CONTENTS1. CERTIFICATE 2. DECLARATION 3.PREFACE

4. ACKNOWLEDGEMENT 5. 6. 7. 8. OBJECTIVES OF THE STUDY BHARAT ELECTRONIC LLMITED AN OVERVIEW DEPARTMENTS OF B.E.L GHAZAIABAD QUALITY POLICY

9. INTRODUCTION OF TQM 10. MARKET RESEARCH FOR B.E.L 11. ERP SYSTEM OF B.E.L 12. TECHNOLOGY ABSORPTION ADAPTATION & INNOVATION 13. LIMITATION 14. CONCLUSION 15. RECOMMENDATIONS 16. BIBLIOGRAPHY

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DECLERATIONI here by declare that the project entitled Market Research For B.E.L and the information presented in this report has been written by me on the basis secondary data which I collected from the website of Bharat Electronics Limited Ghaziabad.This report is correct to the best of my knowledge, and the report presented has not been published anywhere else.

Date : Place:

.. (Vikesh Sharma)

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PREFACE

With the ongoing revolutions in electronic and communications where innovations are taking at the blink of eye; it is impossible to keep the pace with emerging trends. Excellence is an attitude that whole of human race is born with. It is the environment that makes sure that whether the result of this attitude is visible or otherwise. A well planned, properly executed and evaluated industrial training helps lot in inculcating a professional attitude. It provides a linkage between the student and industry to develop an awareness of industrial approach to problem solving, based on a broad understanding of process and mode of operation of organization.

During this period, the student gets the real experience for working in the actual industry environment. Most of the theoretical knowledge that has been gained during the course of their studies is put to test here. A part from this the student gets an opportunity to learn the latest technology, which is immensely helps in them in building their career. I had the opportunity to have a real experience on many ventures, which increased my sphere of knowledge to great extent. I got a chance to learn many new technologies and was also interfaced to many instruments. And all this credit goes to Bharat Electronics Ltd.

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ACKNOWLEDGEMENTI feel immense pleasure in presenting my industrial training Report completed at Bharat electronics limited Ghaziabad . where I could know to put my professional knowledge of Management in a practical way. As any project can not be Completed without cooperation of, and the benefit advice from a large no. of persons we can only express our Gratitude to them .So I would like to acknowledge and Gratitude to Mr.Khan Saifulla and Mr. Aftab and also he is my project guide. I am very thankful for this great opportunity given to me to undergo training in this firm which has a great importance In defence products. I would like to thank everyone.

I am extremely grateful to the executives and officers of the company for being so helpful to the manager, by manager for their kind cooperation due to which we have been a good exposes to this firm.

Date :

.. 4

Place:

(Vikesh Sharma)

Introduction

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1. Bharat Electronics Limited

Company ProfileBharat Electronics Limited (BEL) established in 1954 with its corporate office at Bangalore, has nine units in the country. It is engaged in the design development and manufacture of sophisticated state-of-the-art electronics equipments /components for the use of defence services, Para military organizations and other governmental users like All India Radio, Doordarshan, Department , etc The BEL is also the premier indigenous source for professional electronic equipment. State-of-the-art manufacturing testing and quality assurance facility has been set up in all units of B.E.L online computerization for

materials management state-of-the-art test facilities , facilities for carrying out environment and reliability checks electro- magnetic interference /Electro Magnetic Compatibility Testing facility, Antenna Testing facility back-up support from Standardization Technical information and Documentation, Computer Aided Design and Manufacture have made BEL a modern professional Electronic Company. All manufacturing divisions/units of BEL

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have been accredited with ISO 9002/ ISO 9001. Bharat Electronic Limited (BEL) designs. Develops and manufactures state-of-the-art products in the field of Radars, Defence Communications, Telecommunications, Sound and Vision Broadcasting, Opto-electronics, solar systems. IT products and Electronic components. BEL has the expertise in engineering Radar, Telecom and Satcom networks, providing network solution to meet customer needs .These systems are supplied and commissioned on turnkey basis. With over for decades of manufacturing experience Bharat Electronic Limited has pioneered the professional electronic movement in India. With continuous up gradation of technology, commitment to quality and constant innovation, BEL has grown into a multi product, multi unit, and multi technology company. Bharat Electronics manufactures and supplies Communication equipments for the Defence forces covering ground, air and ship borne equipments and systems. BEL manufactures a comprehensive range of Radars for defence as well as civilian application. Radar systems offered from BEL are for applications like Surveillance, Fire Control, Tracking and Navigation. In the category of Land Based Radars, BEL manufactures systems for 3D Surveillance, Secondary surveillance, fire control and battle field surveillance. For Naval applications Radars offered are in the Navigational, Fire control and Surveillance categories. In Civilian category BEL offers radars for Air Traffic Control. The frequency. Bands covered extend from C band opto Ka band .BEL also offers Networking of Radars.

SONAR products from BEL cover the range of under water applications for surface ships, submarines and Naval aviation. BEL also offers naval systems in user defined configurations for different types and classes of ships, submarines and other platforms and application. Tank Fire control System MK 1B AL 4421 is designed to reduce the

engagement time leading to an increase in kill rate and to improve the first round hit probability. The systems is capable of engaging static or moving targets with own tank

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stationary or static targets with own tank moving. During the year 2001-02, BEL earned the distinction of becoming the first Defence PSU to acquire Operation MINIRATNA CATEGORY- I status. This Enhanced status will provide BEL certain operation autonomy in the areas of capital investment of Joint Ventures etc. A number of initiatives were taken to diversify the business of BEL and secure orders. In September 2001, BEL won a tender of Rs 18 crore from Andhra Pradesh Government towards establishing a network (APNET) for state wide broadcast and communication up to district / block level. The hub has been commissioned and the terminals are in various stages of completion. The Andhra Pradesh Government has now invited BEL to give a proposal for Phase II of the project to cover the whole State. The value of Phase II will be around Rs. 40 crore. Andhra Pradesh Beverages Corporation Limited (APBCL) has also awarded a Satellite Network tender BEL. APBCL negotiated the price with BEL for using the common infrastructure of APNET at the Hub. The main application is for consolidating the sales transaction on-line by 31 remote centres with the APBCL headquarters on the BOOT model.BEL has been selected through competitive tendering by the Ministry of Home Affairs to establish countrywide network called POLNET on turnkey basis. T he project includes 11 M Hub at Delhi, 40 high capacity VSA terminals for the State Headquarters and major cities, 833 low capacity VSATs at District Headquarters and Block levels. The negotiations have been completed and the order valued at Rs 97 crore, is in the final stages of processing. POLNET will enable effective communication among Police Forces of various states, exchange of police data files and fingerprints and Video Broadcast & Conferencing.BEL secured a large number of order for the LTD based Solar Traffic Signals in Bangalore Hyderabad and New Delhi etc. BEL and India Space Research organization have entered into an Understanding for cooperative efforts to meet the growing demands of satellite manufacture in India. Satellite Electronics Payload (Transponders) a major part of any satellite will be manufactured by BEL for integration with the satellites to be launched by 8

ISRO. BEL has also commenced manufacture and supply of solar-based mini power plants, The first of which has been installed in a technology foundation in New Delhi. ICRA has retained the A1 + (pronounced A one plus) rating assign the Rs 2billion short term dept programmer of Bharat Electronics Limited (BEL).The rating indicates highest safety in short term. The rating affirmation takes into account BELs strong position supply of strategic equipments to the defence forces, its majority Government of India (Gol) Ownership, established manufacturing base, Comfortable capital structure and high financial flexibility. BEL, a defence public sector unit with a Gol holding of 75.86%, is a manufacturer of order, communication & electronic warfare equipment and components. The company reported gross sales of Rs. 25.08 billion and a net profit of Rs.2.61 billion in FY 2003.BEL is currently the main domestic supplier of its existing product range to the defence segment in India. Correspondingly, the defence has accounted for over 70% of the companys sales over the last 6 year. BELs non-defence sales comprise sale of integrated circuits and components in the domestic market, Networking and communication equipment to BSNL, DOT, AIR and DD.Relatively recent additions to its products list are the electronic voting machines to the Election Commission. The strategic ownership of Gol Results in considerable amount of collaborative product development and manufacture by BEL for the India armed forces. Supported by a strong R&D Base, BELs key strengths, over the last 5 decades of Operation, have evolved into production sing and indigenizing imported technologies in the area of defence electronics. The last three years saw a buoyant growth in BEL Defence order book from around Rs.29 billion currently .This has translated to an overall growth in Gross sales. Higher scale of operation, improved Productivity and savings on account of VRS has resulted in healthy operating margins (rending between 16% and 18% during FY2001-FY2003). This was despite some pressure on contribution Margins arising out of relatively stable product prices over this period and some low margin orders in the recent past. With a large part of 9

