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Company Information

Home » Market » Company Information

Bharat Electronics Ltd.

Oct 15
110.45 +1.55 (+ 1.42 %)
 
VOLUME : 362636
Prev. Close 108.90
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TODAY'S LOW / HIGH
108.20
 
 
 
111.10
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52 WK LOW / HIGH
72.55
 
 
 
117.45
Oct 15
110.50 +1.55 (+ 1.42 %)
 
VOLUME : 8543399
Prev. Close 108.95
Open Price 109.95
TODAY'S LOW / HIGH
108.15
 
 
 
111.15
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
72.50
 
 
 
117.75
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Market Cap. ( ₹ ) 26924.35 Cr. P/BV 2.92 Book Value ( ₹ ) 37.80
52 Week High/Low ( ₹ ) 118/73 FV/ML 1/1 P/E(X) 14.27
Bookclosure 24/08/2019 TTM EPS ( ₹ ) 0.00 Div Yield (%) 1.85
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2019-03 

Board's Report

To the Members,

Your Directors take pleasure in presenting their Report and the Audited Financial Statements for the financial year ended 31 March 2019 together with the reports of the Statutory 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

11,92,142

9,66,956

Turnover (Gross)

11,78,922

10,08,484

Profit Before Depreciation, Interest and Tax

3,03,162

2,20,011

Finance Cost

1,221

127

Depreciation & Amortisation

31,622

25,100

Profit Before Tax

2,70,319

1,94,784

Provision for Tax

77,590

54,855

Profit After Tax

1,92,729

1,39,929

Other Comprehensive Income /(Loss)

(4,021)

145

Total Comprehensive Income

1,88,708

1,40,074

Dividend paid

51,168

62,765

Tax on Dividend

10,518

12,777

Transfer to General Reserve

40,000

40,000

Other Equity (Including Reserves & Surplus)

8,77,525

7,51,735

Net Worth

9,01,891

7,76,101

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

6,07,993

51%

Employee Cost

1,87,905

16%

Other Expenses (Net)

94,303

8%

Depreciation & Amortisation

31,622

3%

Provision for Tax

77,590

6%

Profit After Tax

1,92,729

16%

Total

11,92,142

100%

Company's Turnover (Gross) for the year 2018-19 has increased to Rs. 11,78,922 Lakhs from Rs. 10,08,484 Lakhs in 2017-18, registering a growth of 16.90%. Profit After Tax for the year is Rs. 1,92,729 Lakhs as against Rs. 1,39,929 Lakhs in the previous year. Turnover from indigenously developed products is 96%. Supplies to the defence contributed to 68% of turnover in 2018-19 as compare to 85% in the previous year.

Dividend

As required under Regulation 43A of the SEBI (LODR) Regulations, 2015, the Board of Directors of the Company has formulated a Dividend Distribution Policy keeping in view the provisions of SEBI (LODR) Regulations, 2015, the Companies Act, 2013, Guidelines issued by SEBI, DPE, DIPAM, Ministry of Finance and other Guidelines to the extent applicable to the Company. The Policy is placed on the Company's website at http://bel-india.in/ContentPage. aspx?Mld=17&Cld=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. 41,422 Lakhs for the year 2018-19. Earlier Interim Dividend of Rs. 1.70 per equity share has been paid to the shareholdersduring2018-19.Thus,the total dividend for the year 2018-19 is Rs. 3.40 per equity share (340%), amounting to Rs. 82,844 Lakhs (excluding dividend distribution tax).

Amount Transferred to Reserves

An amount of Rs. 40,000 Lakhs is transferred to General Reserves for the financial year 2018-19.

Share Capital

The Company's paid-up share capital as on 31 March 2019 was Rs. 24,366 Lakhs and there was no change in the paid-up share capital during the year.

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

SI. No.

Name

Designation

No. of equity shares held

1

Mr M V Gowtama

Chairman and Managing Director

1,263

2

Mr Nataraj Krishnappa

Director (Other Units)

1,263

3

Mrs Anandi Ramalingam

Director (Marketing)

1,263

4

Mr R N Bagdalkar*

Director (Human Resources)

1,263

5

Mr Koshy Alexander

Director (Finance)

1,265

6

Mr Mahesh V

Director (Research & Development)

1,265

7

Mr Vinay Kumar Katyal

Director (Bangalore Complex)

1,263

8

Mr Shivakumaran K M*

Director (Human Resources)

1,263

9

Mr S Sreenivas

Company Secretary

1,263

 

* Mr R N Bagdalkar superannuated as Director (HR) w.e.f 31.05.2019 and Mr Shivakumaran K 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 customers include: 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 (LIC EWS), L-70 Gun Upgrade, Electronic Voting Machines (EVM), Voter Verifiable Paper Audit Trail (WPAT) etc.

Exports

Your Company has been giving an increased thrust towards harnessing the export potential of Defence Electronics Products& Systems including Homeland Security Solutions, Border Protections Systems and State of the Art Systems & Solution which represent its core area of business. BEL has been exporting various products and systems to various friendly Countries. Having established a Coastal Surveillance System (CSS) for few neighbouring Countries, BEL is interacting with Ministry of External Affairs on a regular basis for supply of CSS to other friendly Countries of India. BEL is also exploring civil market in developing& third world Countries with product like smart cities, solar power generation, etc.

