Bharat Heavy Electricals Ltd Management Discussions.

1.1 Economic & Business Overview

World economy has seen significant changes in the past two years. After registering strong growth in 2017 and early 2018, global economic activity started slowing from second half of 2018 onwards. All major indicators of economic activity like industrial production, global trade and Purchasing Managers Index showed a declining trend. Geopolitical issues, trade tensions between the US and China and other economies, coupled with economic sanctions on some oil exporting countries made a serious impact on many economies.

The pace of economic activity in India also slowed in the second half of FY 2018-19. The country grew at 6.8% in FY 2018-19, with the second half growth dropping to 6.2% as compared to 7.5% of the first half. Macro fundamentals of domestic economy remain strong. During FY 2018-19, infrastructure space (power, telecommunications, roads and others) has witnessed significant and continuous rise in credit deployment by financial institutions which has resulted in capital formation (GfCF) to GDP ratio of 32%, the highest in last five years.

In the domestic power sector, momentum for renewable power addition towards the target of 175 GW by 2022 witnessed a slowdown compared to the previous two years. Renewable market, particularly solar PV based, is maturing as policies continue to be put in place to bring competitiveness and confidence amongst domestic players. Nuclear power plant business has begun to witness growth momentum. Emission control business for thermal plants and replacement of old thermal power plants are also seeing traction.

The national transporter, Indian Railways, has taken several initiatives to decarbonize operations, upgrade & modernize infrastructure, and enhance quality of service.

In the e-mobility space, industry is gearing up to change the way citizens commute and travel. In line with the National Electric Mobility Mission and thrust on e-mobility, rapid growth in both private vehicle and public transport segment is expected along with associated electric infrastructure like charging stations etc. Policy schemes like Fame-II have already been announced by the Government for demand side incentivisation.

The growing infrastructure will need raw materials like steel in large quantities. Keeping this in view, National Steel Policy (2017) envisages creation of 300 million tonnes (MT) of steel manufacturing capacity in the country by 2030-31 against 130 MT in 2017. This has led many capital goods manufacturers to sign MoUs with leading Indian steel companies to reduce countrys dependence on imports for setting up steel projects while creating a larger base for manufacture of capital goods in the domestic market.

In the global arena, big players in the capital goods manufacturing sector are undergoing major changes. To bring focus and strengthen their core business, companies have gone for de-conglomeration as well as strategic acquisitions, leading to realignment of their portfolios. Capital goods markets may well witness oligopolistic plays dominating the business scenario in future with such developments.

1.2 Opportunities and Threats

After robust growth in the last four years, Indian economy has grown at a slower pace in 2018-19, primarily due to slow growth in manufacturing & allied sectors, weaker domestic consumption, and slower global growth, among others. As part of its vision of creating a New India, the government aspires India to become a $US 5 trillion economy by 2024-25 and $US 10 trillion by 2030 from $US 2.6 trillion in 20l8. Energy and infrastructure sectors are expected to receive major investment and policy support. The reduction in benchmark interest rates are expected to prove beneficial to the infrastructure sector. Railways, ports, urban infrastructure, environmental solutions and core industries like cement, steel, fertilizers, and petrochemicals are slated for growth. Initiatives such as Make in India are likely to strengthen, and further initiatives towards strengthening of manufacturing sector can be expected.

The global economy witnessed a slowdown in the second half of 2018-19 following two years of robust economic growth. World Economic Outlook predicts the global economic growth to moderate from 3.6% in 2018 to 3.3% in 2019 and then return to 3.6% in 2020. The slowdown was attributed to geo-political risks, country-specific factors in advanced as well as emerging economies, along with trade protectionist policies and retaliations. The threat of impact of inward-looking policies of major economies still looms on the global economy. This is detrimental to the integration of global economy and may pose a threat particularly to the emerging and developing economies.

The ever-evolving domestic business environment is challenging on the one hand, while on the other, it presents a host of opportunities. With steps like the SAUBHAGYA scheme, the focus of the government is on providing access to reliable and sustainable 24x7 Power for All. This, coupled with other drivers such as rapid urbanization, decarbonisation of railway operations, governments thrust on e-mobility and urban transportation development by means of metro rail etc., is expected to contribute significantly to electricity demand growth in the future. This energy demand is envisaged to be met through a balanced fuel mix consisting of clean coal, hydro, nuclear, solar and wind energy. The ordering of coal-based thermal plants has been subdued in the recent years though opportunities continue to emerge in the areas of replacement of old sub-critical plants with supercritical plants and emission control equipment. Development of clean coal technologies is imperative for better utilization of coal and BHEL is already working towards the indigenous development of AUSC technology and development of coal-to-methanol technology. Power generation from renewables has gathered momentum and is expected to continue to do so, subject to the pace of development of battery storage solutions with respect to their scale and cost. Coal based power plants will play an important role specially with the improved generation technology, flexibilization of thermal generation, and deployment of emission control measures.

New opportunities continue to emerge in sectors such as defence, transportation, transmission, renewables etc. as a result of reinvigorated push for the growth of Indian industry under the Make in India initiative. After a challenging phase in the recent years, recovery is expected in corporate capex cycle across sectors including energy and metals sector. Emphasis on boosting infrastructure in the country through various programmes including Sagarmala, e-mobility, rail & road transport modernization through initiatives like Dedicated Freight Corridor & Bharatmala, and smart cities will translate into new business avenues. The governments developmental policies will continue to enthuse growth in investments in the domestic industry. The opportunities have been discussed in detail in the respective Business Sector sections.

1.3 Preparing for Growth

BHEL embarked on the journey of "Creating BHEL of tomorrow" in the backdrop of an uncertain business environment, which presented opportunities amidst challenges. We have focused our efforts in this direction through our seminal strategy framework: Survive, Revive and Thrive and its respective enabling nine elements (NEEV). We have already taken important steps in this journey and are resolute to take many more, with focus on building and maintaining profitable growth, asserting leadership in the core business, and diversifying by harnessing emerging opportunities.

Persistent efforts towards expeditious execution of existing orders, strategic consolidation of companys assets & business groups, and simplification of processes & policies enabled us to continue with the momentum of improved performance. We have continuously recorded growth in turnover for the last three financial years including 2018-19, and have registered quantum growth in profitability. As part of our efforts to make BHEL lean and agile, various initiatives have been taken including consolidation of three units (CSU, FP & IP) as Fabrication, Stamping & Insulator Plant (FSIP) at Jagdishpur, conversion of EMRP into a service centre for Indian Railways at Mumbai, and closure of RMSG at Bhopal.

In the face of continued disruptions in the core business, the company is determined to protect and assert its leadership. Though ordering in the thermal segment has been subdued in the recent years, BHEL has secured 100% of the main plant package orders in the thermal segment for the past two years. The company is strengthening its leadership in emission control equipment business with an existing portfolio of 32 flue gas desulphurisation sets and 11 selective catalytic reductions sets in India and is continuing to grow further, having a significant number of opportunities where it is favourably placed. Resolute focus is being put on maximizing orders from replacement opportunities, enhancing business from primary side capabilities for nuclear cycle, lift irrigation systems, and expanding spares & services business. Simultaneous efforts are on to increase value propositions in power plant business by leveraging digitalization as a driver of new growth opportunities.

Continuing to make a mark beyond the national borders, the company is actively pursuing opportunities in the neighbouring countries and in the African market. In 2018-19, BHEL received the order for Arun-3 Hydroelectric Project which, once commissioned, would be the largest hydro power plant in Nepal, and is on course to execute its first overseas solar project in Chad.

The company is aggressively pursuing its target of increasing the share of non-coal business. Diversification initiatives in various areas such as e-mobility, solar, defence & aerospace, transportation, electricity storage solutions, water etc. have begun to bear results. The company booked the highest ever orders in transportation, solar, and spares and services businesses in 2018-19.

Significant developments in the transportation business during the year include the supply of first in-house manufactured 6000 HP WAG-9H electric locomotives to Indian Railways, and successful in-house development of regenerative braking system for 5000 HP WAG-7 electric locomotives for the first time in the country. In solar business, the Company received its largest single EPC order for 129 MW SPV plants in Telangana from Singareni Collieries Company Limited. Successful execution of the Telibandha lake purification project at Raipur, has opened avenues for entry into lake/water body purification and rejuvenation projects.

New growth areas are being identified further for converting emerging opportunities into potential success stories. BHEL is making forays in many new areas, such as PV plants with battery energy storage, solar floating PV plants, railway electrification, electric vehicle chargers, and municipal water segment, among others. In order to enhance opportunities from developer mode model in solar business, BHEL has already signed an MoU with GAIL, which will enable BHEL to leverage its manufacturing & EPC strengths, with GAIL playing the role of project developer. As a first of its kind project in the world, BHEL is also setting up a 1.7 MW pilot solar power plant for Indian Railways for directly feeding power to the traction system. A rail based logistics terminal is being set up at Haridwar, which will subsequently be developed into a multi-modal logistic facility by adding value- added services like custom clearance facilities and warehousing.

For laying the foundation of new avenues of business growth for the future, focus on R&D and innovation will be one of the major enablers. Significant progress has been made in major in-house technology development projects underway such as Advanced Ultra Supercritical Technology, Coal to Methanol, propulsion technology for locomotives and electric vehicles etc. Simultaneously, the company is strengthening its technology base through technology collaborations with global industry leaders. Six new technology collaborations have been signed in various areas during the last two years.

Success of our initiatives depends on our people- our most important asset. The company continues to put resolute focus on policy and structural changes for giving impetus to employee development. Reskilling and redeployment of people in new growth areas is being continuously pursued. Many progressive initiatives have already been implemented and similar efforts are being continued. A lot has been achieved so far in our journey of "Creating BHEL of tomorrow" and there is a lot yet to be achieved. The results of our persistent efforts and initiatives give us the confidence that though the journey ahead continues to be challenging, but, we will build a new BHEL, and a new India.

1.4 Profile and Performance of Business Segments

1.4.1 Power Sector Overview

The Indian economy has successfully faced multiple challenges and has emerged as one of the fastest growing major economies over the last few years. The success story of the nation has been driven by infrastructure development, demographic expansion, digitalization and urbanization and has been aided by a proactive policy framework and government initiatives.

As a result, the Indian economy is slated to maintain its status as one of the fastest growing major economies in the world in the foreseeable future as well. However, theres still a long Journey to traverse for the nation, navigating through a difficult geopolitical environment and overcoming various challenges, on its road to sustainable development.

The high growth trajectory of a nations economy is strongly correlated with the growth in its energy sector. Availability of reliable and quality energy for all at affordable rates becomes vital for sustained economic growth. India currently possesses an installed capacity base of over 356 GW and has an annual electricity generation of over 1,372 Billion Units (as on 31st March 2019). The nation witnessed a capacity addition of approx. 6 GW from conventional sources in FY 2018-19, most of which was from thermal power plants.

The electricity generation in the nation has grown at a rate of around 5-6% over the past few years, and in 2018-19, there has been almost nil deficit. In the coming years too, the demand is expected to grow significantly, and become almost 1.5 times of the current levels. This is expected to create a significant opportunity for power projects in the coming years.

Current Business Environment

Government initiatives like Make in India, Smart Cities, 24x7 Power for All, etc. are expected to enhance the demand for power in the country in the coming years. The thrust on electrification of railways and development of e-mobility solutions is expected to further boost the demand for power.

With a positive outlook towards infrastructure development and growth in manufacturing industry, the demand for power is expected to improve in the near to medium term, making capacity addition in power systems imperative. The 19th Electric Power Survey and the National Electricity Plan of CEA envisage a demand for power of ~2,050 BU by 2027, which underlines the need for substantial augmentation of power generation, transmission and distribution capabilities from the current levels.

Government of India aims to make thermal electricity generation more environment-friendly. Accordingly, the revised emission norms for existing and upcoming thermal power plants were notified in December 2015, which necessitated installation of emission control equipment in thermal power plants. Ordering for emission control equipment by various utilities has gained further steam in 2019-20, and many tenders are in pipeline, both for central and state sector projects, for retrofitting of emission control equipment in existing power plants. Recent thermal power plant tenders have included emission control equipment as part of scope along with main plant equipment, a trend which is expected to continue in upcoming projects. Also, significant opportunities are expected to arise in Renovation & Modernization (R&M) business, when these new environmental norms get enforced for existing plants. In addition, the Government is also encouraging replacement of old and inefficient subcritical plants with new, more efficient, supercritical plants.

