To the Members,
The Directors are delighted to present the 49th Annual Report on the
business and operations of the Company and the statement of accounts for the year ended
March 31, 2013.
|Figures (in Rs Crore except per share data)
|(a) Turnover (Gross)
|(b) Revenue from operations (Net)
|(c) Other Operational Income
|(d) Operating expenses
|(e) Operating profit
|(f) Add : Other income
|(g) Profit before depreciation, finance cost & tax expense
|(h) Less: Depreciation
|(i) Less: Finance costs
|(j) Profit before tax
|(k) Less: Tax expense
|(l) Profit after Tax
|(m) Add: Balance brought forward from the previous year
|(n) Profit available for appropriation
|i) Dividend (including interim dividend)
|ii) Corporate Dividend tax (incl. on interim dividend)
|iii) Amount transferred to General Reserve
|(o) Balance in Profit & Loss
|(p) Earnings per Share ( Rs )
|(q) NAV per share ( Rs )
|(r) Economic Value Added ( Rs Crore)
During 2012-13, BHEL recorded its highest-ever turnover of Rs 50156 Crore. Profit
before tax is Rs 9432 Crore and Profit after tax is placed at Rs 6615 Crore.
Net worth of the company has gone up from Rs 25373 Crore to Rs 30444 Crore registering
an increase of 19.9%. Net asset value (NAV) per share has been placed at Rs 124.38 in
2012-13 as against Rs 103.67 in 2011-12.
The Board has recommended a Final Dividend of 164.5% ( Rs 3.29 per share), Rs 804.11
Crore, for the year 2012-13. An interim dividend of 106% ( Rs 2.12 per share), Rs 518.89
Crore, on share capital of Rs 489.52 Crore, has already been paid for the year 2012-13.
Thus the total dividend (exclusive of dividend tax) for the year 2012-13 is Rs 1323 Crore
( Rs 5.41 per share) as against Rs 1566.47 Crore ( Rs 6.40 per share) paid in the previous
Provision of Rs 136.66 Crore has been made for Corporate Dividend Tax on the Final
dividend proposed. Corporate Dividend Tax of Rs 84.18 Crore has already been paid on the
Orders worth Rs 31650 Crore were received during the year as against Rs 22096 Crore in
2011-12. Sector-wise orders booked are as follows:
|Total Orders Booked
|Order Book outstanding at the end of the year
*excludes inter sectoral orders
Rating of BHEL vis-a-vis MoU Targets
Performance of BHEL for the year 2011-12 has been rated as `Excellent` in terms of MoU
signed with the Government of India. BHEL has been awarded the MoU Composite score of
Consistent performance in a highly competitive environment enabled BHEL attain the
coveted `Maharatna` Status and be counted among seven select PSU`s having this status.
Management Discussion and Analysis
A report on Management Discussion and Analysis is placed at Annexure - I.
Board of Directors
Smt. Chandra Iyengar has been appointed as Part-time Non-official Director w.e.f.
Ms. Kusumjit Sidhu, IAS, Additional Secretary & Financial Adviser, Department of
Industrial Policy & Promotion, Ministry of Commerce & Industry has been appointed
as Part-time Official Director w.e.f. 10.05.2013.
Shri W.V.K. Krishna Shankar has been appointed as an Additional Director w.e.f.
01.08.2013 to take charge of the office of Director (IS&P).
In accordance with Section 260 of the Companies Act, 1956 and Article 67(iv) of the
Articles of Association of the Company, Ms. Kusumjit Sidhu and Shri W.V.K. Krishna Shankar
shall hold their directorships upto the 49th Annual General Meeting of the
Company and are eligible for appointment as Directors at the Meeting.
Shri V.K. Jairath who was appointed as Part-time Non-official Director w.e.f.
12.11.2009 ceased to be a Director of the Company on completion of his tenure on
Shri Vijay S. Madan, IAS, former Additional Secretary & Financial Adviser, Ministry
of Commerce & Industry, consequent upon his appointment as Officer on Special Duty in
the Unique Identification Authority of India has relinquished his position as Part-time
Official Director w.e.f. 22.03.2013.
