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Bharat Electronics Ltd.

BSE: 500049 Sector: Engineering
NSE: BEL ISIN Code: INE263A01024
BSE 00:00 | 24 Apr 2020 Bharat Electronics Ltd
NSE 05:30 | 01 Jan 1970 Bharat Electronics Ltd

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OPEN 75.60
VOLUME 630199
52-Week high 122.15
52-Week low 56.10
P/E 12.74
Mkt Cap.(Rs cr) 18,189
Buy Price 73.70
Buy Qty 1.00
Sell Price 74.05
Sell Qty 2472.00
OPEN 75.60
CLOSE 76.00
VOLUME 630199
52-Week high 122.15
52-Week low 56.10
P/E 12.74
Mkt Cap.(Rs cr) 18,189
Buy Price 73.70
Buy Qty 1.00
Sell Price 74.05
Sell Qty 2472.00

Bharat Electronics Ltd. (BEL) - Director Report

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Company director report

To the Members

Your Directors take pleasure in presenting their Report and the Audited FinancialStatements for the financial year ended 31 March 2019 together with the reports of theStatutory Auditors and the Comptroller and Auditor General of India thereon.

Financial Results and Performance Highlights

A summary of the Company’s financial results is given below:

(Rs. in Lakhs)

Particulars 2018-19 2017-18
Value of Production 1192142 966956
Turnover (Gross) 1178922 1008484
Profit Before Depreciation 303162 220011
Interest and Tax
Finance Cost 1221 127
Depreciation & Amortisation 31622 25100
Profit Before Tax 270319 194784
Provision for Tax 77590 54855
Profit After Tax 192729 139929
Other Comprehensive Income / (Loss) (4021) 145
Total Comprehensive Income 188708 140074
Dividend paid 51168 62765
Tax on Dividend 10518 12777
Transfer to General Reserve 40000 40000
Other Equity (Including Reserves & Surplus) 877525 751735
Net Worth 901891 776101
Earnings Per Share (in Rs.) 7.91 5.70
Book Value Per Share (in Rs.) 37.01 31.85

Distribution of Value of Production for 2018-19 is given below:

Particulars Amount (Rs. in Lakhs) Percentage
Materials 607993 51%
Employee Cost 187905 16%
Other Expenses (Net) 94303 8%
Depreciation & Amortisation 31622 3%
Provision for Tax 77590 6%
Profit After Tax 192729 16%
Total 1192142 100%

Company’s Turnover (Gross) for the year 2018-19 has increased to Rs. 1178922Lakhs from Rs. 1008484 Lakhs in 2017-18 registering a growth of 16.90%. Profit AfterTax for the year is Rs. 192729 Lakhs as against Rs. 139929 Lakhs in the previous year.Turnover from indigenously developed products is 96%. Supplies to the defence contributedto 68% of turnover in 2018-19 as compare to 85% in the previous year.


As required under Regulation 43A of the SEBI (LODR) Regulations 2015 the Board ofDirectors of the Company has formulated a Dividend Distribution Policy keeping in view theprovisions of SEBI (LODR) Regulations 2015 the Companies Act 2013 Guidelines issued bySEBI DPE DIPAM Ministry of Finance and other Guidelines to the extent applicable to theCompany. The Policy is placed on the Company’s website at aspx?MId=17&CId=527&Lid =1&link=527

The Board of Directors has recommended a Final Dividend of Rs. 1.70 per equity share(170%) amounting to Rs. 41422 Lakhs for the year 2018-19. Earlier Interim Dividend ofRs. 1.70 per equity share has been paid to the shareholders during 2018-19. Thus thetotal dividend for the year 2018-19 is Rs. 3.40 per equity share (340%) amounting to Rs.82844 Lakhs (excluding dividend distribution tax).

Amount Transferred to Reserves

An amount of Rs. 40000 Lakhs is transferred to General Reserves for the financial year2018-19.

Share Capital

The Company’s paid-up share capital as on 31 March 2019 was Rs. 24366 Lakhs andthere was no change in the paid-up share capital during the year.

The details of Directors and Key Managerial Personnel’s shareholding in theCompany as on 31 March 2019 are given below:

Sl. No. Name Designation No. of equity shares held
1 Mr M V Gowtama Chairman and Managing Director 1263
2 Mr Nataraj Krishnappa Director (Other Units) 1263
3 Mrs Anandi Ramalingam Director (Marketing) 1263
4 Mr R N Bagdalkar* Director (Human Resources) 1263
5 Mr Koshy Alexander Director (Finance) 1265
6 Mr Mahesh V Director (Research & Development) 1265
7 Mr Vinay Kumar Katyal Director (Bangalore Complex) 1263
8 Mr Shivakumaran K M* Director (Human Resources) 1263
9 Mr S Sreenivas Company Secretary 1263

* Mr R N Bagdalkar superannuated as Director (HR) w.e.f 31.05.2019 and Mr ShivakumaranK M was appointed as Director (HR) w.e.f 11.06.2019.

The Company has not issued any convertible securities during the year.

Major Orders Executed

Major orders executed during the year for tri services and non-defence customersinclude: Integrated Air Command & Control System (IACCS) Weapon Locating Radar (WLR)Cdr TI Sights Schilka Upgrade Tropo Upgrade Integrated Communication System (ICS)Ground Based Mobile Elint System Low Intensity Conflict Electronic Warfare System (LICEWS) L-70 Gun Upgrade Electronic Voting Machines (EVM) Voter Verifiable Paper AuditTrail (VVPAT) etc.


Your Company has been giving an increased thrust towards harnessing the exportpotential of Defence Electronics Products & Systems including Homeland SecuritySolutions Border Protections Systems and State of the Art Systems & Solution whichrepresent its core area of business. BEL has been exporting various products and systemsto various friendly Countries. Having established a Coastal Surveillance System (CSS) forfew neighbouring Countries BEL is interacting with Ministry of External Affairs on aregular basis for supply of CSS to other friendly Countries of India. BEL is alsoexploring civil market in developing & third world Countries with product like smartcities solar power generation etc.

BEL is focusing on the various opportunities in the area of helping OEM’s to meetoffset obligations in various RFPs of MoD on account of offset policy incorporated in theDefence Procurement Procedure. In this regard BEL is closely working and partnering withvarious major Foreign Aerospace and Defence Companies. BEL is also offering ProvenProducts and Systems to meet the specific requirements of customers. BEL has identifiedcontract manufacturing (build to print and build to spec) to foreign OEM’s andPartnership in form of Transfer of Technology of the latest systems and solution as fewareas of emerging export opportunities. Further efforts are being made to establish longterm supply chain relationship with global players.

Company has achieved an export sale of US$ 21.6 Million during 2018-19 to variouscountries viz. Switzerland USA France Germany Israel Sweden Finland VietnamSeychelles Mauritius and SEZ’s. Major Products / Systems exported are Sub Systems ofRadar & EW Systems Data Link II Cable looms Mechanical Parts CommunicationEquipments Acoustic Test facility Surveillance Systems Coastal Surveillance SystemsRadar Passive Night Sight Shelters Sleevi Transmitting tubes Vacuum Interrupters andRadar Spares.

The decline in export sale is mainly due to the non-establishment of Letter of Creditby customer for various Naval Systems and Land Based Systems and Solutions.