Over the past few years, developers have faced constraints in obtaining assured fuel supply, timely clearances and issues related to land acquisition, funding, and securing power off-take agreements with DISCOMs. Few significant reforms undertaken by the government such as the UDAY scheme, facilitating medium term power procurement from commissioned capacities which are lacking a Power Purchase Agreement (PPA), etc. are expected to result in further improvements in the power sector business scenario. Some aspects of the stress faced by coal-based power projects in India have eased significantly with an improvement in coal availability and power demand, but delayed payments by distribution companies, gas supply constraints, stressed assets in the sector, etc. continue to pose challenges to power producers. Resultantly, even though the sectoral outlook has improved in the recent years, the ordering has been mainly in central and state government sectors, with the private sector still grappling with existing capacity issues.

Policy shift towards Renewable Energy Sources (RES) based power, marked by the governments ambitious target of 175 GW RES based installed capacity by 2022, saw RES based capacity addition outpacing capacity addition from conventional sources of power. However, the RES power segment has witnessed a slowdown in growth rate in 2018-19, due to factors like price escalation for solar modules, safeguard duty on solar PV imports, issues in land acquisition, re-negotiation and cancellation of Power Purchase Agreements (PPAs) between RES developers and discoms, etc. Capacity addition of RES based power generating systems also calls for significant enhancement of hydro-electric power capacity, especially of pumped storage, and gas based power plants, to meet the grid balancing and stabilization requirements necessitated by the inherent variability of RES based power systems. Coal based power plants are expected to remain the mainstay of Indias power generating capacity in the coming years, in view of their suitability for continuous, round-the-year operation and significant improvements in efficiency and emission levels through technology advancements enabling coal based power plants to generate cleaner and greener power.

Only about one-third of Indias hydropower potential of 149 GW has so far been harnessed. Hydropower generation from conventional and pump storage generating stations can play a significant role in the balancing of generation, which will be a major challenge with the increased share of renewable power generation. This is likely to result in a major thrust to hydro projects. Further, 30% of Indias hydropower plants have completed 35 years, thus necessitating requirement of life extension and performance & efficiency upgrades.

Nuclear power, an integral part of Govt. of Indias strategy for clean and green energy, is poised for a quantum leap in the coming years. In addition to 2x700 MWe GHAVP 1&2 (Gorakhpur Haryana Anu Vidyut Pariyojna), procurement activities for 10x700 MWe PHWRs have also started on Fleet Mode basis.

Offerings

BHEL is one of the few companies in the world manufacturing the entire range of power plant equipment, with proven capabilities for executing thermal, gas, hydro and nuclear power projects.

BHEL has the capability for concept to commissioning of thermal power plants encompassing steam turbines, generators, boilers and matching auxiliaries up to 1000 MW ratings. The Company is executing numerous prestigious projects with supercritical thermal sets of 660/700/800 MW ratings on EPC basis.

BHEL also supplies and executes Circulating Fluidized Bed Combustion (CFBC) boilers for thermal plants, suitable for wide range of low-calorific fuels like pet-coke, lignite, etc. BHEL offers gas turbines and matching generators upto 299 MW (ISO) rating, tailored to meet specific needs, for both open and combined cycle operation.

In nuclear power sector, BHEL is amongst the few organisations which are associated in all the three stages of indigenous nuclear power programme of the country both on primary and secondary Side. BHEL supplied 220/235/500/540 MWe Nuclear Turbine Generator sets are already under operation and currently, BHEL is also executing 700 MWe sets.

BHEL has the capability for engineering and manufacturing custom-made conventional hydro turbines of Kaplan, Francis and Pelton types with matching generators upto 400 MW, bulb turbine with matching generators up to 10 MW, pump turbines with matching motor-generators up to 250 MW, high capacity pumps along with matching motors up to 150 MW for Lift Irrigation Schemes and small hydro power plants of 10-25 MW capacity.

In respect of business opportunities arising from the revised emission norms, BHEL offers customized equipment for controlling emissions from thermal power plants. BHEL is also ready to provide retrofit solutions of ESP, FGD, NOx control equipment and furnace modification solutions. BHEL has supplied Electro-Static Precipitators for control of particulate matter not only for BHEL boilers, but also for boilers of other manufacturers.

The company has proven expertise in plant performance improvement through renovation, modernization and uprating of a variety of power plant equipment, besides specialized know-how of residual life assessment, health diagnostics and life extension of plants. Retrofit packages for ESP and C&I with state of the art technologies are also being offered by BHEL.

Achievements during the Year Order Booking

In the fiscal year 2018-19, BHEL has successfully confronted various challenges to maintain 100% market share in main plant thermal utility segment. The organization has secured an order inflow of Rs.15490 crores in power sector, including the highest- ever ordering levels of Rs. 3851 crores from spares and services and R&M business segment.

Significant utility orders received in the year were:

Thermal

• 1x660 MW WBPDCL / Sagardighi Extn #5 (Main Plant Turnkey Package, including FGD & SCR)

• 1x660 MW MAHAGENCO/ Bhusawal #6 (Change Order, incl. fgd & SCR)

• 4x270 MW TSGENCO / Bhadradri (FGD Pkg, Boiler & ESP Modification)

• 1x800 MW TSGENCO / Kothagudem (FGD Pkg)

• 3x660 MW NTPC / Barh Stg. I (FGD Pkg)

• 2x660 MW NTPC / Barh Stg. II (FGD Pkg)

• 3x660 MW NTPC / North Karanpura (FGD Pkg)

• 2x500 MW NTPC / Mauda (FGD Pkg)

• 3x800 MW PVUNL / Patratu (Township Pkg)

• 2x660 MW TANGEDCO / Ennore SEZ (Boiler Modification) Nuclear

• 2x700 MW NPCIL / GHAVP #1&2 (Supply of Moderator Heat Exchangers)

• 2x700 MW NPCIL / GHAVP #1&2 (Supply of D2O Heat Exchangers)

Spares and Services

• 1x370 MW KPCL Yelahanka CCPP (Gas Turbine Spares)

• 2x200 MW UPRVUNL Obra TPS Unit-12 & 13 (Rehabilitation Package)

• 4x210 MW CSPGCL Korba West TPS Unit-1 to 4 (C&I Up-gradation)

• NTPC Lot-1 Projects (Combustion Modification Package)

• 2x250 MW TSGENCO Kothagudam TPS Unit-9 & 10 (C&I r&m)

• 1x500 MW CSPGCL Marwa TPS Unit-1 (HPT Module Assembly)

By securing the order for 1x660 MW Sagardighi Extn #5 project from WBPDCL, the only main plant order finalized in the country in FY 2018-19, against stiff International Competitive Bidding, BHEL has taken its total order tally of supercritical sets in the country to 56 sets of Steam Generators (SGs) and 49 sets of Turbine Generators (TGs), the highest by any single power equipment supplier in the country. Out of these, 17 SGs and 15 TGs have been commissioned till March 31, 2019.

Building on its accomplishments in the emission control equipment business in previous year, BHEL has garnered orders of fGds for 17 sets and SCRs for 2 sets during 2018-19, including FGD orders from NTPC for projects totalling ~6.3 GW.

With this, BHEL has secured orders of FGDs for 32 sets and SCRs for 11 sets in the domestic market, and has maintained its status as the manufacturer with the single largest market share in the nation in this domain.

Diversifying its gamut of offerings, BHEL has secured its first ever order for township package for 3x800 MW Patratu STPS Ph-I project from PVUNL.

With new product offerings in the nuclear segment, BHEL has secured the following 2 significant orders from NPCIL for Gorakhpur Haryana Anu Vidyut Pariyojna 1&2:

• 4 Moderator Heat Exchangers

• 18 D20 Heat Exchangers

Notably, this is the first ever order secured by BHEL for D2O Heat Exchangers.

In the Spares and Services business, BHEL witnessed a 37% growth over the ordering levels of FY 2017-18. BHEL entered into 6 Long Term Spares Supply Agreements (LTSSAs):

• With NTPC for boiler pressure parts, generator spares and boiler auxiliaries spares

• With Bharat Petroleum Corporation Ltd. for turbine spares, compressor and over speed governor

• With Singareni Collieries for mill spares Project Revival

Through the collaborative efforts of all the stakeholders, BHEL has been able to revive the 206 MW Shahpur Kandi HEP project of PSPCL (which was put on hold in Sept. 2015).

Project Execution

In the utility segment for conventional power plants, BHEL achieved a capacity addition of 2,130 MW in FY 2018-19, the highest capacity addition achieved by any single equipment manufacturer during the year.

Following projects have achieved capacity addition during FY 2018-19:

• 1X800 MW TSGENCO / Kothagudem TPS

• 1 unit of 2X800 MW NTPC / Gadarwara TPS

• 1 unit of 4X250 MW BRBCL / Nabinagar TPS

• 1 unit of 3X250 MW NTPC Bongaigaon / TPS

• 1 unit of 4X30 MW APGENCO / Pullichintala (Hydro)

In the year, BHEL also accomplished the milestone of commissioning more than 1,000 utility sets in the country since BHELs inception in 1964. This includes 447 coal based sets, 418 hydro utility sets, 102 gas based utility sets and 12 nuclear based utility sets in India. Installed capacity of BHEL supplied utility sets in India stands at ~157 GW, including ~125 GW coal based and ~21 GW hydro based equipment.

With this, BHEL maintained its significant share of 53% in the countrys total installed capacity of conventional power projects:

In addition, BHEL synchronized utility power projects of 3,480 MW and Lift Irrigation Scheme projects of 957 MW total capacity:

Utility power projects:

• 1x800 MW GSECL / Wanakbori TPS

• 2 Units of 2x660 MW OPGCL / IB Valley TPS

• 1 Unit of 2x660 MW RVUNL / Suratgarh TPS

• 1 Unit of 2x500 MW NLC / New Neyveli TPS

• 1 Unit of 4x200 MW NHPC / Parbati stage-II HEP

Lift Irrigation Schemes:

• 5x30MW Gammon / Kalwakurthy LIS Stage- Ill (1 Unit)

• 7x139 MW I&CAD, Telangana / Kaleshwaram Lift Irrigation Scheme (LIS) Pkg-8 (5 Units)

• 7x116 MW I&CAD, Telangana / Kaleshwaram Lift Irrigation Scheme (LIS) Pkg-6 (2 Units)

Some of the major project execution milestones for the year are:

• BHEL commissioned an 800 MW supercritical unit at 1x800 MW TSGENCO / Kothagudem TPS on EPC basis in a record time of 46 months

• 3x110 MW Kishanganga HEP was dedicated to the nation by Honble Prime Minister of India on 19.05.2018 from Srinagar, J&K. The Electro-Mechanical package for the project has been supplied & commissioned by BHEL.

• R&M works at Koradi Unit-6 were successfully completed and the unit was upgraded from 210 MW to 228 MW

Performance of Equipment

59.6% of the countrys total generation of 1022 BUs from thermal utility sets (coal based) was contributed by BHEL supplied sets, testifying superior performance of BHEL sets:

Focused approach towards completion of Performance Guarantee (PG) tests resulted in completion of PG tests for main plant package for 51 units, the highest ever for BHEL, surpassing the earlier record of 41 Units. Amongst these, BHELs first ever PG test of a 250 MW rating CFBC boiler was completed at 2x250 MW Neyveli Unit 1&2.

Power plants with BHEL supplied equipment continue to exhibit above par performance in respect of Operating Availability (OA)*, Plant Load Factor (PLF), and outages. Some of the major performance achievements of BHEL sets are:

• Thermal sets generated 6,09,747 MUs against 5,89,513 MUs in 2017-18

• Thermal sets registered PLF of 61.3% and OA of 85.0%

• Generation from sets of 195 MW and above (which form the backbone of countrys power generation) went up to 594470 MUs with PLF 62.0% and OA of 85.6%

• 154 thermal sets achieved PLF above 70%, 67 thermal sets between 70% and 80%, 65 thermal sets between 80% and 90% and 22 thermal sets above 90%

• 205 thermal sets registered OA above 90%

*-Units under low system demand, coal shortage & reserve shut down are considered as available while calculating Operational Availability For PLF & OA calculation, only stabilized period i.e. after COD is considered.

Renovation & Modernization (R&M)

During the year, BHEL carried out the renovation & modernization of 6 ESP Sets. Also, 2 C&I R&M projects (NTPC Farakka Unit-4 & 5) were commissioned, Koradi U-6 (which was uprated from 210 MW to 228 MW) achieved full load, and UPRVUNL Obra Unit-12 was synchronized.

