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« Mar 12
Chairman's Speech (Bharat Heavy Electricals) Year : Mar '13
Dear Shareholders,
 
 The past year has been a defining one for your company BHEL as we
 became a ''Maharatna'' company, crossed Rs. 50,000 Crore turnover mark
 and achieved the highest ever addition of 10,340 MW to India''s
 electricity generation capacity while navigating through one of the
 most difficult economic and business environment of our times. Despite
 a challenging environment for Indian industry, your company has not
 lost its focus on creating shareholders'' value. The following outlines
 the milestones we have achieved during the year 2012-13:
 
 - BHEL has achieved the highest ever turnover of Rs. 50,156 Crore
 during 2012-13 registering a growth of 1% despite adverse business
 conditions.  With the Net Profit of Rs. 6,615 Crore, we were able to
 maintain the level of previous five years (2007-12) average profit
 margins of 14% on the back of strong focus on manufacturing
 efficiencies.
 
 - Recognising the consistent performance over a longer period of
 time, your company has been bestowed with the coveted ''Maharatna''
 status by Govt. of India, resulting in further empowerment of the Board
 for greater business agility.
 
 - A total of Rs. 31,650 Crore of orders were received by your
 company, which was an increase of 43% over 2011-12. It included 8 nos.
 of TG, 9 nos. of Boilers and 7 nos. of ESP packages for supercritical
 sets. Interestingly with market share of 67% in power sector, BHEL
 continues to maintain its leadership position in Indian market despite
 rising intensity of competition.
 
 - Various initiatives taken by your company in recent past for
 accelerated project execution have started fetching results. We were
 able to synchronise/ commission all time high 10,340 MW of power plant
 equipment including 9,328 MW in utility segment. Your company
 successfully commissioned India''s first indigenously manufactured
 subcritical set of 600 MW rating on EPC basis at North Chennai.
 
 - With the objective of becoming an innovative developer of clean,
 efficient, reliable and affordable products, systems and technologies,
 we continue to relentlessly strengthen our technology and innovation
 capabilities. BHEL invested Rs. 1,252 Crore in R&D during the year. The
 highest ever 385 patents and copyrights were filed raising the
 intellectual capital of BHEL to 2,170.
 
 - Your company has signed MoU with Indian Railways for setting up a
 green field coach factory for Mainline Electric Multiple Unit at
 Bhilwara, Rajasthan. This is a significant step in our diversification
 endeavours.
 
 Positioning for Future
 
 We are at a critical juncture in our history as we endeavour to sustain
 growth momentum, increase shareholder wealth and fulfil our vision of
 becoming a global engineering enterprise. We are proud of the work your
 company has done to augment manufacturing capacity, enhance pace of
 project execution, strengthen engineering and technology capabilities,
 and people development.
 
 - The Company has adopted its Strategic Plan 2012-17. The plan
 attempts to steer the company towards becoming a global engineering
 enterprise.  Key drivers of our success are expanding our offerings in
 Power Sector by building EPC capability, focus on Industry businesses,
 expansion of spares & services and adoption of collaborative approach.
 
 - Power sector will continue to remain major contributor in our top
 line with transportation and transmission emerging as next big business
 verticals.  Strategies are in place to strengthen our presence in
 Nuclear, Renewable and Water segments.
 
 - Efforts are being made to make supply chain agile and accelerate
 project execution through sustained focus on vendor base expansion,
 scaling up procurement through technology initiatives, advanced
 manufacturing action, global sourcing etc.
 
 - We are working towards developing lower rating sets with
 supercritical parameters providing alternatives to the Utilities to
 take advantage of this eco-friendly and fuel efficient technology.
 
 - To expand our nuclear energy portfoilo, efforts to increase scope
 by offering products beyond conventional island in Nuclear business are
 under way.
 
 - BHEL''s collaborative initiatives to address the growing demand
 potential in Railway Transportation including Metro & Suburban Railways
 include initiative with Indian Railways for setting up a greenfield
 Mainline Electrical Multiple Unit (MEMU) Coach Factory in Rajasthan.
 
 - Considering the National Action Plan on Climate Change targeting
 15% of electricity generation from renewables by 2020, BHEL is looking
 towards expanding its capacity to manufacture photo voltaic modules &
 cells.
 
 - We have constituted R&M Systems Group (RMSG) to address emerging
 opportunities in Renovation and Modernisation of Power Plants.
 
 - In a bid to address the aspirations of the company to become a
 preeminent supplier of Industrial Boiler, Nuclear Steam Generator &
 supplier of equipment for process Industries, merger of BHPV Vizag with
 BHEL is under way. Further, in a bid to make headway in new product
 areas like Alternators for Traction applications etc. facilities of
 BHEL-EML Kasargod, a joint venture of BHEL and Kerala Govt., are being
 leveraged.
 
 - ''Engineering and Technology'' is our strength. To uphold our
 reputation for excellence in our core capability, we will continue to
 upgrade existing products to contemporary levels and develop new
 products through continuous in-house efforts as well as through
 acquisition of new technologies.
 
 Conclusion
 
 Looking ahead, the Board and Management of your company will continue
 to execute various strategies to develop existing assets, optimize
 business portfolio through diversification, strengthen financial
 performance and drive operational efficiencies throughout the
 organization. I am confident that our strategic endeavours would
 generate sustainable growth, stronger cash flows, and better returns on
 capital and greatly improve shareholder wealth.
 
 I would like to thank my fellow Directors and members of the Management
 Committee for their wisdom and support. I would also like to extend a
 special thanks to each and every shareholder of BHEL, whose trust and
 confidence have been the motivating force in all our endeavours. I
 thank all our customers and business associates in India and abroad for
 their unstinted loyalty and steadfast patronage of our products and
 services. Various Ministries of GoI, particularly the Department of
 Heavy Industry, have been providing valuable guidance and support in
 our efforts. Finally, a word of thanks to more than 48,000 employees of
 BHEL who are making these successes happen. I am extremely proud of
 their outstanding performance over this period and have full confidence
 in their ability to deliver even greater success going forward.
 
 With all the ingredients of success, dedicated people, engineering and
 technological excellence and right business strategies in place, your
 company is well positioned to meet the demands of a growing industry
 and deliver the type of consistent results for which this company is
 known for.
 
 I look forward to your unwavering support while continuing the growth
 momentum in coming years too.
 
 With best wishes,
 
 New Delhi                                           (B. Prasada Rao)
 
 August 14, 2013                        Chairman & Managing Director
Source : Dion Global Solutions Limited
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