The transformation in political and economic scenarios in various countries such asMyanmar Sri Lanka and Indian SEZ’s Defense establishments was another factorcontributing to reduced exports in the current year.

Initiative taken to increase exports by development of new markets for products &services during the financial year 2018-19:

• Marketing Offices Abroad

• BEL has put in efforts for increasing the business opportunities in South EastAsia and Middle East by incessant engagement with customers.

• A Marketing office in Sri Lanka and Myanmar was established during 2018-19.

• During 2019-20 the Marketing Office in Oman is proposed to be established.

• Strategic Alliance with the Foreign OEMs

Proposed strategic alliance with foreign OEMs to address Global Markets by offering thebest value proposition:

• Thales – EW & Radar Modules

• Elbit Systems Electro Optics Israel – Electro optics

• SAAB Marketing Agreement for Radar

• Elisra Systems – Self Protection suite

Major leads in pipe line for following Products and Systems offered to foreignCountries / Customers:

• Coastal Surveillance System

• Gun Upgrade

• Weapon Locating Radars

• BEL COMNET system

• Solar Power Projects

BEL has explored huge export business opportunities in the field of Solar PowerProjects in few of the sunshine nations. The business discussion with various foreignMinistries of the sunshine nations has been slow but steady and now the solar leads are infinal stage of contract signature.

These leads were proactively proposed with working on Buyer’s Credit for SolarPowered Projects Model. With huge expertise within BEL these programs are proposed to bedelivered in very short time and will cover more than 80 cities in one of the sunshineAfrican Nations.

The following were the scope for offset business during 2018-19:

• Data Link II for Boeing USA

• Cable Harness for Pilatus Switzerland

• EoS CoMPASS for Elop Israel

• G4 A Technical platform (Shelters) for SAAB Sweden

• EW & radar Sub Assemblies for Thales France

• Communication Radios for Boomeranger Boats Finland.

New Initiatives Proposed for enhancing the Export Business in 2019-20 are:

• Proactive interaction with

o Foreign mission in India

o Foreign DA

o Indian DA (abroad)

• Proactive approach to the solution offered to customers

• Increasing customer interaction by BEL in various countries

o Expand customer base

o Open new offices

o Appointment of multiple agents (segment wise) in a territory

o Participate in exhibition & seminars

o Adopt various model for increase in exports (CKD

SKD Modules Sub-systems & Systems)

o Interaction with export houses.

o Dealership of proven products for foreign OEM’s in other countries.

• Partnership with local Companies to create value to customers

o Multinational Indian OEMs

o Supply Chain o Joint Bidding

• Exploration of civil market in third world countries with product like smartcities solar power generation etc.

• Develop customized solution to meet the specific requirements of customers.

• Inclusion of BEL products in the list of customer for LoC.

• Identification of alternate fund management model to suit customer financialconstraints.

o Buyer’s Credit

o Credit by other banks.

MoU with Government

Your Company has been signing a Memorandum of Understanding (MoU) every year with theGovernment of India Ministry of Defence. Performance of BEL for the year 2017-18 has beenrated as “Excellent” in terms of the MoU with the Government. The MoU rating for2018-19 is under review by the Government.

Order Book Position

The Order Book of the Company as on 1 April 2019 is around Rs. 51798 Crores. Theorder book comprises of mainly major programs like Long Range Surface-to-Air MissileSystem (LRSAM) Weapon Repair Facility for NavalShips Kerala-Fibre Optics Network(K-FON) Smart City Projects Integrated Perimeter Security Solution (IPSS) NavalAirfield Integrated Security System (NAISS).


During this year your Company has declared a higher dividend of 340% as compared to200% in the previous year. Apart from the final dividend of Rs. 9746 Lakhs (40%) for theyear 2017-18 which was paid out in 2018-19 interim dividend amounting to Rs. 41422 lakhs(170%) has been paid during the year 2018-19.

In order to achieve the projected growth in the coming years a focused initiative istaken up by your Company in taking up some major projects which are progressing well andthe outcome from these projects should enable the Company to achieve the planned highertrajectory of turnover and growth. Despite some amount of budgetary constraints faced bycustomers your Company has been able to meet all the incremental working capitalrequirements through internal accruals. Out of the term loan of Rs. 10000 lakhs availedin previous years to fund the CAPEX requirement an amount of Rs. 3334 lakhs isoutstanding as on 31 March 2019. Your Company has retained highest rating by ICRA for bothshort term and long term borrowing.

The inventory position (net) of the Company as on 31

March 2019 was Rs. 445479 Lakhs as against Rs. 473912 Lakhs as on 31 March 2018. Thisworks out to 136 days of value of production as on 31 March 2019 as against 180 days inthe previous year. This reduction has been possible due to better inventory control.

The position of trade receivables (net) as on 31 March 2019 was Rs. 536921 Lakhs ascompared to Rs. 504950 Lakhs in 31 March 2018. This works out to 166 days of turnover ason 31 March 2019 as against 183 days of turnover achieved during the previous year. Thereduction in trade receivables has been possible due to higher collections against openingdebtors and from Election Commission on sale of EVM and VVPAT.


The Company does not have any Public Deposit Scheme at present. However the maturedPublic Deposit amount (collected prior to February 2006) with the Company was Rs. 36.95Lakhs as on 31 March 2019. Out of these 34 deposits amounting to Rs. 36.50 Lakhs are notclaimed or not paid as these accounts are frozen on advice by Karnataka Lokayukta. Theremaining matured deposits of Rs. 0.45 Lakh as on 31 March 2019 is unpaid due toin-sufficient documents / records produced by Depositors.

Research & Development

Your Company has three Tier R&D Structure namely CRL Products Design &Innovation Centre (PD&IC) and D&Es attached to SBUs / Unit. Two Central ResearchLaboratories (CRLs) at Bengaluru and Ghaziabad are involved in conducting futuristicR&D in core technology areas of BEL and develop enabling technology modules for use bySBUs / Units. PD&IC at Bengaluru develops common technology modules subsystems andproducts as required by SBUs / units like Radar Signal Procession Unit MicrowaveComponents Power Amplifier Electro-optics and Lasers Encryption Modules PowerElectrons MMICs Displays etc.

SBUs / Units D&E groups provide System and System of Systems solution having therequired domain expertise technical support during the complete product life cycle fromconcept design to post sale obsolescence management of products / system and developsubsystems and processes as necessary from CRLs PD&IC and Collaborative R&D.

As a Philosophy and Policy these R&D labs work in the identified technologies andproduct areas with well documented three year R&D plans based on RoP / marketingforecast / TPCR and due approval of budget / time by the competent authority.

BEL R&D policy addresses the role of R&D Business requirements Products /Technology requirements and market scenario prevailing at that time. Since then Defencebusiness scenario has changed considerably in terms of Globalisation and Liberalisationdue to changes in Government Policies.

In line with the new business environment BEL has already Undergone changes withrespect to the organization structure creation of new SBUs / Units CRL PD&IC etcand expanded into new business areas over the period of time.

In view of these changes R&D policy is being revised and modified in line with thecurrent business requirements.

The main areas of focus of R&D policy includes technology forecast & roadmapR&D plans process for initiation execution evaluation and reviews of projectsR&D infrastructure management R&D manpower management and recognition andrewards.