BEL is focusing on the various opportunities in the area of helping OEM's to meet offset obligations in various RFPs of MoD on account of offset policy incorporated in the Defence Procurement Procedure. In this regard BEL is closely working and partnering with various major Foreign Aerospace and Defence Companies. BEL is also offering Proven Products and Systems to meet the specific requirements of customers. BEL has identified contract manufacturing (build to print and build to spec) to foreign OEM's and Partnership in form of Transfer of Technology of the latest systems and solution as few areas of emerging export opportunities. Further efforts are being made to establish long term supply chain relationship with global players.

Company has achieved an export sale of US$ 21.6 Million during 2018-19, to various countries, viz., Switzerland, USA, France, Germany, Israel, Sweden, Finland, Vietnam, Seychelles, Mauritius and SEZ's. Major Products/Systems exported are Sub Systems of Radar & EW Systems, Data Link II, Cable looms. Mechanical Parts, Communication Equipments, Acoustic Test facility. Surveillance Systems, Coastal Surveillance Systems Radar, Passive Night Sight, Shelters, Sleevi, Transmitting tubes, Vacuum Interrupters and Radar Spares.

The decline in export sale is mainly due to the non-establishment of Letter of Credit by customer for various Naval Systems and Land Based Systems and Solutions. The transformation in political and economic scenarios in various countries such as Myanmar, Sri Lanka, and Indian SEZ's Defense establishments was another factor contributing 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 East Asia 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 the best 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 foreign Countries/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 Power Projects in few of the sunshine nations. The business discussion with various foreign Ministries of the sunshine nations has been slow but steady and now the solar leads are in final stage of contract signature.

These leads were proactively proposed with working on Buyer's Credit for Solar Powered Projects Model. With huge expertise within BEL, these programs are proposed to be delivered in very short time and will cover more than 80 cities in one of the sunshine African 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

 • Indian DA (abroad)

• Proactive approach to the solution offered to customers

• Increasing customer interaction by BEL in various countries

• Expand customer base o Open new offices

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

• Participate in exhibition & seminars

• 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

• Multinational Indian OEMs o Supply Chain o Joint Bidding

• Exploration of civil market in third world countries with product like smart cities, 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 financial constraints.

• Buyer's Credit

• Credit by other banks.

MoU with Government

Your Company has been signing a Memorandum of Understanding (MoU) every year with the Government of India, Ministry of Defence. Performance of BEL for the year 2017-18 has been rated as "Excellent" in terms of the MoU with the Government. The MoU rating for 2018-19 is under review by the Government.

Order Book Position

The Order Book of the Company as on 1 April, 2019 is around Rs. 51,798 Crores. The order book comprises of mainly major programs like Long Range Surface-to-Air Missile System (LRSAM), Weapon Repair Facility for Naval Ships, Kerala-Fibre Optics Network (K-FON), Smart City Projects, Integrated Perimeter Security Solution (IPSS), Naval Airfield Integrated Security System (NAISS).

Finance

During this year, your Company has declared a higher dividend of 340% as compared to 200% in the previous year. Apart from the final dividend of rs. 9,746 Lakhs (40%) for the year 2017-18 which was paid out in 2018-19, interim dividend amounting to Rs. 41,422 lakhs (170%) has been paid during the year 2018-19.

In order to achieve the projected growth in the coming years, a focused initiative is taken up by your Company in taking up some major projects, which are progressing well and the outcome from these projects should enable the Company to achieve the planned higher trajectory of turnover and growth. Despite some amount of budgetary constraints faced by customers, your Company has been able to meet all the incremental working capital requirements through internal accruals. Out of the term loan of Rs. 10,000 lakhs availed in previous years to fund the CAPEX requirement an amount of Rs. 3,334 lakhs is outstanding as on 31 March 2019. Your Company has retained highest rating by ICRA for both short term and long term borrowing.

The inventory position (net) of the Company as on 31 March 2019 was Rs. 445,479 Lakhs as against Rs. 473,912 Lakhs as on 31 March 2018. This works out to 136 days of value of production as on 31 March 2019 as against 180 days in the 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. 536,921 Lakhs as compared to Rs. 504,950 Lakhs in 31 March 2018. This works out to 166 days of turnover as on 31 March 2019 as against 183 days of turnover achieved during the previous year. The reduction in trade receivables has been possible due to higher collections against opening debtors and from Election Commission on sale of EVM and WPAT.

Deposits

The Company does not have any Public Deposit Scheme at present. However, the matured Public Deposit amount (collected prior to February 2006) with the Company was Rs. 36.95 Lakhs as on 31 March 2019. Out of these 34 deposits amounting to Rs. 36.50 Lakhs are not claimed or not paid as these accounts are frozen on advice by Karnataka Lokayukta. The remaining matured deposits of Rs. 0.45 Lakh as on 31 March 2019 is unpaid due to in-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 Research Laboratories (CRLs) at Bengaluru and Ghaziabad are involved in conducting futuristic R&D in core technology areas of BEL and develop enabling technology modules for use by SBUs/Units. PD&IC at Bengaluru develops common technology modules, subsystems and products as required by SBUs/units like Radar Signal Procession Unit, Microwave Components, Power Amplifier, Electro-optics and Lasers Encryption Modules, Power Electrons, MMICs, Displays etc.

SBUs/Units D&E groups provide System and System of Systems solution having the required domain expertise, technical support during the complete product life cycle from concept design to post sale obsolescence management of products/system and develop subsystems 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 and product areas, with well documented three year R&D plans based on RoP/marketing forecast/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 Defence business scenario has changed considerably in terms of Globalisation and Liberalisation due to changes in Government Policies.

