee was presented to Committee of Functional Directorsand the Board and the same was approved for implementation.
Being a "Learning Organization" BEML ability to sustain its growth in ahighly competitive market originates from its ability to adapt and adopt the newtechnology skills and behaviours. In line with same HR Strategy Conclave held inNovember 2018 focused on "Changing Role of HR as a Strategic and BusinessPartner".
During the year CPSE Conclave-Vision 2022 was organized by Department of PublicEnterprises (DPE). Your Company actively participated in this Conclave focusing onCorporate Governance Human Resource Management Innovation and Technology towardsrealization of the vision for 2022. Further your Company has been one of the first 54CPSEs to be part of the integrated Knowledge Management Portal named as"Samanvay".
The industrial relations scenario in the Company has been peaceful cordial and smoothrelations were maintained between the Management and the Unions/Associations. Regularmeetings with the representatives of the recognized Union/
Officers Associations at the Divisional Complex and Corporate Levels were held andemployee related matters were resolved amicably. The functioning of various bi-partitecommittees at Complex level resolved production related matters.
Grievance Redressal System for SCs/STs
In terms of Department of Personnel & Training guidelines your Company hasconstituted SC/ST Cell at all Complexes / Divisions wherein the HR heads being LiaisonOfficers of the respective Complex / Division are conducting periodical meetings withrespective representatives of SC / ST Employees Welfare Associations to redress thegrievances / issues appropriately. Further the Chief Liaison Officer who is in the rankof Executive Director / Chief General Manager meets all the Cell Officers LiaisonOfficers and Office Bearers of ST Welfare Associations periodically and monitor the statuson redressal of grievances.
Public Grievance Redressal through CPGRAMS
Centralized Public Grievance Redress and Monitoring System (CPGRAMS) initiated by theDepartment of Administrative Reforms and Public Grievances under the Ministry ofPersonnel Public Grievances and Pensions is the platform based on web technologyprimarily aims to enable submission of grievances by the aggrieved citizen s forscrutinizing and taking action for speedy redressal of these grievances. For this purposeyour Company has nominated Deputy General Manager (HR) as the Nodal Officer to deal withvarious public grievances and to ensure prompt and proper feedback to the concernedpersons.
Compliance under Persons with Disabilities Act 1995:
Your Company has complied with the provisions under the Persons with Disabilities(Equal opportunities Protection of rights and full participation) Act 1995 (PwD Act). Interms of various provisions under PwD Act your Company has ensured reservation ofvacancies for the posts identified for each disability carry forward of vacancies whichcould not be filled up due to non-availability of suitable persons with disability duringthe year.
Corporate Social Responsibility & Sustainability:
The Company has constituted Corporate Social Responsibility & Sustainability (CSR)Committee in terms of Section 135 of the Companies Act 2013 and DPE Guidelines on MoU.The Committee comprises of Dr. Gurmohinder Singh Independent Director as Chairman Shri BR Viswanatha Director (Mining & Construction Business) and Shri R H MuralidharaDirector (Defence Business) as members. The CSR Committee oversees the CSR & SDactivities and its implementation in compliance with the Companies Act 2013 and DPEGuidelines on the subject.
Further details of CSR are placed under the same heading in Annexure-III and an annualreport on CSR activities undertaken during the year are placed at Annexure-VI.
Environment and Pollution Control
In order to protect the environment in the vicinity of the factory premises / townshiptree plantation were undertaken. Your Company planted saplings of various types of avenuetrees / flower bearing trees in the vacant lands belonging to the Company for maintainingecological balance in the surrounding areas. The Company in association with the StateForest Department had undertaken planting of saplings at all its Manufacturing Complexesand Townships on a regular basis. During the year a total of 14010 Nos of Tree Saplingshave been planted at KGF Bengaluru Mysuru and Palakkad Complexes as part of sustainabledevelopment.
Particulars of Employees
There were no employees of the Company who received remuneration in excess of thelimits prescribed under Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
Skill Development Initiatives (SDI)
In line with the Government of India's "Skill India" Initiative your Companycontinued to focus on various Skill Development Programmes for its Employees ContractWorkmen and Students/ Youth.
The Centres of Excellence (CoE) of BEML at Mysuru KGF Bengaluru and PalakkadComplexes continued to impart the critical skill training as per the changing technicaland business requirements of the customers which include theoretical and practicalaspects.