D&E Projects Initiated in 2018-19: The major developments initiated in 2018-19 areWeapon Locating Radar (Mountain Version) Active Antenna Array for Ship Borne RadarProgram Submarine Navigation Radar Digital Radar Warning Receiver Indigenous CommonAerial Working (CAW) System for Navy Ship to Shore Communication System (NTRO) PublicKey Infrastructure Solution SOTM for Ku Band Alternate Gyro Sight and Gimbal for BMPII Track pedestal with lifting mechanism for Weapon System Electric Gun and Turret DriveSystem for MBT Development of Quad Copter UAV and Mini UAV for police EW Suite for MLHUpgrade R118 System for HAWK MK 132 Aircraft EO Solution for Drone Guard System MultiSpectral Fog Vision System Development of Uncooled Engine and Tethered UAV based EOSurveillance System Laser Proximity Fuse for Weapon System.

D&E Projects Realised in 2018-19: Some of the major projects completed in 2018-19are the design and development of Air Defence Fire Control Radar Unmanned Battle FieldSurveillance Radar for Border Surveillance Combat Management System JammerSubsystem forDrone Guard System UAV Data Link System (Panchi) Integrated Communication System forNavy V/UHF Communication Network for export CDMA based Wireless Communication Link IACMOD C Costal Security Database Software EOFCS Upgrade II Optical Director SystemUpgrade II 3D Air Surveillance Radar for Navy (Proto) Element Management System forMulti-Channel Encryptor Unit (MCEU) Secure Mil Wireless LAN for Army Commanders DisplayUnit for Radars1KW HF Transmit / Receive Radio SATCOM Terminal for Ground Based MobileELINT System Samyukta up-gradation Fire Control System for Kavach Mod-II Indigenisationof Rate Gyro in T-90 Gun Project Fire Control System for reconfigured NAMICA ElectroOptic System for Radars for Home Land Security and for Drone Guard System TargetAcquisition System for MPTGM.

The Important R&D awards / recognitions received during 2018-19 are “PSEExcellence Awards 2017” ‘Company of the Year’ award and 3 more awards inthe Maharatna & Navratna category for ‘Human Resource ManagementExcellence’ ‘R&D Technology Development & Innovation’ and‘Operational Performance Excellence’.

New Products developed through in-house development efforts and collaborativedevelopment efforts in 2018-19 are as follows:

1. Real Time Information System for Indian Railways : This is being introduced bythe Center for Railway Information System (CRIS) Indian Railways for real time trackingof train information. Some of the main constituents are the locomotive devicestransponders on G SAT-6 satellite 4G / 3G mobile services the loco device monitoring andconfiguration management server.

2. Auto Fare Collection Gate (SWAGAT): Indigenous Auto Fare Collection System forMetro is India’s first indigenously developed payment ecosystem for transportconsisting of National Common Mobility Card (NCMC) SWEEKAR (Swachalit Kriya: Auto FareCollection) and SWAGAT (Swachalit Gate). The validation terminals and gates have beenco-designed and developed by BEL and C-DAC.

3. Drone Guard System: The rapidly increasing popularity of drones have brought awhole assortment of new security threats to Government entities and public safety withpotential hazards of drones carrying weapons or drones used for self destructivemissions. EO System and Jamming Signal Generator for Drone Guard System (DGS) has beendeveloped. Electro Optic System of Drone Guard is used for tracking the Drones. Thejamming signal generator is used in Drone Guard System (DGS) for neutralisation of theintruding Drones.

4. EO System for Home Land Security: This is a mid-wave cooled detector thermalimager channel for night vision and camera channel for day vision. It offers very longrange detection in all weather conditions.

5. Integrated Communication System for Indian

Navy: It comprises of the Advanced (IP based) Composite Communication System(ACCS) Hello Deck Communication System (HDCS) and Versatile Communication System (VCS).The ACCS provides quick and reliable communication over VLF HF V / UHF and STCOM onboardships HDCS enables the control crew in handling supervisory & logistic supportduring take-off landing and docking of helicopters on the ship and the VCS whichfacilitates internal communication on board ships.

6. Coastal Surveillance System for Seychelles: This is a Coastal SurveillanceSystem supplied by BEL in 2015 consists of six radar stations and two control stations.This is now augmented with three additional radar stations and sensors like ElectroOptics VHF Radios X Band Radar meteorological sensors along with microwave link andnetworking units. The system software has been upgraded to integrate these additionalelements.

7. Fire Control System (FCS) Kavach: The Kavach Fire Control System creates a falsetarget by launching a chaff rocket during enemy’s surveillance and attack and thischaff will be misinterpreted as a target and hence will protect the ship.

8. Image Intensifier based Passive Night Vision Devices: Panoramic Night Vision /Aviation goggles is a modern binocular with wide Field of View (FoV) of 295 effectivehandling increased depth penetration and simple maintenance. It can be mounted on abullet proof helmet for ground operations or a helicopter / plane for night surveillance.

9. Indigenous Electronic Upgrade for 52 Calibre Gun: Indigenous Electronicupgrade for 155mm DHANUSH

Gun is the replacement of existing ELBIT electronic suite. Electronics suite consistsof Gun Electronic Unit (GEU) Loader display power distribution unit Emergency switchunit Encoder MVR and Joystick.

10. Maintenance and Training Support Device for Indian Navy: This has been designedand developed for the Indian Navy for training of Naval Personal by using Moodle and MDMserver MTSDs will be loaded with course materials for the trainees.

11. Uncooled Thermal Imager: This has been designed and developed for weapon sightsfor various applications like Rocket Launchers Assault Rifles etc.

12. Commander Thermal Imager Sight for BMP: It has been designed to replace theexisting (obsolete) night vision device in the BMP 1 / 1 / 2K tanks to enhance the rangeperformance and reliability.

13. IFF System for MRSAM Phase II: This system is used for identification oftargets located by the primary radar while operating basically on the principle ofsecondary radar as per Annex 10 of ICAO and STANAG 4193 standard of NATO.

14. Virtual Reality Simulator: This is a simulator which integrates VR devices andmotion platform. It is used for development of Dynamics and Panther vehicle and B vehiclesused in Aerodrome and integration of firefighting procedures.

15. Class Room Jammer: This is a portable jammer designed for deployment at thevarious examination centers. It is used as a cell phone jammer for jamming signals GSMCDMA 3G and 4G bands within the classroom / examination centre.

16. Corner Shot Weapon System: These have been developed for 9mm pistol and 40mmUBGL for usage in hostile and counter insurgency operations. It allows operator to see andattack an armed target without exposing himself for a counter attack.

17. Battery Multi-Function Radar vehicle and

Battery Surveillance Radar Vehicle for Missile System: These are constituents ofthe Quick Reaction

Surface to Air Missile System. They are vehicles equipped with radar and shelterisedelectronics subsystems.

18. Target Acquisition System for Man Portable Anti-

Tank Guided Missile (MPATGM): This is a multi-function compact system capable ofsurveillance ranging target acquisition and a provision to fire missile. It provideshigh quality video during day and night even under adverse weather conditions.

19. Ku Band RF Seeker: RF Seekers have been developed jointly with DRDO for thevarious missile systems including Astra Missile QRSAM Missile and Akash-1S Missile. Theseoperate in Ku Band.

