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Updated:10 Aug, 2020, 15:59 PM IST

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1.00 2.84%

Updated:10 Aug, 2020, 16:01 PM IST




The Directors are delighted to present the 51st Annual Report on the business and operations of the Company and the statement of accounts for the year ended March 31, 2015.

Percentage increase over/ decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer– BHEL has not offered shares to the public at large in an IPO.


The Board has recommended a Final Dividend of 31 % (Rs. 0.62 per share), Rs. 151.75 Crore, for the year 2014–15. An interim dividend of 27 % (Rs. 0.54 per share), Rs. 132.17 Crore, on share capital of Rs. 489.52 Crore, has already been paid for the year 2014–15. Thus the total dividend (exclusive of dividend tax) for the year 2014–15 is Rs. 283.92 Crore (Rs. 1.16 per share) as against Rs. 692.68 Crore (Rs. 2.83 per share) paid in the previous year.  Provision of Rs. 30.89 Crore has been made for Corporate Dividend Tax on the Final dividend proposed. Corporate Dividend Tax of Rs. 26.43 Crore has already been paid on the interim dividend

Orders Received

Despite operating in a subdued but healthy competitive business environment, the company secured orders worth Rs. 30814 Crore during the year. Sector–wise orders booked are as follows:

Events Occurring after the Balance Sheet Date

There were no significant events occurring after the Balance sheet date.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating  to material departures;

(ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) The directors have prepared the annual accounts on a going concern basis;

(v) The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(vi) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively;

Management Discussion and Analysis

A report on Management Discussion and Analysis is placed at Annexure – I.

Board of Directors Appointment

Shri Rajesh Kumar Singh, Joint Secretary, Department of Heavy Industry, Ministry of Heavy Industries & Public Enterprises, has been appointed as Part–time Official Director w.e.f. 22.12.2014.

Shri T.N. Veeraraghavan has been appointed as an Additional Director w.e.f. 07.01.2015 to take charge of the office of Director (E,R&D).

Shri D. Bandyopadhyay has been appointed as an Additional Director w.e.f. 01.08.2015 to take charge of the office of Director (HR).

In accordance with Section 161 of the Companies Act, 2013 and Article 67(iv) of the Articles of Association of the Company, Shri Rajesh Kumar Singh and Shri D. Bandyopadhyay shall hold their directorships up to the 51st Annual General Meeting of the Company and is eligible for appointment as Director at the Meeting.


Shri Ambuj Sharma, Additional Secretary, Department of Heavy Industry, Ministry of Heavy Industries & Public Enterprises, consequent to DHI order No. 1(2)/1995–PEXI dated 17th December, 2014 has relinquished his position as Part–time Official Director on 21.12.2014.

Shri P.K. Bajpai, who was appointed as Director (Finance) w.e.f. 01.07.2011 ceased to be a Director of the Company on attaining the age of superannuation on 31.05.2015.

Shri T.N. Veeraraghavan, who was appointed as Director (E,R&D) w.e.f. 07.01.2015 ceased to be a Director of the Company on attaining the age of superannuation on 30.06.2015.

Shri R. Krishnan, who was appointed as Director(HR), w.e.f. 01.04.2012 ceased to be a Director of the Company on attaining the age of superannuation on 31.07.2015.

The Board of Directors place on record their deep appreciation of the valuable services rendered as well as advice and guidance provided by S/shri Ambuj Sharma, P.K. Bajpai, T.N. Veeraraghavan and R. Krishnan during their tenure.

Further, pursuant to Section 152 of the Companies Act, 2013 and Article 67(i) of the Articles of Association of the Company, Shri Atul Sobti and Shri S.K. Bahri will retire by rotation at the Annual General Meeting and being eligible, offers themselves for re–appointment.

In compliance with Clause 49(VIII)(E)(1) of the Listing Agreement, brief resumes of the Directors proposed for appointment and re–appointment along with requisite details are given in the Explanatory Statement/ Annexure to the Notice.

No Director has given resignation during the year.

CEO/CFO Certificate

CEO/CFO certificate {as per Clause 49(IX) of Listing Agreement} is placed at Annexure – II.

Sustainable Development

Sustainability is just a natural extension of the way BHEL sees itself and its responsibilities. For almost fifty years of its existence, the company has been leveraging technology and innovations for providing products, systems and services to its customers enabling them to use resources with better efficiency and productivity which is also reflected in its Mission Statement – "Providing

Sustainable Business solutions in the fields of Energy, Industry & Infrastructure".

