ANNUAL REPORT 2011-2012
Your Directors have pleasure in presenting the 48th Annual Report and
Audited Accounts for the year ended 31.03.2012.
FINANCIAL RESULTS (Rs.crores)
Particulars 2011-12 2010-11
Revenue billed including 3648.37 3647.07
Revenue including excise duty 2920.58 2826.16
Revenue from operations 2726.49 2652.24
Profit before Depreciation, 198.81 281.66
Interest and Tax
Interest 88.43 61.27
Depreciation 43.92 33.64
Profit Before Tax 66.46 186.75
Tax Expense 9.21 36.99
Profit After Tax 57.25 149.76
Profit available for 393.11 399.40
Proposed Dividend 20.82 41.64
Dividend tax 3.38 6.92
General Reserve 5.73 14.98
Profit & Loss Account 363.18 335.86
Net Worth 2172.08 2139.04
TURNOVER AND PROFITABILITY
Your Company achieved all time high revenue billing of Rs.3648.37 crores
including the value of consortium supplies against Rs. 3647.07 crores of
corresponding value in the previous year. Thus, the performance remained
almost at the same level as that of the previous year. The revenue from
operations (net of consortium supplies) stood at Rs.2920.58 crores as
against Rs.2826.16 crores in the previous year, posting a growth of 3.3%.
The Value of Production is Rs. 3349.40 crores (Rs.4077.19 crores including
consortium supplies) as against Rs.2974.16 crores (Rs.3795.07 crores
including consortium supplies) in the previous year. The Profit before Tax
was Rs.66.46 crores as against Rs.186.75 crores recorded in the previous
financial year. The reduction in profit was mainly on account of change in
product mix propelled by the market demand, lesser quantum of sales of
Defence products and Mining and Construction spares coupled with severe
competition that had exerted pressure on margins and also considerable
increase in the financial charges during the year. However, your Company is
poised to register higher turnover and profit in the current financial
The Board of the Company has recommended a dividend of Rs. 5/- per share
i.e.,50% on the Paid-up Equity Share Capital for the year 2011-12 keeping
in view the past performance and future prospects and simultaneously
meeting the aspirations of the shareholders.
International Business Division of the Company could do a revenue billing
of Rs. 144.05 crores (including Trading) as against Rs. 217.50 crores in
the previous year. The international presence of the Company has increased
to 60 countries including Nigeria, to which entry was made during the year.
`Quality` being the most powerful factor to capture, retain and enlarge
customer base in the modern business scenario, emphasis is on to achieve
higher level of quality. Various measures were taken up during the year to
demonstrate consistent performance as briefed below -
Journey towards quality assurance:
Quality Assurance (QA), a process-centered approach to ensure product
quality, is being implemented across the Company. Journey from Quality
Control (QC) to QA mode, which took off last year, has made a notable
progress, wherein, various "Quality Assurance Teams" at divisions are
working under the guidance of M/s. NIQR, Chennai, whose services are being
utilized to accelerate the process of QC-QA implementation at all
Quality management certification:
All manufacturing divisions continue to hold ISO 9001-2008 Quality
Management System (QMS) certification. The KGF, Bangalore and Mysore
Complexes are certified for ISO 140012004 Environmental Management System.
Bangalore Complex is certified for BS OHSAS 18001-2007 Integrated
Management System. Engine Division/Aerospace Division at Mysore Complex is
audited and upgraded to AS9100C certification. Laboratories at R&D, KGF and
Engine Division, Mysore continue to hold NABL accreditations.
Small group activities are encouraged throughout the Company. To motivate
the Quality Circles, our annual event - `BEML-Nonimara Award` Competition,
is being conducted and the winning teams are deputed for the competitions
conducted by other Quality forums. Accordingly, 5 teams were deputed during
the year for CCQC-2011 competition conducted by M/s. QCFI and all the teams
have won `Bronze" Medal in the competition. Two teams, one each from EM
Division-KGF Complex and Equipment Division-Mysore Complex were deputed for
State level QC Competition conducted by M/s. CII, Bangalore. Team from EM
Division won the First prize in "Highest Business Impact" category.
KAIZEN projects have been taken up and successfully completed at all
divisions. From the current year, `Kaizen Rewarding Scheme` has been
introduced, wherein best 30 Kaizen projects from divisions will be rewarded
during Independence/ Republic day. All divisions put together, nearly 3000
Kaizen projects had planned, out of which 1563 projects have been completed
during the year and the remaining are under regular review.
Implementation of `5S` concept is on throughout the Company. Every year,
inter-shop competition on `5S` are conducted at all divisions and winners
are awarded during quality month celebration. Training on `5S` and `Kaizen`
were conducted at all the divisions by M/s. NIQR experts as a part of QC-
Six-Sigma process approach is in place at all divisions with 53 black belts
working on various projects in the areas of Quality Improvement, Lead Time
Reduction, Cost reduction, Product Improvement and Productivity
Improvement. Services of M/s.TQM International are being utilized for
project guidance. During the year, two black belts from EM Division, KGF
Complex took part in the regional competition conducted by M/s. QCFI and
won `Silver` medals for the case study presentation.
Efforts are on in identifying, developing and evaluating the potential
suppliers. Periodic process/system audits are being conducted and necessary
feedbacks are given to the vendors for process/system improvements right
from development stage to ensure quality in their supplies. Third party
inspection agency is engaged for carrying out source inspection at vendors`
premises to ensure quality of the incoming components, right at source
Vendors who are consistent in quality and self-reliable are encouraged by
awarding "Self Certification" status for their supplies. About 200 firms
have already been accorded self-certification status and 56 firms have been
granted waiver of source inspection.
Achieving customer satisfaction is the essential ingredient of any
business. Cross functional teams and quality improvement teams are active
throughout the Company to address field issues and to gather customer
feedback to enhance product quality.
Professional expertise of M/s. WRI, Trichy is being sought for guidance to
assure quality in critical areas including welding and fabrication.