Acknowledgement & Recognition of Excellence

BHELs efforts for providing higher value to customers through timely project completion, improvement in equipment performance and Service After Sales (SAS) support have been widely appreciated:

• BHEL Power Sector received the Recognition for Active Customer Engagement - Manufacturing (Large Business Organizations) at the Cl Award for Customer Obsession - 2018

• Project Director-BIFPCL, Maitree STPP, Bangladesh appreciated BHEL for providing unique solution for pile capacity enhancement for foundation design of boiler & chimney

• OHPC appreciated BHEL for in-situ repair and replacement of Door Seals of butterfly valves of Upper Kolab hydro Unit-2 and Unit-4

• BBMB appreciated BHEL for R&M of Generator & Turbine of Dehar hydro Unit-5

• Singareni Collieries appreciated BHEL for Generator Earth Fault Rectification in Unit-2

Preparing for Growth

Utilizing its rich experience of over five decades, BHEL has been spearheading the development of the domestic power sector by not only indigenizing technology from world leaders in various domains but also building state-of-the-art in-house manufacturing infrastructure and capabilities. Through its R&D efforts, BHEL has already indigenized and developed products and technologies suited to Indian conditions. Further, BHEL is also working on the indigenous development of Advanced Ultra Super Critical (AUSC) Technology in the nation.

Substantial activities have been initiated in the emission control equipment business, with the developers aiming to meet the revised emission norms. BHEL possesses capabilities to offer customized emission control solutions for new projects as well as for sets which are already in operation. Through continuous improvements in its processes and technologies, BHEL is extending its market leadership in the FGD domain to the entire spectrum of emission control equipment business.

The governments focus on replacement of old subcritical capacity with new supercritical capacity having higher efficiencies will entail requirements to provide solutions for dismantling of older plants. BHEL is equipped to provide optimum techno-economic solutions to developers to meet such requirements.

With large scale influx of RES based power systems in the grid, the need for grid balancing solutions shall create an opportunity for flexiblization solutions for thermal power plants, which may work in consonance with the gas and hydro based projects. Also, lower rating supercritical projects may also be required to be set up, to address the space constraints in expansion projects and the requirement for flexible and two-shift operation of projects. BHEL has developed solutions to meet such requirements and is working towards further optimization of its solutions to provide more value to the customers.

BHEL is already developing indigenously nations first Advanced Ultra Super Critical (AUSC) Technology based plant, which is a pioneer R&D project undertaken jointly with NTPC and Indira Gandhi Centre for Atomic Research (IGCAR). The R&D phase for the project is on course and BHEL will work with NTPC for installation of the Technology Demonstration Plant. Development of this technology will yield significant improvement in efficiencies, leading to reduction in coal consumption as well as CO2 emissions.

BHEL offers its experience in renovation & modernization (R&M) and life extension to developers looking to improve the performance of their existing sets. BHEL is also harnessing digital technologies to enhance its value propositions to customers, including in the spares and services business. In this sphere, an initiative for Digitalization of Spares & Services Business has been taken by the company for generating offers through a dynamic on-line system, through which, enquiry generation, offer submission, and Customer order placement have been automated.

The Companys enlarged scope of offerings in the power sector domain includes water management systems, Air Cooled Condenser, BoP systems, Emission Control Equipment like Selective Non-Catalytic Reduction (SNCR), etc.

In hydropower segment, the organization has enhanced its capabilities to manufacture up to 400 MW hydro sets, with efficient runner profiles and reduced hydro turbine weights. BHEL has also emerged as a leading player in large size Pump-Motors segment for Lift Irrigation Scheme projects.

In order to address EPC business opportunity in hydro sector, BHEL has entered into a Memorandum of Understanding (MoU) with NHPC for getting consultancy services for civil & hydro mechanical works and also for joint bidding in EPC hydro projects, with NHPC being responsible for civil & H&M (HydroMechanical) works and BHEL for E&M (Electro-Mechanical) works.

In the nuclear Segment, BHEL is fully geared up to address the 700 MWe TG Island business on EPC basis for the upcoming PHWRs which are being procured by NPCIL under Fleet Mode. BHEL is also expanding its offerings in nuclear projects being set up under foreign co-operation, such as Kudankulam 2x1000 MW Units 3&4.

Ushering the nation to the third stage of the Indian nuclear power programme, BHEL has developed the secondary turbine cycle for 300 MWe Advanced Heavy Water Reactor (AHWR) nuclear power plant in association with Bhabha Atomic Research Centre (BARC). With its strong engineering and manufacturing prowess, BHEL is well positioned to enhance its contribution to nuclear power projects.

The Indian power sector is in a state of flux, which shall create new challenges and opportunities for the industry. BHEL is continuously working to ensure its preparedness on all fronts, so as to provide higher value propositions to its customers, enabling them in charting their course while meeting the requirements generated by the transitions arising in the sector.

1.4.2 Industry Sector

Overview

Industry Sector offers a broad range of systems and individual products for major industrial segments of the Indian economy since the 1980s. With focus on growth of non-coal based business of the Company, Industry Sector comprising of market-focused groups, offers comprehensive solutions for Transportation, Railway Track Electrification, E-Mobility, Energy Storage Systems, Transmission, Renewable Energy, Water Management, Defence and Aerospace, Captive Power Generation and Industrial Products (Mechanical & Electrical).

During 2018-19, Industry Sector has secured orders worth Rs. 7,016 crores, which includes highest ever order booking in Transportation and Solar business segments.

1.4.2.1 Transportation

Business Environment & Opportunities

• Indian Railways plan to accomplish complete route electrification by 2022. As a result, requirement of electric Iocos and propulsion systems is expected to grow significantly. The increase in freight and passenger traffic is leading to requirement of new types of rolling stock such as train sets, High Horse Power (HHP) Locos, Air-Conditioned Electrical Multiple Units (EMUs) and mainline EMUs. Average annual demand of 500-600 EMU / MEMU coaches is foreseen in the next few years.

• Indian Railways are exploring to convert their existing fleet of more than 5000 Diesel locomotives into electric locomotives and also have plans for retro-fitment of re-generative braking system on its entire fleet of about 2000 conventional WAG-7 locomotives.

• Some of the new technologies are also being explored in transportation include Push-Pull Iocos, High Speed Rail and Advance Signalling System etc.

• In urban transportation, there are plans to set up metros in all cities with population over 2 million and light rail/ monorail is also being explored for smaller cities. Metro projects have already been announced in more than 50 cities.

• Work on Mumbai-Ahmedabad High Speed (HS) Rail Corridor has also started.

Offerings

• Rolling Stock

> Electric locomotives up to 6000 HP

> Diesel-Electric locomotives up to 3000 HP

• Traction Machines

> Traction motors and alternators

• Traction Drive System & Controls

> IGBT based Propulsion System for rolling stock comprising of Traction Converter & Auxiliary Converter.

> Train Control Management System & Vehicle Control Unit

> Hotel Load Converter and Composite Converter

> Control gear equipment for conventional rolling stock

• Traction Transformers for Electric Locos and ACEMUs/ MEMUs

Achievements During the Year

Major Orders:

Transportation sector secured highest ever orders during

FY 2018-19, some of which are:

• Maiden developmental orders: -

> Upgradation kit for 1 no. 9000 HP Freight Ioco from CLW

> 10 nos. Traction Alternator for 3000 HP DE locomotives from M/s Progress Rail India Ltd for their overseas business

> Provision of regenerative braking features in 2 nos. WAG-7 Locos from Eastern Railway, Kancharapara

> 2 nos. of 6531 KVA Main Transformer with indigenous developed aluminium tank from CLW

• Largest value orders:

> 118 sets of Traction Engine and electrics for Diesel Electric Tower Car from DMW Patiala & ICF Chennai

> 563 nos. Traction Motor from DLW Varanasi

> 95 nos. of 7775 KVA transformer from DLW Varanasi

> 104 sets of 3-phase propulsion system for MEMU from ICF Chennai

Other achievements:

• First BHEL make 6000 HP electric locomotive type WAG-9H was flagged off by Member (Traction) & Ex-Officio Secretary to the Govt. of India, Ministry of Railways in Sep.18 from Jhansi plant

• Indias first ever state-of-the-art Regeneration System for 5000 HP electric locomotive type WAG-7 developed indigenously by BHEL flagged off by Member (Traction) & Ex-Officio Secretary to the Govt. of India, Ministry of Railways in Feb 19 from Jhansi plant

• First 9000 HP Electric loco equipped with BHEL manufactured highest powered 3 phase Traction Motor type 1192 KW was flagged off from CLW, Chittaranjan in March 19

• Indigenously developed prototype IGBT based Composite Converter has been successfully tested and dispatched to CLW, Chittaranjan

• IGBT based propulsion equipment for 9000 HP electric locomotive of Indian Railways has been successfully developed Preparing for Growth

• Technology self sufficiency

Complete in-house capability for designing & manufacturing of IGBT based propulsion system for all types of rolling stock. IGBT based propulsion system including Train Control Management System for Air-conditioned AC EMUs has been developed. Development of IGBT based propulsion equipment for DE locomotives, DEMUs and MEMUs, and IGBT based composite converter for 3-phase electric locomotives has also been undertaken by BHEL.

1.4.2.2 Transmission

Business Environment & Opportunities

• Business opportunities in transmission and distribution sector are expected to improve with Government of Indias plan to add substation capacity of 2,92,000 MVA during 2017-2022. High capacity corridors for bulk transmission of power over long distances are being planned and executed on Tariff Based Competitive Bidding (TBCB) in tandem with Government schemes for strengthening of power distribution sector to meet the "Power for All" objective of Government of India. Massive renewable energy capacity addition targeted by 2022 will provide opportunities for evacuation of power, along with energy storage system integration at grid level. Gas Insulated Substation projects will continue to grow on account of effective land utilisation.

Offerings

• Turnkey transmission project execution from concept to commissioning, including EHV & UHV Substations and HVDC converter stations on EPC basis

• Transformers and shunt reactors up to 765 kV, 1200 kV CVT and 1200 kV Auto transformer, Instrument Transformers (CT, PT), Traction Power Transformers, dry type transformers, vacuum and SF6 switchgear, capacitor banks, circuit breakers, control & protection equipment, thyristor valves, etc.

• Gas Insulated Switchgear (GIS) up to 420 kV

• Ceramic and composite insulators. BHEL has a range of disc insulators for EHV and UHV AC/ DC applications up to 1200 kV AC, 800 kV DC, solid core insulators up to 400 kV and hollow porcelain insulators up to 765 kV AC.

• Flexible AC Transmission System [FACTS] devices like Fixed Series Compensation for 400 kV lines, Controlled Shunt Reactor (CSR) for dynamic reactive power compensation of long 400 kV transmission lines and Phase Shifting Transformer (PST) for controlling and balancing power flow up to 765 kV applications

Achievements during the year

Major Orders received

• 400/220/132 kV GIS substations at Rasara (Ballia) and Shamli on turnkey basis from UPPTCL. BHELs maiden entry into EHV GIS EPC segment through direct competitive bidding.

• 400/230/110 kV Vellalaviduthi substation on turnkey basis from TANTRANSCO

• 765/400 kV substation extension at Bara TPP on turkey basis from UPPTCL. Order includes supply of BHEL - make 765 kV Transformers - the first 765 kV Transformer order received through open competitive bidding.

• High rating Power Transformer Packages of total capacity of 32 nos./5920 MVA in aggregation from UPPTCL

• MV Switchgear package of 171 nos. Indoor VCB panels Milestone achievement

• Successful Dynamic Short Circuit test on 3 Nos 400 kV and 1 No. 220 kV class Power Transformers Projects Commissioned

• TANTRANSCO Thappkundu Substation (400 kV - 9 bays, 110 kV - 12 bays) fully commissioned

• Commissioned POWERGRID Bhuj substation (765 kV - 10 bays, 400 kV - 7 bays) and Banaskantha Extn (765 kV - 6 bays)

• Commissioned POWEGRID Banaskantha substation (765 kV - 10 bays, 400 kV - 12 bays) and Sankhari substation (400 kV - 2 bays)

Preparing for Growth

UHVAC & UHVDC Systems:

BHEL has successfully designed, manufactured, supplied and commissioned 765 kV class transformers and reactors, and possesses manufacturing facilities for UHVDC equipment such as converter transformers, thyristor valves, filter capacitors etc. For UHV AC & DC applications, 1200 kV transformers, Capacitive Voltage Transformers, and 420 kN & 530 kN disc insulators have also been successfully commissioned and are under operation.

BHEL has successfully commissioned worlds largest 800 kV multi-terminal HVDC project (North-East to Agra), which is under commercial operation since September, 2017. BHEL is fully geared up to address future market requirements in UHVAC and UHVDC segments.