BHEL has ingrained the triple bottom line approach for Sustainable Development in its business processes. It has been creating value for its stakeholders since inception. Its R&D efforts have always been directed towards development and diffusion of technologies which are having reduced environmental footprints. Its structured CSR programme is directed towards bringing prosperity to the society and is aligned to the efforts being made by Government of India towards inclusive growth.

BHEL has undertaken numerous CSR initiatives and more than 300 such CSR projects/activities implementedduring2014–15coveredmajorly all Units/ Regions. In addition, company has undertaken many environmental sustainability initiatives which falls broadly in the areas of renewable energy generation, material and natural resource management, energy management, water & bio–diversity management and carbon management. The details of all such sustainability initiatives are provided in Annexure–III.

Business Responsibility Report

In line with the requirement of clause 55 of the listing agreement, Business Responsibility Report describing the initiatives taken by the company from an environmental, social and governance perspective as per the suggested format is enclosed at Annexure –IV.

R&D and Technological Achievements

Continuous product development is the cornerstone of strategy for meeting the challenges in today's environment. BHEL places strong emphasis on innovation and creative development, which are the important drivers of BHEL's R&D programmes for achieving growth. The R&D efforts of the company are not only aimed at improving the performance and efficiency of the existing products, but also developing new products using state–of–the–art technologies and processes.

BHEL has recorded significant achievements during the year. The R&D expenditure of the company for the current financial year is Rs. 1018.59 Crore which is 3.29% of the turnover. This also includes the expenditure incurred on R&D efforts gone into major modifications/ improvements in product/ designs against customer requirements which are not covered in R&D projects. The company filed 453 patent and copyright applications filed during the year 2014–15, enhancing the company's intellectual capital to 3010.

It is imperative to focus on newer areas to meet the challenges of a changing business scenario while continuing development in traditional areas of business. To meet this objective, BHEL has taken several technology development initiatives covering various business verticals viz. Power, Transportation, Transmission, Solar, ater, Defence and other areas. Company will continue to pursue various projects undertaken in recent years with focus on low–carbon path technologies including faster assimilation of Supercritical Technology, development of Advanced Ultra Super Critical Technology, IGCC Technology commercialization, Carbon capture, Solar PV & Thermal, 765/1200 kV Transmission System, GIS up to 765 kV, ±800 kV HVDC system, IGBT based Propulsion Systems for higher rating Locos, EMU, Metro coaches on mission mode. The company is also engaged in development of emerging technologies like Fuel Cells for distributed environment friendly power generation, development of new materials with addition of Nano–/micro–particles for improving characteristics, and superconducting application in Transformers, Generators, Motors, etc. Further details are given in Annexure–V.

Official Language Implementation

Continuous efforts were made for propagation and effective implementation of Rajbhasha in the company. Inspection of 12 Units/Divisions was done to monitor and review the progress in this area. Committee of Parliament on Official

Language appreciated the efforts being made in this area during the inspection of Corporate Office  on 16.01.15.

More than 900 non Hindi speaking employees were imparted training under Hindi teaching scheme of Govt. of India. Training for using latest version of Unicode Hindi on computer was also imparted to more than 5000 employees of all the Units/Divisions. 70 Hindi workshops were organized to motivate employees to work in Hindi covering more than 1800 employees. In addition, 1 Translation Training Programme was conducted with the help of Central Translation Bureau, Rajbhasha Vibhag, Ministry of Home Affairs.

Under Inter Unit Rajbhasha Shield Scheme, 13 Units were given award for excellent Rajbhasha Implememtation.03 executiveswere awarded for Hindi Book writing under Hindi Book Award Scheme. In addition, 350 employees who do their work in Hindi were also awarded with cash awards.

All the Units/Divisions of the company, including Corporate Office, celebrated Hindi Divas and Hindi eek/ Fortnight/Month during which various competitions, Seminars, Cultural Programme and Kavi Sammelan were held.

BHEL is playing an active role in Town Official Language Implementation Committees constituted in various cities. Many interesting competitions, Seminars and programmes are conducted under auspices of these committees. This year 15 Units/ Divisions of BHEL were awarded by the TOLICs for various achievements in this area.

A handbook "Rajbhasha Sahayika" has been prepared as helping material for doing work in Hindi. It is being distributed to employees in Hindi workshops and it has been uploaded on Corporate intranet also.

