Dear Shareholders,
I hope this letter finds you and your loved ones in good health and
high spirits. As we approach another significant milestone in the life of our Company, I
am filled with both pride and gratitude. It is with great pleasure that I address you
today as the Chairman & Managing Director of BEML Limited, reflecting on the
remarkable journey we have undertaken together. The past year has brought its share of
challenges emerging from a 'polycrisis' encompassing climate change, geopolitical issues
and reglobalisation. Yet, through resilience, innovation, and the unwavering support of
our shareowners, we have emerged stronger than ever.
Amidst this widespread unpredictability, India stands tall as a beacon
of growth and stability. A new global economic demand is being shaped with these crises
involving radical new strategies, innovations, and business models. Addressing these
challenges and opportunities, BEML Limited is crafting a comprehensive vision to build an
innovative, sustainable, future- tech, and inclusive Indian Company, powered by agility,
competitiveness, resilience, and customer and people centricity. New avenues for growth
have been identified, whilst fortifying existing core capabilities and putting in place
higher order structural competitiveness to create new vitality for the enterprise.
These strategic interventions will make a growing contribution to the
nation in its journey to the Amrit Kaal.
We have to progress through the process of Transformation based on the
principles of TCS where:
T - stands for Truth,
Trust & Technology
C - stands for Compassion, Creativity & Climate
S - Stands for Speed,
Simplicity & Self- Confidence
Growth drives most organizations. And along with growth comes change.
And change is frightening. We have to overcome this fear and not grow with a view that
something can't be done and hence should not be done in our quest for a strong, inclusive
growth.
I am thrilled to present an overview of our achievements, shed light on
our future vision, and reaffirm our commitment to creating enduring value for each one of
you. Your unshakeable trust in us remains the driving force behind our pursuit of
excellence, and for that, I extend my sincerest appreciation.
I, on behalf of the Board of Directors as well as 5,197 passionate
human assets of BEML Limited, present to you the Company's Annual Report for the financial
year 2022-23 for your consideration and adoption at the ensuing Annual General Meeting.
The Year Passed
Let me begin with the stellar performance of our Defence Business Group
which has achieved highest ever sales during the year. The year was also earmarked as
reentry in exports of Defence products as your Company became part of Armenia Export deal
regarding supply of High Mobility Vehicles (HMV) for Pinaka project. The supplies were
commenced and will be completed during current year.
Our Mining & Construction (M&C) Business Group which
contributes about 50% of our Turnover has excelled and has achieved highest ever sales.
The exemplary feat was well supported by Spares & Service group which has contributed
more than 50% of M&C sales and achieved its peak sales during the year.
The performance of our Rail & Metro Business Group was reasonable
due to various extraordinary events. Nevertheless, on project execution front, supplies
commenced for Rail Grinding Machine to Indian Railways which again was the first ever
"India manufactured". Also, additional order for 18 Metro cars for Kolkata Metro
and 88 of Mainline Electric Multiple Unit from Indian Railways were booked during the
year. These orders will be executed during current year.
The supply chain disruptions and project delays beyond our control
presented us with its share of challenges, prompting us to adopt a strategic focus on
maintaining our financial stability. We recognized the importance of managing costs
diligently while continuing to invest in growth areas.
In pursuit of this objective, we undertook several key cost control
measures. Our teams diligently analyzed our operations and identified opportunities for
efficiency enhancements. We optimized our supply chain processes, introduced streamlined
administrative workflows, treasury management and invested in energy- efficient
technologies. These measures were not only necessary responses to the prevailing economic
conditions but also atestament to our commitment to prudent financial management.
I am pleased to report that these efforts yielded positive results.
Through our cost control initiatives, we achieved significant savings across various
aspects of our operations and achieved Profit Before Tax of Rs. 278.60 crore which is
highest in the last 12 years. These outcomes underscore our ability to adapt to changing
circumstances while safeguarding your investment.