In line with the new business environment, BEL has already Undergone changes with respect to the organization structure, creation of new SBUs/Units, CRL, PD&IC etc and 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 the current business requirements. The main areas of focus of R&D policy includes technology forecast & roadmap, R&D plans, process for initiation, execution, evaluation and reviews of projects, R&D infrastructure management, R&D manpower management and recognition and rewards.

D&E Projects Initiated in 2018-19: The major developments initiated in 2018-19 are Weapon Locating Radar (Mountain Version), Active Antenna Array for Ship Borne Radar Program, Submarine Navigation Radar, Digital Radar Warning Receiver, Indigenous Common Aerial Working (CAW) System for Navy, Ship to Shore Communication System (NTRO), Public Key Infrastructure Solution, SOTM for Ku Band, Alternate Gyro, Sight and Gimbal for BMP II, Track pedestal with lifting mechanism for Weapon System, Electric Gun and Turret Drive System for M BT, Development of Quad Copter UAV and Mini UAV for police, EW Suite for

MLH Upgrade, R118 System for HAWK MK 132 Aircraft, EO Solution for Drone Guard System, Multi Spectral Fog Vision System, Development of Uncooled Engine and Tethered UAV based EO Surveillance System, Laser Proximity Fuse for Weapon System.

D&E Projects Realised in 2018-19: Some of the major projects completed in 2018-19 are the design and development of Air Defence Fire Control Radar, Unmanned Battle Field Surveillance Radar for Border Surveillance, Combat Management System, Jammer Subsystem for Drone Guard System, UAV Data Link System (Panchi), Integrated Communication System for Navy, V/UHF Communication Network for export, CDMA based Wireless Communication Link, IAC MOD C, Costal Security Database Software, EOFCS Upgrade II, Optical Director System Upgrade II, 3D Air Surveillance Radar for Navy (Proto), Element Management System for Multi-Channel Encryptor Unit (MCEU), Secure Mil Wireless LAN for Army, Commanders Display Unit for Radars,1KW HF Transmit/Receive Radio, SATCOM Terminal for Ground Based Mobile ELINT System, Samyukta up-gradation. Fire Control System for Kavach Mod-ll, Indigenisation of Rate Gyro in T-90 Gun Project, Fire Control System for reconfigured NAMICA, Electro Optic System for Radars, for Home Land Security and for Drone Guard System, Target Acquisition System for MPTGM.

The Important R&D awards/recognitions received during 2018-19 are "PSE Excellence Awards 2017", 'Company of the Year' award and 3 more awards in the Maharatna & Navratna category for 'Human Resource Management Excellence', 'R&D Technology Development & Innovation', and 'Operational Performance Excellence'.

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

1. Real Time Information System for Indian Railways:

This is being introduced by the Center for Railway Information System (CRIS), Indian Railways for real time tracking of train information. Some of the main constituents are the locomotive devices, transponders on G SAT-6 satellite, 4G/3G mobile services, the loco device monitoring and configuration management server.

2. Auto Fare Collection Gate (SWAGAT): Indigenous Auto Fare Collection System for Metro is India's first indigenously developed payment ecosystem for transport consisting of National Common Mobility Card (NCMC), SWEEKAR (Swachalit Kriya: Auto Fare Collection) and SWAGAT (Swachalit Gate). The validation terminals and gates have been co-designed and developed by BEL and C-DAC.

3. Drone Guard System: The rapidly increasing popularity of drones have brought a whole assortment of new security threats to Government entities and public safety, with potential hazards of drones carrying weapons, or drones used for self destructive missions. EO System and Jamming Signal Generator for Drone Guard System (DGS) has been developed. Electro Optic System of Drone Guard is used for tracking the Drones. The jamming signal generator is used in Drone Guard System (DGS) for neutralisation of the intruding Drones.

4. EO System for Home Land Security: This is a mid-wave cooled detector thermal imager channel for night vision and camera channel for day vision. It offers very long range 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 onboard ships, HDCS enables the control crew in handling, supervisory & logistic support during take-off, landing and docking of helicopters on the ship and the VCS which facilitates internal communication on board ships.

6. Coastal Surveillance System for Seychelles: This is a Coastal Surveillance System 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 Electro Optics, VHF Radios, X Band Radar, meteorological sensors along with microwave link and networking units. The system software has been upgraded to integrate these additional elements.

7. Fire Control System (FCS) Kavach: The Kavach Fire Control System creates a false target by launching a chaff rocket during enemy's surveillance and attack and this chaff 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°, effective handling, increased depth penetration and simple maintenance. It can be mounted on a bullet proof helmet for ground operations or a helicopter/ plane for night surveillance.

9. Indigenous Electronic Upgrade for 52 Calibre Gun:

Indigenous Electronic upgrade for 155mm DHANUSH Gun is the replacement of existing ELBIT electronic suite. Electronics suite consists of Gun Electronic Unit (GEU), Loader display, power distribution unit. Emergency switch unit. Encoder, MVR, and Joystick.

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

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

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

13. IFF System for MRSAM Phase II: This system is used for identification of targets located by the primary radar, while operating basically on the principle of secondary 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 and motion platform. It is used for development of Dynamics and Panther vehicle and B vehicles used in Aerodrome and integration of firefighting procedures.

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

16. Corner Shot Weapon System: These have been developed for 9mm pistol and 40mm UBGL for usage

in hostile and counter insurgency operations. It allows operator to see and attack 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 of the Quick Reaction Surface to Air Missile System. They are vehicles equipped with radar and shelterised electronics subsystems.

18. Target Acquisition System for Man Portable Anti-Tank Guided Missile (MPATGM): This is a multifunction compact system capable of surveillance, ranging, target acquisition and a provision to fire missile. It provides high 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 the various missile systems including Astra Missile, QRSAM Missile and Akash-1S Missile. These operate in Ku Band.

