BEML

Company Profile
BEML Limited (formerly Bharat Earth Movers Limited) was established in May 1964 as a
Public Sector Undertaking for manufacture of Rail Coaches & Spare Parts and Mining
Equipment at its Bangalore Complex. The Company has partially disinvested and presently
Government of India owns 54 percent of total equity and rest 46 percent is held by Public,
Financial Institutions, Foreign Institutional Investors, Banks and Employees.

During the financial year 2008-09, BEML achieved a sales turnover of INR 3013 crores and a
pre tax profit of INR 387 crores. The export earnings touched INR 304 crores.

BEML Limited (BEML) conferred with Mini-Ratna Category-1 Status and under the
administrative control of Ministry of Defence, is a multi-technology company offering high-
quality products for diverse sectors of economy such as coal, mining, steel, limestone, power,
irrigation, construction, road building, aviation, defence, metro and railways. BEML is ranked as
"The Largest and Most Profitable Construction Equipment Company" by Construction World -
NICMAR, 2007. It has emerged in the forefront of heavy engineering industry with a track
record of growth and revenues for over four decades. For its innovative management practices
the company has been awarded the "Golden Peacock Innovation Management Award". BEML
has also been rated as "The Fourth Largest Wealth Creator in the Country" by Dalal Street
Magazine. In keeping with the global technology trends, the company is setting up R&D Centre
of Excellence for Research in Metro Rail System in Bangalore.

Vision
•To become a market leader, as a diversified company, supplying products and services to
Mining & Construction, Rail & Metro and Defence sectors and globalize its presence.

Mission
•Improve competitiveness through organizational transformation and collaboration / strategic
alliances/ joint ventures in technology.

•Grow profitably by aggressively pursuing opportunities in national and international markets.

•Attract and build people in a rewarding and inspiring environment by fostering creativity and
innovation.
Objectives/Goals
•To maintain a dominant position in design, development, manufacture and marketing of
Defence, Earthmoving & Construction and Rail & Metro equipment.

•To diversify and grow.

•To provide total engineering solutions to its customers. •To internationalise operations by
enhancing exports.

•To improve profitability.

•To maintain State-of-the-Art technology for all products.

•Re-orientation of the business operations to match present scenario.

•Continuous building of skills and competencies to bring about Executive Effectiveness for
Management Succession.

Action Plans
 Planned infrastructure investments
Planning Commission’ has projected infrastructure related investments of Rs.20, 272 Bn
during the Eleventh five-year plan in India. This is an increase of 130% over the Tenth
five-year plan.

 Increase in Mining activities

The Government of India, under its plan to provide “Power for all by 2012”, envisages
capacity addition of about 78000 MW in the next 5 years, bulk of which is envisaged
from coal-based thermal power units.
Consequently, the demand for coal is expected to rise to 1,267 million tonnes per annum
by 2025, from the current coal production of 433 million tonnes in FY2007.

 New growth avenues

1. Foray into mining
2. Expanding distribution and marketing network
3. Expansion in Latin American market

Does Plans done match with the vision

 Yes

o Investments
o Diversification by expansion
o Many projects have been Undertaken
Financials

