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Bharat Electronics Ltd.

BSE: 500049 | NSE: BEL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE263A01024 | SECTOR: Electricals

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Dec 04, 16:00
115.60 0.60 (0.52%)
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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Chairman's Speech

Chairman''s Letter

Dear Shareholders,

It gives me immense pleasure to share through this letter, the achievements and financial highlights of your Company during the past year. In FY 2018-19, there were considerable challenges in the environment we operate. In spite of the challenges, your Company has achieved the growth targets with greater emphasis on R&D, technology updation and constant infrastructure modernisation to meet the fast changing business environment. Your Company has achieved significant growth in revenues. At 7 51,79,812 Lakhs (as on 1 April 2019) the order book continues to be healthy and also good order Inflow projections expected in the next 2-3 years. Your Company has continued to maintain its leadership position In supplying equipment/ systems to Defence Forces and is on a steady growth path. I take this opportunity to share with you the performance highlights during the past year and the future outlook for the Company.

Highlights of the Year

Your Company achieved a turnover of Rs. 11,78,922 Lakhs during 2018-19 against Rs. 10,08,484 Lakhs in 2017-18, thereby registering a significant growth of 16.9%. BEL achieved an export sale of 21.6 Million USD. Some of the countries, where your Company''s products were exported are Switzerland, USA, France, Germany, Israel, Sweden, Finland, Seychelles, Mauritius, Vietnam and SEZs. The major Products / Systems exported during the year include Sub Systems of Radar and EW Systems, Data Link Aircraft, Cable Looms, Mechanical Parts, Communication Equipments, Acoustic Test Facility, Surveillance Systems, Coastal Surveillance Systems Radar, Passive Night Sight, Shelters, Precision Parts, Transmitting tubes, Vacuum Interrupters and Radar Spares.

All the 9 manufacturing units of the Company have performed well. The Profit After Tax for 2018-19 is Rs. 1,92,729 Lakhs against Rs. 1,39,929 Lakhs last year, an increase of 37,73% over previous year. The Net Worth of the Company has increased from ?7,76,101 Lakhs in year 2017-18 to Rs. 9,01,891 Lakhs in 2018-19.

R&D has been the main focus area of your Company for increasing indigenisation and value addition in our products / systems. The total investment on R&D as a percentage of turnover during the year was 9.14% which is one of the highest among the defence PSUs. It is our constant effort towards indigenous development that has led us to achieve 96% of our turnover from indigenous products. Only 4% of our revenues came from products manufactured through ToT from foreign OEMs. Defence being the mainstay of the Company, has contributed 68% of sa!es revenue in 2018-19 as against 85% in 2017-18, with the balance 32% coming from the non-defence sector. This year being the exception in this trend, as EVMs & WPATs were the major non-defence products your Company executed.

Some of the major products / systems introduced during 2018-19 are Drone Guard Systems, Integrated Communication System, Coastal Surveillance System for Seychelles, Fire Control System, Ku Band RF Seeker, Target Acquisition System, Battery Multi-Function Radar Vehicle and Battery Surveillance Radar Vehicle for Missile System, Image Intensifier based Passive Night Vision Devices, Indigenous Electronic upgrade for 52 Calibre Gun, Un-cooled Thermal Imager, Commander Thermal Imager Sight, IFF System, Virtual Reality Simulator, Corner Shot Weapon system, Auto Fare Collection Gate (SWAGAT), Electro-Optic System for Home land Security, Real Time Information System for Indian Railways, etc.

Your Company has received orders worth about Rs. 23,43,100 lakhs. Major Orders received during the year include Long Range Surface-to-Air Missile System, Airfield Integrated Security System, Kerala-Fibre Optics Network, Electronic Fuzes, L-70 Gun Upgrade, Weapon Repair Facility, Smart City Projects, Integrated Perimeter Security Solution, Video Surveillance System, Real-Time Information System etc.

I have the privilege to Inform you that your Company has fifed applications for 302 IPRs in 2018-19 as against 25 IPRs filed in 2017-18. As many as 71 technical papers were published by scientists and R&D engineers of BEL in various National and International journals /seminars/ conferences.

Some of the Performance Highlights of Your Company are:

• Commissioning of 33.5 MWSolar PV Power Plants in various Ordinance Factories facilities.

• BSTC (BEL Software Technology Centre) has been formed as a separate S8U.

• Inauguration of India''s first Indigenously developed Metro Gate SWAGAT - an Automatic Fare Collection Gating System jointly developed by BEL & C-DAC. It is compliant with the National Common Mobility Card (NCMC) ecosystem for hassle free commute across India,

• New Marketing Offices were set up at Sri Lanka and Myanmar.

• ExcellentMoURating for 2017-18 from DPE,

• Received LRSAM order worth Rs. 9,23,600 Lakhs.

• New Surface Mount Technology (SMT) Assembly Line in Network Centric System Hangar at BEL Bengaluru and BEL Panchkula Units.

• BEL secured the patent for innovation in EVM.

• Networking and Cyber Security Group formed in MilCom SBU of BEL Bengaluru Unit.

• DGQA Green Channel Status certification for Radar spares.

• Received ISO 27001 Information Security Management System Certification.

• BEL has filed 175 Patents and 127 Copyrights in the areas of Electro optics, Surveillance, Radar Technology, Communication Technology, and Software Technology.

• BEL empanelled totally 237 organizations, which includes 29 collaborative R&D partners, 145 design service providers, 30 consultants and 38 Production service providers and 5 organizations for supporting both design and production.