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

21. CMS for MRSAM (IAF): It is the Combat Management System for the MRSAM for the Indian 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 added focus in these areas.

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

Al and deep learning, Cloud and data analytics, cognitive concepts and super-computing are identified as areas for future focus. Competence building, infrastructure planning, technology acquisition, manpower planning and funding for projects in this area are being pursued. Around 20 projects in Al have been initiated.

To enhance technical competence, BEL is planning to enroll engineers for PhD programs. BEL has taken initiatives to further strengthen R&D by collaboration with Academia and start-ups and other industrial partners as well as consultants.

New Facilities Established During the Year

Company has been continuously modernizing its infrastructure to be in tune with the changing needs of the technology/products. Specific groups in all the units scan the technology changes that are taking place and identify new processes in the world market for acquisition. This enables the Company to maintain its infrastructure on par with international standards. During the year 2018-19, Company has spent Rs. 67,359 Lakhs as part of CAPEX investment towards Modernization of Plant & Machinery, Test Instruments, R&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 which all business processes are dependent. It includes ERP infrastructure, mail servers, WAN, LAN, network security components, Antivirus and Patch management.

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

IS/CO has received the ISO 27001 certificates for Information Security Management Systems. To enable organization to manage regulations & Compliances, Governance, Risk & Compliance (GRC) is implemented. Estimation of Civil contract is automated in SAP for generating SOQR. SMS alerts is activated for various business transactions. Pay revision for non-executive is implemented through SAP. Online Inventory Monitoring System is developed for COD (Agra) and Coast Guard. Lead Management System is implemented for marketing in CRM. Customer service maintenance portal is developed for MAG1 and Indian Air Force. Simplified process for Depot 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, Information Security Officers are nominated. Following major activities are done in cyber security front:

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

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

Quality

Quality, Technology and Innovation are three guiding pillars of BEL's business initiatives. Quality, being the first pillar, has been one of the focus areas for the Company. Quality initiatives have been taken up for improvement in performance related to Product Design, On-time-Delivery, Process Cycle Times, SPC, Quality Control, Customer Service etc.

The Company is committed for improvement of its activities through process approach in line with World-Class Quality Systems. All Units are accredited to ISO 9001 Quality Management System (QMS) since early nineties. 11 Units/ SBUs, viz. Ghaziabad, Panchkula, Kotdwara, Hyderabad, Chennai, Military Radars, Military Communications, Electronics Warfare & Avionics, Naval System (S&CS), Missile System and Export Manufacturing have upgraded their QMS to Aerospace Standard, AS 9100D.

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

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

EFQM (European Foundation of Quality Management) Model for Business Excellence is being followed in BEL since 2002 as an another approach for overall strategic and operational excellence to meet and exceed the needs & expectations of stakeholders and enhancement in competitiveness. During 2018-19, Bangalore Complex received the prestigious Award from CII-EXIM Bank Award for Business Excellence 2018 and highest recognition of Role model organisation status. BEL is the first PSU to receive such a recognition. Ghaziabad, Machilipatnam and Chennai Units received Platinum Award showcasing their maturity in the Business Excellence journey.

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

The organization has facilitated involvement of Non-executives in the Quality Movement through Quality Control Circles (QCC). In the year 2018-19, 717 QCC Presentations for improvement in products and processes were made by various QCCs. Many QCC circles were nominated to participate in national competitions / conventions and all were adjudged for various categories of Awards. One of the QCCs, which won CMD's Rolling Shield in the Inter Unit QCC Competition, represented BEL in the International Convention, ICQCC 2018, held at Singapore and won the "Gold award".

Another approach for Quality Improvement is through Suggestion Scheme, wherein employees from Non executives up to Managers provide suggestions for which they are suitably rewarded on implementation of their suggestions. Around 4124 suggestions were given by employees this year. Selected BEL employees participated at 29th National Level Convention conducted by Indian National Suggestion Schemes' Association during Jan 2019 at Pune and won 10 individual awards under various categories. Ghaziabad Unit and Bangalore Complex were awarded first and Second Prize for "Excellence 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) during the year, taking cumulative CREs in the Company to 266. 43 operating level Quality engineers were certified for Certified Quality Engineers (CQE) program resulting cumulative CQEs in the Company to 219. Similarly, company has 81 senior level executives certified to next higher level program Certified Manager for Quality and Organisation Excellence (CMQ&OE).

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

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

An independent Customer Satisfaction Survey (CSS) was done through an external agency to capture the Customers' Perceptions on BEL's Products and Services. Results for the same is awaited. Customer Satisfaction Index for the previous year 2017-18 was 82%.

Human Resources

Your Company employed 9,612 persons as on 31 March 2019 as compared to 9,726 persons as on 31 March 2018. Out of these employees, 5,021 were engineers/scientists and 2,049 were women employees as on 31 March 2019. A total of 235 executives and 16 non-executives were inducted during the year. 35 employees belonging to SC, 14 employees belonging to ST, 79 employees belonging to OBC and 10 employees belonging to the minority community were recruited during the year.

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

Category of Employees

Executives

Non-Executives

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 in Technical, Functional, Managerial and Leadership areas. Structured Executive Development Programs were conducted regularly with premier institutes to meet the evolving training needs of executives as they progress through various grades.