Candidates are certified on successful completion of training modules. BEMLcollaborated with specialized bodies/ organizations viz M/s Cummins India WeldingResearch Institute (WRI) Trichy M/s SKF Bearings M/s Lucas TVS M/s Bosch etc. forcustomized technical programmes.
To support the Customers /Vendors from India and overseas BEML continued toprovide the Service Trainings at Nagpur KGF and Mysuru. These programmes were tailor-madeand product specific for customers and vendors' personnel. The programmes included variousaspects of hydraulics transmission preventive maintenance productivity improvementtechniques etc. During 2018-19 3-D virtual realization concept was implemented forBH-60M Dumper service training.
Apprenticeship Training has been a major focus area for BEML and it has compliedwith the Government directives. It ensures upgradation of skills of ITI passed students invarious Trades including Fitter Machinist Welder Turner etc. as also that of DiplomaHolders and Engineering Graduates. Internship Training and Project work to Engineering
Students of different disciplines / colleges are also conducted.
Your Company continued its Tie-Ups with premier Engineering and Scientificinstitutions viz. Indian Institute of Science (IISc) Bengaluru Centre for RailwayResearch at IIT Kharagpur and National Institute of Design (NID) Ahmedabad etc. forleveraging cutting-edge technology design and to build internal capability to meet theever-changing business requirements.
Your Company has also adopted Govt. ITI at KGF and Govt. ITI at Mysore as a partof Skill development initiatives. Trainees of Govt ITI at KGF are being provided withsix-month practical training in KGF Complex while Mysuru Complex is the industrial partnerto ITI at KM Dodi and is being provided with assembly items etc.
Under the CSR initiatives one BL 9H Loader equipment with Tool kits andaggregates was provided to the trainingcum-workshop laboratory at the CenturionUniversity Bhubaneswar for skill development for the benefit of SC/ST students and belowpoverty line youth in a naxal affected tribal and poorest district of Odisha. In additionto various assemblies being provided to adopted ITIs 17 machineries have been donated to5 ITIs as per their requirement. More equipments are being reconditioned for donation toITIs. Company also provides internships to engineering graduates in their final year onno-pay no-fees basis for two to three months.
Your Company being committed to ensure employees Health and Safety organizedregular training programmes on Industrial Safety Disaster Management Yoga andMeditation Health etc. Regular programmes / workshops on Vigilance awareness EmployeeSelf Services Pre-Retirement preparations Official Language etc. were also conducted.
Prohibition of Sexual Harassment of Women at Workplace
Under the provisions of the Sexual Harassment of Women at a Work Place (PreventionProhibition & Redressal) Act 2013 an Internal Complaints Committee (ICC) isfunctional in all Complexes / Divisions for receiving complaints of Sexual Harassment ifany and it has been displayed in all the prominent locations for the information of allwomen employees. No cases have been filed under this Act during the year 2018-19.
IT continues to be a focus area for your Company to improve stakeholder experience andCompany capital has made investments during significant this year to improve ITenvironment. IT Infrastructure security was enhanced by implementing Active DirectoryControls over IT Assets End Point Protection and replacement of aged IT end points. AirGAP was undertaken as a major infrastructure project segregating internet and businessnetwork that enhances security of business applications.
FLM was a great step towards paperless office improving transparency in the approvalprocesses and bringing significantimprovements in cycle time for approvals.
Customer experience was enhanced by implementing hand held device enabled CustomerRelationship Management System app that can be used by service engineers and customersfrom remote locations.
Employee experience was improved by implementing workflow enabled processes such asLeave Application Management Exit Management Handing Over and Taking Over HR ConnectIT Connect IT Support Open Innovation Portal and Movement Pass.
Transparency with our supplier partners was improved through provisioning of on-linebill tracking display of technical compliance sheet and price details for closed tenders.
Footprint of video conferencing was extended further to Regional Offices facility atDelhi Regional office and many more are in the pipeline.
Technology was leveraged for conducting on-line promotion test (OPT) for the firsttime. Our employees from across over 10 locations attended these tests that were conductedusing our own Test Engine'.
Reliability of connectivity with Divisions was improved by installing redundant MPLSlines that also helps improve availability.
Application and Infrastructure monitoring was improved with regular reporting of uptimeand status to management.