B.E.Ls facilities aging the Company has been modernizing its facilities Especially with regard to testing equipment and Envisages a higher scale of capital expenditure over The next 2 year to meet the growing order bookBEL Has also steadily increased the extent of outsourcing Of the low value added activities this coupled with The scale of operation and improved productivity are Reflected in the ROCE during FY2003 being over 39% the consistent accruals along with the milestone Linked advances from the defence customers have Resulted in a reducing dependence on borrowings. As On March 31, 2003, the companys gearing stood at 0.04 times and coverage indicators during the year were Very comfortable. The companys working Capital cycle also saw an improvement during FY 2003 with lower inventory holdings, consequent to Easing of the sanction and higher levels of Indigenization. While net debtor days also saw a Decline during the year, the same at over 100 days remain high, reflecting the highly procedural nature of the defence transaction. BELs operations derive considerable strength from the assured order from the Defence segment ICRA believes that notwithstanding the current high Entry barriers in BELs segment of Operation Competition from private players is likely Emerge In the medium to long term. In the short term However, despite the higher capital expenditure Envisaged and long collection cycle, the strong order Book position, continued advances from defence Customer and the high cash balances currently will translate to comfortable liquidity.BEL was born to meet the growing needs of India Defence services for electronic systems. Employing The best engineering talent available in the country BEL has

progressed manufacturing state-of-the-art Products in the field of Defence Electronics like Communications including encryption, Radars and Strategic components. Over the years, BEL has diversified to meet the needs of civilian customers as well and has provided and Network solutions on turnkey basis to customer In India and abroad.

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OverviewB.E.L. was set in 1954 with the vision of

attaining self reliance in defence Starting electronic with the

manufacture of a few Tran receivers at Bangalore, B.E.L now makes a wide range of hi-tech products like radars, Sonar, defence communication equipment, telecommunication equipment, broadcasting equipment, Component electronics voting machines electronics Warfare system, up to electronics at its 9 manufacturing units spread over the length and breadth of the country. BEL has also set up a wide network of offices and service Centres countrywide as well as two offices overseas New York and Singapore. BEL was primarily set up to meet the specialized defence Electronics needs of the armed forces. This continues to be BELs focus but realizing the need to diversify in a highly competitive marketplace, the company has also diversified into areas of civilian need. Some of the successful civilian products include the electronic voting Machines, solar powered LED- based traffic signal lights, broadcasting equipment for DD and AIR and Telecom Equipment for DOT, BSNL, SET TOP BOX and imputers are the latest civilian offerings from BEL. Initially, BEL production came from product which were of foreign design but now more than 60% of BELs Total turnover is from product of indigenous origin. B.E.L has been laying great emphasis on research and development right from the early year. It has also been able

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to successfully partner as production agency with DRDO labs there thrust area has been quality all unit of B.E.L is ISO 9001:2000 certified. As simony to B.E.Ls Quality standards, the company has received self-certification status from DGQA for five products, B.E.L is not only a successful business story but is also a company which cares. Lt Concern for the community and for its own employees is evident. The BEL educational institutions which include a special school for mentally Challenged hospital, crche, canteen and other welfare measures ensure a good quality of life for employees and their dependents. They also serve the local community. It is a matter of great satisfaction that in the golden jubilee Year, BEL allocated a major portion of the fund sets apart or the celebration for various outreach programmes in the Community around all the nine unit this is part of BELs continuing endeavour to be a good corporate citizen. B.E.L has also set up an electronic gallery at the visveswarich industrial & technological museum Bangalore. Clean and green is true of every unit of BEL. Concern for the environment is visible in the profuse greenery that is characteristic of all the unit, the effluent treatment plants, the generation and use of bio- gas and the rain water harvesting, to name a few Awards galore have come BELs way recognizing the striving for the excellence more recent accolades include The Mou award for 2002-03;

Electronics Man of the year Award from ELCINA to CMD, BEL; DSIR National Award for R&D (2000-01) in the electronics industry sector; enterprise excellence award for the year (2000-01) From the Indian institute of industrial engineers; SCOPE Award for excellence outstanding contribution to the public sector management individual category for 2000-01 to CDM. BEL; SHRAM Award for our employees National award for outstanding performance as employers of persons with disabilities; Bangalore stock exchange s Best company award for 2002-2003 first prize for excellence in professional-

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a electronics from union ministry of the communication and information Technology for 2001-02.

Corporate ObjectivesObjectives that Bharat Electronic possesses are as follows: To become a customer- driven company supplying quality product at competitive prices at the expected time and providing excellent customer support. To achieve growth in the operations commensurate with the growth of rofessional electronics industry in the country. To generate internal resources for financing the investment required for modernization, expansion and growth for ensuring a fair return to the investor. In order to meet the nations strategic needs, to strive for self-reliance of materials and components. To retain the technological leadership of the company in Defence and other chosen field of electronics through in-house research and development as well as

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through collaboration / co-operation with Defence National Research Laboratories, International companies, Universities and Academic institutions. To progressively increase overseas sales of its products and services.

Corporate Motto, Mission And Objectives The passionate pursuit of excellence at B. E. L. is reflected in a reputation with its customer that can describe in motto, mission and objectives:

Corporate Motto : Quality, Technology and Innovation Corporate Mission: To be the market leader in Defence Electronics and in the other chosen fields and products Milestone: Bharat Electronics Ltd has natured itself to be known as one of the best public sector units in the nation. A peep into Bharat Electronics Ltd milestone section gives an idea of the progress at Bharat Electronics Ltd.

YEAR 1954 1956 1961 1962 1966 1967 1968 1970 1971 1972 1974 1979 1982 1983 1985 Incorporation of B.E.L

MILESTONE Equipment production started at Bangalore Receiving Valves Germanium Semiconductors Radar Transmitting Tubes HF & Broadcast Equipment, Silicon ,Semiconductor X-ray tubes& magnetrons Integrated Circuits & Hybrid micro circuits B/W TV Picture Tubes Ghaziabad Unit Pune Unit Space Electronics division Machilipatnam integrated with B.E.L Madras & Panchkula Units ,

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Broadcast & T.V , Digital Communication Equipment division 1986 Kotdwara,Taloja&Hyderabad Units 1987 1988 1989 1991 1992 1993 1994 1996 Naval Equipment Division Central Research laboratory Bangalore Telecom-Switching & Transmission System & Mass Mfg. Facility EMI/ EMC Test facilities& Computer Software SATCOM CRL-Ghaziabad ISO-9002 Accreditation ISO-9001 Accreditation

Quality Approach Of B.E.L.Quality Policy Bharat Electronics consistently delivers enhanced value to its customers, through continual improvement of its products and processes Quality Objectives Quality objectives of Bharat Electronics are as Follows: Effective and efficient design and development process, considering the present and future needs of customers. Enhanced customer satisfaction by in-time delivery of defect free products and effective life cycle support. Continual up gradation and utilization of Infrastructure and human resources.

Mutual beneficial alliances with suppliers. Continual improvement of processes through innovation, technology and knowledge management.