13 Hindi Magazines are being published all over the Company to motivate the employees for Hindi writing and these are getting awards from various institutes. "Arunima" from Corporate Office was awarded with Second Prize by TOLIC (PSU), Delhi for excellent House Journal.

All BHEL Rajbhasha Coordinators Meet was held on 9th & 10th October, 2014 at EPD, Bengaluru. 35 employees from various Units/Division of the Company attended the Meet.


The Vigilance organization of BHEL is headed by a Chief Vigilance Officer (CVO) appointed by the Ministry. All major manufacturing Units / Power Sector Region of BHEL have vigilance set up, headed by senior vigilance executive reporting to  the CVO.

Preventive vigilance remained the focus area of BHEL Vigilance, with special emphasis on systemic improvements. To strengthen the vigilance administration, histle blower Policy of the company was issued. Further, action was initiated for review of orks policy, orks Account Manual and HR Manual.

Public Awareness is an important cornerstone for good governance. An enlightened employee not only can contribute in achieving the organizational goal but also in system improvements. Training programmes / sessions were conducted to update employees about Company's policies, rules and procedures in various BHEL Units and Regions. In addition, interactive sessions were held with line executives representing different functional areas to sensitize them about the risk prone areas.

with a view to create awareness about procurement and works policy, rules and procedures etc., to disseminate the instructions/ guidelines issued by CVC and Government of India from time to time and to share best practices and case studies, a quarterly e–Newsletter 'DISHA' is being published by Corporate Vigilance.

Corporate Vigilance teams inspected 9 Units. The issues observed during inspections were discussed in interactive sessions with the respective Unit Managements. It was impressed upon officials to focus on the aspects of estimation and price reasonability while dealing with procurement to remain competitive in the market. The interactive sessions helped BHEL officials to appreciate the role of Vigilance in promoting a strong, viable and competitive organization.

The critical review of tender conditions was also undertaken with a view to increase competition and check cartel formation. Due to proactive action of Vigilance, savings to the tune of Rs. 37.03 Crore (approx.) have been achieved.

BHEL Vigilance prepared a detailed Corruption Mitigation Action Plan in respect of potential areas of corruption, which has been taken up for implementation by all Units.

Routine / Surprise Inspections were carried out by Unit / Corporate Vigilance to verify the compliance of rule and procedures. Instructions/Guidelines were issued concerning following issues for further improvement in the system:

a) Deficiencies in Tendering Process of Transportation Contracts

b) Clarificationonclause4.0 of Guidelines on Suspension on Business Dealings with Suppliers / Contractors

c) Prequalification Criteria (PQ)

d) Receipt and Opening of Tenders

e) Deficiency in Quality Inspections

f) Reasonableness of Rates

Some specific areas concerning Estate Management, Stores Management, Procurement were identified and Unit Managements were advised to initiate action in these areas:

• Recovery of outstanding dues on account of rent and allied charges from the allottees of quarters/ shops in Townships.

• Identification/ segregation of surplus / usable stores/ scrap material from the stores lying outside the workshops in the premises of units and not used/ disposed of for very long time.

• Installation of Bio–metric Attendance System linked with pay system.

• Procurement through open tender route particularly for high value packages and review of PMDs to weed out inactive suppliers.

To improve record management, Guidelines for Retention / Weeding out of Old Records in Vigilance Department issued on 20.08.2014.

To enhance the skills of Vigilance Officers, a workshop for Vigilance Officers was organized from 27.08.2014 to 29.08.2014 at BHEL, Bhopal

BHEL is committed to bring transparency in day to day operations of the Company by leveraging technology. The information regarding procurement related matters like status of purchase orders and Contracts, Vendor registration along with their current status is hosted on the Company website. In addition, e–tendering route is being promoted for procurement and e–payment system has been implemented to reduce vendor interface. Further, steps have been taken to promote e–procurement in the Company. The percentage of e–procurement increased from 25% to 37% and around 26% of tenders (value wise) were decided through Reverse Auction during 2014–15.

Vigilance examined 144 complaints and investigated 30 complaints during the year.

Safety & Security

Though BHEL has an established and mature Safety Management System accredited to OHSAS 18001: 2007, BHEL's management has further enhanced its focus on building a strong safety culture. To reinforce the organisation setup for safety and to improve our safety practices safety performances and other safety related issues are now reviewed in MCM on quarterly basis.