You will be happy to know that your Company has received several accolades, the most noteworthy being:

• BEL Bengaluru Unitworth the twin honour of CII EXIM Bank Business Excellence Award (2018) & Commendation for Role Model Organisation,

• BEL Ghaziabad, Chennai & Machilipatnam Units received the Platinum level recognition for Business Excellence from ClI.

• AlMA Outstanding PSU Award

• SCOPE Award for Exceilence for Digitalization

• PSE Excellence Award 2017

• Business Leader of the Year Award (Aerospace & Defence) 2019

BEL Chennai Unit secured the CII Total Cost Management (TCM) Level3 award

Future Outlook

Government''s emphasis on ''Make in india'' initiative in Defence sector provides a great opportunity for the Company to enhance Indigeilzation efforts and to address the opportunities in Indian Defence sector,

BEL is targeting a healthy growth of 12-15% during 2019-20. Segments [ike Radar and Missile Systems. Communication and Network Centric systems, Tank Electronics, Gun upgrades, Electro Optic systems and Electronic Warfare & Avionics systems will continue to drive the Company''s growth in the coming years. Modernisation and creating several world-class facilities for R&D, Testing, Production and Skill development are planned for achieving the targeted growth. In the non - defence segment, your Company is pursuing business in the field of Solar, Homeland Security, Smart City elements. Space Electronics, Satellite integration and Cyber Security.

The future for your Company looks promising as weil as challenging. The Defence Sector is being opened up for private sector participation with evolutions of Defence Procurement Procedure, The Government has Introduced the Strategic Partnership model for broader participation of indlan private sector to enhance manufacturing capacity of major defence platform in addition to DPSUs. Alf this has pushed your Company towards much higher competitiveness and productivity through initiatives for enhancing value addition.

The Government has come out with a Make-IInd procedure for enhancing the participation of Indian Industry including MSMEs in providing the import substitution and for promotion of innovative solutions for defence equipment. Your Company has also responded to many of these Make-II projects which are in line with BEL business and also in partnership with other companies.

It is important for BEL to stay abreast of technology and develop new products regularity to meet the requirements of the customers and providing cost-effective & Innovative solutions. Thrust on R&D across the Company will continue with roadmaps drawn for future products, acquisition of key technologies and filing of patents. Your Company is also laying greater emphasis on working closely with DRDO labs, research institutions and academic institutions as well as with niche technology Companies & Consultants for development of new products and systems- Your Company is planning to form Center of Excellence [CoE) in the areas of Radar & Weapon Systems, Communication, Electro Optics & Laser for giving thrust in this areas. Aiso, your Company has established B innovation Cells In Product Developmental Innovation Center. Along with this, your Company''s own Central Research Labs, R&D Labs attached with business units are working on new technologies and product development Your Company is planning to enroll engineers for PhD programs to enhance the technical competence.

To retain the leadership position in strategic electronics, your Company has evolved various strategies and has developed action plans to face competition and maintain technological edge.

Some of the major projects planned for execution in this year are LRSAM, IACCS, Tropo Upgrade, Weapon Locating Radar, Sonars, Cdr TI Sights, HHTI Mk-ll, LLTR Radar, Ground Based Mobile EUNT, Smart Cities of Agra & Imphal, Fire Control Systems, Airfield Security Systems, KFON, Repair facilities etc. On the Export front, the order book as on 1 April 2019 is US $ 116.62 Million including Offset orders of US $ 64.7 Million. To give greater thrust to exports, your Company has opened marketing offices at Sri Lanka and Myanmar. BEL has plans to work closely with other Indian Companies in other countries to increase the geo-spatial presence.

Strategic New Initiatives

Your Company is working in strategic areas like Homeland Security Solutions, Smart Cities, Cyber Security, Ammunitions, Software & Artificial Intelligence, Seekers & Missiles, Solar Projects, Unmanned Systems including Robotics, Space Electronics, Energy Storage Products, Satellite Integration and Composites in line with the emerging needs of the Customers.

Corporate Social Responsibility

Your Company has taken various programmes/ initiatives/projects as per the Companies CSR & Sustainability policy which is in line with the Schedule-VII of the Companies Act, 2013. Your Company has spent Rs. 2,416,48 lakhs in key sectors like Healthcare, Rural Development, Technology Incubations, Sports Development, Sanitation, Education & Vocational Skill Development. Your Company has adopted two aspiring districts in Karnataka namely Raichur & Yadgir under CSR for various development activities.

Governance and Sustalliability

Your Company takes pride in constantly adopting and maintaining the highest standards of values and principles. A detailed report on compliance of the guidelines on Corporate Governance, as required by the SEBI (LODR) Regulations, 2015 and the guidelines issued by the Department of Public Enterprises for CPSEs, forms part of the Board''s Report.

Your Company has received Nil comments certificate from the C&AG for the tenth consecutive year.

The corporate performance of BEL is measured in terms of the economic, environmental and societal parameters augurs well to reinforce the image of BEL as a socially responsible corporate entity. Sustainability in BEL is the continuing commitment to behave ethically and contribute towards economic development while improving the quality of life of its workforce, their families and the local community and society at large. The philosophy of greening the environment through recycle, reuse and reduce approach will continue in the near future.


I am grateful to the Board of Directors and members of management committee for their unwavering support and guidance. Ministry of Defence and Defence Services have been continuously providing valuable guidance and support. I further deeply appreciate our shareholders, esteemed customers and business associates for providing the opportunities to earn their confidence.

The dedication and commitment of our employees and officers at all levels continues to be the major strength of our Company. We shall make continuous efforts to build on these strengths to face future challenges and sustain the momentum for profitable growth.

With Best Wishes,

Yours sincerely,


M V Gowtama

7 August 2019

Chairman & Managing Director