Environmental Policy

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Bharat Electronics is involved in the design, development, production and supply of professional Electronic equipments and services with a corporate Mission TO be the market leader in Defence Electronics an other chosen fields and products. It recognizes the impact of our day to day operations on the environment. In order to minimize the harmful effects on the environment by such operations it commits itself to:Continual improvement of our environmental performance and prevention of pollution. Reduction of waste and consumption of resources (materials, water fuel & energy) in all our operation, by implementing and maintaining environmental management systems. Minimize any signification environmental impact of all our activities, products and processes throughout their life cycle, by applying the most economically viable application of the best available technology for Prevention of pollution. Set maintain and review environmental objectives and targets as well as develop environmental performance evaluation procedures and associated Indicators. Complete with all the relevant regulations and industry codes associated with our environmental impacts and where no legislation exists endeavour to set appropriate standards. Promote environmental awareness among all employees and ensure their participation in implementing this environmental policy at their place of work. Suppliers will also be made aware of the need to preserve environmental and prevent pollution In line with the company environment policy, the management of BEL is convinced of the need for quality enhancement, on a continuous basis, in the company. Need was felt impart education /training to all the officers on various facets of quality management. Accordingly an institute called Bharat Electronics Quality Institute (BEQI) was established in 1999. Regular training programs are conducted for all the employees working in different units of the Company. Business Excellence models being followed by different organizations are studied and Efforts are being made to implement the best possible practices in the functioning of the organization. Bharat Electronics Limited, a premier professional Electronics Company of India, has established and nurtured a strong 16

in house R & D base over the years to emerge and remain as a market leader in the chosen Areas of business in professional electronics. Each of the nine units of BEL is having its owe house R&D division to develop new products ion its field of Operation. Besides, there are two Central Research Laboratories (CRL) located at Bangalore and Ghaziabad, to address futuristic technologies of interest to BEL.

B.E.L. Ghaziabad UnitIn the mid 60s, while reviewing the Defence requirement of the country, the government focused its attention to strengthen the air Defence system, in particular the ground electronics system support. For the air Defence network. This led to the formulation of a very major plan for an integrated Air Defence Ground Environment System known as the plan ADGES with prime Minister as the presiding officer of the apex review committee. At about the same time, Public attention was focused on the report of the Bhabha Committee on the development and production of electronic equipment. The Ministry of defence immediately realized the need to establish production capacity for meting the developments and production requirement for the Plan ADGES and in view of the importance of the project it was decided to create additional capacity at a second unit of the company. In December 1970 the Govt. sanctioned an additional unit for BEL. In 1971, the industrial license for manufacture .of radar and microwave equipment was obtained ; 1972 saw that commencement of construction activities and production was launched in 1974.Over the years, the Unit has successfully manufactured a wide variety of equipments needed for Defence and civil use it has also installed and commissioned a large number of system on Turnkey basis. The Unit enjoys a unique status as manufacturer of IFF systems needed to match a variety of Primary Raiders. More than 30 versions of IFFs have already been supplied travelling the path from vacuum technology to solid- state to latest Microwave Component based system. The operation at BEL Ghaziabad are headed by General 17

Manager with Additional / Deputy General Manager heading various division- Design Engineering Divisions Development and Engineering R, Development and Engineering C and Development and Engineering Antenna.

Departments OF B.E.L.GHAZAIABADThe Various Departments Of B.E.L (GZB) Are: Human Resource Development Design and Engineering & DEVELOPMENT Work Maintenance Test Equipment and Automation PCB fabrication Quality Control Works Assembly Microwave Lab Environment and Testing Laboratory Marketing and Customer Co-ordination production control management Services Information Systems Antenna Fabrication Machine Shop Fabrication shop Finance and accounts Material Management Plant and Service 18

Personnel and Administration Quality Assurance and Torque Central Services Central research laboratory

Organisational Set -UpThe organizational set up of the company and of the various departments of the company can be described as following given in other pages. The organizational set up is differing from department to department. Here some departments of company is described which is related to the human resource development department. These are given below:

Duties Assigned by the Administration HRD Department- Main objective of this department is to provide training program for the employee, unpaid trainee, and apprentices.HRD department provide70 types of technical training programmes &36 types of managerial programmes and 9 types of special programmes.

Welfare Department- Main duty of this of factory act and the welfare of the employees like -uniform distribution, canteen facilities, cultural and sports activities, medical facilities, maternity and paternity benefits. This department also provides school facilities, for the children of the employee this department also provide scholarship for the higher education of the

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maximum two children of an employee Welfare department also provide crches facilities to there Employee so that the can work in a vary good mental and behaviour all environment

IndustrialRelation Department This department is headed by AGM (P &A). The aim of department is to solve out of the employee & to make & hormonal relation between the employee and the management. The main duties which are assigned to this department are maintaining discipline within the organization to provide representation in different participative. Forms. This department helps to make to hold meeting of the worker with the management.

Personal department-

The main function of this is to take

disciplinary action. Review of punishment, conciliation of cases, career plans, correspondence with CO/ Govt and wit outside

agencies. Matters related to bonus, PPI /MPI/ incentive scheme etc. meeting with TUs associations. To solve the redresser of the employee grievances, absenteeism cases etc. the matter related to contract labour, medical cases and the implementation of worker, participation in management scheme.

Safety Department-

There is also a safety department which

works for the safety of the whole company. The main aim of this safety department is to provide safety measures to the workers to save them from various hazards. This department provide them helmet. Gumboots and glubs mask coats etc. so that they can 20

save themselves in their respective department where they work in very inconvenient atmosphere.

Establishment department-

The main function of the

establishment department is the recruitment and selection. And provide the essential data to account department and EDP department for effective and efficient work. This department play very important role in Bharat Electronics Ltd. This department also provides the N.O.C. (no objection certificate) for employees who want to do job some where else. Establishment department also provide the lone facilities whether home lone, car lone, education lone,

Quality PolicyWe are committed to consistently deliver enhanced value to our customers, through continual improvement of our products and processes. Quality Objectives 1. Effective and efficient design and development process, considering the present and future needs of customers.

2. Enhanced customer satisfaction by on-time deliverydefect free products and effective life cycle support. 3. Continual up gradation and utilization of infrastructure human resources.

of

and

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4. Mutually beneficial alliances with suppliers. 5. Continual improvement of processes through innovation, technology and knowledge management Evolution of Quality Management System Development of Quality Assurance System in the Early Stages Right from inception in 1954, the Management of Bharat Electronics has understood the varying levels of quality and reliability required by our customers and has been striving to give them complete satisfaction in these areas. Bharat Electronics has developed Quality Systems and Procedures over the years. From the initial days of the company, we had an unique opportunity to interact with large electronic

manufacturers like Siemens, Germany; Plessey, UK; Contrives, Switzerland; Signal Apparition, Netherlands; Bendix & RCA, USA; Nippon Electric, Japan; and Thompson CSF, France. Based on these interactions and our own studies we have developed a good Quality Assurance System. Quality is the responsibility of the owner of the process. Quality functions of the design, manufacture, etc., are well integrated with the Central Quality Assurance Division, which provides overall support for QA activities in the company. Starting as an inspection oriented Quality system during the fifties and sixties, we are the pioneers in adopting the MIL-Q-9858 Quality Management System during the early seventies. The distinguishing feature of this QA System is bifurcation of Quality functions into staff and line 22

functions. Responsibility for satisfactory conduct of line functions is assigned to respective manufacturing divisions and responsibility for satisfactory conduct of staff functions is assigned to QA division. The central QA division was therefore, equipped with all the required infrastructure facilities to perform the intended QA functions. During the period 1976 to 1987, a number of initiatives were taken to improve the Quality Management System. They include: Release of documented QA manual; Promotion of participative culture in the organization; Launching of QC Circles & Suggestion Scheme; Introduction of Quality Management System; Product Quality Improvement. Introduction of TQM Torque: (Total Organisational Quality Enhancement) is the mantra being followed in BEL today. It is being imbibed into B.E.Ls culture through three phases: 1. Knowledge 2. Application 3. Normalization Introduction of TQM (TORQUE) Bharat Electronics has adopted the Total Quality Management (TQM) philosophy under the acronym "TORQUE" which stands for Total Organisational Quality Enhancement. This is a disciplined approach to manage Quality by involvement and commitment of all levels in the organization. TORQUE is a 23

problem solving and process-improving methodology. TORQUE is used as one of the factors to evaluate the performance of the divisions. Torque Parameters 1. Quality cost (percentage to production value) 2. Number of processes under Statistical Process Control (SPC) Yield increase percentage. 3. Cycle time reduction for purchase requisition to purchase order (average lead time in number of days). 4. Cycle time reduction for sub-contract requisition to sub contract order (average lead time in number of days). 5. Percentage full-kit launching to total. 6. Down time for key machines (% down time to available time). 7. Worst case response time to customer complaints for service (in number of days). 8. Delay in supplies - rupee months (with reference to monthly action plan). 9. Quality Control Circle (QCC) 10. %Coverage . 11. Number of case study presentation 12. Number of dormant circles for activation

Thrust areas of TORQUE

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Improvement in Quality Management Systems Consolidation and improvement of Quality Control Circles

Introduction of Statistical Process Control (SPC) Reduction of cycle time in all areas and thus reduction delivery time of products

Improvement in Quality of design Collection and analysis of Quality costs and reducing cost of poor Quality

Institutionalising continuous improvements with the involvement of employees in all areas.