The result of efforts to improve safety are gradually becoming visible as there has been a marked improvement in safety statistics in recent past. It is reflected in data related to fatalities and man–days lost for the calendar year 2013 and 2014. At project sites, there was approximately 45% reduction in incidences of fatalities and 50 % reduction in the man–days lost due to various types of accidents during calendar year 2014 in comparison to calendar year 2013.

Dedicated Safety and Occupational Health Centres are being run in the factory premises taking care of safety and health issues at the work place. Some of  the initiatives taken in our units to build and maintain safety and health culture at work place during the year are:

• Sponsoring BHEL officials for 1 year advanced Diploma course in Industrial Safety conducted by Central / Regional Labour institute at Mumbai, Kanpur, Kolkata, Chennai and Faridabad

•Periodic health and safety awareness campaigns

•Regular health and safety related training programmes

•Display of posters and safety instructions

•Safety pledge & Tool box meetings

•Regular Plant Safety Inspections

•Encouraging use of Personal Protective Equipment

•Mock Drills in identified hazardous areas at specified frequency

•Publication of in–house magazines and hand books on various safety topics  ork Permit system for carrying out critical activities  

•Conducting periodic safety drills, Internal audits & 3rd party audits

•Job Safety Analysis for identified activities

•Monthly departmental Safety Committee meetings and plant safety committee meetings

•Scheduling preventive maintenance of machine/ equipment

•Periodic maintenance & testing of material handling equipment (including cranes, hoists, lifting tackles, forklifts, pallets); all pressure vessels/ air receivers, power presses

• Making available Material Safety Data Sheet (MSDS) for all the hazardous chemicals and safe work procedures are followed

• Developing operation control procedures (OCPs) and providing it to the concerned for effective implementation

Further, Annual Safety Heads Meet was conducted at Corporate Office on 16th & 17th Sep, 2014 for sharing of experience amongst the people directly involved in ensuring safety at their respective workplaces.

The Company's security mechanism is sufficient to provide security to each Plant/Unit. Security of most of the plants of the company is being managed by the CISF except for in some smaller plants where the company has its own security. Also, in some 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 Corporations.

Adequate measures have been taken for security of computers. Department of Electronics, Govt. of India (SRAC) has also carried out audit/review of our software security mechanism and their suggestions have been implemented.

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 incident compiled by Corporate Security Department along with quarterly reports on various security related issues as per the decisions taken in the meetings of HR & Security Heads.

Adequate measures have been taken by installation of CCTV's and SOP in many plants and offices to mitigate any security threats.

The Management, security staff and employees of company are sensitized to the security needs of the company.

Corporate Governance

As per the requirements of Clause 49 of the Listing Agreement a detailed report on Corporate Governance (including Board/Committee meeting details) together with the following is given at Annexure – VI:

(i) Auditors certificate on Corporate Governance (CG) under clause 49 of Listing Agreement & DPE guidelines on Corporate Governance.

(ii) Secretarial Audit Report u/s 204(1) of the Companies Act, 2013 and Management reply thereon.

(iii) Extracts of Annual Return pursuant to section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014.

Declaration under section 149(6) of the Companies Act, 2013 pertaining to criteria of Independence has been given by the Independent Directors to the Board of Directors.

Other Disclosures

Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given at Annexure–VII.

As per provisions of section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the details of the remuneration of directors etc. in the Directors' Report. However as per Notification No. GSR 463(E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from complying with provisions of section 197 of the Companies Act, 2013. BHEL being a Government Company, therefore, such particulars have not been included as part of Directors' Report.

Statement pursuant to Section 129 of the Companies Act, 2013 (AOC–1) relating to Subsidiary Companies & Joint ventures and Form AOC–2 pursuant to section 134(3)(h) of the Companies Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given at Annexure–VIII.

Links to Company Websites

1. Familiarisation Programme of Independent Directors, eblink :

<> familiriazation_progrm_for_IDs.pdf

2. Policy Determining Material Subsidiaries and Policy Dealing with Related Party Transactions,  eblink :

<> to_Related_Party_Transactions.pdf

The Auditors of your Company are appointed by the Comptroller and Auditor General of India. The names of auditors appointed for the year 2014–15 are printed separately in the Annual Report.

The Auditors' Report and Comments of the Comptroller and Auditor General of India are given at Annexure – IX.


The Board places on record its sincere appreciation towards the Company's valued customers in India and abroad and esteemed shareholders 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 future.

The Board also grate fully 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, Secretarial 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 company proud.

For and on behalf of the Board of Directors of


B. Prasada Rao

Chairman & Managing Director

Place : New Delhi

Dated : 06.08.2015

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