Initiative was taken in organizing Lead Auditor/ Internal Auditor awareness
training programme on QMS by M/s. BVCI, Bangalore. A `Welders Training and
Certification` course was conducted by M/s. TUV Rheinland, Bangalore for
160 identified welders and 8 welding inspectors across all divisions, and
111 welders have qualified the tests conducted under the course.
Quality engineering personnel at all levels are deputed to various
training/seminar programmes covering topics in areas of technological
updates and personality development.
RESEARCH & DEVELOPMENT
The Company`s Research & Development Centre continues to play a vital role
in the design and development of products, critical aggregates,
indigenization activity etc. During the year, R&D has developed and
launched various products in Mining & Construction and Defence segments.
The information on R&D, Technology Absorption, Adaptation and Innovation
including the products developed by the Company during the year is at
The working capital requirements were met from the internal resources and
credit facilities availed from banks. There was no overdue installment of
principal and interest.
The Company`s contribution to exchequer was in the order of Rs. 682.58
crores during the year by way of Excise Duty, Customs Duty, Sales Tax,
Income Tax, Wealth Tax, Service Tax, Cess, etc.
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year, the Company`s export earning stood at Rs. 116.12 crores.
The total foreign exchange utilized during the year was Rs. 683.50 crores.
A sum of Rs. 2.14 crores was incurred towards deputation of personnel
abroad for business/export promotion, after-sales-services and training.
The Company has not accepted/renewed any fixed deposits during the year and
there is no outstanding fixed deposits as on 31.03.2012.
The Company has an independent Vigilance Department headed by a full-time
Chief Vigilance Officer. Following the dictum, `there cannot be Management
without Vigilance`, the Chief Vigilance Officer provides aid and advice to
the Company on all vigilance matters. The units of the vigilance
department, namely, Investigation Wing, Disciplinary Wing, Anti-Corruption
Wing, Preventive Vigilance Wing and Technical Wing deal with various facets
of vigilance mechanism. Several initiatives were taken in the process of
creating awareness, sensitisation, and ensuring accountability, probity,
and transparency within the overarching vigilance functions of punitive,
preventive and surveillance and detection. As part of the observance of the
Vigilance Awareness Week 2011 and in sync with the theme `Participative
Vigilance` a unique journal `VIG-KIRAN`, which included a compact disc
containing a compendium of essential guidelines and directives of the
Central Vigilance Commission (CVC), Department of Public Enterprises,
Ministry of Defence, Ministry of Corporate Affairs, SEBI and BEML for the
engagement and empowerment of all the stakeholders, was released for
circulation. The system of filing Annual Property Returns (APRs) by Public
Servants has been evolved to check possession of assets disproportionate to
known sources of income. A sensitisation programme was developed and
conducted for the Executives on filing of the APRs which is mandatory as
per Rule 16 of BEML Conduct, Discipline and Appeal (CDA) Rules 1976. To
mitigate corruption in public procurement CVC has issued guidelines,
promoted e-procurement and adoption of Integrity Pact, compliance of which
have been ensured in the Company. BEML e-procurement solution is customized
to process Open/Global Tenders, publishing of Tenders on website,
publishing of contracts awarded on website, online Vendor Registration, e-
payment and online Bill status. Integrity pact is signed for all
procurement transactions/contracts above Rs. 20 Crores and monitored by two
Independent External Monitors. The Public Interest Disclosure & Protection
of Informers Resolution (PIDPIR) 2004, wherein CVC is the designated
authority to handle the "Whistle blower" complaints and provide protection
to the "Whistle blowers", has been uploaded on the BEML website
www.bemlindia.nic.in with a link to the Vigilance portal for wider
publicity and to encourage public and employees to come forward and
lodge/report information of corrupt practices. In short, the Vigilance
department has facilitated Good Corporate Governance.
A report on Corporate Governance including Management Discussion and
Analysis Report along with a Compliance Certificate from the Auditors as
required under the Listing Agreement entered into with the Stock Exchanges
is annexed to this report.
M/s Vignyan Industries Limited (VIL):
VIL has posted a turnover of Rs. 39.21 crores with profit before tax of
Rs.0.65 crores recording a growth of about 16% in turnover and 140% in
profit. The value of production of the Company stood at Rs. 45.29 crores as
against value of production of Rs. 35.70 crores recording a growth of about
27% in the previous year. The profit after tax recorded at Rs. 0.82 crores.
A perspective plan has been drawn for five years commencing from 2011-12 to
2015-16 for balancing the production capacity and upgrading the existing
technology of the foundry. The capital expenditure has been estimated at
Rs. 20 crores, out of which an amount of Rs. 10 crores is proposed to be
spent in the first phase. At the end of second year, the plan would be
reviewed and the investment of remaining Rs.10 crores considered.
The statement and particulars relating to VIL, pursuant to Section 212 of
the Companies Act, 1956 is attached. In accordance with Section 212(8) of
the Companies Act, 1956, your Company has been exempted from attaching the
Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, Auditors`
Report, Directors` Report etc., of the Subsidiary Company to the Balance
Sheet of BEML Limited as per Government of India Order No.51/12/2007-CL-III
dated 08.02.2011 issued under General Circular No.2/2011. However, the
Company will make available these documents upon request by any member of
JOINT VENTURE COMPANY
A JV Company, M/s BEML Midwest Limited incorporated on 18th April, 2007 at
Hyderabad with BEML having 45% share, M/s Midwest Granite Pvt. Ltd., and P
T Sumber Mitra Jaya of Indonesia as partners with 55% share. The Company
has been established to capitalize the growing business opportunities in
the mining segment. However, due to certain unauthorized transactions and
the oppression and mismanagement by the nominees of M/s. Midwest Granite P
Limited, BEML has filed a petition u/s 397 and 398 of the Companies Act,
1956 before Hon`ble Company Law Board seeking for suitable relief. Hon`ble
CLB vide order dated 01.06.2012 directed the Central Government to appoint
an inspector to investigate the affairs of BEML Midwest Limited. However,
as advised by the legal counsels of the Company an appeal against the said
order has been filed by the Company before the appellate authority. In the
meantime, as a matter of abundant caution, provision has been made for the
full value of Rs. 5.42 Crs. in the books of the Company towards possible
diminution in the value of investment in the JV Company.