Improvements in safety of operations, Quality of work life and customer satisfaction.

Employees Participation In Improvement Process Quality Control Circles (QCCs) are playing a significant role for contributing to improvement in various areas. There are 652 circles covering 39% of employees and more than 1,000 problems have been identified & solved so far. Many of our QCCs have won awards at various forums and two circles have participated in International Conventions bringing laurels to the organization. Suggestion Scheme is playing complementary role to QCC in the improvement process. 642 suggestions were given involving 834 suggestions during the year 2004-05. Safety And Health Of Employees 25

Safety and health of employees are considered important factors contributing to productivity. A full-fledged Safety Department takes care of this aspect, with various activities having focus on creating awareness among the employees. Quality of work life of employees, conducive work environment and concern for society play a significant role for organization efficiency.

Statutory committees formed within the organization, welfare measures adopted by the management and effective steps taken to maintain a healthy and clean environment are aimed at achieving this objective. Company's Standardisation Standardisation & Quality are two inseparable parts of TQM process and they play a complementary role. The corporate standards department, with four decades of its activity, has evolved 4000 standards providing effective support for design, manufacturing and vendor development. Quality Function Deployment(QFD)

To ensure that the requirements of the customers are understood and the same are translated into product design, the following steps are taken: R & D holds regular meetings with the customers to understand their requirements before actual design work is started

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Design review meetings are held to make mid-course corrections Products undergo evaluation at each and every stage to check that they meet quality and reliability requirements of the customers. Extensive user trials are carried out before finalization of design. Design modification takes place based on feedback provided by customers. Working Conditions This company provides very good working condition to the worker and their employees. There are air conditioners in every department. Some departments are air cooled here; there are some divisions where the production processes going on are also cooled. This company provides very hygienic and very clean atmosphere so that the workers can work here easily and without tension. The employees also feel very comfortable and very peaceful at workplace. They provide safety measures also to the workers and the employees. Of the company. There are more than 2563 employees, there are two shifts for the production process .Working condition are key factor for any organization to establish the objective. If working conditions are not so good or effective, no organization can achieve their goals.

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Monitoring Quality During Manufacturing The major thrust is on prevention of defects rather than detection and correction. This is ensured by: having line Quality functions in manufacturing divisions by the respective QAdepartments. Central QA division overseas implementation of Quality Management System and Procedures by production divisions Use of standard & approved components and materials Identification of special processes and application of SPC techniques

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Periodic calibration of all instruments used in manufacturing areas and preventive maintenance of machines. Formation of fact based problem solving teams in production areas. Other Initiatives for Further Improvement Include Modernisation of assembly, testing, plating and painting shops to ensure better infrastructure facilities. Formation of Productivity Steering Committee for monitoring productivity. Establishing task force for better inventory control. Strict monitoring of vendors / sub-contractors by vendor evaluation and rating system

Awards And RecognitionIn recognition of the achievements of Bharat Electronics in various fronts including Quality, more than 150 awards have been received by Bharat Electronics. The areas in which these awards have been given include: Quality, Safety, MoU, QCC, R&D, Strategic Export, Standardisation, Electronics and Import Excellence in Substitution.

Some of the awards received include National Golden Peacock Award from the Institute of Directors British Safety Award from the British Safety Council, London 29

Excellence in Export Award from the Electronics and Computer Software Export Promotion Council, Ministry of

Commerce, Government of India Excellence in Research & Development from the Department of Scientific and Industrial Research, Government of India Best Employer of the Handicapped Award from the Ministry of Welfare, Government Of India INSSAAN Award from the Indian National Suggestions Scheme Association for Excellence in Implementation of Employees' Suggestions Best Performing Enterprise in Development of Women from the forum of Women in Public Sector (WIPS) under the MoU for the year 2005-06 based on internal evaluation is Excellent. Company has achieved Excellent rating for the eighth consecutive year.

Order book position

The order book of your Company as on 1st April, 2006 Was Rs.66330 million (as against Rs.61080 million as on (1-4-2005), of which orders worth Rs.35410 million are Executable during 2006-07. Patents During the year under report, your Company received following Patent rights in India: _ Electronic Voting Machine _ Solar Traffic Signalling System 30

_ Phase Tapering technique for Beam Shaping of Cellular Base Station Antenna .In respect of Electronic Voting Machine, patent rights were obtained in Singapore and Namibia also.

Manufacturing Initiatives

Your Company is setting up a new manufacturing facility to produce super components. This will address the present and the future requirements of a wide variety of super components. A new mass manufacturing facility to assemble electronic circuit boards, using surface mounted devices has been set up at Panchkula Unit of your Company to meet the captive requirement and also to address the contract manufacturing business segment for exports. To develop and manufacture stateof-the-art phased array antennae, an indoor Near Field Test Facility has been set up at Ghaziabad Unit of your Company.

A new shelter manufacturing facility is being set up at the Navi Mumbai Unit of your Company to produce state of- the-art shelters required for the defence forces. Quality Company has adopted the CIIExim Bank Model to achieve Business Excellence. Seven Units/Strategic Business Units of Company have been awarded the first level of CII-Exim Bank Commendation for Strong Commitment to Excel. All the Units/SBUs have Migrated to the revised ISO 14001: 2004 standards. Company' has a total of 17 EMS and 20 QMS 31

certificates. 17 senior officers of Company Assessed external business organisations for the CII-Exim Bank excellence award on behalf of the Confederation of Indian Industries. QCC activities at BEL are at a new high. A total of 681 circles made 750 presentations on improvements in products / processes. The employee involvement in QCC is 42.71%. The BEL Quality Institute trained 120 officers on Six Sigma methodology during the year.

ERP System Of B.E.LCompany embarked on a project to implement SAP Last year to improve overall business performance. Components SBU at Bangalore Unit of the Company which was identified as the Pilot Site has gone live on SAP? The first phase of Data Centre with servers and Storage Area Network to cater to the needs of the entire company has also been set up. A Wide Area Network is planned to connect all Units and offices including the overseas offices of your Company.

Personnel: The employees strength of your Company has come down from 12390 as on 31.3.2007 to12262 as on 31.3.2007. There were

2466 women employees as on 31.3.2006 as against 2437 as on 31.3.2005. As it operates in high technology area, your Company employs a large number of engineers and scientists.

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As on 31.3.2006 your Company had a total of 2558 engineers and scientists on its roll and of which 1121 were in D&E area.

Vigilance Vigilance function in B.E.L is headed by the Chief Vigilance Officer, a senior IPS officer appointed by the Government of India. The CVO has taken various initiatives to bring awareness at all levels and strengthen the systems and procedures aimed at ensuring good corporate governance and preventing

irregularities and improper use of your Companys resources. The performance of vigilance during the year has been satisfactory. 99.9% of the executives of companies' have filed their Annual Property Returns. These returns are regularly reviewed and scrutinized by the Vigilance Committees/Officers. A large number of regular / surprise inspections were conducted. There is no CBI case. To improve awareness and strengthen the vigilance function, 677 executives were put through Vigilance Awareness programmes, 172 executives have been trained on domestic enquiry and principles of natural justice. A Vigilance Bulletin Jagriti has been introduced for circulation to all employees periodically to communicate the vigilance activities as well as best practices in the industry. An Apex Committee was formed to monitor Implementation of e-tendering / eprocurement in all Units / SBUs. Three Committees have been constituted for review and revision of the existing Purchase,

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Works Contract and Sub-Contract Manuals and revision of these Manuals are at final stage.