20. Air Defence Fire Control Radar-ATULYA: It is a new Gen ADFCR to replace allexisting FCRs like Flycatcher and USFM.

21. CMS for MRSAM (IAF): It is the Combat Management System for the MRSAM for theIndian Air Force.

Future Plan: BEL has taken Initiatives to form CoE (Centre of Excellence) in (a)Radar & Weapon Systems (b) Communication and (c) Electro Optics and Laser for addedfocus in these areas.

To focus on Innovation BEL has established 8 Innovation Cells in Product Innovationand Development Centre. The Broad areas of Innovation in these cells are finalised and arebeing progressed with.

AI and deep learning Cloud and data analytics cognitive concepts and super-computingare identified as areas for future focus. Competence building infrastructure planningtechnology acquisition manpower planning and funding for projects in this area are beingpursued.

Around 20 projects in AI have been initiated. To enhance technical competence BEL isplanning to enroll engineers for PhD programs. BEL has taken initiatives to furtherstrengthen R&D by collaboration with Academia and start-ups and other industrialpartners as well as consultants.

New Facilities Established During the Year

Company has been continuously modernizing its infrastructure to be in tune with thechanging needs of the technology / products. Specific groups in all the units scan thetechnology changes that are taking place and identify new processes in the world marketfor acquisition. This enables the Company to maintain its infrastructure on par withinternational standards. During the year 2018-19 Company has spent Rs. 67359 Lakhs aspart of CAPEX investment towards Modernization of Plant & Machinery Test InstrumentsR&D investments infrastructure up-gradation etc.

Following are some of the major facilities established during the year.

• A shock Test Facility.

• High Temperature Test facility.

• Surface Mount Technology (SMT) Assembly Line.

SAP Implementation in BEL and other IT Initiatives

BEL has adopted a centralized approach to manage critical IT infrastructure on whichall business processes are dependent. It includes ERP infrastructure mail servers WANLAN network security components Antivirus and Patch management.

During year 2018-19 RFID implementation was done in SAP for real-time tracking ofcapital asset management. The RFID system is integrated with SAP.

IS / CO has received the ISO 27001 certificates for Information Security ManagementSystems. To enable organization to manage regulations & Compliances Governance Risk& Compliance (GRC) is implemented. Estimation of Civil contract is automated in SAPfor generating SOQR. SMS alerts is activated for various business transactions. Payrevision for non-executive is implemented through SAP. Online Inventory Monitoring Systemis developed for COD (Agra) and Coast Guard.

Lead Management System is implemented for marketing in CRM. Customer servicemaintenance portal is developed for MAG1 and Indian Air Force. Simplified process forDepot based sales and material management is implemented.

BEL has well defined organizational structure for Cyber Security Management. Director(R&D) is nominated as CISO for BEL at Corporate Level. At each unit / SBU InformationSecurity Officers are nominated. Following major activities are done in cyber securityfront:

• Five Divisions dealing with IT related projects or handling internal ITinfrastructure and ERP were certified with ISO27001.

• BEL conducted VAPT on the entire ISCO infrastructure and all the vulnerabilitieshave been fixed.


Quality Technology and Innovation are three guiding pillars of BEL’s businessinitiatives. Quality being the first pillar has been one of the focus areas for theCompany. Quality initiatives have been taken up for improvement in performance related toProduct Design On-time-Delivery Process Cycle Times SPC Quality Control CustomerService etc.

The Company is committed for improvement of its activities through process approach inline with World-Class Quality Systems. All Units are accredited to ISO 9001 QualityManagement System (QMS) since early nineties. 11 Units/ SBUs viz. Ghaziabad PanchkulaKotdwara Hyderabad Chennai Military Radars Military Communications ElectronicsWarfare & Avionics Naval System (S&CS) Missile System and Export Manufacturinghave upgraded their QMS to Aerospace Standard AS 9100D.

Units of the Company are committed to Environment Management System through ISO 14001Certification. Ghaziabad Unit is accredited to OHSAS (Occupational Health Safety andAssessment Series) 18001 Certification. Five Units and SBUs are accredited for InformationSecurity Management System ISO-27001.

Test Equipments Calibration departments of Bangalore Complex Ghaziabad and PanchkulaUnits are certified by NABL in accordance with ISO / IEC 17025 Standard. Pune Unitmanufacturing X-ray tubes is certified for ISO 13485 Standard for Medical Devices. BharatElectronics Software Technology Centre (BSTC) at Bangalore Complex is CMMi level 5certified. D&E - NCS and CRL - Ghaziabad are certified for CMMi level 3.

EFQM (European Foundation of Quality Management) Model for Business Excellence is beingfollowed in BEL since 2002 as an another approach for overall strategic and operationalexcellence to meet and exceed the needs & expectations of stakeholders and enhancementin competitiveness. During 2018-19 Bangalore Complex received the prestigious Award fromCII-EXIM Bank Award for Business Excellence 2018 and highest recognition of Role modelorganisation status. BEL is the first PSU to receive such a recognition. GhaziabadMachilipatnam and Chennai Units received Platinum Award showcasing their maturity in theBusiness Excellence journey.

To bring in a culture of improvement through analytical approach selected seniorexecutives were periodically trained as ‘Black Belt’ by Indian StatisticalInstitute Bangalore. These Black Belts guide other executives (Green Belts) in their SixSigma Projects. Out of 495 Projects completed in 2018-19 33 Six Sigma Projects werenominated for Regional / National level competitions. BEL has received 15 regional and 18National Level Championships awards.

The organization has facilitated involvement of Non-executives in the Quality Movementthrough Quality Control Circles (QCC). In the year 2018-19 717 QCC Presentations forimprovement in products and processes were made by various QCCs. Many QCC circles werenominated to participate in national competitions / conventions and all were adjudged forvarious categories of Awards. One of the QCCs which won CMD’s Rolling Shield in theInter Unit QCC Competition represented BEL in the International Convention ICQCC 2018held at Singapore and won the “Gold award”.

Another approach for Quality Improvement is through Suggestion Scheme whereinemployees from Non executives up to Managers provide suggestions for which they aresuitably rewarded on implementation of their suggestions. Around 4124 suggestions weregiven by employees this year. Selected BEL employees participated at 29th National LevelConvention conducted by Indian National Suggestion Schemes’ Association during Jan2019 at Pune and won 10 individual awards under various categories. Ghaziabad Unit andBangalore Complex were awarded first in Implementation of Suggestion Scheme 2018”under Engineering Industry Category at the National Level respectively.

37 D&E engineers were trained for ASQ Certified Reliability Engineers (CRE) duringthe year. taking cumulative CREs in the Company to 266. 43 operating level Qualityengineers were certified for Certified Quality Engineers (CQE) program resultingcumulative CQEs in the Company to 219. Similarly company has 81 senior level executivescertified to next higher level program Certified Manager for Quality and OrganisationExcellence (CMQ&OE).

A revised Quality Recognition Award (QRA) was introduced in 2017 to award bestperforming Unit/SBU in 7 key business processes namely Design Procurement QualityManagement Material Management People Management Manufacturing and Customer Service.Panchkula Unit MR SBU EW&A SBU Hyderabad Unit Ghaziabad Radar SBU Antenna and NCSSBUs and Chennai Unit awarded QRA 2018.

Project Management training programs for Project Management Professionals (PMP) wereconducted. Post training 35 PMPs (Cumulative 489 from the year 2007-08 onwards) wascertified by Project Management Institute (PMI) in year 2018-19.

