A provision to meet the wage revision requirement has dragged down the net profit of defence Navaratna Public Sector Unit (PSU) Bharat Electronics Ltd (BEL), a top official has said.
Although turnover rose 13.2% in 2009-10, net profit declined as the new wage structure kicked in. Provisional figures, released by BEL CMD, in Bangalore on Tuesday, show that net profit declined to Rs 740 crore in 2009-10 from Rs 747 crore the previous year. Net profit tumbled even as the company?s turnover crossed Rs 5,000 crore for the first time. Currently, the company is in the process of revising wages of its employees, due from 2007. Last wage revision in BEL was done in 1997. BEL CMD said the company had made a provision of Rs 160 crore in 2009-10 for this.
BEL has a workforce of 11,700 employees, of which around 5,500 employees fall under the executive bracket while the remaining are non-executives. The company had also made a provision of around Rs 120 crore in 2008-09 for wage revision, said MG Raghuveer, director finance, BEL.
The money was utilised for the wage revision of executive-level employees. Salaries of non-executive employees would be revised this year. Raghuveer added wage revision negotiations were on and the company was expected to come out with a concrete decision by next month.