Environment management B.E.L, through its constant endeavour to maintain clean environment in and around its manufacturing Units and townships, fulfils its devout commitment to sustainable development. The established practices adopted by your Company include: High degree of effluent treatment, zero effluent discharge, recycling treated wastewater, rainwater harvesting, generation of bio-gas from canteen wastes, use of domestic waste after treatment for horticultural purpose, and systematic hazardous wastes management and these measures play a vital role in containing pollution and enhance resource conservation. Further efforts undertaken by your Company during the year include reduction in generation of hazardous wastes and use of environment friendly materials and processes. The introduction of cyanide-free plating process and sludge reduction in primary treatment plants reduces the adverse environment impact caused by hazardous materials. Your Company continues to reduce water consumption with several control and conservation measures due to which the potable water consumption in Bangalore Unit of your Company alone has dropped by 1.2% in 2006-07. With the additional deployment of 10 KLD capacity Solar Water Heating system during the year, the total installed

34

capacity at Bangalore Unit stands at 48 KLD, resulting in corresponding electrical energy saving. Plantation area was increased and 10000 saplings were added with the involvement of employees. All the six SBUs and services divisions of Bangalore Unit have upgraded their environment management system certification from ISO 14001-1996 to 14001-2004. Companies has been striving for long to promote the Usage of non-conventional energy resources. BEL is now establishing a 2.5 MW Wind Energy Farm near Basavapatna village in Channagiri Taluk of Davanagere District in Karnataka. The plant is expected to generate 50 lakh Units per annum and the expected life of the System is 20 years.

Awards In addition to the DSIR National Award for R&D Efforts in Industry for the year 2005 indicated earlier in this report, B.E.L received the following awards and recognitions during the year 2005-06:_ Raksha Mantris Institutional Award for Excellence in Performance as well as the Raksha Mantris Awards for Design Effort. _ MoU Award for 2003-04 from the Department of Public Enterprises for being one of the Top Ten Public Sector Enterprises. This is the second consecutive year that B.E.L has won this award.

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_Institute of Cost and Works Accountants of India (ICWAI) Award for Excellence in Cost Management for 2005, first in the PSU Category. _ Business Standard Star PSU award for 2004-05. _ Indira Gandhi Rajbhasha Award for implementation of Hindi for the year 2003-04. _ Kotdwara Unit won the Platinum Award for Manufacturing Excellence from Frost & Sullivan in the Large Engineering category. _ Everest Quality Control Circle of BEL- Ghaziabad received the first prize at the National Level Competition conducted by the CII in May 2005.

Expenditure on R&D

Total Gross R&D Expenditure during 2005-06 was Rs.1301.5 million. This expenditure constitutes about 3.7% of the turnover. Of this, the capital R&D expenditure was Rs. 206.9 million and revenue expenditure was Rs. 1094.6 million.

Technology Absorption, Adaptation and Innovation (a) Efforts in brief, made towards technology absorption,adaptation and innovation: The indigenous products developed by R&D Divisions of BEL are not only due to in-house R&D efforts but also due to joint 36

development Collaboration with DRDO/Other R&D Labs and institutes. During the process of co-development or collaboration with these indigenous organizations & institutes, R&D Engineers of B.E.L come closer to various indigenous technologies of interest to BEL and actively involve to build varieties of indigenous products in the areas of BELs interest. While building the prototype, B.E.L Engineers provide concurrent Engineering & other services required for the development, customer trials, evaluations & acceptance before the grant of Bulk Production Clearance. During 2006-07, technology absorption for the following two major products has been completed in respect of indigenous sources of technologies from various DRDO Labs: SV 2000 Radar for ALH (Source of Technology: LRDE) TARANG MK-1B (Source of Technology: DARE) BEL Engineers do adapt the indigenously acquired technologies and bring out higher versions of the earlier products by introducing innovative features. Some of the products for which improvement / modifications & up gradations have been carried out during 2006-07 by the R&D Engineers of BEL through innovative adaptation of DRDO technologies absorbed earlier are as follows : INDRA II Trainer SECTEL MK II ULSB MK III SAFARI MK-II

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(b) Benefits derived as a result of the above efforts: R&D efforts at BEL to absorb technologies from indigenous sources besides in-house efforts have resulted in the development of significant indigenous products, which otherwise would have been imported by Indian Defence Forces and also have resulted in additional business & turnover for BEL. Following are some of the major products developed through indigenous sources of technologies like DRDO & Others, which went into production for the first time during 2006-07 :Combat Net Radio (CNR), CIDSS, ELLORA, TARANG MK1B, RWR for Russia, LINK. (c) Information regarding technology imported sduring last 5 years: BEL acquires new technologies through ToT as per the market requirements and sets up production facilities and upgrade them to the level of indigenous manufacture. Subsequently, after the full absorption of ToT, B.E.L engineers provide the product support including up gradation and bring out new variants of the products utilizing the absorbed technologies.

C. Foreign exchange earnings and outgo Detailed information on export has been provided in the Directors Report. Foreign Exchange Earnings on account of export (FOB) was Rs. 526.9 million as against Rs. 369 million in the previous year. Foreign Exchange outgo was Rs. 10594 million as against Rs. 11844 million in the previous year. or to the analysts. a Government Company, it is subject to Government audit also. 38

C) Financial / Operational Performance: Strategy & objectives The main objectives of the financing strategy of Company are as follows: (i) To make available funds by effective cash flow management without resorting to borrowing; (ii) To maintain the highest credit rating to be able to raise funds at most economical rate if required; (iii) To comply with the expectations of the various stakeholders. (iv) To effectively do tax planning thereby improving the post tax yield to the share holders. Your Company continues to accord the highest priority to each of the objectives listed. During the year, the funding of incremental working capital requirement and the additional capital expenditure was met entirely from the Companys own resources without resorting to any external borrowing, besides improving the earnings on

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Bharat Electronics Quality Institute The management of BEL is convinced of the need for Quality Enhancement, on a continuous basis, in the company. Need was felt to impart Education / Training to all the officers on the

various facets of quality management. Accordingly, an institute called Bharat Electronics Quality Institute (BEQI) was established in 1999. Regular training programs are conducted for all employees working in different units of the company. Business Excellence models being followed by different organisations are studied and efforts are being made to implement the best possible practices in the functioning of the organisation Business Excellence there are many approaches in achieving sustainable excellence. Excellence is dependent upon balancing and satisfying the needs 40

of all relevant stakeholders. Customer focus, Leadership, Management by Processes and Facts, Development of people and their involvement, continuous improvements, Development of partners and public responsibility form the basis for business excellence.CII-EXIM Bank model of business excellence is considered an appropriate tool for achieving business excellence. BEL is gearing towards achieving excellence in business operating through this model. Fivebusiness units- BEL KOT, BEL PK, BEL MC, NS SBU and MC&EW SBU were awarded the first level CII-EXIM Bank Excellence recognition Commendation for Strong Commitment to Excel during the year 2005.

Bharat Electronics Ltd. (BEL) was established in 1954 to meet the Defence needs of the Government of India. Three units of BEL, located in Bangalore, Hyderabad & Ghaziabad, were included on the list of Indian entities that were subjected to US sanctions announced after the May 1998 nuclear tests. Added to the US sanctions, these units are also faced with passive sanctions from some European countries. Presently, it is the country's premier electronics organisation, having nine manufacturing units located at Bangalore, Madras, Hyderabad, Machilipatnam, Pune, Taloja, Panchkula, Ghaziabad and Kotdwara. Its corporate office is at Bangalore. BEL is engaged in the design, development and manufacture of 41

sophisticated, state-of-the art electronic equipments for the use of Indian Defence Services, and Para military organisations. BE is India's only manufacturer of radars, sensors, sonar and the complete range of antennae for defence surveillance

requirements in various configurations meant for ground, air and naval use. For high-tech support to defence, BE makes sophisticated simulators and trainers, gun fire control and stabilisation systems, and optical and opto-electronic passive night vision devices. Communication equipment for the army includes HF, VHF and UHF manpacks; mobile and static transreceivers and transmitters of various capacities; radio relays; digital troposcatter systems; as well as secure voice & data equipment and digital switching systems. For naval communication, BE manufactures ship-borne transmitters & receivers, display and console systems and ESM & ECM electronic warfare systems for various platforms.