An independent Customer Satisfaction Survey (CSS) was done through an external agencyto capture the Customers’ Perceptions on BEL’s Products and Services. Resultsfor the same is awaited. Customer Satisfaction Index for the previous year 2017-18 was82%.

Human Resources

Your Company employed 9612 persons as on 31 March 2019 as compared to 9726 persons ason 31 March 2018. Out of these employees 5021 were engineers / scientists and 2049 werewomen employees as on 31 March 2019. A total of 235 executives and 16 non-executives wereinducted during the year. 35 employees belonging to SC 14 employees belonging to ST 79employees belonging to OBC and 10 employees belonging to the minority community wererecruited during the year.

Your Company has been implementing the Government Directives on Reservation. Theparticulars of SC / ST and other categories of employees as on 31 March 2019 are as under:

Executives Non-Executives
Category of Employees Group ‘A’ Group ‘B’ Group ‘C’ Group ‘D’
Scheduled Caste 1043 31 618 40
Scheduled Tribe 351 11 137 22
OBC 1302 38 819 44
Ex-Servicemen 86 5 261 72
Physically Challenged 97 4 123 3

Various Training programs were conducted during the year to enhance competencies inTechnical Functional Managerial and Leadership areas. Structured Executive DevelopmentPrograms were conducted regularly with premier institutes to meet the evolving trainingneeds of executives as they progress through various grades.

The training programs are designed to enhance competencies in various areas likeTechnical Functional and Managerial / Leadership.

A detailed write up on Company’s HR philosophy and specific HR initiatives duringthe year is provided separately in the Management Discussion and Analysis Report whichforms part of this report.

Disclosure under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013

The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of SexualHarassment of Women at Workplace (Prevention prohibition and Redressal) Act 2013 andRules framed there under the Company has implemented the policy on preventionprohibition and redressal of sexual harassment at the workplace which has been uploadedon the Company’s intranet portal. All women permanent temporary or contractualincluding those of the service providers are covered under the Policy.

An Internal Complaints Committee has been constituted in each of the nine constituentunits including Corporate Office to redress complaints relating to sexual harassment.Awareness programs were conducted across the Company to sensitize the employees and upholddignity of their colleagues at workplace particularly with respect to prevention ofsexual harassment. The details of complaints filed disposed of and pending during theyear pertaining to sexual harassment is provided in the Business Responsibility ReportAnnexed to Boards’ Report.

Awards and Recognitions

Your Company continues to be a highly trusted for the quality of its productsinnovation and renovation of its products based on strong consumer insights and theability to engage with consumers across the country. During the year your Company hasreceived various Awards and Recognitions. Some of the important accolades received duringthe year include:

• AIMA Outstanding PSU Award

• SCOPE Award for Excellence for Digitalization

• PSE Excellence Award 2017

• ‘Business Leader of the Year’ Award (Aerospace & Defence) 2019 BELBengaluru Unit won the twin honour of CII

• EXIM Bank Business Excellence Award (2018) & Commendation for Role ModelOrganization.

• BEL Ghaziabad Chennai & Machilipatnam Units received the Platinum levelrecognition for Business Excellence from CII.

• BEL Chennai Unit secured the CII Total Cost Management (TCM) Level 3 award.

• Raksha Mantri Award for Excellence in Performance Export Import substitutionand Design effort.

• Vigilance Excellence Award - 2017 for “Best Institutional Practice to fightCorruption”.

Other significant achievements during the year:

• Company registered a growth of 16.90%.

• Company has achieved an Export turnover of 21.60 million USD.

• Set up new Marketing offices at Vietnam Myanmar Sri Lanka and Oman.

• BEL acquired Rs. 23431 Crores of Order during the year 2018-19.

• Receipt of LRSAM order worth Rs. 9236 Crores.

• BEL Inaugurated 16 MW Solar Power Plant at HVF Avadi near Chennai.

• India’s first indigenously developed Metro Gate SWAGAT - an Automatic FareCollection Gating System jointly developed by BEL & C-DAC inaugurated.

• Flycatcher Radar Spares got DGQA Green Channel Status certification.

• Strategic partnership with Global OEMs like SAAB (Sweden) Elettronica SpA(Italy) Elbit Systems (Israel) etc. and Mahindras in domestic segment.

• Launched the New Product-Atmospheric Water Generator an innovative solution tomeet the ever-increasing need for drinking water.

• BEL received ISO 27001 Information Security Management System Certification.

Subsidiaries Joint Ventures and Associates

BEL Optronic Devices Limited (BELOP) engaged in the business of manufacturing of ImageIntensifier is a wholly owned subsidiary of BEL. Your Company has made further investmentto the tune of Rs. 1449.37 Lakhs (589176 equity shares of Rs. 100/- each at a premium ofRs. 146/- per share) during the year in the equity shares of BELOP by subscribing to rightissue made by BELOP.

BELOP achieved a turnover of Rs. 10325 Lakhs for the year as against Rs. 12164 Lakhsin the previous year. The profit after tax (PAT) for the year was Rs. 1418 Lakhs ascompared to Rs. 1155 Lakhs in the previous year. BELOP has proposed a dividend of Rs.5.89 per share for financial year 2018-19.

The Associate Company GE BE Private Limited [26% shareholding by BEL] continues toperform well. This Company manufactures CT Max and other latest version X-Ray Tubes. BELsupplies some parts required for the products manufactured by this Company. GE BE Pvt.Ltd. recorded a turnover of Rs. 105851 Lakhs for the year as compared to Rs. 80691 Lakhsin the previous year. The profit after tax (PAT) was Rs. 14862 Lakhs for the year ascompared to Rs. 9146 Lakhs in the previous year. BEL has received a dividend of Rs. 9100Lakhs for the financial year 2018-19.

BEL-THALES Systems Limited (BTSL) a subsidiary was formed for design developmentmarketing supply and support of civilian and select defence radars for Indian and Globalmarkets. Your Company holds 74% of the equity capital in BTSL. During the year BTSL hasrecorded a turnover of Rs. 672 Lakhs as compared to Rs. 312

Lakhs in the previous year. The profit after tax (PAT) was Rs. 104 Lakhs as aginst aloss of Rs. 259 Lakhs in previous year.

Defence Innovation Organization (DIO) was incorporated on 10 April 2017 as a ‘Notfor Profit’ Company as per the provisions of Section - 8 of the Companies Act 2013with an authorised share capital of Rs. 1 Crore. The equity participation is 50% from BELand 50% from HAL. The Company has been formed with an objective of funding innovation indefence sector.

In pursuant to provisions of section 129(3) of the

Companies Act read with Rule 5 of Companies (Accounts) Rules 2014 the statementcontaining salient features of the financial statements of Subsidiaries / Associate /Joint Ventures is attached to the Financial Statements.

Consolidated Financial Statements

Consolidated Financial Statements of your Company and its Subsidiaries and AssociateCompanies are attached to this Report.