MICRO, SMALL AND MEDIUM ENTERPRISES
The Micro, Small and Medium Enterprises continue to get support and
preference from BEML wherever there is shortage of in-house capacity. The
Company extends technical guidance and requisite support to these
industries wherever required. Our quality control personnel visit the
industries to assist and ensure that the quality of the products meet the
During 2011-12, the Company procured items worth Rs. 600.84 crores from the
said category of enterprises.
> Your Company ensured compliance of the Official Languages Act, 1963, and
the Rules made thereunder and administrative instructions regarding use of
Hindi received from the Department of Official Language and Ministry of
Defence from time to time.
> Hindi training for all the three courses viz., Prabodh, Praveen and
Pragya under Hindi Teaching Scheme of Ministry of Home Affairs, Department
of Official Language were arranged regularly. A total of 257 employees have
been trained during the year.
> Seven officials of the Company have been trained in Computer Training
programme in Hindi organised by National Informatics Centre in
collaboration with Central Hindi Training Institute, Ministry of Home
> To inculcate interest and efficiency among the staff, 12 Hindi workshops
were organized for 204 employees at Corporate Office and Business Complex
Offices during the year.
> Hindi Month was observed with great zeal in the Corporate Office, all the
Business Complex Offices and Regional offices of Hyderabad, Mumbai and
Chennai from 14th September to 13th October, 2011. During this period, to
motivate the employees competitions viz. Hindi Antakshari, Hindi Quiz,
Hindi Crossword and Noting and Drafting, were organized and the winners of
these competitions were awarded. Further, Hindi Day i.e. 14th September,
2011 was observed in accordance with the guidelines issued by the Ministry
of Defence and Department of Official Language, Ministry of Home Affairs.
> During the period, all translation work and Hindi typing work relating to
Annual Reports, Technical Reports, C&AG Audit Paras, MoUs, Reports on
SC/ST, RTI, Reservation policy, Standing Orders, Product Profiles,
Advertisement Materials and standard forms were attended to with full
efficiency and dedication.
> The Parliamentary Committee on Official Language visited Mysore Complex
on May 07, 2011 and satisfied over the progress being made and also devised
some suggestive measures to implement the Official Language Policy further.
> All the sign boards outside the premises of the Company displayed tri-
lingually i.e. Kannada (Regional Language), Hindi and English and the name
plates which are displayed within the premises of the Company are also in
> A session on "Official Language Policy" is included in all in-house
> Hindi Library is functioning in Corporate Office with good number of
Hindi Books and Hindi periodicals. Hindi Dictionaries, Administrative
Glossaries, Help-literature are supplied to the staff to encourage them to
do official work in Hindi.
> Website of BEML is made available in Hindi also.
> BEML won National Safety Award on 29.11.2011, instituted by the Director-
General, Factory Advice Service and Labour Institute under Ministry of
Labour and Employment, Government of India, for its Heavy Fabrication Unit
at KGF (performance year 2009) under Scheme-III (Lowest Average Frequency
Rate) and under Scheme-IV (Accident Free Year 2009).
> BEML received the prestigious All India Export Excellence Award of EEPC
India `Star Performer Award` for the year 2010-11 on 23.03.2012.
The manpower strength as on 31st March, 2012 stood at 11,644 as against
11,798 of the previous year.
Representation of SC/ST and Ex-Servicemen category-wise as on 01.01.2012
and recruitment made are as under:
Representation of SC/ST/Ex-Servicemen as on 01.01.2012
Category/Group A B C D E F G H
Group-A 1383 1433 207 221 41 43 8 8
Group-B 1405 1327 245 238 72 72 11 7
Group-C 9049 8716 1919 1881 344 332 343 328
Group-D 67 50 29 22 3 4 - -
Total 11904 11526 2400 2362 460 451 362 343
A = Total Strength As on 1.1.2011
B = Total Strength As on 1.1.2012
C = No. of SC/ST and Ex-servicemen - Scheduled Caste 1.1.2011
D = No. of SC/ST and Ex-servicemen - Scheduled Caste 1.1.2012
E = No. of SC/ST and Ex-servicemen - Scheduled Tribe 1.1.2011
F = No. of SC/ST and Ex-servicemen - Scheduled Tribe 1.1.2012
G = No. of SC/ST and Ex-servicemen - Ex-Service Men 1.1.2011
H = No. of SC/ST and Ex-servicemen - Ex-Service Men 1.1.2012
Recruitment during 2011
Group General OBC SC ST EX-S TOTAL
A 18 5 8 1 4 36
B 97 105 36 28 5 271
C 126 96 97 28 - 347
D - - - 2 - 2
TOTAL 241 206 141 59 9 656
HUMAN RESOURCES DEVELOPMENT & INDUSTRIAL RELATIONS
The HR Department identified several thrust areas for continuously updating
technical/professional knowledge and skills of employees and bring about
attitudinal changes in fostering a performance driven work culture in all
areas of operations particularly at shop floors. During the year, the
Company organized several in-house and external training programs covering
The overall industrial relation situation in the Company was cordial during
CORPORATE SOCIAL RESPONSIBILITY/SOCIAL WELFARE
> BEML Limited provides opportunity to such of the unskilled literate
Contract Labourers, by extending on-Job skilled training to consider them
for regular employment.
> Extension of out-patient medical facilities to ex-BGML employees and
their families by deputing a Doctor and 2 para-medical staff to the areas
of Marikuppam, Champion Reef and Oorgaum and medicines are dispensed free
of cost for general illness.
> Provided medical treatment through Company`s medical centres and
dispensaries to the common public dwelling in the adopted village of
Dasarahosahalli at KGF.
> BEML runs one Junior College and two Nursery Schools at KGF and one
Nursery School at Bangalore. These Institutions not only meant for BEML
employees children, it also caters to a large extent to the local
population. In addition, BEML runs a Kendriya Vidyalaya Project School at
KGF by providing school building with infrastructure facilities, mid-day
meal programme and other facilities.
> BEML has extended facilities viz., school building, furniture and other
infrastructure and one attender for mid-day meal programme and night
watchman to Govt. English Higher Primary School at KGF.