Your company made exports aggregating Rs. 830.14 Crore (which includes
physical exports of Rs 178.42 Crore and deemed export of Rs 651.72 Crore) and got export
incentive of Rs.1.92 Crore during FY 202223 as against exports of Rs 564.74 crore (which
includes physical exports of Rs. 48.75 crore and deemed exports of Rs. 515.99 Crore) and
export incentive of Rs. 1.11 Crore during the previous year. During the year, we have
concluded the supplies to Cameroon and expanded our footprints to 70 countries where BEML
equipment have been supplied till date.
Order book is the key driver of our turnaround. During 2023-24, we
shall strive to build a healthy order book which will surpass all our previous records and
ensure a quantum jump in growth in the coming years. Intense focus on Product Quality,
Cash collection, execution as per schedule and controlling costs will continue to remain
our priority areas.
The order book position of your Company as on 01.04.2023 stood at Rs.
8,570 crore as against Rs. 9,192 crore in the previous year. Further, Value added per
employee was reported Rs. 33 lakhs as against Rs. 31 lakhs in the previous year, a jump of
6.45%.
Although your Company is in intense competition across all Business
verticals, 74% of sales was achieved on competitive mode. Your Company has sustained and
maintained major market share in Dump Trucks, Dozers, and Metro cars.
Research & Development (R&D) has played a pivotal role in
driving innovation, growth, and sustainability. In an ever- evolving business landscape,
our dedication to R&D has remained steadfast, propelling us forward and ensuring our
position in industry. During the year, we have designed & developed and upgraded
products across all three business verticals.
Further, our commitment to R&D is a testament to our belief in
investing not only in physical assets but also in intellectual capital. We understand that
the knowledge and expertise generated through our R&D endeavours are invaluable assets
that contribute to our long-term competitiveness. During the year, your Company has filed
105 Intellectual Property Rights (IPR) as against target of 96. I am happy to share that,
we have been granted eleven patents during the year which is the highest since inception.
It gives me immense pleasure to share that over 75% of our business was
through In-house R&D Developed products which is a lead indicator of your company's
technical prowess and competence.
Further, R&D expenditure for the year as a Percentage (%) of
revenue stands at 1.91% and as a Percentage (%) of PBT stands at 26.75%.
Your Company will continue to invest in the brightest minds, the latest
technologies, and the most promising ideas, driven by the belief that innovation is the
key to Company's sustained success.
In an ever-evolving global landscape, the concept of self-reliance
stands as a pillar of strength, shaping our strategies and driving us to achieve greater
heights.
Self-reliance is more than a strategic choice; it is a mindset that
empowers us to be masters of our own destiny. We have consistently sought to reduce
dependencies, enabling us to chart our course even in the face of uncertainty. By
harnessing our internal capabilities and resources, we have cultivated an environment of
resilience and adaptability, positioning us to navigate challenges and seize opportunities
with confidence.
Srijan Portal, a GoI initiative is being utilized for indigenization of
items by uploading imported items. Under Defence equipment, we have achieved more than 96%
of Indigenisation level in High Mobility Vehicles (HMV) 8x8 and further efforts are on for
High Mobility Vehicles (HMV) 6x6 and High Mobility Vehicles (HMV) 12x12. For other Defence
Products, the present level of Indigenisation is more than 95%.
On Mining & Construction and Rail equipment front, we have already
attained indigenisation level of over 90%. On Metro cars, the present indigenisation level
is 65% and further efforts are on to increase these levels.
Your Company has embarked to implement the Digital Transformation
(DT)initiatives for the business processes covering all the 3 business verticals.
DT initiatives in the areas of Infrastructure, Cyber Security, Business
Applications & Systemic Improvements have been fully implemented and all the projects
have positive impact on business in both top-line and bottom-line while aligning people
and processes.