As part of our digital initiative Company has implemented automatic on-line refund ofEMD amounts. R&D teams have been provided with latest design modeling and analysissoftware to improve their efficiencyand quality of will reflect in the new designinitiatives undertaken in coming years.
The journey of leveraging technology will continue into next year through our pipelineinitiatives such as implementation of collaboration platform analytics many moreworkflow enabled processes and management dashboards. Infrastructure upgrade is planned toensure improved reliability and performance while initiatives such as Security OperationsCenter (SOC) will further improve Cyber Security posture.
Swachh Bharat Abhiyan:
Company has joined hands with Hon'ble Prime Minister of India towards fulfilling thedream of
Mahatma Gandhiji for Clean India'. In this endeavor the Company has undertakenthe various initiatives under Swachh Bharat Abhiyaan & Swachh Vidyalaya Abhiyaanduring the current year 2018-19. Important Swachh Bharat Initiatives at BEML Limited for2018-19 are as hereunder:
Your Company has adopted all Swachh Bharat initiatives like Pledge takingconducting public awareness programmes on cleanliness Swachh Vidyalaya Environmentprotection public awareness on cleaning nearby areas arranged for fixing of awarenessboards participation of employees/officers in
Shramadaan' (100 Hrs in a year) to ensure cleanliness of the work area andsurroundings training programme on waste management importance of cleanlinesswalkathon organizing skit/street play to create awareness on cleaning and cleanlinessconstruction of toilets vermi-compost bins painting of buildings extensive cleaning ofhangars clean my street continuous House-keeping and renovation of toilets fogging anderadication of mosquito menace focus on creating plastic free zones etc.
In addition to the regular Swachh Bharat Activities Company had organized"Celebration of Fourth Anniversary of Swachh Bharat Campaign" on 02.10.2018 tocoincide with the Gandhi Jayanthi'. Under the Swachhta Hi Seva celebrations variousprogrammes like administration of Swachhta Pledge organizing special cleaning driveswalkathon to spread the message of cleanliness distribution and planting of saplingsetc. were conducted at its manufacturing units located at Bengaluru KGF MysuruPalakkad Regional & District Offices and also at its subsidiary Unit VIL Tarikere.
Company has undertaken various activities as per the Annual Action Plan based onthe recommendations of the Group of Secretaries on Swachh Bharat & GangaRejuvenation'(GoS) for the period from 2018-19 up to 02.10.2019. The main activities areconducting awareness programmes construction of toilets bio-gas units vermi-compostbins tree plantation renovation of toilets adoption of dual pipeline system and rainwater harvesting system etc.
Company had organized two Swachh Bharat Pakhwadas' during the currentyear. The first Swachhta Pakhwada was held from 15th to 31st August 2018 and the secondfrom 1st to 15th December 2018 across the Company. Various activities in line with theaction plan was held at Corporate Office Manufacturing Complexes Townships District& Regional
The Comptroller & Auditor General of India has appointed M/s. V. Krishnan &Co. Chartered Accountants Bengaluru as the Statutory Auditors for the financial year2018-19.
Observation if any made in the Independent Auditors' Report on the financialstatement including consolidated financial statement and the reply of the Board ofDirectors thereto will be given by way of an addendum to this report.
Your Company appointed M/s R M Bansal and Co Cost Accountants Bengaluru as CostAuditors for the year 2018-19 in terms of Section 148 of Companies Act 2013 read withthe Companies (Cost Records and Audit) Rules 2014 to conduct the audit of the costrecords of the Company. The Company maintains Cost records as specified by the CentralGovernment under section 148(1) of the Companies Act 2013 in respect of the Railway andRolling Stocks (Bengaluru Complex) other Machinery (Truck Engine EM H&P Divisions)and Power (EM Division).
Further as required under the said Rules the remuneration payable to the Cost Auditorwas ratified by the members in the 54 th Annual General Meeting held on 27.09.2018.
In terms of Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Company appointed M/s V NAssociates Practicing Company Secretaries (PCS) Bengaluru Offices and also at VILTarikere. Various Programmes related to cleanliness and competitions were conducted acrossthe Company on daily basis during the fortnight as per the calendar of activities /events.