Gas Insulated Switchgear(GIS):

BHEL has successfully completed one year of successful field operation of its first own-make 145 kv GIS at TSTRANSCO Vittalwadi in Dec18 including its O&M.

1.4.2.3 Renewable Energy

Business Environment & Opportunities

Against the target of addition of 100 GW capacity of solar photovoltaic power by 2022 as per Jawahar Lal Nehru National Solar Mission (JNNSM) roadmap, approx. 28 GW has been installed in the country as on March 31, 2019. There is also an increased focus on integration of Battery Energy Storage System (BESS) with the solar PV plants. The growth of this sector is driven by governments thrust on solar power based electricity.

Offerings

• EPC solutions for Solar PV Power Plants (with and without BESS (Battery Energy Storage System))

• Roof top, canal top and floating solar power plants

• Solar-based irrigation pumps Achievements during the year

• 5 MW Ground Mounted Solar Power Plant successfully commissioned in hilly terrain at Berradol, H.P for Himachal Pradesh Power Corporation Limited

Major Orders received:

• First commercial Floating Solar Power Plant - BHEL has set footprint on the floating solar opportunities with the first commercial scale order of 5 MW from WBDPDCL, Sagardighi

• Largest Single EPC order for 129 MW SPV plant at different locations in Telangana from Singareni Collieries & Corp Limited (SCCL)

• Roof Top Solar orders totalling to 4.6 MW received from various customers such as Rajasthan Electronic and Instrument Ltd (REIL), Cochin Smart City Ltd, Ludhiana Smart City Ltd etc.

Projects commissioned

61 MW SPV plants commissioned during FY18-19 including:

• 25 MW GIPCL, Gujarat

• 15 MW GACL Charanka

• 10 MW BEL Bolangir

• 5 MW HPPCL Berra Dol

• 5 MW WBSEDCL Santhaldih

• 1 MW BEL Medak

With this BHELs solar portfolio stands at 716 MW as on 31.03.2019, including projects under execution.

Preparing for Growth

• BHEL is planning further expansion of its module manufacturing capacity to address the growing SPV market

• Pilot project for Indian Railways to establish concept of SPV

projects in close proximity of railway track for feeding power directly to 25 kV traction sub-station

1.4.2.4 Water Business

Business Environment & Opportunities

Water availability per capita in India is declining. Nearly seventy percent of sewage generated in urban areas, and more than half of industrial effluents go untreated, polluting rivers, lakes and other water bodies. Industries are opting for recycling and reuse of waste water to meet their growing water requirements in the face of higher industrial tariff and enforcement of water discharge regulations.

Offerings

Complete water management solutions for power plants, industries and municipal applications with comprehensive solutions for:

• Pre Treatment Plants (PT)

• Sea Water Reverse Osmosis (SWRO) and Demineralization (DM) Plants

• Effluent Treatment Plants (ETP)

• Sewage Treatment Plant (STP) and Tertiary Treatment Plants (TTP)

• Zero Liquid Discharge (ZLD) Systems Achievements during the year

• Raipur Smart City Limited has appreciated the timely completion of their Telibandha Lake purification project by BHEL.

• Order secured for 3 MLD Sewage Treatment Plant based on Sequential Batch Reactor (SBR) technology with 10 years of O&M second consecutive order from Raipur Smart City Limited

Preparing for Growth

BHEL has signed an MoU with Raipur Smart City Limited (RSCL) for jointly conceiving and implementing the projects related to water, waste water and waste to energy segment.

1.4.2.5 Defence & Aerospace

Business Environment & Opportunities

Government of India (GOI) is promoting procurement of defence equipment through indigenous sources to increase indigenous procurement to 70% from current level of 30% over the next decade. Major initiatives are:

• Defence Procurement Procedure (DPP) 2016 focuses on indigenous design, development and manufacturing of defence equipment to give a boost to Make in India initiative of the Government of India. Buy (IDDM - Indigenously Design, Development & Manufacture) category introduced and given highest priority.

• Draft Defence Production Policy 2018 prepared by MOD, provides a focused, structured and significant thrust to development of defence design and production capabilities in the country. The aim of the policy is to promote domestic production by public sector, private sector and micro, small and medium enterprises (MSMEs). The salient features of the Draft Policy are:

> Creation of a dynamic, robust and competitive defence and aerospace industry as an important part of the Make in India initiative

> Creation of a tiered defence industrial ecosystem in the country

> Reducing current dependence on imports and strive to achieve self-reliance in development and manufacture of weapon systems / platforms

• ISRO has plan to increase the launch frequency of GSLV/ GSLV Mklll to 6 nos per annum by 2025. To meet the launch targets, ISRO is looking for alternate/ additional facilities/ infrastructure ISRO plans to offload complete satellite manufacturing in 5- 10 years to the industry.

Offerings

• 76/62 mm SRGM (Super Rapid Gun Mount), its spares & services for Naval Ships

• Compact Heat Exchangers for defence & aerospace applications

• In-house Capability for hot forming of Cryogenic Tanks, Titanium Shell/Domes, welding & machining of Titanium sheet and tubes

• For space applications, BHEL has established state-of-the-art facility for the assembly and testing of Space Grade Solar Panels & Batteries of various capacities

Achievements during the year

Order Book

• Development order of Air to Air Heat Exchanger (AAHE) for Sukhoi Su-30MKI aircraft application received from HAL.

1.4.2.6 Captive Power Plants

Business Environment & Opportunities

• Expansion in various sectors of economy are pushing the demand of Captive power and steam. Expansion plans of major state owned refineries shall augment the demand for GTG based Combined Cycle Power Plant package. Major players of process industries viz. cement sector, are also planning to augment their capacities, thus contributing towards enhanced demand for Captive power business.

• National Steel Policy 2017 envisages expansion of steel manufacturing capacity from 130 MT to 300 MT by 2030.

Demand for captive generation requirements in steel segment is expected to pick up in the coming years.

Offerings

• Steam Turbine based Captive Power Plants

• Gas Turbine based Open, Cogeneration and Combined Cycle Captive Power Plants

Achievements during the year

Major orders received

• 1 no. 120 MW BTG package for TATA Kalinganagar. Order for Gas Fired Boiler

• 9 STGs (sub 50 MW)

Projects Commissioned

More than 160 MW CPP projects commissioned in 2018-19

• 40 MW Tata Steel Ltd, Jamshedpur

• 36 MW Sarda Energy & Minerals Ltd. Unit-2

• 27 MW Shree Cement Ltd for Karnatak Cement Project

• 20 MW CPCL, Chennai Unit-5

• 16.75 MW Rohit Sulfactants Pvt. Ltd (RSPL) Unit-1

• 16.75 MW Rohit Sulfactants Pvt. Ltd (RSPL) Unit-2

• 12 MW Tata Projects Ltd, Kalinganagar

1.4.2.7 Industrial Products (including Oil & Gas and Electrical Machines)

Business Environment & Opportunities

• The government is planning to invest US$ 2.86 billion in the upstream oil and gas production to double the natural gas production to 60 BCM and drill more than 120 exploration wells by 2022. This would increase business prospects for Oil field equipment, Well Heads & X-Mas Trees, Compressors, Fired Heaters, Columns and Air separation units in the coming years.

• Capacity expansion projects of approx. 32 MMTPA by IOCL, NRL & CPCL are in pipeline in coming years which includes brown-field expansion at IOC Barauni, IOCL Panipat, IOCL Gujarat, CPCL Nagapattinam, NRL Expansion etc. and

Green-field refineries at Barmer which are likely to yield good business potential for Compressors, Fired Heaters, Columns and Air separation units etc.

• Indias finished Steel consumption is anticipated to increase to 230 MT by 2030 from 100 MT in Apr19. Demand would be supported by growth in the domestic market. The Government has taken various steps to boost the sector including the introduction of National Steel Policy 2017. The anticipated growth in the steel sector present opportunity to BHEL for making inroads in the Steel industry as an indigenous steel making equipment manufacturer.

Offerings

• Oil Rigs - A variety of on-shore drilling rigs with AC- VFD and AC-SCR technology for drilling up to depths of 9.000 metres, work-over rigs for servicing up to depths of 6,100 metres and mobile rigs for drilling up to depths of 3.000 metres. Beside complete rig package, supplies of onshore drilling rig mechanical and electrical equipment such as draw works, mast & substructure, AC & DC PCR, Motors etc. Refurbishment and up gradation of aged Oil Rigs is also being done.

• Well heads and X-mas Trees - Up to 10,000 psi Mud Line Suspension, Choke and Kill manifold, CBM Wellheads, DSPM H-Manifold Assembly, Mud valves, ESP hangers, Block type X-mas Trees & Landing Bases for Casing Heads.

• Compressors- Design, engineering, manufacturing and supply of various types of Multi-stage Centrifugal Compressors as per API 617 for application in Fertilizers, Refineries, Petrochemicals, Pipelines, Gas processing, Steel industries etc. BHEL has the capability to execute contracts for Centrifugal Compressor Stations on EPC/LSTK (Lump sum turnkey) basis also.

• Mechanical Packages- Cryogenic Air separation units, Fired Heaters, Columns, Reactors, Pressure Vessels, Heat Exchangers, Fired Heaters and Purge Gas Recovery Unit.

• Electrical Machines- AC squirrel cage, slip ring, synchronous motors for safe and hazardous area applications, variable speed motors, industrial alternators and special purpose machines.

Achievements during the year Orders Received

• 1st LSTK (Lump sum turnkey) /EPC order for 1 no. Lean Gas Centrifugal Compressor from ONGC Uran

• 1 no. Recycle Gas (RGC) & 1 no. Net Gas Compressor order from BPCL Kochi. This (RGC Compressor) will be the Biggest Barrel Type Compressor (BCL 800 series) being manufactured by BHEL

• Rate Contract for supply of Well Head & X-Mas Trees finalised with ONGC and Oil India Ltd.

• 10 nos. 6 MW, Squirrel Cage Induction Motors (SCIM) from M/s KSB Ltd, Pune for NPCIL, 2x700 MWe, Gorakhpur Haryana Anu Vidyut Pariyojana (GHAVP)

Preparing for Growth

• Efforts are on to enter into the business of 15000 psi Well Heads & X-Mas Trees in the oil & gas sector and axial compressors for blast furnace application in the Steel Industry.

1.4.2.8 Energy Storage Solutions Group Electric Mobility

Business Environment & opportunities

• FAME-2 scheme has been notified and is effective from 01st April 2019, for period of 3 years with total outlay of Rs. 10,000 Crore to incentivize EVs and develop Charging Infrastructure.

• Some STUs (State Transport Undertakings) have already initiated floating tenders/ deploying electric buses under Fame-I

• Ministry of Power has issued guidelines and standards for charging infrastructure of EVs with at least one charging stations to be installed in a grid of 3km x 3km and on every 25Km on both sides of highways.

• DHI issued Phased Manufacturing Program (PMP) on 6th March 2019 to promote indigenous manufacturing of electric vehicles, its assemblies/sub-assemblies/parts through graded duty structure over a period of time.

Offerings

• EV Charging Stations

• E-Buses

• EV Components - Power trains and battery packs

Achievements during the year

• In-house development successfully completed for:

> 50 KW EV charger

> 67 KW induction motor

> 130 KW Induction Motor

> 125 KW Permanent Magnet Synchronous Motor (PMSM)

Developmental work on EV power train, EV chargers and E-bus are under progress.

• BHEL has successfully commissioned first Solar based EV charging station along Delhi-Chandigarh Highway at Ethnic Resort, Rai, Sonepat (Haryana)

• 12 metre Electric Bus Prototype developed

Major Orders Received

• Maiden order for supply, installation & commissioning and AMC of 40 nos. DC-001 Chargers from EESL

• Installation of Solar Based EV Chargers across Del hi— Chandigarh highway under FAME scheme from DHI

Preparing for Growth

BHEL is committed to nations e-mobility mission with a vision to provide end to end integrated e-mobility solutions. In this direction, BHEL has taken up several in-house developments and also entered into strategic partnership with renowned companies.

Energy Storage System Business Environment

• The government has set up a target of adding 175 GW of renewable energy by 2022 to the grid. With the increase in share of renewable energy, energy storage is set to become an integral part of power system to ensure grid stability and power availability. The market potential for energy storage market is expected to reach 2- 3.5 GWh by 2022.

• Companies such as NTPC, SECI, NLC have floated tenders for energy storage systems to support PV plants.

• As a part of the National Mission on Transformative Mobility and Battery Storage, government is considering a plan to establish battery making capacity of 40 gigawatts (GW) to give a boost to its electrical vehicles and renewable energy initiatives with an expected investment of $40 billion.