Some of the initiatives implemented during 2022-23 are Industry 4.0 at
H&P Division, KGF Complex, Improvements in File Lifecycle Management System, HCI
Server for Non-SAP Applications, IT Tools deployed for managing IT Assets like Network
& Desktop monitoring, EPS Applications for declaration and display, Monthly Cyber
Security awareness training sessions and Daily Cyber Security Tips.
Our Human Resources department plays an invaluable role in driving our
Company's success. The dedication, talent, and passion of our workforce are at the heart
of our achievements, and our Human Resources initiatives stand as a testament to our
commitment to their growth and well-being.
It is often said that a company's true strength lies in its people, and
I wholeheartedly believe in this sentiment. Our employees are not just workers; they are
innovators, collaborators, and ambassadors of our values.
Your Company recognizes that employees' growth is intrinsically linked
to company's growth. During 2022-23, Human Resources initiatives were centered around
providing opportunities for skill development, career advancement, and continuous
learning. Through training programs,mentorship, and leadership development, your Company
empowered team members to excel in their roles, foster innovation, and contribute to
Company's success.
During the year 2022-23, Vigilance Activities were carried out in a
holistic manner and covered prevention, detection and enforcement.
Surprise checks, periodic checks, scrutiny of purchase orders/
contracts, Scrutiny of TA/DA & Medical reimbursement claims, scrutiny of Annual
Property Returns, ten (10) CTE type of in-house inspections and fifteen (15) system
studies were conducted.
The year ahead:
The year 2023-24, started with a positive note and your Company has
booked more than Rs. 5000 crore worth of orders till date. Going ahead, orders to the tune
of over Rs. 10,000 crore are in the pipeline across all three business verticals. Your
Company has fixed an aspirational target for current year and planned to grow over 25%
w.r.t previous year's achievements. On sustaining & further improvement in bottom-line
and creating value to stakeholders, your Company is committed to an intense focus on
quality, cash collection, execution as per schedule and controlling costs. We are actively
exploring new ways to enhance our operational efficiency, innovate our processes, and
seize opportunities that align with our core competencies.
Our cost control measures are not only about achieving short-term gains
but also about reinforcing our long-term strategic objectives. By aligning our cost
manage-
ment strategies with our broader vision, we ensure that every step we
take contributes to the sustainable growth of BEML Limited.
In Defence & Aerospace, major orders are available for execution
for current year. Further, orders worth Rs. 4000 crore are in the pipeline which will
improve our order book position and will be a game changer in subsequent years. Your
Company is optimistic that share of its Defence Business in total Company's revenue will
improve and reach around 30% during current year.
The policy initiatives taken by the Government of India with with
regard to boosting indigenous design, development, and manufacture of defence equipment in
the country and make a sustainable defence industrial ecosystem has undoubtedly opened
various opportunities for the domestic sector. The call for Atmanirbhar Bharat has
provided further impetus to realise the goal of self-reliance.
With the increased defence modernization plans for 2023-24, procurement
of High Mobility Vehicles for various projects is under pipeline by MoD. BEML Limited has
also entered into MoUs with strategic partners for emerging Defence & Aerospace
procurement opportunities. Also, new areas of Business viz. overhauling of Recovery/ High
Mobility Vehicles, De-mining equipment, Vehicles for gun systems, etc. will also boost the
revenue numbers.
On the export front, supply of High Mobility Vehicles to Armenia is
under progress and will be completed during current year. Also, supply of High Mobility
Vehicles for Brahmos missile will becommenced during current year. Further, prospects of
Defence equipment from SAARC and African countries are being explored and expected to
fructify during current year.
On R&D front, design & development of first of its kind 1500hp
engine which shall power armoured fighting vehicles of future is under progress and 1st
engine will be fired in due course. Further, development of variants of High Mobility
Vehicles, engines and hydraulic aggregates for other applications are under progress which
will open up further opportunities for your Company.