To undertake the Secretarial Audit of the Company for the year 2018-19. The SecretarialAudit Report given by the PCS and the replies to the observations made in the said Reportshall be annexed with the Board's Report. Further the said requirement has to be compliedin terms of Regulation 24A of the Listing Regulations w.e.f. the year ended 31.03.2019. Inaddition an Annual Secretarial Compliance Report is required to filed with the StockExchanges within 60 days from the end of financial year 2018-19.
The Secretarial Audit Report and the replies to the observations made in the saidreport are placed at Annexure-VII.
The Comments of the Comptroller & Auditor General of India under section 143(6)(b)of the Companies Act 2013 on the financial statement including consolidated financialstatement are appended at page No.152-155 & 222-225 to the annual report.
Extract of Annual Return
In terms of Section 92(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 an extract of the Annual Return in theprescribed form is placed at Annexure-VIII.
(1) Appointment / re-appointment of Independent Directors
During the year the Government of India vide letter Ref: 8(2)/2014-D(BEML) dated10.08.2018 appointed Dr. Gurmohinder Singh as Independent Director of the Company and hisappointment has taken effect from 13.08.2018. Further Government of India vide letterRef: 8(2)/2014-D(BEML) dated 22.11.2018 re-appointed Shri B P Rao Shri Sudhir Kumar Beriand Shri M G Raghuveer as Independent Directors for a period of one year from the date ofcompletion of their tenure on 01.12.2018.
Pursuant to Schedule IV of the Companies Act 2013 the appointment / re-appointment ofthe Independent Directors would be formalized through a letter of appointment setting outthe terms and conditions of their appointment which is also placed on the web-site of theCompany at www.bemlindia.in. In terms of section 149 of the Companies Act 2013 theprovisions of section 152(6) and (7) in respect of retirement of directors by rotationshall not be applicable to appointment of independent directors.
(2) Statement on declaration by Independent Directors
Independent Directors have given declarations u/s 149(7) of the Companies Act 2013that they meet the criteria of independence as laid down u/s 149(6) of the said Act.
(3) Board Evaluation:
The Board of Directors of the Company comprises Functional Directors GovernmentNominee Directors and Independent Directors appointed by the Government of India from timeto time pursuant to Article 97 of Articles of Association of the Company. Further theGovernment communication also indicates the detailed terms and conditions of theirappointment based on applicability of the relevant rules of the Company.
In view of the above the performance of all Functional Directors and GovernmentNominee Directors is being evaluated by the Administrative Ministry every year based onown evaluation methodology. Further considering the educational qualifications age richand varied experience of the applicants the Administrative Ministry / Department wouldappoint the IDs on the Board on the recommendation of Search Committee after obtainingapproval of competent authority. In addition the assessment/ evaluation of performance ofIndependent Directors who will be completing their 3 years tenure was undertaken by theAdministrative Ministry during May 2018. Considering the above a separate evaluationcriterion has not been framed by the Company.
(4) Remuneration of Directors:
Your Company being a Central Public Sector Enterprise the appointment tenure andremuneration of Directors are decided by the Government of India. The Governmentcommunication appointing the Functional Directors indicate the detailed terms andconditions of their appointment including a provision for the applicability of therelevant rules of the Company.
Government Nominee Directors were neither paid any remuneration nor sitting fee forattending Board / Committee meetings. Independent Directors are paid only sitting fee of20000/- per meeting of the Board /Committee of the Board attended by them. Further ifthere are more than one such meeting on the same day a sitting fee @ 10000/- is paid forthe second and subsequent meeting/s.
Neither there was payment of commission to the Board of Directors nor any stock optionscheme offered to them during the year.
Further none of the Directors had any pecuniary relationship nor entered into anyrelated party transactions with the Company during the year.
Pursuant to the provisions of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the details of remuneration paid to the Directors during 2018-19are provided under the Report on Corporate Governance' annexed to this report.
(5) Change of Directors and Key Managerial Personnel
In terms of Article 97 of the Articles of Association of the Company the President ofIndia is vested with the power to appoint the Directors of the Company from time to timeand also shall determine the term of office of such Directors. Accordingly the followingappointments on the Board of your Company were effected as per the directives of thePresident of India:
(i) Shri Suresh S Vastrad Executive Director (Rail & Metro Business) BangaloreComplex has been appointed as Director (Rail & Metro Business) of the Company videMoD letter No.8(5)/2016-D(BEML) dated 28.11.2018 and he took charge on 29.11.2018.