> The Company has extended all help and support to the Labour Welfare Fund
(LWF) functioning in the production units for the benefits of Employees,
their independants and local population. The LWF had conducted training
programmes in Tailoring, Computer, Typing / Shorthand course, Diploma
course in Laboratory Technology, Job Oriented Courses, Music / Dance
classes, spoken English Course, Summer camps for art / painting and sports
and various entertainment activities during the year.
> Company has sponsored a scheme for award of Scholarship to the SC/ST
students pursuing full time undergraduate Engineering course in Engineering
Institutions all over the country. The scheme also aims at providing
employment to students who successfully complete the Engineering programme.
> Your Company has adopted four children from the United Physically
Handicapped School of Coimbatore and decided to continue the adoption till
the children can be employed suitably under PH quota / services to orphans
> Your company has expressed solidarity towards the cause of helpless
children in Prayasam, a Kolkata based NGO which look after social welfare
of poor and destitute children in various places of West Bengal by issuing
an advertisement every year in the annual report of Prayasam.
> Renovated Government ITI at Rajahmundry and Kakinada by constructing the
compound wall and repairing 8 labs.
> Your Company has constructed comfortable waiting area at SBC Railway
Station, Bangalore particularly for senior citizens.
PARTICULARS OF EMPLOYEES
There were no employees of the Company who received remuneration in excess
of the limits prescribed under Section 217(2A) of the Companies Act, read
with the Companies (Particulars of Employees) Rules, 1975.
ENVIRONMENT AND POLLUTION CONTROL
In order to protect the environment in and around the factory
premises/township, tree plantation were undertaken. Saplings of various
types of avenue tree/flower bearing trees were planted in the vacant lands
belonging to the Company for maintaining ecological balance in the
surrounding areas. Further, measures have also been taken to protect the
existing flora and fauna from any basic interference.
Effluent treatment plants have been constructed inside the factory premises
of the production units for treatment of domestic/industrial effluents.
Further, treatment plants/oxidation ponds for treatment of natural process
of treating effluents have been installed in various locations inside the
factory and township. Treated effluent water is being utilized by the
Landscaping Department in the production unit. Artificial tanks have been
constructed in Manufacturing Complexes to harvest rain water, restrict soil
erosion and to raise ground water level. Storage yard facility for
Hazardous waste at salvage stores in the divisions is constructed as per
ISO 14001 requirements.
In a bid to harness renewable energy, the Company commissioned a 5 MW Wind
Mill during the year
2007-08 in Gadag District of Karnataka. The
energy generated by the plant is fed into the KPTCL grid and sold to Hubli
Electricity Supply Co. Ltd., and as of 31.03.2012, 396.44 lakh kWh power
has been generated enabling green house gas reduction. Further, your
company is setting up an additional 18 MW Wind Mill Farm to develop green
energy towards being self sufficient on power requirements.
The Company continues to give emphasis on conservation of energy. The
efficiency of energy utilization is closely monitored to attain higher
level of effective conservation. Some of the measures adopted during the
year for energy conservation are:-
1. Introduction of 2 Nos. 5000 litres capacity solar water heating system
in Workers Canteen for pre-heating of water at 60O centigrade.
2. Replacement of Inverter welding sets (18KW) in place of old type
Kirloskar make Motor Generator welding set of 30KW.
3. Switching off of roof extractors during lunch time in I, II shifts and
shift ending hours/non-working hours.
4. Introduction of 150W metal halide high bay fitting for street lights in
place of 800W HPMV lamp at various places in the unit premises.
5. Introduction of 24 Watt LED solar lights in place of 250 Watt HPSV
6. Introduction of LED type DSL power supply indication lamps for EOT
cranes and panel indication lamp in place of incandescent lamp.
The particulars as prescribed under sub-section (1)(e) of Section 217 of
the Companies Act, 1956, read with the Companies (Disclosure of particulars
in the Report of the Board of Directors) Rules 1988, are annexed to this
M/s. Padmanabhan Ramani & Ramanujam, Chartered Accountants, Chennai, were
appointed by Comptroller & Auditor General of India as Statutory Auditors
for the year 2011-12.
Reply of the Board of Directors to the observations made in the report of
the Auditors on the Accounts are given in the addendum to this report.
Your Company has appointed the following firms as Cost Auditors with the
approval of Central Government:
(i) M/s Rao, Murthy & Associates for `Heavy Earth Moving Equipments`, and
(ii) M/s AGI & Associates for `IC Engines`.
DIRECTORS` RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirm:
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there has been no material
ii) that the selected accounting policies were applied consistently and the
Directors made judgements and estimates that are reasonable and prudent so
as to give a true and fair view of the state of affairs of the Company as
at 31st March, 2012 and of the profit of the Company for the year ended on
iii) that proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities ; and
iv) that the annual accounts have been prepared on a going concern basis.
Your Directors express their hearty thanks to the Company`s valued
customers, in particular Defence Services, M/s Coal India Limited and its
Subsidiaries, M/s. Singareni Collieries Company Limited, Railway Board, M/s
Steel Authority of India Limited, M/s Delhi Metro Rail Corporation, M/s
Bangalore Metro Rail Corporation and M/s Jaipur Metro Rail Corporation for
their patronage and confidence in the Company. The Directors also
acknowledged and thanked all collaborators, vendors and other service
providers for their valuable assistance and cooperation extended to the
The Directors express their appreciation to the members of Consortium of
Banks and other Bankers of the Company and Financial Institutions for their
continued support to the Company`s operations. The Directors also thank all
the shareholders/investors for reposing continued confidence in the
The Directors wish to thank the Comptroller & Auditor General of India, the
Principal Director of Commercial Audit & Ex-officio Member, Audit Board and
Statutory Auditors for their valued co-operation.
The Directors also gratefully acknowledge the valuable support and
assistance received from various Ministries of Government, in particular
Ministry of Defence, Ministry of Coal, Ministry of Mines, Ministry of
Steel, Ministry of Railways and the Ministry of External Affairs. The
Directors are also grateful to the Government of Karnataka and Kerala for
the support and co-operation extended to the Company.