In Aerospace segment, your Company has partnered with M/s. ISRO and
realized First off Structure for Launch Vehicle Mark 3 Program of Strap on Base Shroud
(SBS) Assembly. Additionally, orders for Aerospace components and parts from other DPSUs
are in the pipeline which will help in propelling its growth.
For Rail & Metro Business vertical, orders are available for
meeting the sales revenue targets for the current year. Also, orders worth Rs. 10,000
crore are in the pipeline which is expected to be awarded during current and next year.
The anticipated robust order book will certainly increase our share in Metro cars.
Under Rail segment, your Company has received an order for supply of 10
rakes of Vande Bharat Sleeper trains from M/s. Integral Coach Factory. The supplies will
commence in the financial year from 2023-24.
Further, supplies for Main Line Electric Multiple Unit (MEMU) &
Rail Grinding Machines is under progress and will becompleted during current year.
Further, orders for Maintenance Vehicles are also expected during the current financial
year.
For Metro cars, supplies for Driverless Metro cars for Mumbai Line 2A
and 7 is under progress. Further, supplies for Kolkata East-West metro corridor will be
completed during current year.
On exports front, I am happy to share that, we have tied-up with an SPV
lead by Delhi Metro Rail Corporation (DMRC) for supply of Metro Cars to Bahrain Metro. The
tender is expected during current year. With this opportunity, your Company will leverage
its manufacturing expertise and technology to optimize business operations for urban
transportation Metro Rolling Stock and expand on a global level.
The R&D team has already taken up design & development of Vande
Bharat Sleeper Coaches. Also, possible tie-ups with renowned partners for Bogie Design of
Medium / High Speed Trains and Aluminium Coaches are being explored.
Your Company's top performer Business Group has set another exemplary
target for current year with major thrust on exports. With GoI impetus on promoting
indigenous high-end mining equipment and increase in annual output to 1 billion tonnes by
2024 from 893 million tonnes currently, the demand for 'Made in India' Heavy Mining
equipment is on the rise. The construction equipment market outlook is prospering. Your
Company has drawn strategies to further consolidate our share and supply the equipment
within its portfolio.
In order to navigate the ever-changing landscape of technology and
business, our
R&D Team has taken up a number of projects viz. design &
development of 21 Cum. Rope Shovel, higher capacity Motor Grader & Tyre handler,
upgradation of engines to meet emission norms, etc. Inhouse developed Construction
Equipment Vehicle (CEV) Stage IV Engine has been certified by International Centre for
Automotive Technology (ICAT).
Also, Artificial Intelligence based features are being introduced on
equipment which will certainly benefit / safety of customers.
For Current year, Exports is expected to play a key role in growth of
your Company. As we continue to expand our global footprint, exports have emerged as a
strategic avenue for value creation, and market diversification.
We have received orders from Russia and Indonesia for Mining &
Construction equipment. Supplies have been commenced and will be executed during current
year. Additional orders worth Rs. 300 crore comprising all three-business vertical is
expected during current year.
Your Company acknowledges the importance of strong corporate governance
and its profound impact on company's performance, integrity, and sustainability. The Board
of the Company hold itself accountable to the highest standards of governance, ensuring
that your trust is upheld and company's future remains bright.
A report on Corporate Governance compliances has been made part of the
Board's report. Your Company has been getting "Excellent" rating from DPE for
complying various norms of Corporate Governance.
Your Board of Directors regularly review and update the policies,
procedures, and structures to align with best practices and emerging trends. This
commitment to evolution ensures that our governance framework remains relevant,
responsive, and effective.
Your company's journey is not solely defined by financial achievements;
it is guided by a broader purpose to make a positive impact on society and the
environment. Our commitment to CSR reflects our understanding that our responsibilities
extend beyond our balance sheets, encompassing the wellbeing of communities, the
preservation of natural resources, and the empowerment of future generations.
Your Company consistently spends more than 2% of average PAT of last 3
years exceeding the target as stipulated in guidelines.