Annual Balance Sheet
2006 2005
In Millions of Rupee 2008 2007 2006-03-31 2005-03-31 2004
(except for per share items) 2008-03-31 2007-03-31 Restated Restated 2004-03-31
2007-03-31 2006-03-31
Cash 5,211.0 3,478.4 3,800.1 3,969.2 5,079.5
Cash & Equivalents -- -- -- -- --
Short Term Investments -- -- -- -- --
Cash and Short Term Investments 5,211.0 3,478.4 3,800.1 3,969.2 5,079.5
Accounts Receivable - Trade, Net 14,965.8 9,036.0 7,698.3 6,082.0 4,435.6
Notes Receivable - Short Term -- -- -- -- --
Receivables - Other 1,561.9 838.4 1,531.6 2,180.1 1,000.3
Total Receivables, Net 16,527.7 9,874.4 9,229.8 8,262.1 5,435.9
Total Inventory 9,352.3 7,346.9 6,528.9 6,208.0 5,732.7
Prepaid Expenses -- -- -- -- --
Other Current Assets, Total 191.0 61.2 64.9 145.0 126.6
Total Current Assets 31,282.0 20,760.9 19,623.7 18,584.3 16,374.7
Property/Plant/Equipment, Total - Gross 7,117.9 6,312.2 5,801.4 5,502.0 5,451.1
Accumulated Depreciation, Total (4,733.2) (4,560.2) (4,430.5) (4,273.8) (4,094.9)
Property/Plant/Equipment, Total - Net 2,384.7 1,752.0 1,370.9 1,228.3 1,356.3
Goodwill, Net -- -- -- -- --
Intangibles, Net -- -- -- -- --
Long Term Investments 54.2 0.0 0.0 25.3 27.9
Note Receivable - Long Term -- -- -- -- --
Other Long Term Assets, Total 172.4 190.4 260.3 403.0 323.7
Other Assets, Total -- -- -- -- --
Total Assets 33,893.3 22,703.4 21,254.8 20,240.8 18,082.5
Accounts Payable 4,840.7 3,050.0 2,993.5 167.8 --
Payable/Accrued -- -- -- -- --
Accrued Expenses 0.0 343.9 0.0 44.9 --
Notes Payable/Short Term Debt 0.0 66.5 27.4 334.3 0.0
Current Port. of LT Debt/Capital Leases -- -- -- -- --
Other Current liabilities, Total 8,915.3 8,602.5 9,151.9 11,565.1 11,581.4
Total Current Liabilities 13,755.9 12,062.9 12,172.8 12,112.2 11,581.4
Long Term Debt 3,040.6 262.4 252.4 755.4 332.9
Capital Lease Obligations -- -- -- -- --
Total Long Term Debt 3,040.6 262.4 252.4 755.4 332.9
Total Debt 3,040.6 328.9 279.7 1,089.8 332.9
Deferred Income Tax 0.0 14.3 13.8 26.4 155.8
Minority Interest 2.3 1.9 1.6 -- --
Other Liabilities, Total -- -- -- -- --
Total Liabilities 16,798.8 12,341.5 12,440.5 12,894.0 12,070.1
Redeemable Preferred Stock, Total -- -- -- -- --
Preferred Stock - Non Redeemable, Net -- -- -- -- --
Common Stock, Total 417.7 368.7 368.7 368.7 368.7
Additional Paid-In Capital 6,138.0 1,053.4 1,053.4 1,050.7 --
Retained Earnings (Accumulated Deficit) 10,538.8 8,939.7 7,392.2 5,927.4 5,643.7
Treasury Stock - Common -- -- -- -- --
ESOP Debt Guarantee -- -- -- -- --
Unrealized Gain (Loss) -- -- -- -- --
Other Equity, Total -- -- -- -- --
Total Equity 17,094.5 10,361.8 8,814.4 7,346.8 6,012.5
Total Liabilities & Shareholders' Equity 33,893.3 22,703.4 21,254.8 20,240.8 18,082.5
Shares Outs - Common Stock Primary Issue 41.64 36.74 36.74 36.74 36.74
Shares Outstanding - Common Issue 2 -- -- -- -- --
Shares Outstanding - Common Issue 3 -- -- -- -- --
Shares Outstanding - Common Issue 4 -- -- -- -- --
Total Common Shares Outstanding 41.64 36.74 36.74 36.74 36.74
Total Preferred Shares Outstanding -- -- -- -- --