Offerings

• PCS (Power Conditioning System)

• EMS (Energy Management System)

• Complete Containerized solutions

Achievements during the year

• Successful commissioning of 1 MWh Battery Energy Storage System (BESS) pilot project. The BESS is integrated with existing PV plant, to demonstrate the functionality of three different battery chemistries viz. Lithium ion, Lead-acid and Flow battery with in-house developed PCS and EMS.

Preparing for Growth

• BHEL envisages to offer complete solution for grid interactive BESS

Railway Track Electrification

Business Environment & opportunities

• Indian Railways has a target of electrifying approximately

30,000 RKMs (Route KMs) by 2022 by way of tenders in EPC mode

• Through Central Organization for Railway Electrification (CORE), Indian Railways has already floated tenders for 7 sections totaling around 6266 RKMs on EPC basis

Offerings

• Complete EPC solution for Railway Electrification

Major Orders received

• Maiden order for electrification of 386 Route Kilometers (RKM) of railway line on EPC basis

Preparing for Growth

• BHEL has leveraged its rich project execution experience to execute railway electrification projects by actively participating in all the opportunities of railway electrification.

1.4.3 International Operations

Overview

The world has increasingly become unpredictable and uncertain with escalation of trade disputes, regional conflicts, abrupt tightening of global financial conditions and climate concerns bringing about a paradigm shift in business environment, disrupting globally connected value chains. This has led to market consolidation, intense competition and protectionist tendencies among companies and countries worldwide.

While financial conditions remain generally benign, these factors have resulted in capital inflow reductions, higher financing costs and exchange rate pressures, more acute in countries with weaker fundamentals or higher political risks.

With the first ever export order in the early seventies, the companys presence has now been established in 83 countries across 6 continents. Outside India, BHEL has executed close to 11 GW of power plant equipment and the number continues to grow. After-sales support is a key focus area of BHEL and the company is committed to provide quality services to its overseas customers in the form of spares and services.

Orders Received

During the year, BHEL secured the following overseas orders:

• Prestigious order for electro-mechanical package of 4x225 MW Arun-3 Hydroelectric Project which, once commissioned, would be the largest hydro power plant in Nepal.

• First ever export order for expert O&M supervision of 4x28 MW coal-fired power plant, PT Amman minerals, Indonesia[non-BHEL machines]- Entry into new market segment

• Orders for motors from Indonesia, Japan & Oman

• Orders for Major Inspection (MI) of Gas Turbines to ORPIC, Oman; complete balanced rotor for Fr-6B GTG from M/s. JBA International FZC, UAE; complete balanced rotor for 57 MW Steam Turbine from M/s. Sojitz Kelanitissa (PVT) Ltd., Sri Lanka, etc.

• Orders for spares & services from various countries including Australia, Belarus, Bhutan, Indonesia, Iraq, Jordan, Kazakhstan, New Caledonia, Oman, Senegal, Sri Lanka, Thailand & United Arab Emirates

Overseas Project Execution

• Thermal Power Project commissioned in Africa

1x125 MW Sendou thermal power project, Senegal has been commissioned successfully. This provides a significant reference for BHEL in the African market and would be instrumental in harnessing future opportunities in the continent.

• Project completion

BHEL successfully completed the 220/20 kV Charikar & Doshi substations in Afghanistan. Ministry of Energy & Water, Islamic Republic of Afghanistan has placed on record their appreciation for successful completion of the project under difficult conditions and challenging environment.

• BHELs first overseas Supercritical project execution

Boiler Erection started for both units of the 2x660 MW Maitree Super Thermal Power Project, Bangladesh.

Awards & Appreciations

• EEPC National Award for Export Excellence for the Category Star Performer Award for the year 2016-17 in the product group - Project Exports - Large Enterprise at the 49th EEPC INDIA National Award for Export Excellence.

• EEPC India Northern Region Award for Engineering Export Excellence in the category of Top Exporter for the year 2015-16 "Special Trophy for Excellence in Exports of High - Technology Products - Large Enterprise".

• Appreciation letter from Bangladesh Power Development Board (BPDB), Bangladesh for services rendered by BHEL for 100 MW Baghabari GTPPs generator.

Preparing for Growth

Globalization is a key element of BHELs growth strategy. We are adopting a prudent approach of aligning the new requirements of market with BHELs commercial interest and leveraging its core competence in coal, gas and hydro in potential markets. The opportunities include our conventional sectors of coal, hydro & gas based power plants, besides renewables, products & aftersales support. Effective project management, faster adoption & assimilation of technology and enhanced cooperation amongst CPSEs are some of the strategies being pursued to further strengthen and expand BHELs global presence.

1.5 Analysis of Financial Performance

1.5.1 BHEL Standalone

Financial Results

1. Revenue from operations

(Rs Crore)

Particulars 2018-19 2017-18
Sales less returns 22402 21888
Income from external erection & other service 6947 5962
Turnover 29349 27850

Growth in turnover was 5.4% in FY 2018-19 over FY 2017-18. Other operational income

(Rs Crore)

Particulars 2018-19 2017-18
Other operational income 1000 963

There was a growth of 3.8% in FY 2018-19 over FY 2017-18. For details of other operational income Note 29 to standalone financial statements may be referred.

2. Other income

(Rs Crore)

Particulars 2018-19 2017-18
Interest income 599 591
Profit on sale of units of mutual funds 17 26
Dividend on investment in joint venture - BGGTS 16 15
Dividend on investment in mutual funds - 11
Profit on sale of items of PPE, Govt. grants & others 46 51
Total 678 694

Interest income excluding interest on income tax refund was Rs. 512 crore in FY 2018-19 against Rs. 539 crore in FY 2017-18. Though yield on investment was higher as compared to previous year, reduction in quantum of investments made during the year due to decline in cash & bank balances during the year, resulted in this marginal dip in interest income.

3. Expenses

a) Material consumption, erection and engineering expenses

(Rs Crore)
Particulars 2018-19 2017-18
Consumption of raw material & components 15030 12096
Civil, erection & engineering expenses 3866 3418
Sub total 18896 15514
Changes in inventories of finished goods and work in progress (1073) 736
Total 17823 16250

Direct material cost as % to turnover has gone up from 58.3% in FY 2017-18 to 60.7% in FY 2018-19. This is mainly due to change in composition of turnover, project / product mix, higher content of imported bought outs due to conditions stipulated under DJU (Deed of Joint Undertaking) and depleting margins.

b) Employee benefits expenses

(Rs Crore)

Particulars 2018-19 2017-18
Employee benefits expenses 6261 6067
No. of Employees 35471 37540

Pay revision in respect of executive cadre was finalized in FY 2017-18 and impact of the same was included in the last year employee benefits expenses. In FY 2018-19, impact due to finalization of wage revision of other cadres is also included in these expenses. However, there was only marginal increase in employee benefits expenses mainly due to decrease in defined benefits liabilities as per actuarial valuation and savings consequent to reduction in manpower during the year.

c) Manufacture, administration, selling & distribution expenses

(Rs Crore)
Particulars 2018-19 2017-18
Manufacture, administration, selling & distribution expenses 2761 2522
Exchange rate variation loss / (gain) (67) (520)
Total 2694 2002

Manufacture, administration, selling and distribution expenses were Rs. 2761 crore in FY 2018-19 against Rs. 2522 crore in FY 2017-18. The increase was primarily due to increase in R&D expenses from Rs. 48 crore in FY 2017-18 to Rs. 123 crore in FY 20i8-19 mainly due to AUSC project and adjustment of excise duty (net) (-) Rs. 113 crore in FY 2017-18. With these adjustments, the expenses as percentage to revenue was lower at 8.9% in FY 2018-19 against 9.3% in FY 2017-18.

Exchange rate variation gain was Rs. 67 crore in FY 2018-19 against Rs. 520 crore in FY 2017-18, the decline in gain was mainly due to (a) appreciation in INR v/s EURO by 3.5% in FY 2018-19 against depreciation by 15.8% in FY 2017-18 (b) depreciation in INR v/s USD by 6.1% in FY 2018-19 against appreciation by 0.4% in FY 2017-18. Better forex management and hedging strategies during the year has resulted in a gain of Rs. 42 crore.

d) Provisions (Net)

(Rs Crore)
Particulars 2018-19 2017-18
Doubtful debts, liquidated damages and others 1640 2031
Bad debts, LD & losses written off 93 42
Provision for expected credit loss (Time value) 150 251
Contractual obligations (51) 70
Impairment of investment in JVs 4 44
Subtotal 1836 2438
Provision for wage revision (760) (156)
Total 1076 2282

Provisions have been made in line with accounting guidelines and policies of the Company. Decline in provision during the year were due to:

a) withdrawal of provision (Rs. 760 crore) for wage revision created last year for cadre other than executives;

b) vacation of provisions consequent to settlement of contractual issues in certain projects;

c) lower creation of provision for expected credit loss (ECL) as a result of better collection from opening outstandings and other factors.

4. Finance costs

(Rs Crore)
Particulars 2018-19 2017-18
Borrowing cost 191 220
Interest expense 87 35
Discount on commercial papers 9 -
Total 287 255

Borrowing cost represents unwinding of interest impact on long term provisions. Increase in interest expense was mainly due to short term borrowings (PCFC loan, loan against FDs and commercial paper) made in FY 2018-19 to meet short term operational cash requirements. However, the Company has managed its treasury operation effectively, thereby minimising the interest outgo and earning higher returns on intermittent surplus. PCFC loan has also provided the natural hedging benefit to the company.

5. Depreciation & amortisation expenses

(Rs Crore)
Particulars 2018-19 2017-18
Depreciation & amortisation 475 786
expenses

Para 51 of Ind AS 16 requires annual review of estimated useful life of Property, plant & equipment. Accordingly, the estimated useful life of items of Property, plant & equipment was reviewed and for certain items where estimated useful life was lower than the life prescribed in Schedule II of Companies Act 2013 as well as estimated economic useful life, the same were aligned as per Companies Act. This has resulted in lower depreciation by Rs. 201 crore for the year.

6. Tax expenses

(Rs Crore)

Particulars 2018-19 2017-18
Current tax - Current year 719 552
-Earlier years 16 27
Deferred tax -Current year 7 (63)
-Earlier years 100 262
Total 842 778

Tax expense represents the sum of current tax and deferred tax. The current tax is created in accordance with the provisions of Income Tax Act 1961, subject to adjustment of deferred tax. The current tax as %age to Profit before tax was 35.7% in FY 2018-19 against 36.5% in FY 2017-18. The tax expense including deferred tax was 40.9% in FY 2018-19 against 49.0% in FY 2017-18 consequent to the reassessment of deferred tax assets.

7. Profitability

Operational EBIDTA was Rs. 2142 crore in FY 2018-19 against Rs. 1933 crore in FY 2017-18, a growth of 10.8%.

Net profit (PAT) stood at Rs. 1215 crore in FY 2018-19 against Rs. 807 crore in FY 2017-18, a quantum jump of 50.6%. This has been achieved through stringent budgetary control, expense management and various other strategic initiatives. Accordingly, return on average net worth increased from 2.48% in FY 2017-18 to 3.79 % in FY 2018-19.

8. Other comprehensive income

(Rs Crore)

Particulars 2018-19 2017-18
Re-measurement of defined employee benefits (gain)/loss 183 (127)
Income tax related to above item (64) 44
Total 119 (83)

Other comprehensive income, which represents re-measurement (gain) / loss on defined benefit plan such as gratuity, PF, Post-Retirement Medical Benefit (PrMb) etc. was loss of Rs. 119 crore in FY 2018-19 against gain of Rs. 83 crore in FY 2017-18.

Fund Position

9. Fund flow position and liquidity

(Rs Crore)
Particulars 2018-19 2017-18
Cash generated from Operations before working capital changes 3839 4221
Net cash inflow / (outflow) from operating activities after working capital changes (3881) 991
Net cash inflow / (outflow) from investing activities 1915 964
Net cash inflow / (outflow) from financing activities (7) (671)
Total net cash inflow (outflow) for the year (1973) 1284

Net cash outflow from operating activities in FY 2018-19 was Rs. 3881 crore against cash inflow of Rs. 991 crore in FY 2017-18, due to: a) high level of inventory built up (increased by Rs. 1944 crore) to enhance shop production; and b) increase in trade receivables including contract assets (by Rs. 4593 crore) due to change in composition of customer profile and change in payment terms. Further, Company has paid pay revision arrears in FY 2018-19. This was offset to some extent by cash generated from operations and short term borrowings. In addition during FY 2018-19, the Company had paid Rs. 1628 crore towards buyback of equity shares.