Under CSR, your Company undertakes initiatives such as Promoting
Education, Skill Development, Health Care, Community Development, Rehabilitation of
Specially Abled persons, Eradication of Hunger & Malnutrition, Afforestation, adoption
of villages, Sanitation, Drinking Water facilities and also includes commitment to Swachh
Bharat Mission.
Regarding sustainability, we feel that it is not just remain a buzzword
but it is a way of life. Our initiatives in sustainable development are designed to ensure
that our growth is responsible and enduring. By integrating sustainable practices into our
operations, we are minimizing our environmental footprint, reducing waste,and conserving
resources. This approach is not only environmentally responsible, but it also contributes
to long-term cost savings and operational efficiency.
Your Company intends to become a complete Green Company and towards
this power generated through "Green Energy" projects viz. 23MW Windmill Projects
& 250KWp Solar Power, has met 91% of your Company's energy requirements. Additionally,
the green projects has mitigated appox 24,823 tons of carbon during 2022-23. Further,
approx. 46.83 Lakh Tons of carbon is being saved yearly for the nation through our
contribution to the clean urban mobility solutions being provided.
As we look to the future, our commitment to CSR and sustainable
development remains unshaken. We understand that our actions today shape the world of
tomorrow. With the support of our dedicated teams and the trust of our shareholders, we
are committed to forging ahead on a path that not only ensures our business's success but
also contributes to the greater good.
In order to truly serve its customers, your Company has formed
dedicated teams who engage with customers on various platforms, solicit their opinions and
use these insights to refine our product offerings. Through surveys, focus groups and
direct interactions, we gain valuable knowledge that guides our efforts to continuously
improve and innovate.
Your Company recognizes that the world of business is dynamic, and
customers' expectations will continue to evolve. By staying attuned to their changing
needs, valuing their feedback, and investing incontinuous improvement, your company is
confident in its ability to navigate the future with resilience and success.
Your Company has received many accolades and awards and significant of
them are:
Received Raksha 'Srijan Ratn' award for indigenisation during
Def Expo 2022.
Received Engineering Export Promotion Council of India (EEPC)
'Quality Award' for Outstanding Performance under PSU Category.
Conferred with Governance Now 9th PSU Awards in 2 categories a)
Leadership Award and b) Research & Innovation.
Bagged Equipment India Award 2022 for the Category 'Bestseller
in Crawler Dozers'.
Company received Awards for the categories;
o Diamond' - Corporate Film,
o Gold' - a) Best Book Production - BEML's Journey since 1964
b) Most creative ad and
o Silver'- In-house Journal Corporate Note Book from Public Relations
Council of India (PRCI).
Let me express my deep gratitude to Government of India, Administrative
Ministry, the Ministry of Defence and in particular, the Department of Defence Production,
MoUHA, MoR, PMO, CIL, DPSUs, Indian Railways and other allied Administrative Departments
of the
Government of India for its unwavering support and encouragement.
I also take this opportunity to place on record my sincere thanks to my
fellow Board members, our clients, partners, employees, and other stakeholders who have
placed their trust and confidence in us. As we look ahead to the future, I want to assure
you that the dedication of our team and the depth of our collective ambition know no
bounds. We embrace the challenges that lie ahead with enthusiasm and confident in our
ability to adapt, innovate, and capitalize on opportunities that come our way. I am very
excited and committed to the transformation journey we are driving and confident that we
will come out stronger as we scale new heights.
In closing, I find solace in a quote that captures the essence of our
journey and the values that guide us:
"The only way to do great work is to love what you do." -
Steve Jobs
These words resonate deeply with your company's philosophy and reflect
the passion and dedication with which we approach our endeavours. Our commitment to
excellence is not just about achieving financial milestones; it's about the genuine love
for our work that fuels our innovation, resilience, and continuous growth.
Together we will surely make this 'Amrit Kaal' more charismatic for the
Country and for BEML Limited.
Sd/- |
Shantanu Roy |
Chairman & Managing Director |
Bengaluru |