Your Directors take this opportunity to place on record their appreciation
for the invaluable contribution made and excellent co-operation extended by
the employees and executives at all levels for the continued progress and
prosperity of the Company.
For and on behalf of the Board of Directors
Chairman & Managing Director (I/c)
FORM - A (See Rule 2)
Form for disclosure of particulars with respect to Conservation of Energy
Current year Previous year
(A) POWER AND FUEL CONSUMPTION
Units (Kwh) 40738330 43592559
Total Amount 229727220 234362324
Cost/Unit (Rs.) 5.64 5.38
b) Own Generation:
i) Through Diesel Generator
Units (Kwh) 1648111 2675236
Units per ltr. of Diesel oil (Kwh) 0.03 1.15
Cost/Unit (Rs.) 13.24 24.82
ii) Through Steam Turbine/Generator
Units (Kwh) - -
Units per ltr. of fuel oil/gas (Kwh) - -
Cost/Unit (Rs.) - -
2) COAL (Specify Quality & where used)
Quantity (Tonnes) - -
Total Cost (Rs. ) - -
Average Rate (Rs.) - -
3) FURNACE OIL (Diesel for Boiler)
Quantity (Kilo Litres) 4727000 6706000
Total amount (Rs.) 2174512 2712000
Average Rate (Rs.) 46.00 40.44
4) OTHERS/INTERNAL GENERATION
Quantity (Diesel in ltrs.) 213840 228000
Total Cost (Rs.) 9476760 9338400
Average Rate (Rs.) 44.32 40.96
(B) CONSUMPTION PER UNIT OF PRODUCTION
Products (with details) unit 1521 2290
Electricity 9105 43987
Furnace Oil - -
Coal (specify quality) - -
Diesel in litres 295 247
Others (specify) - -
Absorption disclosure particulars with respect to technology:
RESEARCH & DEVELOPMENT (R&D):
1. SPECIFIC AREAS IN WHICH R&D CARRIED OUT BY THE COMPANY:
The R&D at BEML has designed and developed number of high technology
products and aggregates for Construction & Mining, Rail & Metro and Defence
sectors as per customer requirements without any collaboration and the same
have been manufactured and launched for customer trials.
Depending on the sectoral needs for the year 2011-12 R&D, BEML has launched
the following products/projects:
Mining & Construction:
a) BE450LC - 45 ton class - Hydraulic Excavator
b) BE220R - 22 ton class - Rail - Road Hydraulic Excavator
c) BL9H - Back Hoe Loader with BS-III compliant engine & improved aesthetics
d) BL200-1 - Wheel Loader with BS-III compliant engine & improved
e) BD355-1 - Dozer with BS-III compliant Electronic Engine & Transmission
f) BD155 - Dozers with BEML Electronic Engine
g) BG605A - Articulated version of BG605 Motor Grader-
h) BH100 - Dump truck with MTU Engine & Allison Transmission.
Metro & Rail:
i) 8-Wheeler Overhead Equipment Inspection Car for Indian Railways.
ii) Stainless Steel ACEMU for Indian Railways.
2. BENEFITS DERIVED AS RESULT OF ABOVE R&D
Major R&D initiatives have enlarged the product range and also provide
latest technology for the existing products that enables Company to retain
the existing customers, increase the market share and enter new markets.
These new initiatives have enhanced the skill sets, knowledge, expertise
and induced confidence in taking up new challenges that are arising from
time to time.
(a) Design & Development of 8-Wheeler OHE Car for Indian Railways:
OHE Car is a self-propelled 8-Wheeler Overhead Equipment Inspection Car
used for periodical inspection, patrolling and maintenance of traction
overhead equipment. It is also useful for attending sites of break-
down/restoration of overhead equipment.
OHE Car is successfully designed, developed, tested and commissioned and
Research Design and Standards Organisation have inspected and cleared the
equipment for bulk production.
(b) Design & Development of Stainless Steel AC EMU (SS EMU) for Indian
Railways: The design & development of SS EMU Project has been successfully
completed by BEML, R&D, Bangalore Complex against a developmental order
from Railway Board.
The new design of SSEMU has been evolved for the first time in the country
to replace the existing conventional corten steel EMUs, which are more
prone to corrosion. Designing the car body with stainless steel has
resulted in cars which are modern, clean and aesthetically appealing and
more importantly un-painted coaches. The conventional steel structure front
end of the motor coach has been replaced with the innovatively designed FRP
cab mask and cab skirt which provide a modern aesthetic appeal to the
The interiors of the EMU have been innovatively designed to be on par with
that of the sophisticated Metro car interiors, which are aesthetically
pleasant, more comfortable, more durable, safe and easy for cleaning and
3. FUTURE PLAN OF ACTION:
One of the key objectives of R&D is product diversification. Keeping in
mind the future trends in technology in line with changing business
scenario, R&D has in place, plan of action to take up a number of projects
with enhanced allocation of resources. To achieve this, R&D infrastructure
and resources are being continuously strengthened/upgraded as needed, to
handle the latest technologies effectively.
BEML R&D, has planned to develop a series of products/aggregates covering
all the three business segments i.e., Mining & Construction, Rail & Metro
and Defence in the coming years.
4. EXPENDITURE ON R&D FOR 2011-12:
Company has spent Rs. 97.79 crores on R&D during 2011-12 which is about
2.68% of the turnover as shown below:
As % of Turnover 2.68
The Company commits spending 0.50% of Profit After Tax towards R&D during
FY 2012-13 for technology up-gradation and new product development as per
5. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
Efforts made and benefits derived in brief towards technology absorption,
adaptation and innovation are:
- Acquisition and absorption of new technologies
- Faster and newer introduction of competitive product
- Import Substitution
- Customer satisfaction and Business growth
- Indigenization and standardization
Future Plan of Action:
Infrastructure established for indigenization of components for Metro cars
and some of the Defence products. Scanning and identification of technology
/partners for mining and construction products including higher capacity
dump trucks and underground mining equipment are on the cards.