Financial position

10. Property, plant and equipment (PPE), intangible assets and capital WIP

(Rs Crore)

As at

Particulars

March 31,2019

March 31, 2018

PPE Intangible Total PPE Intangible Total
Gross carrying value 5746 250 5996 5404 222 5626
Less: Accumulated dep./ amortisation 2862 167 3029 2427 131 2558
Net carrying value (net block) 2884 83 2967 2977 91 3068
cwip & intangible assets under development 223 12 235 195 8 203
Total 3202 3271

The net carrying value of PPE and intangible assets is after adjustment of depreciation /amortization and capitalization during the year. Brief on capital investments are given separately under para on "Capital Investment".

The company had opted for exemption under Ind AS 101 and accordingly carrying value as on March 31, 2015 was considered as deemed cost on Ind AS transition.

11. Equity investments

(Rs Crore)

As at

Particulars

March 31,2019

March 31, 2018

Investment Impairment Net Investment Impairment Net
Investment in joint ventures 723 57 666 741 53 688
Investment in subsidiary Company 5 5 5 5
Investment in other equity instruments 6 3 3 6 3 3
Total 734 65 669 752 61 691

Investment in joint ventures (JV) and subsidiary Company

were accounted at cost after considering impairment loss, if any in line with Ind AS. During the year an impairment loss of Rs. 4.40 crore has been provided against investment with M/s. NBPPL, a joint venture. A sum of Rs. 17.30 crore has been received in FY 18-19 against investment of Rs. 22.50 crore M/s. Dada Dhuniwale Khandwa Power Projects Ltd and Impairment loss of Rs. 5.20 crore (withdrawal of Rs. 0.30 crore in FY 2018-19) was retained.

Investment in other equity instrument are accounted at fair value through profit and loss and changes in carrying value has been made based on fair value on the reporting date.

12. Trade receivables (Net)

(Rs Crore)

As at

Particulars

March 31,2019

March 31,2018

Non current Current Total Non current Current Total
Trade receivables 3935 12010 15945 3437 14064 17501

As per the requirement of Ind AS 115, the amount billed to customers and contractually due for payment is shown as Trade receivables. These figures are net of provisions created as per the policy/guidelines of the Company. Due to increase in cash collection during FY 2018-19 over FY 2017-18, 14% higher than the last year, there was reduction of Rs. 1556 crore in Trade receivables (Trade receivable as no. of days of revenue from operations in FY 2018-19 is 167 days as against 194 days in FY 2017-18). Non-current trade receivables constitutes trade receivables where realisation may take longer period due to contractual issues like settlement of time extension or where legal action has been initiated for realisation of debts.

13. Cash & cash equivalents and bank balances

(Rs Crore)

As at

Particulars March 31,2019 March 31,2018
Cash & cash equivalents 796 2769
Deposits having maturity more than 3 months but not more than 12 months 6700 8400
Earmarked bank balances & FD against margin money 7 7
Total 7503 11176

were: a) Higher level of inventory built up to enhance shop production;

b) increased level of contract assets due to the nature of business;

c) outgo of Rs. 1628 crore towards buy back of shares and

d) payment of pay revision arrears in FY 2018-19.

14. Deferred tax assets (net)

(Rs Crore)

As at

Particulars March

31,2019

March

31,2018

Deferred tax assets (net) 3515 3626

The deferred tax assets (net) represents the tax impact on item of expenses which are in the nature of temporary differences, to be adjusted against the taxable profit of future periods.

15. Other assets

(Rs Crore)

Particulars

As at

March 31,2019

March 31,2018

Non current Current Total Non current Current Total
Contract assets (net of provision) 14392 7904 22296 10264 7728 17992
Input tax credit receivable - 1188 1188 1009 1009
Claim recoverable - 735 735 - 708 708
Deposit with tax authorities & others 160 496 656 145 512 657
Advances & others 170 258 428 110 435 545
Less: Provision 51 187 238 49 270 319
Total 14671 10394 25065 10470 10122 20592

Contract assets (deferred debtors and unbilled revenue) represent the amount not yet due for payment as per contract terms/agreed schedule with customers. The same will be contractually due on completion of related activities/ milestones.

The increase in contract assets by Rs. 4304 crore in FY 2018-19 over FY 2017-18 was mainly due to the change in the customer profile, State utilities portion being higher than last year, skewed payment terms in certain contracts with higher portion of milestone linked payment etc.

The increase in input tax credit receivable was mainly on account of GST, which will get adjusted in due course.

16. Inventories

(Rs Crore)

As at

Particulars March 31,2019 March 31,2018
Raw material & components 3930 3075
wip 3220 2284
fg 1092 950
Stores & spare parts 238 248
Other inventory 188 168
Sub total 8668 6725
Less: Provision for nonmoving inventory 555 466
Inventories 8113 6259

The Inventory as no. of days of turnover in FY 2018-19 was 101 days as against 82 days in FY 2017-18. The built up of inventory was to meet increased level of operations in line with the project requirements and to address the long lead time to speed up execution of projects.

17. Current tax assets / liabilities (Net)

(Rs Crore)

As at

Particulars March 31,2019 March 31,2018
Current tax assets / liabilities (net of provisions) (91) 223

This represents tax deducted at source and advance tax net of provision for tax.

18. Share Capital

(Rs Crore)

As at

Particulars March 31, 2019 March 31, 2018
Authorised share capital 2000 2000
Issued, subscribed & paid up share capital 696 734

During FY 18-19, Company has bought back its 18.93 crore equity shares @ Rs. 86 per equity share. Consequently, the paid-up share capital has reduced from Rs. 734.28 crore in FY 2017-18 to Rs. 696.41 crore in FY 2018-19.

19. Other equity

As at

Particulars March 31, 2019 March 31, 2018
Opening balance 31867 31805
Add: Total comprehensive income for the year 1096 890
Add: Ind AS 115 - transition adjustment 126
Less: Buyback of shares 1599 -
Less : Dividend (incl. interim dividend) paid during the year 653 485
Less : Corporate Dividend Tax 134 98
Less: Bonus share issued - 245
Closing balance 30703 31867

Decrease in other equity by Rs. 1164 crore during FY 2018-19 was mainly on account of buyback of shares out of General Reserves, offset by total comprehensive income for the year net of final dividend for the previous year and interim dividend for the current year and dividend tax thereon. The Company has implemented Ind AS -115 from April 01, 2018 with transitional impact adjusted in opening retained earnings as on April 01, 2018 in line with notification issued by Ministry of Corporate Affairs. This has increased opening retained earnings by Rs. 126 crore.

20. Borrowings

(Rs Crore)

Particulars

As at

March 31, 2019

March 31, 2018

Non current Current Total Non current Current Total
Borrowings - 2457 2457 - - -
Maturities of finance lease obligation 95 63 158 57 46 103
Total 95 2520 2615 57 46 103

The short term borrowing in the form of PCFC loan, Loan against FDs and commercial paper were availed to meet short term operational requirements at the lowest possible interest rate. For repayment schedule of borrowings, Note 24 to financial statements may be referred to.

21. Financial liabilities

(Rs Crore)

As at

Particulars

March 31,2019

March 31,2018

Non current Current Total Non current Current Total
Trade payables 703 11375 12078 479 10587 11066
Other financial liabilities 92 2005 2097 115 2224 2339
Total 795 13380 14175 594 12811 13405

The increase in trade payables were in line with operations of the Company. Other financial liabilities include liability towards employees dues, other dues, deposits from contractors and others.

22. Provisions

(Rs Crore)

As at

Particulars

March 31,2019

March 31,2018

Non current Current Total Non current Current Total
Provision for contractual obligation 3844 1443 5287 3478 1854 5332
Provision for employee benefits 1303 781 2084 1260 1563 2823
Other provisions 305 242 547 184 336 520
Provision for CSR 2 19 21 1 30 31
Total 5454 2485 7939 4923 3783 8706

This decrease of Rs. 767 crore in total provisions was mainly due to withdrawal of provision for pay revision created last year for cadre of employees under supervisors and workers.

23. Other liabilities

(Rs Crore)

As at

Particulars

March 31,2019

March 31,2018

Non current Current Total Non current Current Total
Advances from customers (incl. valuation adjustments) 3578 3261 6839 3610 3963 7573
Statutory dues - 1311 1311 - 1296 1296
Govt. grants 38 6 44 27 8 35
Total 3616 4578 8194 3637 5267 8904

Advances from customers gets adjusted progressively during execution of the project. The decline in advances was also due to nil / lower advances in recent orders from state utilities and CPSEs. Statutory dues mainly comprises GST liabilities to be discharged on due dates. Corresponding input credit available is also shown under other assets in item serial number 15 above.

24. Segment performance

The Company has two operating segments power and industry. The performance of segments was as below:

(Rs Crore)

Particulars

2018-19

2017-18

Power Industry Power Industry
Segment revenue 23405 5944 22881 4969
Segment results 2812 437 2792 180
Segment capital employed 20362 4121 16271 3724
Segment results as % of segment revenue 12% 7% 12% 4%

Power segment revenue increased by 2.3 % in FY 2018-19 over FY 2017-18 with segment profit as %age to segment revenue remaining at 12%. Industry segment revenue increased by 19.6% in FY 2018-19 over FY 2017-18 with segment profit to segment revenue improved from 4% in FY 2017-18 to 7% in FY 2018-19 due to enhanced share of transportation and transmission business.

1.5.2 Financial Review of Subsidiary Company

BHEL Electrical Machines Ltd.

A subsidiary company was incorporated on January 19, 2011 as "BHEL Electrical Machines Ltd", with BHEL holding majority stake of 51% with an equity investment of Rs. 5.36 crore. Government of Kerala retained 49% stake.

Board of Directors has approved on May 29, 2018 the transfer of BHELs 51% stake in BHEL Electrical Machines Limited to Government of Kerala which is subject to approval of Department of Heavy Industry, Government of India.

The brief financials of BHEL- EML are tabulated below:

(Rs Crore)

Particulars 2018-19 2017-18
BHEL Share (%) 51% 51%
BHELs Investment in Equity 5.36 5.36
Revenue from Operations 18.65 14.42
Loss for the year 5.46 6.02

1.5.3 Financial Review of Joint Ventures Companies

a. BHEL-GE Gas Turbine Services Private Limited (BGGTS):

BHEL-GE Gas Turbine Services Private Limited (BGGTS) is a Joint Venture Company of BHEL and GE, USA formed to take up repair & servicing of GE designed gas turbines. The brief financials are tabulated below:

(Rs Crore)

Particulars 2018-19 2017-18
BHEL share (%) One share less than 50% One share less than 50%
BHELs investment in equity 2.38 2.38
Revenue from operations 675.07 631.87
Profit after tax 60.73 53.64
Net worth 298.83 277.08

For FY 2018-19, BGGTS has paid interim dividend at 490% and proposed final dividend at 195% on the equity share capital of Rs. 4.76 crore.

b. NTPC BHEL Power Projects Private Limited (NBPPL):

NTPC BHEL Power Projects Private Limited (NBPPL) is a Joint Venture Company of BHEL and NTPC Limited promoted to execute EPC contracts for Power Plants and manufacture power plant equipment. The JVC has a manufacturing facility for Balance of Plant (BoP) equipment at Mannavaram in Andhra Pradesh.

The brief financials are tabulated below:

(Rs Crore)

Particulars 2018-19* 2017-18
BHEL share (%) 50% 50%
BHELs investment in equity 50.00 50.00
Revenue from operations 73.52 139.90
Loss for the year 53.02 70.54

* based on provisional unaudited figures

The provision for impairment in value of investment in NTPC- BHEL Power Projects Private Limited has been made to the extent of Rs. 50.00 crore (up to previous year Rs. 45.60 crore) based on the net financial position. In principle approval for pursuing the winding up of NBPPL has been accorded by the Board of Directors in its meeting held on February 8, 2018.

c. Raichur Power Corporation Limited (RPCL):

Raichur Power Corporation Limited (RPCL) is a Joint Venture Company of BHEL, Karnataka Power Corporation Limited (KPCL) and IFCI Limited promoted for setting up of 2x800 MW supercritical thermal power plant at Yeramarus, Raichur, Karnataka and 1x800 MW supercritical thermal power plant at Edlapur, Raichur, Karnataka on build, own and operate basis. The paid up equity capital as on March 31, 2019 was Rs. 2373.76 crore with contribution of Rs. 1277 crore from KPCL, Rs. 664.04 crore from BHEL and Rs. 432.72 crore from IFCI Limited. The financial highlights of the Company are as under:

(Rs Crore)

Particulars 2018-19* 2017-18
BHEL share (%) 27.97% 27.97%
BHELs investment in equity 664.04 664.04
Revenue from operations 1030.96 719.97
Loss for the year 1254.24 1562.76

* based on provisional unaudited figures

The paid up share capital as on June 3, 2019 was Rs. 2373.76 crore with contribution of Rs. 1709.72 crore from KPCL, post-acquisition of equity contribution of IFCI by KPCL. The equity contribution of BHEL remains at Rs. 664.04 crore.

d. Dada Dhuniwale Khandwa Power Limited (DDKPL):

Dada Dhuniwale Khandwa Power Limited (DDKPL) is a Joint Venture Company of BHEL and Madhya Pradesh Power Generating Company Limited (MPPGCL) promoted for setting up of 2x800 MW supercritical thermal power plant at Khandwa, Madhya Pradesh on build, own and operate basis.