Smt. Chandra Iyengar, Part-time Non-official Director, consequent upon her appointment
as Member on the Maharashtra Electricity Regulatory Commission, has resigned from the BHEL
Board on 29.05.2013.
Shri O.P. Bhutani, who was appointed as Director (E,R&D) w.e.f. 24.12.2009 ceased
to be a Director of the Company on attaining the age of superannuation on 31.05.2013.
Shri M.K. Dube, who was appointed as Director (IS&P) w.e.f. 25.06.2011 ceased to be
a Director of the Company on attaining the age of superannuation on 31.07.2013.
The Board of Directors place on record their deep appreciation of the valuable services
rendered as well as advice and guidance provided by Shri V.K. Jairath, Shri Vijay S.
Madan, Smt. Chandra Iyengar, Shri O.P. Bhutani and Shri M.K.Dube during their tenure.
Further pursuant to Sections 255 and 256 of the Companies Act, 1956 and Article 67(i)
of the Articles of Association of the Company, S/Shri P.K. Bajpai and Atul Saraya will
retire by rotation at the Annual General Meeting and being eligible, offer themselves for
In compliance with Clause 49(IV)(G)(i) of the Listing Agreement, brief resumes of the
Directors proposed for appointment and re-appointment along with the nature of their
expertise in specific functional areas and names of companies in which the person also
holds the directorship along with the membership of the Committees of the Board are given
at Annexure-II forming part of the Directors` Report.
Official Language Implementation
1. Corporate Office was awarded first prize by Town Official Language Implementation
Committee (Undertaking), Delhi for excellent implementation of Official Language.
2. RC Puram, Hyderabad won first prize for excellent O.L. implementation from TOLIC,
3. PS-WR got third prize from TOLIC, Nagpur for excellent editing of their Hindi
4. PS-ER was awarded second prize for excellent editing of their Hindi Magazine
`Poorvabha` by TOLIC, Kolkata.
5. PS-WR got award of Active Member of TOLIC, Nagpur from TOLIC, Nagpur.
6. With a view to create favourable atmosphere for usage of Hindi in the Company, all
the Units/ Divisions of the company, including Corporate Office, celebrated Hindi Divas
and Hindi Week/Fortnight/Month during which various competitions were held. 11 Hindi
competitions were held by Corporate Office. 230 participants participated in the
competitions and 85 of them were given cash awards.
7. In addition, wards of the employees of various Units/Divisions, who secured minimum
60% in class XII exam and B2 grade in class X exam in Hindi subject were given cash prize.
8. `Hindi Shabdakosh Jnan` competition was held by Corporate Office under auspices of
TOLIC (Undertaking), Delhi. Various Hindi competitions and programmes were also conducted
by the Units/Divisions under auspices of TOLIC existing at their cities.
9. 13 Hindi magazines were published by Units and Divisions of the company during the
year. Corporate Office also brought out 2 issues of its half yearly Hindi magazine
`Arunima` during the year.
10. 40 Translation Assistants (FTA) and 14 Typing Assistants (FTA) were recruited in
various Units/ Divisions of the company during the year. 6 days Rajbhasha Orientation
Programme was oraganized for Translation Assistants.
Participation in the Global Compact of the United Nations
BHEL is an environment friendly company in all its activities, products & services,
besides providing safe and healthy working environment to all its stakeholders and it has
made United Nations Global Compact (UNGC) programme as part of the Company`s strategy,
culture and day-to-day operations.
BHEL continues to be a member of the United Nations Global Compact (UNGC) Programme and
stands commited to the core values enshrined in its principles on human rights, labour
standards, and environment and anti corruption. BHEL is now a Lifetime Corporate member of
Global Compact Network, India.
The Vigilance organisation of BHEL is headed by a Chief Vigilance Officer (CVO)
appointed by the Ministry. Each manufacturing Unit / Power Sector Region of BHEL has a
vigilance set up headed by a senior vigilance executive reporting to the CVO.
In addition to preventive vigilance which has remained the focus area of BHEL Vigilance
all through the years, additional impetus was also given for effective vigilance
administration through leveraging technology during 2012-13. This has helped in proactive
and predictive Vigilance Management.