MANAGEMENT DISCUSSION AND ANALYSIS
a. Industry structure and developments:
The Company is a Mini Ratna Category -1 Public Sector Undertaking under the
administrative control of Ministry of Defence, operating in three
distinct business segments namely, Mining & Construction, Defence, and Rail
The three major Business verticals- viz. Mining & Construction, Defence and
Rail & Metro are headed by the respective Business Group Director, who acts
as CEO of the business. The Technology Division provides end-to-end
technology solutions in Auto, Aero, Defence and Rail & Metro related areas
and the Trading Division deals in non-company products. The International
Business Division exports products manufactured by all the three verticals
to 60 countries. Strategic Business Units (SBUs) and Product Heads are also
set up under each of the above business to increase organizational
effectiveness. The Company`s manpower strength stands at 11,644 as of end
The Company has nine fully integrated manufacturing units located at
Bangalore, Kolar Gold Fields (KGF), Mysore and Palakkad including a
subsidiary steel Foundry in Tarikere, Chikmagalur District.
The Bangalore Complex manufactures various types of railway products such
as Railcoaches, ACEMUs, OHE Cars etc. for Indian Railways. The Company
manufactures state-of-the-art stainless steel Metro Coaches and supplied to
DMRC against the first order. The Complex also manufactures Defence
products such as High Mobility BEML Tatra Trucks and variants used for
various applications such as tank transportation, transportation and
launching of guided missiles, radar mounting, Field Artillery Tractor and
Crash Fire Tender, Pontoon Bridges, Tank Transportation Trailers, Ejector &
Air Cleaner assemblies, Milrail Coaches and Military Wagons.
KGF Complex: Earth Moving Equipment Division, Hydraulics and Power line
Division, Rail Unit-II and Heavy Fabrication Unit located in KGF produce a
wide range of equipment such as Bulldozers, Hydraulic Excavators, Wheel
Loaders, Dozers, Pipe Layers, Tyre Handlers, Hydraulic Cranes, Walking
Dragline, Electric Rope Shovel, Engineering Mine Ploughs, Heavy Recovery
Vehicles, Armoured Recovery Vehicles, Transmissions, Axles, hydraulic
aggregates and allied assemblies for all the manufacturing units of BEML.
Rail Unit-II supports Bangalore Complex by supplying components/aggregates
for Rail Coaches and wagons.
Mysore Complex: The Truck Division at Mysore produces off-highway Rear Dump
Trucks, Motor Graders, Water Sprinklers and BEML Tatra Trucks. The Engine
Division produces a wide range of Diesel Engines powering BEML`s product
range. The Aerospace Manufacturing Division established at Mysore
manufactures Aircraft Towing Tractor, Crash Fire Tender, Weapon Loading
Trolley (Bheema) etc. for defence and civilian applications, in addition to
precision manufactured items such as gears for aircraft industry. BEML`s
Engine Division and Aerospace Manufacturing Division has been accredited
AS9100B certification. BEML`s Technology Division has received CEMILAC
Certification for Design, Development of CAD & CAE Applications to Aircraft
Engine and Airframe Components for Airborne Applications. The Dredging
Equipment Manufacturing Division has been established at Mysore complex to
manufacture Dredging equipment.
Palakkad Complex: The Palakkad Complex manufactures products for Defence
Business and Rail & Metro Business such as High Mobility BEML Tatra Trucks,
Sarvatra Bridge and Railcoach aggregates/parts.
Subsidiary Unit: Vignyan Industries Limited (VIL), Tarikere, was taken over
by BEML in 1984 as a subsidiary unit. VIL supplies quality steel and alloy
castings to various manufacturing units of BEML. To meet the increased
demand for steel castings, the company has modernized the plant and
augmented the capacity by installing new foundry equipment.
Marketing: BEML`s products are sold and serviced through its large
marketing network comprising 11 Regional Offices, 4 Zonal Offices, 15
District Offices, 2 Activity Centres, Service Centres and 12 dealers.
International Business: BEML has established its global foot-print in 60
countries including Syria, Tunisia, UAE, Jordan, Suriname, South Africa,
UK, Sri Lanka, Bangladesh, etc. Company has its overseas offices in
Malaysia, Brazil, China and Indonesia.
Developments and Performance during 2011-12:
During 2011-12, India posted a growth of 6.5% as compared to last year`s
8.4% growth in GDP The manufacturing sector, mining and quarrying,
construction also are witnessing a pressure on their growth rates. The
continuing global economic slowdown and the high domestic interest rate is
having its impact on the performance of all major manufacturing industries.
All these are impacting the GDP.
BEML registered billed revenue of Rs. 3648 Cr including value of consortium
supplies during 2011-12. Revenue from operations stood at Rs. 2921 Cr
excluding consortium supplies. The Mining & Construction made an impressive
growth in sales of 17% compared to previous year`s sales. The Company`s
exports stood at Rs.144.05 Cr exporting equipments to countries like
Indonesia, Ghana, Myanmar, Syria, Nigeria, etc.
The Company has achieved important landmarks during the year namely:
* The keys of the First set of indigenously manufactured train rakes were
handed over to Bangalore Metro.
* Entered into a MoU with M/s. Vosta LMG, Netherlands for Design and
Manufacture of dredgers to customers in India and South East Asia. This
dredger business has a Market Potential of Rs 5000-6000 Crs in the next 5
* India`s First Stainless Steel EMU (Electrical Multiple Unit) and 100 Ton
Stainless Steel Wagon (SS Wagon) was flagged off by Hon`ble Union Minister
for Railways. These equipments were designed and developed by BEML`s in-
house R&D. The Stainless Steel wagon and the Aluminium Wagon have been
developed keeping in view the requirement of the upcoming Freight Corridor.
* BEML has initiated construction of Hangers at Aerospace SEZ on 25 acres
acquired land, near Bangalore International Airport, Devanahalli with an
investment of Rs. 455 crs. in phases upto 2014-15. This facility is being
established for design and manufacture of aircraft components/sub-
assemblies and MRO activities relating to Aerospace applications.