Communications' for the air force includes satcom systems and shelter based tactical secure air support communication packages. Other users are All India Radio, Doordarshan, Department of Telecommunications, Police, and Meteorological Department etc. It has a very wide product range and makes over 350 different products, comprising communications equipment, radars for military and civil use, optical and opto-electronic equipment, sound and vision broadcasting equipment and electronic components. Bharat Electronics has manufacturing 42

units with special focus on products such as Defence Communication, Radars, Optical & Opto Electronics,

Telecommunications, Sound and Vision Broadcasting, and Electronic Components. BEL is a technology driven multi-product, multi-unit

professional electronics Government of India Enterprise under the Ministry of Defence. Accredited to ISO 9001/9002 quality standards, BEL's turnover during 1998-99 was over $280 million. Out of the 2000 engineers working in nine manufacturing units, more than 800 are R&D Engineers. BEL manufactures a wide range of products in areas like Defence Communications, Radars, Telecommunications, SATCOM, Sound and Vision Broadcasting, Opto & medical Electronics and Electronic Components. Services offered by BEL include Contract Manufacturing, Telecom Consultancy and

Semiconductor Device packaging.

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Achievements Of B.E.LListening To The Voice Of The Customer Feedback meetings with all major customers are held twice in a year to resolve problems. Every product shipped from the factory goes with a set of feedback cards in which customers can report any defects observed in the product for corrective action. Senior officers from R & D, Quality and Sales visit customers periodically to understand the customer problem and the information is passed on to the concerned agencies.

Accessibility is provided to customer to have any information needed by him. Third party Customer Satisfaction survey is conducted once in two years besides the yearly survey conducted by the Business units.

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Research Objective

2. Research ObjectivesThe research objective is subdivided in following points:

1. Knowing the consumers taste for the new products.

2. Accelerating the demand of the present product and finding out the reasons of lesser sales.

3. Finding out the customer interest, habits and changes in them.

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4. Finding out the quantum sales, trends and reasons for them.

5. Knowing about the pricing policy.

6.Finding out the effect of packaging on the psychology of the customers.

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LIMITATION

3. Limitation of B.E.L1. B.E.L has niche market so they have to be specialists in their production. 48

2.

Their products are too costly. a normal person is not aware by their products

3.

New technology is introducing everyday so they have to be update always, but it is not possible because professionals of that technology are limited.

4. 5. 6. 7. 8.

Innovation is taking place at producing new products. service of products is not always possible . Transfer of Technology is not possible at every time. It is Depend on the relations with country. It is government organization so it has some formalities to follow which restrict the growth of company.

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MARKET RESEARCH FOR B.E.L

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4.Market Research

Market research is the systematic gathering, recording & analyzing the data about marketing problems the end of providing in formation useful in marketing decision making.

Marketing ResearchThe subject of marketing research is the result of consumer oriented marketing. Today, it has become necessary to study systematically the different aspects relating to marketing process with regard to fulfilling the expectations and needs of the consumer by the right thing (product) , at the right time and at the right place. In the simple words, marketing research is concerned with all those factors, which have a direct impact upon the marketing of products and services. It links the organization with its marketing environment. It involves gathering, analyzing, processing and interpreting the information to help the management to understand the environment, identify problem(s) and opportunities and develop the courses of action to achieve the marketing objectives. Marketing research is directly interested in offering sound alternative solutions to all 51

marketing problems relating to exchange of goods and services from marketer to buyer. Marketing research is the systematic problem analysis, model building and fact finding for the purpose of improved decision making and control in the marketing of goods and services. Philip Kotler Marketing research is the systematic gathering, recording and analysis of the data about marketing problems towards the end of providing information useful in marketing decision marking. Still and Cardiff

Objectives/Need of Marketing Research

According to Still and Cardiff, marketing research is needed in the following circumstances:

1. Knowing the consumers taste for the new products. 2. Accelerating the demand of the present product and finding out the reasons of lesser sales.

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3. Finding out the public interest, habits and changes in them. 4. Finding out the quantum of sales, trends and reasons for them. 5. Knowing about the pricing policy. 6. Finding out the effect of packaging on the psychology of the customers.

Scope of Marketing ResearchMarketing research can be successfully applied to do the research under the following areas:1. Analysis of the market size according to age, sex, income, and standard of living of the customers. 2. To know about prospective customers. 3. To get a knowledge of competitors share in the market. 4. Estimating the territorial demand of different markets. 5. Studying the market changes and market conditions affecting the market changes. 6. Knowing about the profitability of different markets and the market segments. Analysing the working of various channels of distribution

Importance/ Benefits of Marketing Research

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White has pointed out the following benefits of marketing research: 1. Marketing conditions and their potential may be knownthrough marketing research. 2. Information about customers is obtained.

3. Test and improvement of present selling activities is possible through data collection. 4. Sales territories can be distributed more efficiently after conducting marketing research which gives the potential of each territory. 5. Determination of sales quota is possible. 6. Study of old commercial policies and test of new policies may be conducted easily. 7. Efficiency of promotion can be determined by the promotional analysis. 8. Power and weaknesses of competitors may be studied and fair policies may be determined. 9. Customers like one product in comparison to others may obtain knowledge of this fact. 10. Knowledge about habits of customers and retailers may be obtained.

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Research Methodology

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5. Research Methodology

Marketing Research Procedure For B.E.L.

Step I- defining the problem and deciding the objective of the study.

Step II- conducting a situation analysis

Step III-Planning conducting a formal Investigation

Step V- Analyzing & interpreting data

Step VI- preparing a written report for management.

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Data Collection & Analysis

6. Data Collection

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In this section we study about the B.E.L position in the market. For this we have to know about the customer profile of B.E.L Customer Profile Defence area Army:-Tactical and strategic communication equipment, digital switches, GPS receivers, battlefield, surveillance radars, air defence and fire control radars, opto electronic products, thanks fire control system, simulators and trainers transmitting tubes, microwave tubes, laser range finder, and batteries.

Navy:- Navigational, surveillance, fire control radars,

IFE,

sonar system, Torpedo decoys, display systems, EW systems, transmitting tubes, microwave tubes, laser range finder, batteries.

Air force:-Surveillance and tracking radars, communication equipments and systems, IFF, EW systems, transmitting tubes, microwave tubes.

Non Defence area Para military:-Communication equipment and systems. Space department:- Ground electronics, on board sub systems. All India Radio:MW, SW, & FM Transmitting tubes, microwave tubes

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Doordarshan (T V Network):-TV Transmitting, OB Vans, Antenna, mobile and transportable satellite uplinks, transmitting tubes, microwave tubes. Bharat Sanchar Nigam Limited :Microwave radios, point to multi point radios, PCM multiplexes, Rural and main automatic exchange, flyway satellite terminals. Videsh Sanchar Nigam Limited & their corporate bodies:Satcom earth stations and VAST based systems. Civil aviation:- Air port surveillance radars and secondary surveillance radars and information display system. Corporate bodies and state Government :-Communication equipment and systems. Medical and Health care:-Surgical microscopes (E N T Ophthalmic) &X-ray tubes. Railways.-Communication equipments and alarm for unnamed level crossing.

Entertainment industry:-Silicon transistors, ICs, Bipolar, CMOS Computers, peize electric crystals, Hybrid microcircuits and SAW Filters, Switching industry:Vacuum interrupters. Instrumentation industry :- Liquid Crystal display. Election Commission:- Electronic Voting Machine. Fisheries department:-Fish Finder.

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In this section we know about Sales of last years , By which we can analyze the present condition of B.E.L in market . I am really thankful to Sales Department for showing their cooperation to me in preparing a report.

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40000 2005-06 35000 30000 2002-03 25000 20000 15000 10000 5000 0 2002-03 2003-04 2004-05 2005-06 2003-04 2004-05

Sales analysis from last four years it very encourgable. The increase in sales is near about 103% with in one year 2005-06.

PROFIT BEFORE TAX-:

9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2002-03 2003-04 2004-05 2005-06 PROFIT BEFORE TAX (IN MILLION)

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Profit before tax increases by 80.20% during last year 2005-06.

PROVISION FOR TAX3000 2500 2000 1500 1000 500 0 2002-03 2003-04 2004-05 2005-06 East

DIVIDEND-:

2005-06 35%

2002-03 16% 2003-04 23%

2004-05 26%

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The dividend distributed by company in increase of 76% from last year 2005-06.