Annual Income Statement

2008 2006 2005

2009 2008-03-31 2007 2006-03-31 2005-03-31
2009-03-31 Reclassified 2007-03-31 Restated Reclassified
(except for per share items)
Period Length 2009-03-31 Period Length 2007-03-31 2006-03-31
12 Months Period Length 12 Months Period Length Period Length
12 Months 12 Months 12 Months
Revenue 28,796.7 25,401.4 24,244.6 20,601.6 17,464.8
Other Revenue, Total (824.8) 0.0 489.9 603.6 587.8
Total Revenue 27,971.9 25,401.4 24,734.5 21,205.2 18,052.6
Cost of Revenue, Total 15,474.8 14,700.1 14,745.7 12,492.4 10,051.1
Gross Profit 13,321.9 10,701.3 9,498.9 8,109.3 7,413.7
Selling/General/Admin. Expenses, Total 5,738.5 4,507.3 3,674.1 3,371.8 3,561.6
Research & Development -- -- -- -- --
Depreciation/Amortization 275.8 179.5 138.3 143.7 229.9
Interest Expense, Net - Operating 393.1 231.6 56.6 73.3 17.9
Interest/Investment Income - Operating -- -- -- -- --
Interest Expense(Income) - Net
-- -- -- -- --
Operating
Unusual Expense (Income) -- -- 87.2 75.7 --
Other Operating Expenses, Total 2,195.0 2,282.3 2,860.1 2,186.4 1,473.1
Total Operating Expense 24,077.2 21,900.8 21,562.0 18,343.2 15,333.6
Operating Income 3,894.7 3,500.6 3,172.4 2,862.0 2,719.0
Interest Expense, Net Non-Operating -- -- -- -- --
Interest/Invest Income - Non-Operating -- -- -- -- --
Interest Income(Exp), Net Non-
-- -- -- -- --
Operating
Gain (Loss) on Sale of Assets -- -- -- -- --
Other, Net -- -- 1.7 2.2 9.0
Net Income Before Taxes 3,894.7 3,500.6 3,174.2 2,864.2 2,727.9
Provision for Income Taxes 1,193.7 1,230.6 1,115.2 989.0 975.1
Net Income After Taxes 2,701.0 2,270.0 2,059.0 1,875.2 1,752.8
Minority Interest -- -- -- -- --
Equity In Affiliates -- -- -- -- --
U.S. GAAP Adjustment -- -- -- -- --
Net Income Before Extra. Items 2,701.0 2,270.0 2,059.0 1,875.2 1,752.8
Accounting Change -- -- -- -- --
Discontinued Operations -- -- -- -- --
Extraordinary Item -- -- -- -- --
Tax on Extraordinary Items -- -- -- -- --
Net Income 2,701.0 2,270.0 2,059.0 1,875.2 1,752.8
Preferred Dividends -- -- -- -- --
General Partners' Distributions -- -- -- -- --
Miscellaneous Earnings Adjustment -- -- -- -- --
Pro Forma Adjustment -- -- -- -- --
Interest Adjustment - Primary EPS -- -- -- -- --
Income Available to Com Excl ExtraOrd 2,701.0 2,270.0 2,059.0 1,875.2 1,752.8
Income Available to Com Incl ExtraOrd 2,701.0 2,270.0 2,059.0 1,875.2 1,752.8
Basic Weighted Average Shares 41.64 40.23 36.74 36.74 36.75
Basic EPS Excluding Extraordinary
64.860 56.432 56.035 51.032 47.700
Items
Basic EPS Including Extraordinary Items 64.860 56.432 56.035 51.032 47.700
Dilution Adjustment -- -- -- -- --
Diluted Weighted Average Shares 41.64 40.23 36.74 36.74 36.75
Diluted EPS Excluding ExtraOrd Items 64.860 56.432 56.035 51.032 47.700
Diluted EPS Including ExtraOrd Items 64.860 56.432 56.035 51.032 47.700
DPS - Common Stock Primary Issue -- 12.000 12.000 10.000 10.000
Gross Dividends - Common Stock -- 538.7 511.5 382.9 374.6
Total Special Items -- -- 88.1 77.0 --
Normalized Income Before Taxes 3,894.7 3,500.6 3,262.3 2,941.2 2,727.9
Effect of Special Items on Income Taxes -- -- 31.0 26.6 --
Inc Tax Ex Impact of Sp Items 1,193.7 1,230.6 1,146.2 1,015.6 975.1
Normalized Income After Taxes 2,701.0 2,270.0 2,116.1 1,925.6 1,752.8
Normalized Inc. Avail to Com. 2,701.0 2,270.0 2,116.1 1,925.6 1,752.8
Basic Normalized EPS 64.860 56.432 57.591 52.404 47.700
Diluted Normalized EPS 64.860 56.432 57.591 52.404 47.700