At present Company’s Vigilance Organisation is headed by a Chief VigilanceOfficer (CVO) an IAS Officer from Haryana cadre (1991 batch). During 2018-19 an IASOfficer from Bihar cadre was heading the vigilance setup. Permanent Vigilance Officers were posted in each of the Units and in the SBUs. Vigilance Committees were formed in theeach of the Units to look after the Vigilance Administration in the Units and SBUs and theUnit / SBU heads are also designated as Chairman of the Vigilance Committee. Apart fromthis there exists a Vigilance Committee at the Corporate where Chairman cum ManagingDirector is the Chairman of the Committee and the CVO is the Member secretary. PreventiveVigilance has been the thrust area of the Vigilance Organisation and the same receivedfocused attention during the current year. The Vigilance Department examines procurement /sub-contracts and processes on continual basis conducts regular and surprise inspectionsand investigates instances of any suspected transactions referred to it. Employees orthird parties can refer any suspected transaction to the notice of CVO for investigationwhich are examined as per the Complaint Handling Policy of the Company. Online complaintmanagement system has been made operational and online complaints can be filed throughaccessing the Vigilance Portal in BEL website.

During the year 1603 Purchase Orders / Contracts have been reviewed. CTE Type intensiveexamination has been restructured with the formation of five IE teams. CTE Type ofIntensive Examination of 60 High value Procurement Contracts has been taken up during theyear. Regular and Surprise checks and Inspections have also been conducted by the fieldVigilance Officers. During the year 44 Complaints including Complaints referred by CVC /MOD / CBI were received. A total of 41 Complaints including 5 Complaints referred by CVC /MOD / CBI were disposed. Disciplinary action and System / process Improvement has beenrecommended in some cases where lapses were observed. Two Complaints are pending with CBIGhaziabad and one complaint is pending with CBI Bangalore for detailed investigation.

During the year 110 Probationary Engineers at the induction level 1029 Executives and378 Non Executives were given basic awareness program on Vigilance. 31 Executives & 17Non-executives working in sensitive areas for more than 3 years have been job rotated andthe percentage coverage is 86%.

Vigilance Department is continued to be certified for ISO 9001 / 2015 Certification forthe Vigilance function of BEL.

In line with the CVC’s guidelines on Leveraging Technology and to ensuretransparency through effective use of technology the following functions have been madeoperational through SAP and in the Company’s website:

• E Procurement - about 92% of the procurements excluding the ToT procurementLong term Rate Contracts and Repeat Orders were covered under e-procurement mode.

• Online registration of Vendors.

• Vendor Payment Information System.

• E-payment / Bank transfer of payment to Vendors.

• Details of awarded contracts / Purchase Orders valuing more than Rs. 10 lakhs inrespect of works contracts service contracts capital items and non-production items havebeen posted in the website.

• Details of awarded Contracts / Purchase Orders issued on nomination / singletender basis value exceeding Rs. 5 Lakhs have been posted in the website.

• Purchase Procedures and Works Contract Manual have been revised and were postedin the BEL website.

• Complaint Handling Policy and Whistle Blower Policy are posted in the website.

• Corruption Risk Management Policy is framed and implemented across the Companyfor implementation. The same is posted in the web site.

• Vendors’ Directory after flagging removing defunct vendors have beenposted in the website.

• File Life Cycle Management System (FLM) has been implemented across the companyand the coverage is about 95% ofthetotalfilesgenerated in the Company.

• On-line filing of APRs is facilitated in SAP for all the Executives and theExecutives have been filing the APRs in SAP.

• Vigilance Monthly and Quarterly Reports are generated through SAP.

• Vigilance clearance is accorded through the dedicated Vigilance portal in SAP.

Vigilance setup in BEL has been continuously endeavoring to bring transparencyfairness and equity in all transactions and processes of the company through creating asense of awareness on System and Procedures through awareness campaign and trainingprogram. Some of the key activities that have been carried out during the year are:

i) Vigilance awareness week 2018 was observed during October / November 2018. Theobservance of the week was marked with special address by eminent personalities. GramSabhas were organized as part of the outreach activities in Yentaganahalli Village inBengaluru District and at Mandhana near Panchkula. Skit plays and Video films integrationand anti-corruption messages were shown to School and College Students located near theBEL Factories. Similar anti corruption awareness program in the form of skit plays andinspirational video films were arranged for the School students of BEL Educationalinstitutions. Integrity Pledge was administered to School and College students during theoccasion. Walkathon and Cycle rally by BEL School Children Human chain by BEL employeesVigilance Walk by employees of Bangalore based PSUs and PSBs Tree plantations anddistribution of saplings unveiling of Vigilance Slogan Boards and series of lecture bydistinguished personalities and Competitions were organized as part of the observance ofthe Vigilance Awareness Week.

ii) E- pledge an initiative of the Commission was facilitated in BEL- lntranet apartfrom the facility of taking the e-pledge in the CVC website.

Integrity Pact

One of the initiatives of the Central Vigilance Commission (CVC) to eradicatecorruption in procurement activity is introduction of the Integrity Pact in large valuecontracts in Government Organizations. In line with the directives from Ministry ofDefence and the Central Vigilance Commission your Company has adopted Integrity Pact withall vendors / suppliers / contractors / service providers for all Orders / Contracts ofvalue Rs. 300 Lakhs.

The Pact essentially envisages an agreement between the prospective vendors / biddersand the Principal (BEL) committing the Persons / officials of both sides not to resortto any corrupt practices in any aspect / stage of the contract. Only those vendors /bidders who commit themselves to such a Pact with the Principal would be consideredcompetent to participate in the bidding process. Integrity Pact in respect of aparticular contract would be operative from the stage of invitation of bids till thefinal completion of the contract. Any violation of the same would entail disqualificationof the bidders and exclusion from future business dealings.

As recommended by the CVC the Company has appointed Mr Girish Chandra Chaturvedi IAS(Retd.) and Mr Suresh N Patel for monitoring implementation of Integrity Pact in theCompany. During the financial year 2018-19 the IEMs reviewed 278 contracts and heldstructured meetings with the Chairman & Managing Director.

Procurement from MSEs

Your Company has been providing increased thrust on enhancing procurement from Micro& Small Enterprises (MSE) and is implementing Public Procurement Policy for MSEs asper the guidelines / notification issued by the Ministry of MSMEs. During 2018-19 BEL hascomplied with the mandate of Government’s Public Procurement Policy for MSEs.

BEL has on-boarded on TReDS Platform and MSME Sambandh & MSME Samadhaan Portalscomplying with Government guidelines.

The Company actively participated in various Vendor Development Programs held acrossthe country including National MSME Defence Conclave at Belagavi (Karnataka)Exhibition-cum-Vendor Development Program-SUBCON 2018 at CODISSIA (Coimbatore TamilNadu) Seminar-cum-Workshop on Skills for Indigenization (BSDU Jaipur Rajasthan)Defence Industrial Corridor Meets held at various locations in Uttar Pradesh and TamilNadu. BEL showcased various items for indigenization for domestic vendors including MSEs.

It is pertinent to mention here that BEL has been awarded Second Runner-up (NavratnaCategory) for the Exemplary Work done under Public Procurement Policy for Promotion of SC/ ST Entrepreneurs.

ImplementationofOfficial Policy Language

Your company is committed to adhere to the OL policy of the Government of India. During2018-19 company has achieved the various targets prescribed in the Annual Program 2018-19issued by Dept. of OL MHA GoI to transact official work in Hindi. The efforts madetowards implementation of Official Languages include:

OL Inspections: Committee of Parliament on Official Language conducted OL inspection ofChennai Unit on 08.10.2018. MoD officials conducted OL inspections of RO Delhi KotdwaraCorporate Office Hyderabad Unit and RO Kolkata. Corporate OL Audit team conducted OLaudits at Ghaziabad Unit CRL-Ghaziabad RO Delhi Pune Navi Mumbai RO Vizag RO Mumbaiand Milcom SBU of BC.