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

A detailed write up on Company's HR philosophy and specific HR initiatives during the year is provided separately in the Management Discussion and Analysis Report which forms part of this report.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is an equal opportunity employer and consciously strives to build a work culture that promotes dignity of all employees. As required under the provisions of Sexual Harassment of Women at Workplace (Prevention, prohibition and Redressal) Act, 2013 and Rules framed there under, the Company has implemented the policy on prevention, prohibition and redressal of sexual harassment at the workplace, which has been uploaded on the Company's intranet portal. All women, permanent, temporary or contractual including those of the service providers are covered under the Policy.

An Internal Complaints Committee has been constituted in each of the nine constituent units including Corporate Office to redress complaints relating to sexual harassment. Awareness programs were conducted across the Company to sensitize the employees and uphold dignity of their colleagues at workplace, particularly with respect to prevention of sexual harassment. The details of complaints filed, disposed of and pending during the year pertaining to sexual harassment is provided in the Business Responsibility Report Annexed to Boards' Report.

Awards and Recognitions

Your Company continues to be a highly trusted for the quality of its products, innovation and renovation of its products based on strong consumer insights and the ability to engage with consumers across the country. During the year your Company has received various Awards and Recognitions. Some of the important accolades received during the 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

• BEL Bengaluru Unit won the twin honour of CII EXIM Bank Business Excellence Award (2018) & Commendation for Role Model Organization.

• BEL Ghaziabad, Chennai & Machilipatnam Units received the Platinum level recognition 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 substitution and Design effort.

• Vigilance Excellence Award -2017 for" Best Institutional Practice to fight Corruption".

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. 23,431 Crores of Order during the year 2018-19.

• Receipt of LRSAM order worth Rs. 9,236 Crores.

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

• India's first indigenously developed Metro Gate SWAGAT - an Automatic Fare Collection 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 to meet 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 Image Intensifier Tubes, is a wholly owned subsidiary of BEL. Your Company has made further investment to the tune of Rs. 1,449.37 Lakhs (589,176 equity shares of Rs. 100/- each at a premium of Rs. 146/- per share) during the year in the equity shares of BELOP by subscribing to right issue made by BELOP.

BELOP achieved a turnover of Rs. 10,325 Lakhs for the year as against Rs. 12,164 Lakhs in the previous year. The profit after tax (PAT) for the year was Rs. 1,418 Lakhs as compared to Rs. 1,155 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 to perform well. This Company manufactures CT Max and other latest version X-Ray Tubes. BEL supplies some parts required for the products manufactured by this Company. GE BE Pvt. Ltd. recorded a turnover of Rs. 105,851 Lakhs for the year as compared to ? 80,691 Lakhs in the previous year. The profit after tax (PAT) was ? 14,862 Lakhs for the year as compared to Rs. 9,146 Lakhs in the previous year. BEL has received a dividend of Rs. 9,100 Lakhs for the financial year 2018-19.

BEL-THALES Systems Limited (BTSL), a subsidiary, was formed for design, development, marketing, supply and support of civilian and select defence radars for Indian and Global markets. Your Company holds 74% of the equity capital in BTSL. During the year BTSL has recorded a turnover of Rs. 672 Lakhs as compared to ? 312 Lakhs in the previous year. The profit after tax (PAT) was Rs. 104 Lakhs as aginst a loss of Rs. 259 Lakhs in previous year.

Defence Innovation Organization (DIO), was incorporated on 10 April 2017 as a 'Not for Profit' Company as per the provisions of Section - 8 of the Companies Act, 2013 with an authorised share capital of Rs. 1 Crore. The equity participation is 50% from BEL and 50% from HAL. The Company has been formed with an objective of funding innovation in defence sector.

In pursuant to provisions of section 129(3) of the Companies Act, read with Rule 5 of Companies (Accounts) Rules, 2014, the statement containing 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 Associate Companies are attached to this Report.

Vigilance

At present. Company's Vigilance Organisation is headed by a Chief Vigilance Officer (CVO), an IAS Officer from Haryana cadre (1991 batch). During 2018-19, an IAS Officer 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 the each of the Units to look after the Vigilance Administration in the Units and SBUs and the Unit/SBU heads are also designated as Chairman of the Vigilance Committee. Apart from this, there exists a Vigilance Committee at the Corporate, where Chairman cum Managing Director is the Chairman of the Committee and the CVO is the Member secretary. Preventive Vigilance has been the thrust area of the Vigilance Organisation and the same received focused attention during the current year. The Vigilance Department examines procurement/sub-contracts and processes on continual basis, conducts regular and surprise inspections and investigates instances of any suspected transactions referred to it. Employees or third parties can refer any suspected transaction to the notice of CVO for investigation which are examined as per the Complaint Handling Policy of the Company. Online complaint management system has been made operational and online complaints can be filed through accessing the Vigilance Portal in BEL website.

During the year 1603 Purchase Orders/Contracts have been reviewed. CTE Type intensive examination has been restructured with the formation of five IE teams. CTE Type of Intensive Examination of 60 High value Procurement Contracts has been taken up during the year. Regular and Surprise checks and Inspections have also been conducted by the field Vigilance 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 been recommended in some cases where lapses were observed. Two Complaints are pending with CBI, Ghaziabad and one complaint is pending with CBI, Bangalore for detailed investigation.

During the year, 110 Probationary Engineers at the induction level, 1029 Executives and 378 Non Executives were given basic awareness program on Vigilance. 31 Executives & 17 Non-executives working in sensitive areas for more than 3 years have been job rotated and the percentage coverage is 86%.

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

In line with the CVCs guidelines on Leveraging Technology and to ensure transparency through effective use of technology the following functions have been made operational through SAP and in the Company's website:

• E Procurement - about 92% of the procurements excluding the ToT procurement. Long 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 in respect of works contracts, service contracts, capital items and non-production items have been posted in the website.