(ii) Dr. Md. Nazmuddin Economic Advisor Department of Defence Production Ministry ofDefence has been appointed as Government Nominee Director of the Company in place of ShriRajib Kumar Sen vide MoD letter No.10(2)/2011-D(BEML) dated 25.02.2019 and his appointmenthad taken effect from 28.02.2019.
(iii) Shri Arvind Kumar Arora Former Director General (Personnel) Military EngineerServices Government of India has been appointed as Independent Director of the Companyvide MoD letter No.8(2)/2014-D(BEML) dated 10.07.2019.
Shri D K Hota (DIN-06600812) Chairman and Managing Director and Shri R HMuralidhara (DIN-07363484) Director (Defence Business) retires by rotation at theensuing annual general meeting and being eligible offered themselves for re-appointment.Shri. Rajib Kumar Sen (DIN-07669981) Government Nominee Director who was appointedon the Board w.e.f. 30.05.2018 was ceased to be Director on 24.02.2019 consequent uponchange in nomination by Government of India. Further Shri B R Viswanatha Director(Mining & Construction Business) ceased to be Director w.e.f. 01.06.2019 consequentupon superannuation.
The Board placed on record its deep appreciation for invaluable services rendered byShri Rajib Kumar Sen as Government Nominee Director and Shri B R Viswanatha as Director(Mining & Construction Business) on the Board whose term of office ended during theyear.
(6) Number of meetings of Board:
During the year eight meetings of the Board were held on 25.05.2018 08.08.201811.09.2018 26.09.2018 03.11.2018 03.12.2018 02.02.2019 and 21.03.2019. Requirements onnumber and frequency of meetings in terms of Section 173(1) of the Companies Act 2013Regulation 17(2) of the Listing Regulations and Para 3.3.1 of the DPE Guidelines werecomplied with in full.
(7) Directors' Responsibility Statement:
Pursuant to section 134(3)(c) and 134(5) of the Companies Act 2013 your Directorsstate that (a) in the preparation of the annual accounts for the year ended 31.03.2019the applicable accounting standards has been followed along with proper explanationrelating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year 2018-19and of the profit of the Company for that period;
(c) the directors had taken proper and sufficient care for the adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors express their hearty thanks to the Company's valued customers inparticular Defence Services M/s Coal India Limited and its Subsidiaries M/s. SingareniCollieries Company Limited M/s Steel Authority of India Limited Railway Board M/s DelhiMetro Rail Corporation Limited M/s Bengaluru Metro Rail Corporation Limited M/s JaipurMetro Rail Corporation M/s Kolkata Metro Rail Corporation M/s. Maha Metro RailCorporation Limited Integral Coach Factory-Chennai M/s Bharat Electronics Limited M/sBharat Dynamics Limited Ordnance Factory Board Defence Research & DevelopmentOrganization (DRDO) M/s Brahmos Aerospace Pvt. Ltd. Indian Space Research OrganizationM/s Hindustan Aeronautics Limited Aeronautical Development Agency for their patronage andconfidence reposed on the Company. The Directors also acknowledge and thank allcollaborators vendors and other service providers for their valuable assistance andcooperation extended to the Company.
The Directors express their appreciation to the maintenance members of Company'sConsortium of Banks and other Bankers and Financial Institutions for their continuedsupport to the Company's operations. The Directors also thank all the shareholders /investors for reposing continued confidence in the Company.
The Directors wish to thank the Comptroller & Auditor General of India thePrincipal Director of Commercial Audit & Ex-officio Member Audit Board and StatutoryAuditors for their valued cooperation.
The Directors also acknowledge the valuable support and assistance received fromvarious Ministries of Government in particular Ministry of Defence Ministry of CoalMinistry of Mines Ministry of Steel Ministry of Railways Ministry of Housing and UrbanAffairs Ministry of External Affairs and Ministry of Home Affairs. The Directors are alsograteful to the Government of Karnataka and Kerala for the support and co-operationextended to the Company.
Your Directors take this opportunity to place on record their appreciation for theinvaluable contribution made and excellent co-operation extended by the employees andexecutives at all levels for the continued progress and prosperity of the Company.
|For and on behalf of the Board of Directors || |
| ||Sd/- |
|Bengaluru ||D K Hota |
|25.05.2019 ||Chairman & Managing Director |