Bilingualisation: All Units and Offices including Corporate Office of the Company areissuing Section 3(3) documents in bilingual usage of Hindi is being encouraged incorrespondence Rule 11 items (stationary codes and manuals procedural literature) oncomputers and registers in accordance with OL rules.

OL in SAP and Website: OL Portal GARIMA is in place to facilitate OL implementationacross the company and to provide latest inputs pertaining to OL and is regularly updated.QPR reports from Units / Offices are being received online in SAP. Hindi notings are beingwritten in File Lifecycle Management (FLM).Company’s website is also available inHindi and being updated simultaneously.

Hindi Month Celebrations: During September Hindi Month and Hindi Day was observed inall the Units and Offices of the Company. During the month employees and officersparticipated enthusiastically in various programs / competitions. Employees of variousUnits / Offices and Corporate Office bagged prizes in the Inter Organization TOLICCompetitions. Hindi workshops for those having working knowledge in Hindi were conductedduring the year. Various Incentive Schemes are propagated among all employees and numberof Executives / Employees took part in these schemes.

Awards and Recognitions: During the year our Ghaziabad Unit CRL-Ghaziabad RO NewDelhi and Bengaluru Complex were awarded by the respective TOLICs. Higher officialsparticipated in TOLIC meetings and officers / employees were awarded in TOLICcompetitions.

At Corporate level various OL activities were conducted during FY 2018-19 whichinclude: Initiation of Defence Electronic Terminology - in coordination with CSTT NewDelhi; 665 Bilingual Standard Email phrases prepared; Initiation of tracking percentage ofwork done in Hindi and bilingual standard notings in SAP; Initiated to prepare StandardBilingual Correspondence across CO Depts.; Vishwa Hindi Diwas on 10th January 2019: Hindibooks donated to Govt. School; Hindi site of BAE portal was introduced; In order to makethe OL Audit Questionnaire more meaningful and factual the questionnaire was revisitedand revised; TOLIC: Sr. Officials participated in meetings and staff members were awardedin inter PSU Competitions; Incentive Schemes: 63 Ex. / NEs of CO (incl. ROs) awarded forFY 2018-19; Two issues of Corporate Hindi Magazine ‘NavaPrabha’ were publishedand 4 Hindi Workshops and 2 Technical Talks were organized. Efforts are in progress toensure OL implementation and achieving progressive usage of Hindi across BEL.

Implementation of RTI Act

The information required to be provided as per Section 4(1)(b) of the Right toInformation Act 2005 has been posted on the website of the Company TheInformation posted on the website contains general information about the Company powersand duties of employees decision making process rules regulations manuals and recordsheld by BEL a directory of the Company’s officers pay scales procedure forrequesting additional information about the Company by citizens and associated requestformats.

During the year 2018-19 the Company had received and attended to 308 requests forinformation under RTI Act. Most of the requests were for information related torecruitment service policy(ies) and commercial matters.

Board Meetings / Change in Directors and Key Managerial Personnel

During the year seven Board meetings were held the details of which form part of theCorporate Governance Report.

Following changes took place in the Directorate and Key Managerial Personnel of yourCompany during the financial year:

Sl. No. Name of the Director Designation Date of Appoint- ment Date of Cessation
1 Ms J Manjula Govt. Nominee Director 23.04.2018 Not Applicable
2 Dr Ajit T Kalghatgi Director (Research & Development) - 31.05.2018
3 Mr Mahesh V Director (Research & Development) 01.06.2018 Not Applicable
4 Mr Vinay Kumar Katyal Director (Bangalore Complex) 27.11.2018 Not Applicable

During the year there was no change in the Key Managerial Personnel (KMP) of theCompany.

Mr M V Gowtama Chairman & Managing Director Mr Koshy Alexander Director(Finance) and Chief Financial Officer and Mr S Sreenivas Company Secretary are the KMPsas defined under the Section 2(51) of the Companies Act 2013.

Mr Vinay Kumar Katyal Director (Bangalore Complex) was appointed as AdditionalDirector w.e.f 27 November 2018 and Mr Shivakumaran K M Director (HR) was appointed asAdditional Director w.e.f 11 June 2019 in place of Mr R N Bagdalkar who retired from hisservices on 31 May 2019 on attaining the age of superannuation. Mr Sunil Kumar Kohli wasappointed as Additional Director w.e.f. 18 July 2019.

Mr Vinay Kumar Katyal Mr Shivakumaran K M and Mr Sunil Kumar Kohli AdditionalDirectors are being appointed as Directors on terms as set-out in the Notice of the 65thAnnual General Meeting:

Mr Nataraj Krishnappa Director (Other Units) retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment.

Directors’ Responsibility Statement

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors in terms of Sections 134(3)(c) & 134(5)of the Companies Act 2013 state that :

a) in the preparation of the annual accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures;

b) the Directors had selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31 March 2019 and of the profit ofthe Company for the year ended on that date;

c) the Directors have sufficient care taken proper and for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) proper internal financial controls were in place and such financial controls wereadequate and were operating effectively; and

f) systems to ensure compliance with the provisions of all applicable laws were inplace and same were adequate and operating effectively.

Significant and Material Orders

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations in future.

Events Subsequent to the Date of Financial Statements

There are no material changes and commitments affecting the financial position of thecompany which have occurred between 31 March 2019 and date of signing of this Report.

Related Party Transactions

There were no materially significant transactions with the Company’s PromotersDirectors Management or their relatives which could have had a potential conflict withthe interests of the Company. Transactions with related parties that were entered intoduring the financial year were on an arm’s length basis and were in the ordinarycourse of business. All Related Party Transactions are placed before the Audit Committeeand also to the Board for approval if required. Members may refer to the notes to theaccounts for details of related party transactions. The policy for related partytransaction has been uploaded on the Company’s website Informationpursuant to section 134(3) (h) of the Companies Act 2013 read with rule 8(2) of theCompanies (Accounts) Rules 2014 is attached to this report as “Annexure 1”.

Corporate Social Responsibility

Your Company has formulated a CSR & Sustainability Policy pursuant to theprovisions of Section 135 of the Companies Act 2013 and the Companies (Corporate SocialResponsibility) Rules 2014 read with various clarifications amendments issued byMinistry of Corporate Affairs (MCA) & Department of Public Enterprises (DPE). The CSRProgrammes / Initiatives / Projects are taken up in line with the Schedule-VII of theCompanies Act 2013 which is duly incorporated in the CSR & Sustainability Policy andforms the guiding principle for all our programmes. The CSR & Sustainability Policy ofBEL is posted on the Company’s website

The objective of CSR is to contribute towards inclusive growth sustained and equitabledevelopment in society through capacity building measures empowerment of the marginalisedand underprivileged sections / communities.

Focused interventions are undertaken in the sectors of Education Healthcare &Sanitation Rural Development Vocational Skill Development Environmental SustainabilityContribution to Technology Incubators and Promotion of Nationally recognised Sports.

During the FY 2018-19 DPE guidelines for CSR Expenditure stipulate CPSEs to take upfocussed CSR interventions on the common theme of School Education and Healthcare withpreference being given to Aspirational Districts identified by NITI Aayog. Accordinglythe Company has undertaken thematic CSR programmes in the Aspirational districts of Yadgir& Raichur in Karnataka. Further CSR Projects that support skilling of youth are beingimplemented under Skill India.