Due to non-availability of coal linkage and problems being faced in land acquisition, both the promoters approved for voluntary winding up of the JVC. An amount of Rs. 17.30 crore has been received during FY 2018-19 against investment in JVC of Rs. 22.50 crore. The provision for impairment in value of investment has been retained to the extent of Rs. 5.20 crore (previous year Rs. 5.50 crore) based on the net financial position. The JVC is under liquidation.

e. Powerplant Performance Improvement Private Limited (PPIL):

Powerplant Performance Improvement Private Limited (PPIL) is a Joint Venture Company of BHEL and Siemens AG, Germany promoted for plant performance improvement of old fossil fuel power plants.

Since sufficient business to ensure viability of the Company was not forthcoming, the promoter partners mutually agreed to gradually wind up the Company. All the pending contracts of the JVC have been closed and the process of winding up has been initiated during FY 2018-19. The JVC is under liquidation.

1.5.4 Consolidated Financial Statement (CFS)

Consolidated Financial Statements have been prepared in accordance with Ind AS-110 on "Consolidated Financial Statements" and Ind AS 28 "Investments in Associates and Joint Ventures".

The financial statements of subsidiary Company is combined on a line by line basis after fully eliminating the intra group balances and intra-group transactions and for joint ventures, Equity method is adopted in line with Ind AS. M/s. DDKPL and NBPPL were not considered for CFS as they are under liquidation.

A summary of the results on financial performance, in line with the aforementioned Ind AS are as under:

Financial performance

(Rs Crore)

For the year ended

Particulars March 31, 2019 March 31, 2018
Revenue from operations 30368 28827
Profit before tax 1850 1215
Profit after tax 1009 438
Other comprehensive income/(expenses) (119) 83
Total comprehensive income 890 522

The Groups revenue from operations increased by 5.4% in FY 2018-19 over FY 2017-18. The profit before tax and profit after tax increased by 52.2% and 130.3% respectively in FY 2018-19 over FY 2017-18. The share of loss in respect of joint ventures was Rs. 185.60 crore in FY 2018-19 as against Rs. 390.76 crore in FY 2017-18.

The Joint venture companies (NBPPL and RPCL) have incurred losses in 2018-19. The group has recognised accumulated losses equal to the cost of investment as at March 31, 2019 in consolidated financial statements 2018-19.

Financial position

(Rs Crore)

As at

Particulars March 31, 2019 March 31, 2018
Assets
Property, plant and equipment, intangible assets and CWIP (net carrying value) 3206 3276
Investment accounted for using equity method 149 409
Non-current financial assets 4021 3543
Deferred tax assets (net) 3523 3632
Noncurrent other assets 14671 10471
Current assets 38349 42143
Total 63919 63474
Equity and Liabilities
Equity share capital 696 734
Other equity 30176 31601
Non-controlling interest (7) (4)
Non-current liabilities 9973 9275
Current liabilities 23081 21868
Total 63919 63474

The decrease in other equity by Rs. 1425 crore during FY 2018-19 was on account of buyback of shares which has resulted decrease by Rs. 1599 crore. This was offset by total comprehensive income for the year after adjustment of final dividend for the previous year and interim dividend for the current year.

1.6 Capital Investment

Paving the way towards diversification, BHEL has invested a sum of Rs. 272 crore during FY 2018-19 on building capabilities for new growth areas coupled with modernization of the existing assets and building enabling infrastructure for execution of projects.

The focus of Capital Investment during the year has been on manufacturing capability building by setting up the facilities for new growth areas such as Li-Ion based Space Grade Cells, Large Sized Gates & Dampers and strengthening the facilities to meet the growing demands of transmission sector of country.

1.7 Quality Performance

BHEL has well established Quality Management systems to realize the objective of its Quality Policy.

Various initiatives for continual improvement in process & product quality and enhancement of Quality Management System effectiveness were taken up during the year.

• Twenty-two divisions were subjected to Quality Management Effectiveness Review - an indigenous copyright quality

model of BHEL- by internal cross functional teams. Around 100 product/ process quality audits were carried out at Manufacturing Units/ Engineering Centres and 29 quality audits at different project sites with an objective to enhance product & service quality.

• Around 820 executives were trained in Quality Management topics conducted by Corporate Quality & Business Excellence function over around 2000 man-days.

• Quality Circle (QC) movement in BHEL driven by workers & supervisors is a role model in the country. Every year interunit annual QC summit is held in BHEL where Quality Circles showcase their case studies. 29th BHEL Annual Quality Circle Summit was organized at HEEP Haridwar on 26th April 2019 in which 48 Quality Circles from 15 units participated. Quality Circle no. 582 of HPBP Trichy was awarded with Shri S R Udpa trophy for best Quality Circle 2018-19.

• Major thrust is given to Root Cause Analysis (RCA) of quality issues at manufacturing shops and erection sites. Intraunit standing RCA committees and Inter-Unit Special RCA committees analyse the issues and recommend corrective actions. RCA findings are shared with customers as well as with Top Management. RCA initiative has been institutionalized in the organization.

• Quality Certifications and Business Excellence Awards:

> M/s American Petroleum Institute (API) awarded Monogram Licensing permission to HPEP Hyderabad unit with validity up to June 18, 2021.

> HPBP Trichy and HPVP Vizag recertified by American Society of Mechanical Engineers (ASME) for "S, "U", "U2" and National Board "R" certification The new certificates are valid up to 17th June 2021 for HPBP Trichy and 31st July 2021 for HPVP Vizag.

> On 12th Feb19, Bhopal unit was awarded with prestigious Quality Council of India - D L Shah Silver Award for its project "Quality and Productivity improvement and Upgradation of load carrying capacity of Thrust & Guide bearing assemblies used in vertical AC motors".

> Hyderabad unit was conferred as "Best Organisation for pioneering Quality Circle movement in India and contributing to its growth" award by Quality Circle Forum of India (QCFI), Hyderabad Chapter in its 32nd Chapter Convention on Quality Concepts (CCQC-2018) held in September 2018.

> 32nd National Convention Quality Circles meet (NCQC-2018) was organized by QCFI at Gwalior from 21st-24th Dec. 2018. 57 Quality Circles from different units of BHEL participated out of which 53 Quality Circles awarded in Par Excellence/ Excellence categories.

1.8 Internal Financial Control System

The Internal Financial Control (IFC) of BHEL is designed in the form of well documented policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of assets, the prevention & detection of frauds and errors, the accuracy & completeness of the accounting records, and the timely preparation of reliable financial information.

The source of implementation and maintenance of IFC are Manuals, Guidelines, Delegation of Powers, IT system & controls and are effected through well-defined organizational structure i.e. people operating in various departments within the Company at different levels at each stage of the processes.

BHEL has an in-house Internal Audit Department commensurate with its size of operations and nature of its business. Apart from Corporate Internal Audit, 12 Internal Audit Cells are set up across BHEL to cover internal audit activities at all locations of BHEL. With a view to assess the adequacy and effectiveness of IFC, Internal Audit carries out continuous audit of risk focussed areas and critical appraisal of the functioning of the processes and systems designed at respective locations.

Audit assignments are conducted as per Annual Audit Programme approved by Board Level Audit Committee (BLAC). Highlights of Internal Audit activities are presented to senior executives at various forums and shared with all Units and Regions. BLAC also reviews major Internal Audit observations and C&AG audit findings and issues directions, wherever required, to strengthen the IFC, keeping in view the dynamic environment in which the Company is operating.

BHEL has a process in place to continuously monitor the action to be taken towards improvement of the systems and processes and strengthening of the governance mechanism. The Company continues its efforts to align all its processes and controls with the best global practices.

Internal Financial Controls in BHEL has been evaluated at all locations by the Internal Audit during the year by applying test of controls and the controls tested have been found in place and operating effectively within the company.

1.9 Human Resource

1.9.1 Learning and Development

Aligned to the changing needs of the organization, knowledge transfer, skill development and behavioral interventions were facilitated for BHEL employees. During the year, an average of 3.58 Training Man Days per employee was achieved across the organization.

Seven Advanced Management Programs in collaboration with IIM-Calcutta were conducted for 217 executives at senior management level. There was thrust on technical programs which were organized for existing business areas as well as for emerging areas. There is a strong focus on eLearning in the Organization. BHEL has been developing e-Learning modules meeting business requirements and has a full-fledged integrated in house e-learning platform UNNAYAN that caters to a wide variety of training courses following the model of content creation through crowd sourcing.

As part of behavioral/managerial initiatives,redesigned core programs have been conducted followed by impact analysis to measure the effectiveness of these programs for the first time. Programs like "Leader as Coach", "Influencing through Assertiveness" & "Winning Together for supervisors" have been facilitated in the organization. Workshops were also conducted to initiate collaborative thinking and creative approach. Knowledge sharing sessions were conducted for superannuating senior executives across the company. Orientation programs for successful on-boarding of newly recruited medical doctors & law officers were also held.

BHEL was also actively involved in skill development initiatives of the GoI, and about 20,000 non-BHEL individuals were imparted training under various schemes like NAPS & NATS of apprenticeship & industrial visits.

1.9.2 Performance and Career Development

People Capability Maturity Model (PCMM) Assessment was carried out in the organization through QAI India Ltd. who certified that BHEL has broadly implemented the P-CMM level 2 process areas up to the desired level, with a few improvement areas.

To meet the career development aspirations of young executives and to build a systematic pipeline of high potential executives to feed into the succession planning scheme for key positions, High Potential (HiPo) Employees Scheme is in place for identifying and grooming suitable candidates. Under the HiPo scheme, 1210 mid-level executives have been identified. Grooming process for such executives as envisaged in the scheme is underway in all the Units, with an online platform to track the grooming process also in place.

With a view to encourage and motivate employees to attain higher level of excellence and to contribute towards growth and development of the organization and to provide thrust to BHELs initiatives towards enhancing engagement levels of employees, an Employee Recognition Scheme was also launched in the organization

Behavioral competencies of around 1000 executives have been assessed through SHL psychometric tool. The inputs from this exercise has helped in preparing individual development plan and is being used to identify High Potential Employees and potential successors.

To continuously evolve our well established performance management system, a Performance Improvement Plan has been launched in BHEL for employee development and ensuring a high performance culture. In order to simplify the process of performance evaluation, the number of competencies being evaluated has been rationalized.

Core programmes like Young Managers Programme, General Management Programme, Strategic Management Programme, Advanced Management Programme, various technical and function specific programmes on quality, material management, etc. and behavioural programmes ensure commitment towards talent management process.

Disclosure under section 134 (3)(p) of the Companies Act

As per Section 134 (3) (p) of the Companies Act 2013, the Boards Report of a Listed Company shall include a statement indicating the manner of formal annual evaluation of Board, individual Directors etc. Ministry of Corporate Affairs has, vide its notification dated June 5, 2015, notified the exemptions to Government Companies from the provisions of the Companies Act, 2013 which inter-alia provides that Sec. 134(3)(p) regarding statement on formal annual evaluation shall not apply to Government Companies in case the Directors are evaluated by the Ministry which is administratively in-charge of the Company as per its own evaluation methodology. Further, in line with above exemptions, sub-sections (2), (3) & (4) of Sec. 178 regarding appointment, performance evaluation and remuneration shall not apply to Directors of Government Companies.

In a CPSE, the MoU signed between the Company and the Government of India details out the parameters and initiatives that the Company is required to undertake during that financial year. This MoU is evaluated at the end of the year by the Government and a performance rating is assigned to BHEL based on the performance on the spelt out parameters. Further, there is a well laid down procedure for performance evaluation of Chairman & Managing Director and Functional Directors. Department of Public Enterprises (DPE) has designed a format and laid down a procedure for evaluation of Functional Directors performance. The tenure of Functional Directors as spelt out in their Terms and Conditions of Appointment is five years or the date of their superannuation, whichever is earlier. In respect of Independent Directors, their appointment and tenure (normally a period of three years) is decided by the Government of India. The terms of reference of Board Level Committees are approved by the Board. The minutes of Board Level Committees are placed before the Board for its perusal.