Training programmes were conducted to update employees on Company`s policies, rules and
procedures. 119 such programmes were organized during the year 2012-13 in various Units,
Regions and offices of BHEL. Interactive sessions were held with line executives
representing different functional areas, in order to sensitize employees and to enhance
their knowledge of the Company`s rules, procedures and policies.
To create awareness about the procedures of procurement in BHEL, to disseminate the
instructions issued by Statutory Authorities and to share the case studies, the inaugural
issue of quarterly e-Newsletter "DISHA" was published on 01.07.2013.
With a view to making systems more effective and transparent, Vigilance had carried out
system studies during the year 2012-13 based on which suggestions towards system
improvement have been rendered. Some of the major areas where suggestions for improvement
were given are:
- Purchase Policy
- Amendments to `Vendor Registration Procedures - SEARP, 2010`.
- Systemic changes in `Reverse Auction Guidelines`.
- Amendments to certain provisions in `Guidelines for Suspension of Business Dealings
- Formulation of Common Loading Criteria in evaluation of tenders.
With a view to restructure the mechanism for effective and timely disposal of
complaints a `Complaint Handling Policy` was issued on 24.06.2013 wherein the complaints
received by Vigilance can be dealt in a consistent manner, in accordance with the extant
instructions issued by the CVC.
A workshop was organized at Corporate Office on 29.05.2013 wherein senior executives of
major PSUs-SAIL, ONGC, IOCL, EIL, NLC, RINL, BPCL, participated to share the best
practices being followed by various PSUs for Reverse Auction (RA). The inputs will be
helpful while revising the RA guidelines of BHEL.
As per the directions of the Central Vigilance Commission (CVC), the Company has taken
many initiatives to make available all relevant information on the web on real time basis.
Following have been ensured to make available all relevant information on the web:
Status of Purchase Orders, Works Contracts concluded every month, as per CVC
format, is being uploaded by all Units.
Procedure and forms related to Vendor registration are hosted on the Company web
Status of vendor registration applications is hosted on the web and can be
viewed by vendors.
E-payment of vendor bills is being implemented throughout the organization and
principle of first in first out is being followed as a rule in payment of vendor bills.
Status of bill payment can be viewed by the vendors on-line.
Indents are being raised on-line in most of the Units.
Information relating to Rules/Procedures of the Company is available on the
This year the Company has initiated uploading of project documentation on VIGEYE
GPMS, an initiative taken up by the CVC, with a view to raise alerts on probable
inconsistencies during project execution.
The Company`s Security mechanism is sufficient and geared up to provide security to
each Plant/Unit. Whereas, the security of the most of the Plants of the Company is being
managed by the CISF, in some smaller plants, the Company has its own Security. In other
Plants, Corporate Office and Regional Offices, the security is being looked after by the
private agencies sponsored by Directorate General Resettlement, Govt. of India or
Adequate measures have been taken for Security of computers. Department of Electronics,
Govt. of India (SRAC) has also carried out inspection of our software security mechanism
and their suggestions have been implemented.
Security audit of major plants is being done by the Intelligence Bureau periodically
and the additional requirements, wherever pointed out by them, are immediately complied
with by the concerned Units. Review of Security is done internally also from time to time.
Monthly report on theft / pilferage and fire incidents is being compiled by Corporate
Security Department along with quarterly reports on various security related issues as per
the decisions taken in the meetings of HR & Security Heads.
CCTV`s are being installed and standard operating procedures (SOP) are being prepared
to deal with any security threat.
The Management, security staff and the employees of Company are sensitized to the
security needs of Company.
The concept of Sustainability has been ingrained in the DNA of BHEL which is evident
from the Mission Statement - "Providing Sustainable Business solutions in the fields
of Energy, Industry & Infrastructure". Sustainability is an integral part of the
BHEL is commited to be an Environment friendly company in all its areas of activities,
products and services while providing a safe and healthy working environment. In line with
the company`s strategy, Environment Improvement Projects (EIP) / Sustainable Development
(SD) Projects and Community Development Programmes are being given special thrust.