Pursuant to the requirement under the Companies (Corporate Social Responsibility)Rules 2014 as amended a report on CSR activities for FY 2018-19 is annexed herewith as “Annexure2”.


Statutory Auditors

Pursuant to Section 139(5) of the Companies Act 2013 the Comptroller and AuditorGeneral of India appointed M/s SURI & CO. Chartered Accountants Bengaluru asStatutory Auditors for the financial year 2018-19 for audit of accounts of BangaloreComplex Hyderabad Unit Chennai Unit and Corporate Office. M/s Tambi & JaipurkarChartered Accountants Pune were appointed as Branch Auditors of Pune & Navi MumbaiUnits for the financial year 2018-19. M/s J P Kapur & Uberai Chartered AccountantsNew Delhi were appointed as Branch Auditors of Ghaziabad Panchkula and Kotdwara Unitsfor the financial year 2018-19. M/s Tungala & Co. Chartered AccountantsMachilipatnam were appointed as Branch Auditors for Machilipatnam Unit for financial year2018-19.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 (as amended) the cost audit records maintained by theCompany in respect of its Manufacturing activities are required to be audited by the CostAuditor. Your Directors had on the recommendation of the Audit Committee appointed M/sGNV & Associates Cost Accountants Bengaluru as Cost Auditors of the Company for thefinancial year 2018-19 for conducting the audit of cost records of the Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 (as amended) theCompany has appointed M/s Thirupal Gorige & Associates LLP Practicing CompanySecretaries for the financial year 2018-19 to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is annexed to this report as“Annexure3”.

The Secretarial Auditor in his Report observed that the Company is yet to appoint theadequate number of Independent Directors as per the requirements of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015. It is informed that the appointment of Directors is done by Govt. of India andfilling up of vacancies of the said Independent Directors is also pending with theappointing authority namely Government of India.

Auditors’ Report

Auditors’ Report on the Annual Accounts for the financial year 2018-19 and“Nil” Comments of the Comptroller & Auditor General of India under Section143(6)(b) of the Companies Act 2013 on the Annual Accounts are appended to this report.

Reporting of Frauds by Auditors

During the year under review neither the Statutory Auditor nor Secretarial Auditor hasreported to the Audit committee under Section 143(2) of the Companies Act 2013 anyinstance of fraud committed against the Company by its officer or employees the detailsof which need to be mentioned in the Board’s Report.

Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the form MGT-9 is annexed to this report as “Annexure 4”.

Business Risk Management

Pursuant to the Reg. 21 of SEBI (LODR) Regulations 2015 the Company has constituted aRisk Management Committee. The details of Committee and its terms of reference RiskManagement Policy etc. are set out in the Corporate Governance Report and a detailed noteon Risk Management is provided in the Management Discussion and Analysis Report.

Remuneration Policy & Board Evaluation

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration Board Evaluation etc. The details are set out in the Corporate GovernanceReport.

Vigil Mechanism/ Whistle Blower Policy

The Company has a vigil mechanism named Whistle Blower Policy to deal with instance offraud and mismanagement if any. The details of the policy are set out in the CorporateGovernance Report.

Declaration from Independent Directors

The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6) ofthe Companies Act 2013.

Management Discussion and Analysis Report

Management Discussion and Analysis Report required under the SEBI (LODR) Regulations2015 and also under the Government (DPE) Guidelines on Corporate Governance for CentralPublic Sector Enterprises (CPSEs) is attached to this Report as “Annexure5”.

Particulars of Loans Guarantees & Investments

Details of loans guarantees and investments covered under the provision of Section 186of the Companies Act 2013 are given in the notes to the financial statements.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference tofinancial statements. A detailed note on Internal Financial controls is provided in theManagement Discussion and Analysis Report.

Composition of Audit Committee

The Audit Committee comprises of Independent Directors viz. Mr Mukka Harish BabuChairman of the Committee Mrs Usha Mathur Dr R K Shevgaonkar and Mr Surendra SinghSirohi as its members and all the recommendations made by the Audit Committee wereaccepted by the Board during the year.

Corporate Governance Report

DPE guidelines on Corporate Governance for CPSEs provide that CPSEs would be graded onthe basis of their compliance with the guidelines. DPE has graded BEL as“Excellent” for 2017-18. In terms of Regulation 34 of the Securities ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and DPEGuidelines a Report on Corporate Governance along with Compliance Certificate issued byStatutory Auditors of the Company is attached to this report as “Annexure 6”.

Sustainability Report

The DPE guidelines on Sustainable Development for CPSEs mandate CPSEs to disclose theirSustainable Development efforts in a ‘Standalone Report’ or as a separatechapter in the Annual Report. Pursuant to this requirement a Report on yourCompany’s efforts on “Sustainable Development” is attached to this Reportas “Annexure 7”.

Business Responsibility Report

The Securities and Exchange Board of India (SEBI) has mandated inclusion of BusinessResponsibility Report (“BR Report”) as part of the Annual Reports for the top500 listed entities based on market capitalization. This SEBI mandate is also inserted asRegulation 34(2)(f) of SEBI (LODR) Regulations 2015. The SEBI (LODR) Regulations 2015provide a format for BR reports. It also contains a list of nine Key Principles andvarious core elements under each principle to assess compliance with Environmental Socialand Governance norms. Listed Companies are required to prepare policies based on thesenine Key principles and core elements put in place a framework to integrate and embed thepolicies into business activities and a mechanism to measure and report the achievementsas Business Responsibility Report.

Your Company has prepared a comprehensive policy framework for Business ResponsibilityReport after studying the SEBI (LODR) Regulations 2015 requirements and keeping in viewthe business and governance environment in which BEL as a Defence PSU operates.

Highlights of this policy are posted on the Company’s website Company’s Business

Responsibility Report for the year is attached to this Report as “Annexure8”.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

Your Company being a defence PSU the disclosure of information with respect toconservation of energy technology absorption foreign exchange earnings and outgo underthe provisions of Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules2014 is not required as the Ministry of Corporate Affairs vide Notification GSR No.680 (E)dated 4 September 2015 has granted exemption to Defence Public Sector Undertakings.


Your Directors place on record their deep appreciation and gratitude for the valuablesupport received from all the customers particularly the Defence Services and thepara-military forces and look forward to their continued support and co-operation infuture. Your Directors also place on record their gratitude for the support received fromvarious Ministries of the Government of India especially the Ministry of DefenceDepartment of Defence Production. Your Directors express their gratitude to the DefenceResearch & Development Organisation and the various Research Laboratories under DRDOfor the support received by the Company particularly in the joint development programmesand new products brought out with the help of them. Your Directors express their sincerethanks to the Comptroller and Auditor General of

India Statutory Auditors Branch Auditors Cost Auditors Secretarial AuditorsCompany’s Bankers Collaborators and Vendors. Your Directors appreciate the sincereefforts put in by the employees at all levels which enabled the Company to achieve thegood performance during the year. Your Directors express their appreciation and gratitudeto all the shareholders / investors for the trust and confidence reposed in the Companyand look forward to their continued support and participation in sustaining the growth ofthe Company in the coming years.

For and on behalf of the Board
Bengaluru M V Gowtama
7 August 2019 Chairman & Managing Director

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