* Company has launched new products to expand the market share like
Stainless Steel EMUs, Rail Road Excavator, 45 ton Excavator during the
year. Apart from this, R&D has upgraded the existing products, introduced
electronic engine and transmission to meet the customer expectations and
also the emission norms.
b. Opportunities and Threats:
While the global economic prospects are clouded with uncertainty, emerging
markets are growing much more robustly, and India has been one of the
leaders in this process. With effective resolution of issues holding up
domestic production of coal and effective measures for improving financial
health of power utilities, the 12th Plan, is aiming at capacity creation of
about 90,000 MW. The demand for coal is going to be met by increased
production in India and the gap is expected to be imported. India is
planning to invest nearly Rs. 45 lakh Cr (US$1 trillion) to develop
infrastructure during the 12th Plan period compared to Rs. 23 lakh Cr (US$
514 billion) during 11th Plan period. 8800 km of National Highway
Development Programme contracts for 2012-13 are expected to be awarded
worth Rs. 25,360 Cr, a 14% increase over last year. These developments in
Mining and Construction sector is expected to create a demand for more
equipments to ensure timely execution of projects.
All the three Armed Forces, Army, Navy and Air Force, are on the cusp of
transformation and huge orders are expected for platforms and weapons with
the cutting edge technology in the 2012-13. India`s Defence production, for
the first-time is part of the country`s five-year planning process and has
joined the exercise carried out by the Planning Commission for the 12th
Plan Period from 2012 to 2017. The development is aimed at giving a boost
to India`s efforts to build an indigenous Defence industrial base. It is
estimated that India will spend around $100-120 billion (Rs.5,10,000-
6,12,000 crore) during this 12th plan period to buy Defence equipment and
weapons to boost armed forces modernization. With the Defence offset
policy, an estimated investment of at least $30 billion (Rs.1,47,000 Cr) is
expected in the next 10 years.
The 12th Plan is aiming at developing an efficient public and freight
transport system. The Freight Strategy is to run "HEAVIER, LONGER, FASTER"
trains. The Dedicated Freight Corridors are expected to be commissioned by
March 2017. Ministry of Railways has decided to set up a National High
Speed Rail Authority, as an autonomous body for implementation of High
Speed Rail Corridor projects of Indian Railways. Further on the Metro
segment, many of the cities like Kochi, Bhopal, Indore have already
initiated action to go the metro way and expansion projects of Delhi and
other Metros which are expected to be an opportunity for metro cars
(Rolling Stock) valuing Rs. 60,000 Cr.
All these opportunities will translate into more business to BEML with its
concerted efforts to tie-up with foreign collaborators for required
technology. The Company is making efforts to maximize the business by
tapping the opportunities opened up by all the sectors in which it is
operating through product basket expansion, capacity expansion,
The major challenges faced by the company are:
1. Uncertainty, especially Mining sector due to delay in resolving
environmental and social issues.
2. Demand for higher capacity equipment, in line with the global market
3. To meet the expectations of contractor segment.
4. To reduce input cost to stay ahead in business.
5. Innovative marketing strategies to counter competition from MNCs
6. Uncertainty in Defence business.
7. To retain skilled manpower.
However all action plans and strategies are in place to address the above
challenges and ensure business with reasonable growth as in the past.
c. Segment-wise/Business Group-wise performance during 2011-12:
Segmenls A B C
1 Mining & Construction Business 1803.47 1670.00 61%
2 Defence Business 454.95 448.57 17%
3 Rail & Metro Business *1335.26 553.36 20%
4 Others 54.69 54.56 2%
Total 3648.37 2726.49
A = Turnover including ED
B = Turnover excluding value of ED & Consortium
C = % age
* including the value of consortium supplies of Rs. 727.79 Cr.
The Company has been exempt from providing segment-wise data of its
business vide SEBI letter No. SMD/Policy/BEML/13902 dated. 21.07.2003.
India`s economy for 2012-13 is likely to grow in the range of 7.5 to 8%.
Industrial growth in 12th Plan period is targeted at 11 to 12% compared to
8%) in the 11th plan. Economic Advisory Council, expects the construction
sector to register 6.5% growth rate during 2012-13 and the related
construction equipment demand is expected to grow at 12-15% growth annually
by 2015. This is due to the emphasis in the 12th plan on infrastructure
with higher investments proposed over the next several years in power and
To cater to this robust demand, the Company has taken several proactive
measures to increase the share of Mining & Construction business by
strengthening the service setup for both international and domestic market
and expanding dealer network, introduction of new products in line with the
customer expectations. Strategies and plans are in place to maintain the
present market through technological upgradation programmes and also
introduction of new products in line with the international products
through in-house R&D to meet the expectation of the customers for higher
capacity equipments. Apart from this, BEML has diversified into Dredging
equipment manufacturing business and the first order is expected during the
current year. Further, orders valued over Rs. 500 Cr are anticipated during
the current year.
The Union Budget for 2012-13, hiked the defence outlays to Rs. 1,93,407.29
crore. This represents a growth of 18% over the previous year`s outlays and
is one of the highest increases in recent years. Of the total Capital
Expenditure of the three services, around 89% 66,459.43 crore) is earmarked
for capital acquisition or modernization. To meet this demand, BEML has
geared up by setting up a facility to overhaul T-72 in addition to BMP II
and power pack for Arjun and manufacture of parts, quantity of Arjun tank.
BEML will produce and supply spare parts for MBT Arjun required for both
OEM and spares requirement as OFB is not able to cater to the demand. Plans
are on the anvil to deliver the order of ARV as per the delivery terms
To cater to the offset opportunities, BEML has acquired 25 acres of land in
Aerospace SEZ near Bangalore International Airport. Work is in progress to
set up Aerospace manufacturing facility with an investment of Rs. 455 Cr
over 5 years. This facility will produce components/aggregates for
Aerospace industry and also do maintenance, repair and overhaul of
aircraft/helicopters. The facility is expected to be established by another
4-5 months and will start operating in the current year itself. A sizeable
business is expected from offset opportunities which will start trickling
from the current year. This will enable BEML to tap the huge market in the
area of Aerospace and offsets, which is estimated to the tune of Rs. 75,000
Cr in the next 10 years. The Aero vertical has been already certified with
certification from `CEMILAC for Aerospace Designing, with CAD/CAM and CAE
and also got manufacturing certificate
Indian Railways (IR) has planned a highest ever plan outlay of Rs. 60,100
Cr with introduction of 75 new Express trains, 21 new passenger services, 9
DEMU services and 8 MEMU services. To cater to this increased demand, the
Company has set up additional coach manufacturing units at KGF and Palakkad
which are rolling out rail coaches in addition to the plant at Bangalore.