BHEL has defined its Sustainable Development (SD) policy keeping in view the scale
& nature of organization`s activities, products & services. The SD projects
undertaken in 2012-13 were in the areas of Rain water harvesting, afforestation, captive
power generation based on solar energy, use of renewable energy, energy efficiency &
conservation, and responsible waste disposal. A broad strategic management framework has
also been developed for ensuring Sustainable Development in BHEL through its product and
services as well as in-house activities.
Through these initiatives, organization is directing its efforts to minimize the carbon
footprint of the organizational activities. Further it is also helping the customer to
reduce the carbon footprint in their operations as well through development of cleaner
In keeping with the commitment to promote the use of renewable power in manufacturing
units, the company has installed 250 KWp Solar power plant at Bhopal unit and Roof Top
Solar power plant of 20 KWp at Trichy unit in 2012-13. Company also installed more than
1200 Turbo ventilators across its units to encourage energy conservation. As a part of
Energy Efficiency more than 20 energy efficiency projects were completed at the units.
Total expenditure incurred on such activities taken under Sustainable Development Projects
for the year 2012-13 was Rs 8.16 Crore against target of Rs 7.44 Crore.
All manufacturing Units/ Regions of the company are accredited to international
standards viz. ISO-14001 certification for environmental management and OHSAS-18001
certification for occupational health and safety management systems.
BHEL has been awarded with the prestigious "Golden Peacock Award for
EPD Bangalore was honored with the "Gold Award" during 2012 for its
outstanding achievement in the Safety Management by M/s Greentech Foundation.
BHEL, EPD-Bangalore & BHEL, Trichy units received "CII-ITC Sustainability
Award 2012" for being India`s, `one of the most Sustainable organization`.
Directors` Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed:
(i) that in the preparation of the annual accounts for the financial year ended 31st
March, 2013 the applicable Accounting Standards have been followed along with proper
explanation relating to material departures;
(ii) that the Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that were reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at the end of the
financial year 2012-13 and of the profit of the company for that period;
(iii) that the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 1956
for safeguarding the assets of the Company and for preventing and detecting fraud and
(iv) that the Directors have prepared the annual accounts for the financial year ended
31st March, 2013 on a `going concern` basis.
As per the requirements of Clause 49 of the Listing Agreement a detailed report on
Corporate Governance together with the following is given at Annexure - III:
(i) CEO/CFO Certificate [as per Clause 49(V)] and
(ii) Certificate from the Company`s Auditors [as per
Information in accordance with the provisions of Section 217(1)(e) of the Companies
Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign
exchange earnings and outgo is given at Annexure-IV.
None of the employees have drawn remuneration in excess of the limits prescribed under
section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of employees)
Rules, 1975 during the year 2012-13.
Statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary
Companies is given at Annexure-V.
Events Occurring After The Balance Sheet Date
There were no significant events occurring after the Balance sheet date.
The Auditors of your Company are appointed by the Comptroller and Auditor General of
India. The names of auditors appointed for the year 2012-13 are printed separately in the
The detail of cost auditors appointed for the year 2012-13 and Cost Audit details are
printed separately in the Annual Report.
The reply to the point referred to in the Auditors` Report and Comments of the
Comptroller and Auditor General of India are given at Annexure - VI.
The Board places on record its sincere appreciation towards the Company`s valued
customers in India and abroad for the support and confidence reposed by them in the
management of the company and look forward to the continuance of this mutually supportive
relationship in future.
The Board also gratefully acknowledges the support and guidance received from various
Ministries of the Government of India, particularly the Department of Heavy Industry, in
Company`s operations and developmental plans. The Directors express their grateful thanks
also to the Comptroller and Auditor General of India, Chairman and Members of Audit Board,
Statutory Auditors, Branch Auditors and Cost Auditors. The Company also wishes to place on
record its appreciation for the continued co-operation received from all the Technology
Collaborators and Suppliers and support provided by the Financial Institutions and
bankers. Last but not the least the Board wishes to place on record its deep gratitude to
all BHELites whose enthusiasm, team efforts, devotion and sense of belongingness has made
this great company proud.
||For and on behalf of the Board of Directors of
||BHARAT HEAVY ELECTRICALS LTD.
|Place : New Delhi
|Dated : August 3, 2013
||Chairman & Managing Director