Interpretation & Findings

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7. Interpretation & FindingsAs we all know that B.E.L has niche market in their segment so their products are too costly and specialized in their segment. Army, Industrial houses are the main customers of B.E.L . As concern with the growth phase B.E.L distribute 1168.0 million as dividend. B.E.L. awarded by NAVRATNA AWARD for their best quality in production. Transfer of technology has been under process by many countries due to their efficiency , relationship with foreign government. For analyzing the B.E.L we present SWOT ANALYSIS HERE-:

SWOT AnalysisIn the changing environment, your Company has identified following strengths, weaknesses, opportunities and threats: Strengths _ Strong R&D base in-house as well as by close association with DRDO labs _ Very good infrastructure and manufacturing facilities _ Well established systems & procedures 65

_ Financial strength _ Skilled, dedicated & motivated work force _ Capability to provide lifetime product support Weaknesses _ Low risk taking ability _ Not proactive enough _ Lack of aggressive marketing _ Dependence on Defence sector _ Slower response time Opportunities _ Upgrade programmes _ System solutions business _ Export through offset mechanism _ Strategic Alliances Threats _ Rapid changes in technology _ Private sector participation in Defence production _ Sourcing of Technology non-availability & exorbitant cost _ Attrition of trained & skilled manpower _ Large number of international players BEL on one hand is consolidating its strengths and on the other hand focusing to reduce the impact of its weaknesses.

The strengths of R&D and infrastructure are leveraged to have strategic alliances to address the emerging opportunities and

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reducing the impact of perceived threats. Major initiatives undertaken and planned to ensure sustained performance and growth: Your Company has undertaken various initiatives to ensure sustained growth in the coming years. The various initiatives taken are in the areas of : 1. R&D - Ugpradation of existing products with emerging technology - Design & development of products in core competency areas - Investment in new technologies 2. Manufacturing - Continuing upgradation of manufacturing facilities - Increase automation in Assembly & Testing 3. Marketing - Providing total systems solutions - Enhanced customer focus & customer support - Image building initiatives 4. Quality - Adoption of CII EXIM Bank Excellence Models in all its Units - Periodic customer satisfaction survey - Benchmarking of products / processes 5. Human Resources - Retention of specialists in core areas - Induction of experts to fill knowledge gaps 6. IT Initiatives - Setting up of WAN across the Units - Implementation of ERP 67

Risk management Company has constituted a Committee of senior officers to identify various risks and advise on the risk mitigation measures. The Committee has already identified the various risks associated with different areas of its operations and a suitable risk management mechanism is being put in place. As a first step, to address the product and technology related risks, company' has set up two Divisions at the Corporate Office, viz. (i) Strategic Business Planning Group and (ii) Technology Planning Group. The Strategic Planning Group, headed by a General Manager, has been set up to draw out strategy for market entry/share for different business segments in which the Company operates, to interact with potential customers for identifying specific future plans and for preparation of perspective business plans for the Company. The Technology Planning Group, headed by a General Manager, will scan relevant technologies and identify sources of technology, jointly develop products with R&D labs, acquire technology through ToT route and encourage in house R&D for new products. The marketing function is also being strengthened. Necessary measures are being taken to manage risks associated with FE variation and other areas of Finance, HRD, etc.

Cost Reduction 68

The cost reduction efforts in the company have resulted in considerable benefit to the company in the areas of indigenisation, process, yield improvement, finding out

alternatives, energy conservation etc. The company has cost reduction teams working in all its Units / Divisions which take up the task of reducing the cost in both manufacturing and nonmanufacturing areas.

Indigenisation The company undertakes indigenisation of high cost critical items as part of its strategy to be self-reliant. On account of indigenisation efforts taken by the company in its Units, the company could achieve cost reduction also.

Diversification Diversification into various segments of civilian market has been identified as the vehicle to achieve the anticipated future growth. Reorganising the Systems activity into a separate Business Unit has started yielding the requisite results for example, winning the prestigious contract from MTNL.To improve the civilian market share, new business areas are being addressed. During 2005-06, your Company introduced different models of Set Top Box for Free to Air DTH application. Your Company is in the process of negotiating with the private broadcasters for providing end-to-end solutions for supply, installation, commissioning and operation of FM transmitters.

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Also, in the telecom sector, new opportunities like expansion of GSM and CDMA networks are being explored through consortium approach with other OEMs. Company' also entered into new business of EDUSAT Network for ISRO and X-ray baggage inspection for Airports Authority of India. B) Internal Control System and their adequacy: Company has an adequate system of Internal Controls implemented towards achieving effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. The system comprises well defined organisation structure, pre-identified authority levels and procedure issued by Management covering all vital and important areas of activities, viz. Budget, Purchase, Materials control, Works, Finance & Accounts, Personnel, etc. Company has an Internal Audit Department which monitors compliances of Companys procedures and policies with well defined annual audit programme and significant audit observations are reported to the Audit Committee of Board of Directors. The Internal Audit function is headed by General Manager (Internal Audit) reporting to the Chairman & Managing Director. Company is in the process of implementation of ERP System which will further strengthen the Internal Control Systems with its in-built checks and balances at various levels of operations. The Internal Control systems are reviewed by the

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Audit Committee. The adequacy of internal control procedures is reviewed and reported by the Statutory Auditors in their Audit Report. Company being

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RECOMMANDAT IONS

8. RECOMMANDATIONS1. B.E.L has to develop technological relationship with othercountries by which they can Transfer the Technology easily.

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2. Due to new era of Technology B.E.L spent their 20% of profit on R&D, which not sufficient for research work. 3.The products of B.E.L very Sensitive from environment.

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CONCLUSIO N

9. Conclusion

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Bharat Electronics Limited, the leading Indian defence PSU, manufactures a wide range of products in the areas of Military Communication, Radars, Naval Systems, Telecom & Broadcast, Electronic Warfare, Tank Electronics, Opto-electronics,

Professional Electronic Components and Solar Photovoltaic Systems. BEL became a Mini Ratna Category I company in February 2002 and has now been elevated to a Navratna based on its consistent performance. BEL was started in 1954 to meet the defence electronics requirements of the Indian Armed Forces. Starting with a single Unit at Bangalore, BEL now has nine Units spread across the country. From a humble beginning, BEL has grown steadily over the years to register a CAGR of around 15% in the last 5 years. During 2006-07, BEL recorded a turnover of Rs.3960.38 crores (provisional), PAT of Rs.713.85 crores (provisional). 81% of the turnover accrued from products of indigenous design, which included BEL's own R&D efforts and its collaboration with DRDO labs. BEL spends nearly 5 per cent of its turnover on R&D. BEL is constantly innovating and coming out with new products to meet customers' requirements. Mr V V R Sastry, Chairman and Managing Director of BEL, says, "We are delighted. It is a recognition of the company's inherent strengths in research and development, manufacturing, quality and thrust on self-reliance. It is also a recognition of the

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company's

ability

to

face global competition and become an international player." "On the occasion of BEL formally being conferred Navratna status, we would like to thank all our stakeholders the Ministry of Defence, customers, particularly the Armed Forces, employees, technology partners like DRDO, business associates, vendors and shareholders,

without whose unstinting support we would not have reached this milestone," Mr Sastry reiterates. The eligibility for considering a PSU for Navratna status is that it should be a Mini Ratna I, Schedule 'A' company and have obtained 'excellent or 'very good' MoU rating in three of the last five years and a composite performance score of 60 or above on various financial

parameters for the last three years including Net Profit to Net Worth, Manpower Cost to Total Cost of Production, PBDIT to Capital Employed, PBIT to Turnover and Earning Per Share. It is also appropriate to mention that BEL has been ranked first among mid-size aerospace / defence companies worldwide by Aviation Week and Space Technology for 2004 and 2005. BEL was named Star PSU for 2004-05 by Business Standard. By becoming a Navratna PSU, BEL will have greater financial and operational autonomy. BEL looks forward to leverage this for further business growth and diversification. 76

inception in 1954, the Management of Bharat Electronics has understood the varying levels of quality and reliability required bytheircustomers and has been striving to give them complete satisfaction in these areas. Bharat Electronics has developed Quality Systems and Procedures over the years. From the initial days of the company,theyhad an unique opportunity to interact with large electronic manufacturers like Siemens, Germany; Plessey, UK; Contraves, Switzerland; Signaal Apparaten, Netherlands; Bendix & RCA, USA; Nippon Electric, Japan; and Thompson CSF, France. Based on these interactions and our own studiethey developed a good uality Assurance System.