The Company has an exclusive unit to manufacture Metro Coaches ramping up
the production rate by adopting modern manufacturing techniques keeping in
view the steep increase in demand for metro trains. In addition to metro
cities, Tier-II cities are also expected to go in metro way and BEML is
hopeful of bagging these orders. BEML has developed intermediate cars which
will add further revenue to the metro business. BEML has also developed SS
EMUs for the Indian Railways (IR) and also developing DEMUs in line with
the modernization programme IR. Besides the above, the Company has also
taken proactive steps to develop Aluminum and Stainless steel wagons, for
Further, to expand the market, the company is exploring exports of Railway
& Metro Coaches to Bangladesh, Dubai Metro, Ghana, Thailand and Syria and
also plans to foray into Track laying business.
The past uncertainties faced in various businesses have made the
organization more dynamic, responsive and market oriented for survival and
growth in the changed business environment. To face the global economic
recession, the Company has plans to grow in each of its vertical through
technology tie-ups and joint ventures. BEML is doing well and working
towards reaching Rs. 5000 Cr by 2012-13. It is looking at new allied
products like Aerospace products, Tank Manufacture, Underground Mining
Equipments, and Dredging Equipment etc. to add business. With its
strategies to enter into sectoral markets and geographical markets, BEML is
pursuing its vision to be a global company, by globalizing its operations.
The company is making all out effort to match global technology with
suitable tie-ups for technology upgradation and also developing new
technologies. These strategies, will help the Company to achieve Rs. 10,000
Cr by 2018-19 and probably scale much more higher levels in the days to
e. Risks and Concerns:
The Company follows a system of making all major business decisions after a
thorough discussion and analysis of risks and returns involved. Through
this approach it strives to identify opportunities that enhance
organizational values while managing or mitigating risks that can adversely
impact the Company`s future performance. The Company has also engaged the
services of a professional Risk Management firm to study all aspects of the
Company`s business/ operations, identify the risks and recommend measures
to mitigate the same.
f. Internal control systems and their adequacy:
The Company has an internal control system designed to provide high degree
of assurance regarding optimization and safeguarding of resources, quality
and reliability of financial and operational information, compliance with
applicable statutes and corporate policies. It is the Company`s endeavour
to align all its processes and controls with global best practices.
The internal audit process is designed to review the adequacy of internal
control checks in the system and covers all significant areas of the
company`s operations. The internal audit department performs risk based
audits, based on an internal audit plan, which is reviewed each year in
consultation with the statutory auditors and the Audit Committee.
The Audit Committee reviews audit reports submitted by the internal
auditors and follow up on the implementation of corrective actions
Your Company has implemented an enterprise-wide ERR This will accompany by
re-engineering and simplification of business processes to improve agility
and customer service. Further, it has end-to-end SAP platform that provide
a robust foundation to address several emerging business needs.
g. Discussion on financial performance with respect to operational
Particulars 2011-12 2010-11
a. Revenue billed 3648.37 3647.07
b. Revenue including excise duty 2920.58 2826.16
c. Value of Production
(net of consortium) 3349.40 2974.16
d. Profit before tax 66.46 186.75
e. Profit after tax 57.25 149.76
f. Networth 2172.08 2139.04
g. Inventory 2420.64 1888.91
h. Trade Receivables (Gross) 1006.79 1288.40
Total inventory in no. of
days of VoP (g/c) 264 232
in days (h/b) 126 166
Profit Before Tax to Sales (d/b) 2.28 6.61
Profit After Tax to Networth (e/f) 2.64 7.00
Your Company achieved all time high revenue billing of Rs. 3648.37 crores
including the value of consortium supplies against Rs. 3647.07 crores of
corresponding value in the previous year. Thus, the performance remained
almost at the same level as that of the previous year. The revenue from
operations (net of consortium supplies) stood at Rs. 2920.58 crores as
against Rs. 2826.16 crores in the previous year, posting a growth of 3.3%.
The Value of Production is Rs. 3349.40 crores 4077.19 crores including
consortium supplies) as against Rs. 2974.16 crores 3795.07 crores including
consortium supplies) in the previous year. The Profit before Tax was
Rs.66.46 crores as against Rs.186.75 crores recorded in the previous
financial year. The reduction in profit was mainly on account of change in
product mix propelled by the market demand, lesser quantum of sales of
Defence products and Mining & Construction spares coupled with severe
competition that had exerted pressure on margins and also increase in the
financial charges considerable during the year. However, your Company is
poised to register higher turnover and profit in the current financial
h. Material developments in Human Resources/Industrial Relations front,
including number of people employed:
The Company intensified focus on training and development of manpower.
Training and development at middle management levels were in focus during
the year. The Company introduced competence management by way of a
structured approach in major locations. A company-wide associate survey was
undertaken to obtain feedback on various aspects, covering all employees.
The Company intensified its communication with all levels and categories of
employees by way of different internal forums. The company also continued
to excel in the field of training apprentices and workmen.
The industrial relations has been harmonious and cordial. The manpower
strength as of 31.03.2012 stood at 11,644. During the year, 30,396 man-days
of training were imparted to sharpen their skills and update the knowledge
Cautionary Statement - Certain statements made in the Management
Discussion and Analysis report related to the Company`s objectives,
projections, outlook, expectations, estimates and others may constitute
`forward looking statements` within the meaning of applicable laws and
regulations. Actual results may differ from such expectations, projections
and so on whether expressed or implied. Several factors could make
significant difference to the Company`s operations. These include climatic
conditions and economic conditions affecting demand and supply, government
regulations and taxation, natural calamities and so on over which the
Company does not have any direct control.