It is a great pleasure to communicate to you directly once again and to
share with you the highlights of the achievements of your Company
during the past year and the future outlook for the Company.
Highlights of the year
In FY 2010-11, new records have been set for order acquisition,
revenues, order book, profits and exports. Your Company achieved a
turnover of Rs. 552,969 lakhs in 2010 - 11 as against Rs. 521,977 lakhs in
2009 - 10, registering a growth of 5.94 %. Exports sales saw a quantum
jump from US $ 23.67 millions in 2009 - 10 to US $ 41.53 millions in
2010 - 11, an increase of 75.45 %. The order book more than doubled
from Rs. 1,135,000 lakhs as on 1st April 2010 to Rs. 2,360,000 lakhs as on
1 April 2011.
All the nine manufacturing Units of the Company have performed well and
earned profits during the year. Our efforts to streamline our costs and
execution capabilities yielded dividends, which resulted in increase of
Profit After Tax for 2010-11 to Rs. 86,147 lakhs from Rs. 72,087 lakhs last
year, an increase of 19.50% in spite of the additional cost of wage
revision. R&D continues to be our thrust area and our expenditure on
R&D was Rs. 38,818 lakhs, which is 7 % of the sales revenue.
Defence being our mainstay, the sector contributed 80 % to our sales
revenue with the balance of 20 % coming from the civilian sector.
Indigenously developed products contributed 78% to the turnover out of
which 57 % came from in - house developments and 21 % from products
developed by other indigenous agencies. 22 % of the turnover was
contributed by products using foreign technology.
A few of the other highlights are :
- The Defence Minister inaugurated the newly set up Product Support
Centre at Kalamessery, Kochi, for providing product support to Southern
- A modern D&E facility with Embedded Systems Lab was started at BEL''s
- During FY 2010 - 11, BEL took up some major and prestigious projects
like Akash Weapon System, Humsa NG, Integrated Fire Detection and
Suppression System for Tanks and Armoured Vehicles, and Coastal
Security System for the Indian Coast Guards.
- Four numbers of India''s first and wholly indigenous Nuclear,
Biological and Chemical Recce Vehicles developed by BEL in association
with DRDO were delivered to the Indian Army.
- On the civil business side, Ministry of Home Affairs has nominated us
for the creation of the National Population Register for the Country.
You will be happy to know that your Company has received several
accolades, the most notable being :
- The Gold trophy for SCOPE Meritorious Award for Corporate
Governance for the year 2009 - 10.
- Award for the Top Indian Company under the Electrical and Electronic
Equipment, Technology Development Sector for the Dun and Bradstreet -
Rolta Corporate Awards 2010.
- International Aerospace Awards 2011 under the category of Most
Influential Company of the Year and Excellence in Innovation.
The Govt. of India has put in place a policy for replacing and
acquiring weapon systems / platforms for its defence and paramilitary
forces. Helped by the steady economic growth in the Country, the Govt.
is in a position to provide the required resources too.
The Govt''s modernisation drive for its security forces will provide
business opportunities for BEL in future. Starting with an all time
high order book, we are targeting a turnover of Rs. 620,000 lakhs during
2011 - 12. As stated before, segments like radar, communications,
network centric warfare and weapon systems will drive the Company''s
growth. While pursuing our forays into new businesses like nuclear
instrumentation, solar / clean energy solutions and homeland security,
we are continuing our efforts in forging alliances in the areas of
radars for civilian and select defence applications, seekers for
missiles, and RF & microwave components. Radars are and will continue
to be one of our primary business segments in future also. Another
major segment will be defence communication equipments and systems.
The weapon systems segment is emerging as a major area along with
command and control systems. Electro optics will grow due to its demand
from both defence and civil sectors. Defence will continue to be our
priority and provide close to 80 % of our revenues while civilian
business will continue to provide the balance 20 %.
It is extremely important for BEL to stay abreast of technology and
develop new products regularly. Thrust on R&D across the Company will
continue. I am pleased to inform you that during the last year, your
Company developed many new products and systems. Some of the major new
products / systems introduced during 2010 - 11 include Akash Weapon
System, New Generation Humsa Sonar, Mobile Communication Terminal, and
Combat Management Systems for ships.
The year 2011 - 12 looks promising as well as challenging. The Defence
Sector is increasingly being opened up for private sector participation
and changes are being brought into the Defence Purchase Procedure. All
this has pushed the Company towards much higher competitiveness and
productivity. Apart from strengthening its in - house R&D, the Company
is also laying greater emphasis on working closely with DRDO labs,
other research institutions and academic institutions for development
of new products and systems.
This year the Company will work for many strategically important
projects like Akash Weapon System, Battlefield Surveillance System,
Upgraded Weapon Locating Radar, next generation Electronic Warfare
Systems and Coastal Surveillance System. On the exports front, we
shall be achieving growth through offsets as well as export of Coastal
Security Network for Government of Mauritius.
Governance and sustainability
Your Company takes pride in constantly adopting and maintaining the
highest standards of ethics in all its business activities. The tenets
of Corporate Governance are implemented in letter and spirit and the
results are obvious through recognition of this fact by SCOPE. A
detailed report on compliance with the Corporate Governance guidelines
/ norms as per Clause 49 of the Listing Agreement with Stock Exchanges
and the DPE Guidelines on Corporate Governance for CPSEs forms part of
the Directors'' Report.
The major principles for fulfilling its social, environmental and
economic responsibilities have been integrated and embedded in the core
business processes of BEL, and these principles have been incorporated
into its strategy for responsible business. Sustainability in BEL is
the outcome achieved by balancing the social, environmental and
economic impacts of business. This process ensures that the business
goals are pursued without compromising any of the three elements.
I deeply appreciate the continuing support of our customers, especially
Ministry of Defence and Defence Services, our business associates,
shareholders, my colleagues and members of the Board for their support
I also wish to express my sincere gratitude to all the officers and
employees of BEL for their dedication and commitment, which is a major
strength for driving growth in the Company. It shall be our continuous
endeavour to build on these strengths to face future challenges to
continue the journey of profitable growth.
Bangalore Ashwani Kumar Datt
12th August 2011 Chairman & Managing Director