Financials

BEML’s strategy to diversify into metro coaches and strong demand environment for CME in India, has enabled it
to register a CAGR of 14% in revenue over the period of FY04 to FY08, inspite of significant decline in defense
business revenue over the same period. Considering, BEML’s order book position and opportunity in domestic
CME industry and metro coach segment, we expect BEML’s revenues to increase at a CAGR of 18% over the
period of FY08 to FY10E.

The operating margin improvement, along with revenue growth has led to increase in BEML’s net profit at a CAGR
of 103% over the period of FY04 to FY07. Operating leverage resulting from the increase in revenue and decline in
employee cost (as a result of VRS scheme at the end of FY05) has led to the significant increase in operating
margins. Going forward, we expect operating margin to be under pressure (due to increase in raw material prices
and wage hike pressure because of the sixth pay commission’s recommendation), resulting an increase in net profit
at a CAGR of 14% over the period of FY08 to FY10E.

OST Finance
Achievements and Milestones
 CMD received the 'SCOPE Award for Excellence and Outstanding COntribution to the
Public Sector Management - Medium PSE CategoryD'  for the year 2006-07
 CMD received Raksha Mantri's Award for 'BEST DEFENCE PSU'  for the year 2007-08
 CMD received the 'BEST PSU AWARD'  instituted by India's leading B School, Indian
Institute of Planning & Management held at Bangalore on 25th March 2009
 Southern Region of EEPC India awarded BEML with 'Silver Shield'  for Star Performer
as a Large Enterprise for its outstanding contribution to Engineering Export held at
Trivandrum on 11th February 2009
 CMD received the 'Raksha Mantri's Award for Excellence' for 'Best Performance in
Exports'  held at New Delhi on 7th November 2008
 CMD received the 'ROTARIAN AWARD'  of Vocational Excellence in their District
Conference held at Bangalore on 9th February 2008
 Conferred ‘Star Performer Award’ by Engineering Export Promotion Council, Southern
Region on 24th November 2007
 Bharat Earth Movers Limited (BEML) on Sep 11 2009 achieved a milestone with the
manufacture and delivery of India's first set of four standard gauge metro car and the
nation's first aluminium 80-tonne wagon.
 Award for ‘Excellence in Technology and Innovation’  from Confederation of Indian
Industries (CII)
 Rated ‘AAA’  by ICRA in January 2007
 Received 'Golden Peacock Award for Innovation Management'  from Institute of
Directors on 14th January 2007
 Ranked ‘4th Best Wealth Creator among 21 Best Wealth Creators of India’  and the 1st
among PSUs (US$ 1 in 2002 has appreciated to US$ 62.64 in 2007) by Dalal Street
Magazine
 Conferred ‘Mini Ratna Category-1 Status’  by Ministry of Defence, Govt. of India during
August 2006
 Received ‘Golden Export Award’  from Government of Karnataka, India during August
2006
 Received ‘Enterprise Excellence Award’  from Indian Institute of Industrial Engineers
during May 2006
 Received ‘Excellent’  MoU rating in 2005-06
 Award for ‘Outstanding Export Performance’  from Engineering Export Promotion
Council (EEPC) during February 2005
 Award for ‘The Largest and Most Profitable Construction Equipment Company’  - 1st
Rank from Construction World - NICMAR 2007