Further, DPE in May, 2018, through our Administrative Ministry (DHI) has started the exercise of performance evaluation/ assessment of non-official (Independent) Directors on the Board of the Company.

1.9.3 Industrial Relations

Industrial Relations in various manufacturing units, divisions and offices of the Company remained harmonious and peaceful during FY 2018-19. A meagre 0.022% mandays were lost during the year on account of strike call given on 28th February, 2019 by 3 participating unions at Trichy Unit to protest against wage revision settlement.

Five meetings of the apex level bipartite forum, namely "Joint Committee" were held during the year. There were 60 meetings of Plant Councils and 552 meetings of Shop Councils. In addition, meetings were also held with the representatives of executives and supervisors on business prospects & challenges, company level issues, etc.The focus of discussions in the various fora centered on improvement of the overall performance of the company by increasing the productivity, cost reduction, quality and delivery improvement in order to meet customer commitments.

Pay revision of Executives and Supervisors w.e.f. 01.01.2017 was implemented during the year. A Memorandum of Understanding (MoU) regarding wage revision of workmen w.e.f. 01.01.2017 was reached in the apex level bipartite forum namely "The Joint Committee for BHEL" on 10.01.2019 after several rounds of negotiation. Subsequently, wage revision of workmen w.e.f. 01.01.2017 was also implemented.

The employees of BHEL expressed solidarity with their fellow citizens distressed by natural calamity which struck in Kerala during the year by contributing an amount of Rs.   5.24 Crore.

Annual workshop on Reservation Policy for SC/ST/OBC Liaison Officers and SC/ST/OBC Association representatives was held at Tiruchy from 20.11.2018 to 21.11.2018.

Policy on compensation in cases of death/ permanent incapacitation of person due to unintended/ unforeseen occurrences during manufacturing/ operations and works incidental thereto at BHEL factories/ offices and precincts thereof, project execution, erection and commissioning, services, repairs and maintenance, trouble shooting, serving, overhaul, renovation and retrofitting, trial operation, performance guarantee testing undertaken by the company or during any works / during working at BHEL Units/ Offices/ townships and premises/ Project Sites has been issued.

1.9.4 Manpower Strength

BHELs greatest strength is its highly skilled and committed workforce of 35471 employees.

1.9.5 Status on Presidential Directives

1.9.5.1 Directives on Reservation Policy for Reserved Category Persons

Presidential Directives on reservation policy issued by Central Government from time to time provide for certain percentages of reservation in direct recruitment as well as promotion in specified posts and for specified reserved category of candidates, i.e. SCs, STs, OBCs and Persons with Disabilities(PwD). Besides, the Directives also contain provision for certain concessions and relaxations for specified category of employees in direct recruitment and promotion. The Presidential Directives on the subject are being strictly complied with and reservation percentages are ensured through maintenance of Post Based Roster system as prescribed by Govt. However, there is no direct impact of these guidelines on the financial position of the company.

Other relevant information on the subject is furnished below:

i. Representation of SC/ST/OBC employees

The overall representation of SC/ST/OBC employees in total manpower as on 31/12/2018 was 20.47%, 7.05% and 33.15% for SCs, STs and OBCs respectively. The percentages in direct recruitment during the year 2017 were 10.99%, 5.50% and 20.88% for SCs, STs and OBCs respectively.

The Annual Statement in the prescribed format showing the representation of SCs, STs and OBCs as on 31/12/2018 and number of appointments made during the preceding calendar year, as furnished to the Government, is given at Annexure - A.

ii. Manpower strength of PwD employees as on December 31,2018

Total number of PwD employees as on 31/12/2018 is 894. In the year 2018, 2 Persons were appointed under PwD Category. The group wise manpower strength of PwD employees in the Company as on 31/12/2018 is given at Annexure - B.

1.9.5.2 Safeguard of Women at Workplace

An Act to provide protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and for matters connected therewith or incidental thereto called "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013", has come into force from 9th December 2013 with notification of rules by Government of India, Ministry of Women and Child Development called "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013".

The provisions of the Act and the rules thereon are being strictly complied with. In accordance with the Act, Internal Committee has been constituted in all units of BHEL and their constitution and contact details have been hosted on units website. Posters highlighting the key provisions of the Act, Duties of the Employer, Complaints Redressal Mechanism, Action for Malicious Complaints & various misconceptions about Sexual Harassment have been displayed at conspicuous places in all units in Hindi, English and regional languages. 5 workshops were conducted by Corporate Office for ICC members across units through Video Conferencing. At unit level, 32 Workshops / awareness programmes were conducted on gender sensitization, self defence and awareness about the Act. In addition, women employees are also nominated for suitable programs conducted by external agencies.

The annual report on number of complaints of sexual harassment received during the year 2018-2019 and status thereof as on 31.03.2019 is given at Annexure - C.

Annexure -A

Groups

Representation of SCs/STs/OBCs (As on December 31,2018)

No. of appointments made during the calendar year 2018

By Direct Recruitment

By Promotion*

By Deputation/ Absorption

Total No. of Employees SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs OBCs
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Group A 11276 1965 869 2650 54 7 4 11
Group B 8089 1606 642 1915 35 2 1 7
Group C 16174 3671 1018 7200
Group D (Excl. SW) 382 77 5 156 2 1 0 1 NIL
Group D (SW) 47 42 1 1 0 0 0 0
Total 35968 7361 2535 11922 91 10 5 19 0 0 0

* In BHEL, no appointments are made at induction level by promotion

Annexure - B

Statement showing number of persons with disabilities appointed during the calendar year 2018

Group

Number Of Employees

Direct Recruitment*

Promotion**

Total number of employees

VH

HH

OH

No. of vacancies reserved

Total

No. of appointments made

No. of Vacancies reserved

Total

No. of appointments made

VH HH OH VH HH OH VH OH HH VH HH OH
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Group A 11276 6 18 227 0 1 1 54 0 1 1
Group B 8089 3 14 203 0 0 0 35 0 0 0
Group C 16174 17 31 363 0 0 0 1 0 0 0
Group D 429 1 6 5 0 0 0 1 0 0 0
Total 35968 27 69 798 0 1 1 91 0 1 1

Note: (i) VH stands for Visually Handicapped (persons suffering from blindness or low version)

(ii) HH stands for Hearing Handicapped (persons suffering from hearing impairment)

(iii) OH stands for Orthopaedically Handicapped (persons suffering from locomotor disability or cerebral palsy)

**There is no reservation in Promotion from Group C to B, Group B to A and within Group A. In BHEL within Group C & D, except in cadre change promotion, seniority- cum-merit promotion policy is followed, wherein all employees on completion of prescribed eligibility period in a Grade and subject to attaining satisfactory levels in conduct and performance are promoted to the next higher grade.

Annexure- C

Annual Report on Safeguard of Women at Workplace

1 No. of complaints received during the year 2018-19 5
2 Number of complaints disposed off during the year 2018-19 4
3 Number of cases pending for more than ninety days 2**
4 Number of workshops or awareness programme against sexual harassment carried out 37
5 Nature of action taken by the employer on recommendations of ICC.
Complaint was made by three female Apprentices against BHEL employee for misbehaving and indulging in wrongful acts during change of shifts. However, the complainants could not identify the respondent and the case was closed. Case closed
Complaint was made by a female employee in February 2019 against a male employee for passing sexually coloured remarks, stalking her and staring at her at workplace and canteen. Chargesheet has been issued to the respondent in March 2019. Case pending
Complaint was made by a female employee of one unit against a male employee of another unit for misbehaving with her including indulging in unwelcome physical contact. Based on the statement of witnesses, documentary and circumstantial evidence, the respondent was found guilty and penalty of reduction to a lower time scale was imposed for a period of one year. However, the case could not be closed within 90 days. Case closed
Complaint was received from a female employee against a male employee for misbehaving with her including indulging in unwelcome physical contact. Chargesheet was issued to the respondent and on enquiry, out of three charges, one was proved and two were partially proved. Penalty of reduction to a lower stage in the time scale of pay for a period not exceeding 2 years without cumulative effect and not adversely affecting his terminal benefits was imposed on the respondent and he was also transferred from the Unit. Case closed
An anonymous complaint was received in May 2018 against a male employee for indecent behaviour. From the contents, it appeared that the complaint was made by female apprentice of 2017-18 batch. Since all apprentices were relieved on the date of receipt of complaint, all apprentices, working under the respondent, were contacted on phone. Respondent was interrogated and regular & contract female employees working with him were also questioned by the ICC. The authenticity of the complaint could not be ascertained and therefore, the case was closed. However, the case could not be closed within 90 days. Case closed

** 1. Non-availability of ICC members due to exigencies of work & of the complainant for a week; 2. Due to anonymous nature of complaint, the investigation took longer time.

1.10 Right To Information Act, 2005

In consonance with the provisions of the Right to Information Act, 2005 (the Act) BHEL works towards promoting transparency and accountability. A Central Public Information Officer (CPIO) at Corporate Office, along with 20 other CPIOs at each of the major administrative units are functioning in the Company. 21 First Appellate Authorities are also functioning in the Company to dispose of first appeals filed under the Act.

As a measure to facilitate citizens in filing their RTI applications and first appeals online, BHEL has adopted the Online RTI web portal (https:// rtionline.gov.in) launched by Department of Personnel & Training. Consequently, RTI applications and RTI first appeals filed on this online RTI portal are being replied through the online mode.

Section 4 (1) (b) disclosures have been made available on BHELs website. In addition, certain guidelines & proforma(s) indicating procedure for obtaining information and for filing RTI first appeals under the Act have been placed on BHELs website.

The CPIOs and other internal stakeholders involved are sensitised about their obligations under the Act through training and workshops.

BHEL being a member of Steering Committee on RTI constituted by Standing Conference of Public Enterprise (SCOPE) actively participates in its meetings and discussions related to RTI matters organised by scope.

Quarterly RTI Returns for all the four (4) quarters have been submitted to the Central Information Commission. There was an opening balance of 47 RTI applications and 65 RTI appeals at the beginning of the year. During 2018-19, 1117 applications and 231 appeals were received, and 1064 applications and 228 appeals were disposed off.

1.11 Risks and Concerns

BHEL has in place a Board approved Risk Management Charter & Policy to implement a structured and comprehensive enterprise risk management system. This charter is intended to establish a common understanding, language and methodology for identifying, assessing, responding, monitoring and reporting risks and to provide assurance to the management that key risks are being properly identified and effectively managed in the company.

A Board level Risk Management Committee (BLRMC) is assigned responsibility of reviewing the companys Risk Governance structure, Risk Assessment & Risk Management framework, Guidelines, Policies and Processes. The Board/ BLRMC regularly review major risk areas.

Key risks faced by the company are analysed in detail by Risk Management Steering Committee (RMSC), which is responsible for adopting & implementing the risk management framework and leading the risk management initiative across the company.

Chief Risk Officer (CRO), the convener of BLRMC & RMSC, is responsible for periodic reporting on risk management to Board/ BLRMC.

Risk management committees at unit level analyse the risks concerned to their respective areas, prepare mitigation plans, ensure their implementation and also inform the top management, if required.

Some of the key risks the company faces and corresponding strategies for mitigation are mentioned in the table below:

Risk Statement Mitigation Strategies
Online data & information security breach leading to loss and critical information infrastructure breakdown • Established organizational level Cyber Security Operations Centre (SOC), a facility in which an information security team continuously monitor and improve organizations security posture
• Enhancement of Cyber SOC by integrating 23000+ end points across BHEL under the SOC
• Consolidation of Internet Gateways to minimize chances of data leakage points
• Enhancing BHEL- Computer Emergency Response Team (B-CERT) in-line with CERT-In
Excess domestic manufacturing capacities, changes in business mix due to policy changes and increasing competition leading to lower order book • Focus on development of non-coal based business
• Expanding offerings and diversification
Technology readiness to meet current/ future market requirements • In house development of new products/ Technologies
• Technology collaboration agreement with suitable partners
Rising debtors • Formation of special groups to accelerate cash collection
• Swift closure of punch points with customers
• Better scheduling of supplies
• Flagging the issues with government in case of state utilities

For and on behalf of the Board of Directors of

BHARAT HEAVY ELECTRICALS LTD.

(Dr. Nalin Shinghal)
Chairman & Managing Director
Place: New Delhi
Date: July 26, 2019