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

• Purchase Procedures, and Works Contract Manual have been revised and were posted in 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 Company for implementation. The same is posted in the web site.

• Vendors' Directory, after flagging removing defunct vendors, have been posted in the website.

• File Life Cycle Management System (FLM) has been implemented across the company and the coverage is about 95% of the total files generated in the Company.

• On-line filing of APRs is facilitated in SAP for all the Executives and the Executives 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 transparency, fairness and equity in all transactions and processes of the company through creating a sense of awareness on System and Procedures through awareness campaign and training program. 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. The observance of the week was marked with special address by eminent personalities. Gram Sabhas were organized as part of the outreach activities in Yentaganahalli Village in Bengaluru District and at Mandhana near Panchkula. Skit plays and Video films portraying national integration and anti-corruption messages were shown to School and College Students located near the BEL Factories. Similar anti corruption awareness program in the form of skit plays and inspirational video films were arranged for the School students of BEL Educational institutions. Integrity Pledge was administered to School and College students during the occasion. Walkathon and Cycle rally by BEL School Children, Human chain by BEL employees, Vigilance Walk by employees of Bangalore based PSUs and PSBs, Tree plantations and distribution of saplings, unveiling of Vigilance Slogan Boards and series of lecture by distinguished personalities and Competitions were organized as part of the observance of the Vigilance Awareness Week.

ii) E- pledge, an initiative of the Commission was facilitated in BEL- Intranet, apart from the facility of taking the e-pledge in the CVC website.

Integrity Pact

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

The Pact essentially envisages an agreement between the prospective vendors/bidders and the Principal (BEL), committing the Persons/officials of both sides, not to resort to 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 considered competent to participate in the bidding process. Integrity Pact, in respect of a particular contract, would be operative from the stage of invitation of bids till the final completion of the contract. Any violation of the same would entail disqualification of 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 the Company. During the financial year 2018-19 the lEMs reviewed 278 contracts and held structured 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 as per the guidelines/notification issued by the Ministry of MSMEs. During 2018-19, BEL has complied with the mandate of Government's Public Procurement Policy for MSEs.

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

The Company actively participated in various Vendor Development Programs held across the country including National MSME Defence Conclave at Belagavi (Karnataka), Exhibition-cum-Vendor Development Program-SUBCON 2018 at CODISSIA (Coimbatore, Tamil Nadu), Seminar-cum-Workshop on Skills for Indigenization (BSDU, Jaipur, Rajasthan), Defence Industrial Corridor Meets held at various locations in Uttar Pradesh and Tamil Nadu. 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 (Navratna Category) for the Exemplary Work done under Public Procurement Policy for Promotion of SC / ST Entrepreneurs.

Implementation of Official Language Policy

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

OL Inspections: Committee of Parliament on Official Language conducted OL inspection of Chennai Unit on 08.10.2018. MoD officials conducted OL inspections of RO Delhi, Kotdwara, Corporate Office, Hyderabad Unit and RO Kolkata. Corporate OL Audit team conducted OL audits at Ghaziabad Unit, CRL-Ghaziabad, RO Delhi, Pune, Navi Mumbai, RO Vizag, RO Mumbai and Milcom SBUof BC.

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

OL in SAP and Website: OL Portal GARIMA is in place to facilitate OL implementation across 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 being written in File Lifecycle Management (FLM).Company's website is also available in Hindi and being updated simultaneously.

Hindi Month Celebrations: During September, Hindi Month and Hindi Day was observed in all the Units and Offices of the Company. During the month, employees and officers participated enthusiastically in various programs/ competitions. Employees of various Units/Offices and Corporate Office bagged prizes in the Inter Organization TOLIC Competitions. Hindi workshops for those having working knowledge in Hindi were conducted during the year. Various Incentive Schemes are propagated among all employees and number of Executives / Employees took part in these schemes.

Awards and Recognitions: During the year, our Ghaziabad Unit, CRL-Ghaziabad, RO New Delhi and Bengaluru Complex were awarded by the respective TOLICs. Higher officials participated in TOLIC meetings and officers/employees were awarded in TOLIC competitions.

At Corporate level, various OL activities were conducted during FY 2018-19 which include: Initiation of Defence Electronic Terminology - in coordination with CSTT, New Delhi; 665 Bilingual Standard Email phrases prepared; Initiation of tracking percentage of work done in Hindi and bilingual standard notings in SAP; Initiated to prepare Standard Bilingual Correspondence across CO Depts.; Vishwa Hindi Diwas on 10th January 2019: Hindi books donated to Govt. School; Hindi site of BAE portal was introduced; In order to make the OL Audit Questionnaire more meaningful and factual, the questionnaire was revisited and revised; TOLIC: Sr. Officials participated in meetings and staff members were awarded in inter PSU Competitions; Incentive Schemes: 63 Ex. / NEs of CO (incl. ROs) awarded for FY 2018-19; Two issues of Corporate Hindi Magazine 'NavaPrabha' were published and 4 Hindi Workshops and 2 Technical Talks were organized.

Efforts are in progress to ensure 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 to Information Act, 2005 has been posted on the website of the Company www.bel-india.in. The Information posted on the website contains general information about the Company, powers and duties of employees, decision making process, rules, regulations, manuals and records held by BEL, a directory of the Company's officers, pay scales, procedure for requesting additional information about the Company by citizens and associated request formats.

