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 2012-13 2011-12
(in Rs. Crore except per share data)
(a) Turnover (Gross) 50156 49510
(b) Revenue from operations 47618 47228
(c) Other Operational Income 807 751
(d) Operating expenses 39037 38092
(e) Operating profit 9388 9887
(f) Add : Other income 1122 1266
(g) Profit before depreciation, 10510 11153
finance cost & tax expense
(h) Less: Depreciation 953 800
(i) Less: Finance costs 125 51
(j) Profit before tax 9432 10302
(k) Less: Tax expense 2817 3262
(l) Profit after Tax 6615 7040
(m) Add: Balance brought forward 1031 812
from the previous year
(n) Profit available for 7646 7852
i) Dividend (including 1323 1567
ii) Corporate Dividend tax 221 254
(incl. on interim dividend)
iii) Amount transferred to 5000 5000
(o) Balance in Profit & Loss 1102 1031
(p) Earnings per Share (Rs.) 27.03 28.76
(q) NAV per share (Rs.) 124.38 103.67
(r) Economic Value Added (Rs. Crore) 2657 4032
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
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 year.
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 interim dividend.
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:
(Rs. in Crore)
Power Sector 25560 14012
Industry Sector* 4086 7850
International Operations 2004 234
Total Orders Booked 31650 22096
Order Book outstanding at the
end of the year 115100 135300
*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 Rs.1.085''.
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
Board of Directors Appointment
Smt. Chandra Iyengar has been appointed as Part-time Non-official
Director w.e.f. 01.04.2013.
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.
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
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 11.11.2012.
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 re-
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, Hyderabad.
3. PS-WR got third prize from TOLIC, Nagpur for excellent editing of
their Hindi Magazine ''Tarangini''.
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,
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
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
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
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
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 with Vendors''.
- 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 site.
- 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 BHEL/Units websites.
- 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
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 Ex-Servicemen Corporation.
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
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 &
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 company''s strategy.
BHEL is committed 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
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 technologies.
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
BHEL, EPD-Bangalore & BHEL, Trichy units received CII-ITC
Sustainability Award 2012 for being India''s, ''one of the most
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby
(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
(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 other
(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 Clause 49(VII)].
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
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
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 Annual Report.
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 -
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
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
For and on behalf of the Board of Directors of
BHARAT HEAVY ELECTRICALS LTD.
Place : New Delhi (B.Prasada Rao)
Dated : August 3, 2013 Chairman & Managing Director