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Summary

10. Summary of Report

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As a result of the continuous efforts your Company was able to achieve reduction in total inventory in number of Days of production from 120 days as on 31-3-2005 to 110 days as on 3103-2006. In the case of receivables there has been an increase in the level of Debtors from 79 days sales as on 31st March, 2005 to 105 days sales as on 31st March, 2006. This increase is mainly due to the late receipt of the orders/ clearances resulted in higher Value of sales at the year end against which no advances / Progressive payment could be received, sale of products where the payment terms are not the standard payment terms of Defence, etc. Efforts are continuing for the prompt collection of dues and to bring down the level of sundry debtors. During the financial year 2005-06, there was a substantial reduction in interest on Public Deposits from Rs.22.23 million in 2004-05 to Rs.7.70 million in 2005-06 and also on cash credit from Rs.1.67 million in 2004-05 to Rs.0.008 million in 2005-06. However, the total interest expenditure during 2005-06 was Rs.268.29 million (Rs.90.62 million in 2004-05) because of provision of Rs.240.60 million towards likely liability of interest on adhoc advance received. During the year 2001-02 an adhoc advance was paid to the Company on Letter of Intent without any stipulation of interest payment whereas the final contract was received in the year 200506, having a stipulation that the adhoc advance paid including interest in accordance with the Ministry of Defence norms will be adjusted From the initial advance payable on the final contract value. Public deposits with the Company came down from Rs. 79

147.1 million as on 31.03.2005 to Rs. 72.9 million as on 31.03.2006. Rs. 4.9 million of deposits that had matured but has not been claimed as on 31st March 2006 has been included under current liabilities. Out of this, an amount of Rs.0.03 million was subsequently paid up to 31.07.2006. profits, exports etc., against which performance of the Company is evaluated and rated. Company performance Benchmarking The data pertaining to Quality of products and Services is collected from our collaborators like NEC, Japan; HAS, Holland; Thompson CSF, France; Motorola,USA; etc., and from other leading manufacturers like Hewlett Packard, USA and India; Anritsu, Japan; etc. Data with regard to value

engineering, concurrent designs, Design of experiments, Quality Function Deployment and marketing strategies are compiled from time to time. The data is first analysed at the company's director's level and distributed to senior managers for taking appropriate action with regard to implementation.

Information is also collected with respect to business strategies, value added per employee, inventory, etc. for comparison and improvement. In the strategic electronics area, the Quality level of our products compares favourably with the Quality levels of corresponding products of our collaborators and other companies manufacturing similar products elsewhere in the world. One of the crowning achievements is the successful

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execution of a prestigious export order for RADAR sub systems to a European country by Bharat Electronics, Bangalore.

Important achievements and new business Initiatives Exports Your Company achieved an export turnover of US$ 13.70 million during 2005-06, an increase of 9% against export of US$ 12.50 million in the previous year. Contract manufacturing operations related to parts supplied to GE Medical Systems, USA and Satellite Radios manufactured on build to print basis and delivered to ETON Corporation, USA formed substantial part of this turnover. Export of Satellite Communication equipment to Nigeria, HF Radios to Suriname and export of components including Vacuum Interrupter Tubes and

Magnetrons to various countries formed the remaining part. Your Company has planned to achieve an export turnover of US$ 24.8 million during 2006-07. Marketing initiatives like product demonstration, participation in exhibitions abroad, customization of products / systems meeting specific customer requirements, etc. are being pursued vigorously.

Subsidiary/Joint ventures Your Companys subsidiary, BEL Optronic Devices Ltd. (BELOP) at Pune continued to perform well. BELOP recorded a turnover of Rs. 516.55 million as against the turnover of Rs. 433.33 million in the previous year, an increase of 19.20 %. The 81

Profit after Tax rose by 31.15 % from Rs. 45.78million in the previous year to Rs. 60.05 million during the year. With good order book position, BELOP is expected to perform well in the year 2006-07. In accordance with Section 212(8) of the Companies Act 1956, (the Act), your Company has obtained exemption from the Government from attaching the Balance Sheet, Profit & Loss Account, Auditors Report, Directors Report, etc., of the subsidiary company to the Balance Sheet of BEL. Hence, Annual Accounts of the subsidiary company, BEL Optronic Devices Limited, are not attached to the Balance Sheet of your Company. Your Company will make available copy of the Annual Accounts of the subsidiary company and the related information upon request by any member of your Company or its subsidiary company. The Annual Accounts of the subsidiary company are kept for inspection by any investor at the registered office of your Company and the subsidiary company and any investor interested to inspect the same may please contact the Company Secretary of your Company or its subsidiary. A statement as per Section212 of the Act relating to the subsidiary company is annexed to this report. Further, the information required to be disclosed as per the directions while granting exemption under Section 212(8) of the Companies Act, 1956 is annexed to this Report. The Joint Venture Company with General Electric, USA, viz. GE BE (P) Ltd. achieved a turnover of Rs. 4157.6 million as against Rs. 4690.6 million in the previous year. The Profit after Tax was Rs. 348.97 million as 82

against Rs. 297.30 million in the previous year. The JVC paid 100% dividend for the year 2005-06 and your company received Rs. 26 million as dividend on its 26% investment in this JVC. The other Joint Venture Company, BEL Multitone Ltd., jointly promoted with M/s. Multitone plc, UK has achieved a turnover of Rs. 14.49 million during the year as against Rs.8.33 million in the previous year. The Profit after Tax recorded was Rs. 3.3 million as against Rs. 0.81 million in the previous year. The main objective of this JVC was to supply, install and service Private Paging Systems and Pagers from M/s. Multitone plc, UK. With paging systems no longer in demand and being phased out, there has not been much scope of business for this JVC. Hence, Directors have decided that this JVC be closed down and accordingly the matter is taken up with Multitone to initiate necessary steps for winding up of the JVC.

Research & Development Company continued to lay focused emphasis on R&D in the areas of Defence Electronics & other chosen fields of Professional Electronics for the development of enabling technologies for building state-of-the-art new products and taking up of up gradation of existing products. Your company has received good support from indigenous design & development laboratories and institutes, particularly from various Defence Research & Development Laboratories for the development of State of-the-art indigenous Defence equipment

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&systems. Many technological initiatives taken up in the recent past in the fields of interest to BEL have started yielding results in terms of new products & systems. Approximately 73% of turnover for 2006-07 was achieved from products manufactured based on indigenous design & development. A good number of R&D projects are going through Users evaluations and are expected to fructify into production in near future. All D&E Groups in SBUs/Units, Core R&D Groups at Central D&E and two Central Research Laboratories (CRLs) of BEL have contributed significantly by developing state-of-art Core Subsystems, embedded software packages, enabling technology modules etc. and helped to build a large number of R&D products. Some of the technology / software modules developed by CRL during 2005-06 are : Data Modem for Frequency Hopping Radio, Modems for DAMA S-band Satellite terminals, Base band processing module & serial tone modem for HF radio, Image Compression module for Picture transmission

over Radio; network Security Solutions, Scan Converters & low cost Display Engines for radar, Plot extractor & Tracker modules for X-band radar, GSM base station antennae, Multisensor Data Fusion algorithms using artificial intelligence, Communication Software using Point to Multi-point Protocol, Software for data distribution & exchange using ATM technology, Network health monitoring solution, Ku-band Satcom NMS, Multi chip Modular technology based Radio Frequency Units etc. The interaction between BEL & DRDO has been very fruitful and a good 84

number of large system developments based on the joint efforts between DRDO & BEL are either completed or at the advanced stages of development, trials & evaluations. Your Company received the DSIR National Award for R&D Efforts in Industry for the year 2006 for successful commercialization of Battle Field Surveillance Radar Short Range (BFSR-SR), The technology of which was acquired from LRDE, a DRDO Lab. Totally 43 Scientific papers have been presented / published during 2005-06 in various National / International Seminars, Conferences / Journals by CRL Scientists and R&D Engineers of BEL. A large number of new development initiatives in R&D have been taken up during the year in almost all the areas of BELs business interest, which are expected to be completed within 12-36 months of R&D efforts. These initiatives will be pursued through in-house R&D, Collaboration with DRDO/Other R&D Organisations, Institutes.

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BIBLIOGRAP HY

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11.Bibliography1. 2. 3. Marketing Management (PHILIP KOTLER) edition-11 . Pragatis Marketing Management GATIVIDHI HOUSE JOURNAL OF BHARAT ELECTRONICS LTD. 4. www.belindia.com

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