During the year 2018-19 the Company had received and attended to 308 requests for information under RTI Act. Most of the requests were for information related to recruitment, 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 the Corporate Governance Report.

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

SI. No.

Name of the Director

Designation

Date of Appointment

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 the Company.

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

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

Mr Vinay Kumar Katyal, Mr Shivakumaran KM and Mr Sunil Kumar Kohli, Additional Directors are being appointed as Directors on terms as set-out in the Notice of the 65th Annual General Meeting:

Mr Nataraj Krishnappa, Director (Other Units), retires by rotation at the ensuing Annual 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 and explanations 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 had been followed along with proper explanation relating to material departures;

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

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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 were adequate and were operating effectively; and

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

Significant and Material Orders

There are no significant and material orders passed by the regulators or courts or tribunals 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 the company which have occurred between 31 March 2019 and date of signing of this Report.

Related Party Transactions

There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee and also to the Board for approval, if required. Members may refer to the notes to the accounts for details of related party transactions. The policy for related party transaction has been uploaded on the Company's website www.bel-india.in. Information pursuant to section 134(3) (h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 is attached to this report as "Annexure 1".

Corporate Social Responsibility

Your Company has formulated a CSR & Sustainability Policy pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications, amendments issued by Ministry of Corporate Affairs (MCA) & Department of Public Enterprises (DPE). The CSR Programmes / Initiatives / Projects are taken up in line with the Schedule-VII of the Companies Act, 2013, which is duly incorporated in the CSR & Sustainability Policy and forms the guiding principle for all our programmes. The CSR & Sustainability Policy of BEL is posted on the Company's website, www.bel-india.in.

The objective of CSR is to contribute towards inclusive growth, sustained and equitable development in society through capacity building measures, empowerment of the marginalised and underprivileged sections/communities. Focused interventions are undertaken in the sectors of Education, Healthcare & Sanitation, Rural Development, Vocational Skill Development, Environmental Sustainability, Contribution to Technology Incubators and Promotion of Nationally recognised Sports.

During the FY 2018-19, DPE guidelines for CSR Expenditure stipulate CPSEs to take up focussed CSR interventions on the common theme of School Education and Healthcare with preference being given to Aspirational Districts identified by NITI Aayog. Accordingly, the Company has undertaken thematic CSR programmes in the Aspirational districts of Yadgir & Raichur in Karnataka. Further, CSR Projects that support skilling of youth are being implemented 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 "Annexure 2".

Auditors Statutory Auditors

Pursuant to Section 139(5) of the Companies Act 2013, the Comptroller and Auditor General of India appointed M/s SURI & CO., Chartered Accountants, Bengaluru, as Statutory Auditors for the financial year 2018-19 for audit of accounts of Bangalore Complex, Hyderabad Unit, Chennai Unit and Corporate Office. M/s Tambi & Jaipurkar, Chartered Accountants, Pune were appointed as Branch Auditors of Pune & Navi Mumbai Units for the financial year 2018-19. M/s J P Kapur & Uberai, Chartered Accountants, New Delhi, were appointed as Branch Auditors of Ghaziabad, Panchkula and Kotdwara Units for the financial year 2018-19. M/s Tungala & Co., Chartered Accountants, Machilipatnam were appointed as Branch Auditors for Machilipatnam Unit for financial year 2018-19.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the cost audit records maintained by the Company in respect of its Manufacturing activities are required to be audited by the Cost Auditor. Your Directors had, on the recommendation of the Audit Committee, appointed M/s GNV & Associates, Cost Accountants, Bengaluru, as Cost Auditors of the Company for the financial 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), the Company has appointed M/s Thirupal Gorige & Associates LLP, Practicing Company Secretaries for the financial year 2018-19 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed to this report as "Annexure 3".

The Secretarial Auditor in his Report observed that the Company is yet to appoint the adequate number of Independent Directors as per the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. It is informed that the appointment of Directors is done by Govt. of India and filling up of vacancies of the said Independent Directors is also pending with the appointing 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 Section 143(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 has reported to the Audit committee under Section 143(2) of the Companies Act, 2013, any instance of fraud committed against the Company by its officer or employees, the details of 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 the annual 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 a Risk Management

Committee. The details of Committee and its terms of reference. Risk Management Policy etc. are set out in the Corporate Governance Report and a detailed note on 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 Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Board Evaluation etc. The details are set out in the Corporate Governance Report.

Vigil Mechanism/Whistle Blower Policy

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

Declaration from Independent Directors

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

Management Discussion and Analysis Report

Management Discussion and Analysis Report required under the SEBI (LODR) Regulations, 2015 and also under the Government (DPE) Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs), is attached to this Report as "Annexure 5".

Particulars of Loans, Guarantees& Investments

Details of loans, guarantees and investments covered under the provision of Section 186 of 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 to financial statements. A detailed note on Internal Financial controls is provided in the Management Discussion and Analysis Report.

Composition of Audit Committee

The Audit Committee comprises of Independent Directors viz., Mr Mukka Harish Babu, Chairman of the Committee,

Mrs Usha Mathur, Dr R K Shevgaonkar and Mr Surendra Singh Sirohi as its members and all the recommendations made by the Audit Committee were accepted by the Board, during the year.

Corporate Governance Report

DPE guidelines on Corporate Governance for CPSEs provide that CPSEs would be graded on the basis of their compliance with the guidelines. DPE has graded BEL as "Excellent" for 2017-18. In terms of Regulation 34 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE Guidelines, a Report on Corporate Governance along with Compliance Certificate issued by Statutory 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 their Sustainable Development efforts in a 'Standalone Report' or as a separate chapter in the Annual Report. Pursuant to this requirement, a Report on your Company's efforts on "Sustainable Development" is attached to this Report as "Annexure 7".

Business Responsibility Report

The Securities and Exchange Board of India (SEBI) has mandated inclusion of Business Responsibility Report ("BR Report") as part of the Annual Reports for the top 500 listed entities based on market capitalization. This SEBI mandate is also inserted as Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015. The SEBI (LODR) Regulations, 2015 provide a format for BR reports. It also contains a list of nine Key Principles and various core elements under each principle to assess compliance with Environmental, Social and Governance norms. Listed Companies are required to prepare policies based on these nine Key principles and core elements, put in place a framework to integrate and embed the policies into business activities and a mechanism to measure and report the achievements as Business Responsibility Report.

Your Company has prepared a comprehensive policy framework for Business Responsibility Report, after studying the SEBI (LODR) Regulations, 2015 requirements and keeping in view the business and governance environment in which BEL as a Defence PSU operates. Highlights of this policy are posted on the Company's website www.bel-india.in. The Company's Business Responsibility Report for the year is attached to this Report as "Annexure 8".

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Your Company being a defence PSU, the disclosure of information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo under the provisions of Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 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.

Acknowledgement

Your Directors place on record their deep appreciation and gratitude for the valuable support received from all the customers, particularly the Defence Services and the para-military forces and look forward to their continued support and co-operation in future. Your Directors also place on record their gratitude for the support received from various Ministries of the Government of India, especially the Ministry of Defence, Department of Defence Production. Your Directors express their gratitude to the Defence Research & Development Organisation and the various Research Laboratories under DRDO for the support received by the Company, particularly in the joint development programmes and new products brought out with the help of them. Your Directors express their sincere thanks to the Comptroller and Auditor General of India, Statutory Auditors, Branch Auditors, Cost Auditors, Secretarial Auditors, Company's Bankers, Collaborators and Vendors. Your Directors appreciate the sincere efforts put in by the employees at all levels, which enabled the Company to achieve the good performance during the year. Your Directors express their appreciation and gratitude to all the shareholders/investors for the trust and confidence reposed in the Company and look forward to their continued support and participation in sustaining the growth of the Company in the coming years.

 

For and on behalf of the Board

Bengaluru

M V Gowtama

7 August 2019

Chairman & Managing Director

Annexure 1 Form AOC-II

(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/agreements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arm's length basis

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts/arrangements/transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable

(e) Justification for entering into such contracts or arrangements or transactions: Not Applicable

(f) Date(s) of approval by the Board: Not Applicable

(g) Amount paid as advances, if any: Not Applicable

(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188: Not Applicable

2. Details of material contracts or arrangements or transactions at arm's length basis

(a) Name(s) of the related party and nature of relationship: Not Applicable

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts/arrangements/transactions: Not Applicable

d) Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable

(e) Date(s) of approval by the Board: Not Applicable

(f) Amount paid as advances, if any: None

 

For and on behalf of the Board

Bengaluru

M V Gowtama

7 August 2019

Chairman & Managing Director

Annexure 2

REPORT ON CSR ACTIVITIES

1. A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs.

The Company's CSR policy has been uploaded in the website of the Company under the web-link: Weblink: http://www.bel-india.in/ContentPage.aspx?Mld=17&Cld=527&Lld=1&link=527

2. The Composition of the CSR Committee as on 31 March 2019:

Mr M V Gowtama (Chairman& Managing Director), Chairman Mr Nataraj Krishnappa (Director, Other Units), Member Mr R N Bagdalkar (Director, Human Resources), Member Mr Koshy Alexander (Director, Finance), Member Mr Surendra S Sirohi (Independent Director), Member Mrs Usha Mathur (Independent Director), Member

3. Average net profit of the Company for last three financial years: Rs. 177,137.37 Lakhs.

4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): Rs. 3,542.75 Lakhs.

5. Details of CSR spent during the financial year 2018-19:

(a) Total amount spent for the financial year: Rs. 2,416.48 Lakhs.

(b) Amount unspent, if any: Rs. 1,324.83 Lakhs (carried forward)*.

(c) Manner in which the amount spent in respect of projects taken up during the financial year 2018-19 is detailed below:

* In line with DPE guidelines. Project-wise provision has been made in the books for amount yet to be spent against the respective project.

 

 

 

 

 

 

 

(Rs. in Lakhs)

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

SI. No.

CSR Project or Activity identified

Sector in which the project is covered

Project or Programs (1) Local area or other (2) Specify the State in which projects or programs was undertaken

Amount outlay (budget) Project or programs wise

Amount Spent on the projects or programs Sub-heads : (1) Direct expenditure on projects or programs (2) Overheads

Cumulative expenditure upto the reporting period.

Amount spent: Director through implementing agency

1

(i) Providing Solar Power Plant, Solar Street Lights,

School Education

(i) Other: Kuppam, AP

437.40

366.92

366.92

Direct

 

Electronic Equipments and Solar Modules to Educational Institutions

 

(ii) Local: Bengaluru, Karnataka

 

 

 

 

 

(ii) Augmentation of Infrastructure & Facility Maintenance in Educational Institutions

 

 

 

 

 

 

 

Status: Ongoing

 

 

 

 

 

 

2

Providing aids and assistive devices to Persons With Disabilities in collaboration with ALIMCO

Healthcare

Other: Chikkamagalur, Bellary, Koppal districts of Karnataka

59.40

54.45

54.45

Direct

 

Status: Completed

 

 

 

 

 

 

3

Upgradation of Anganwadis in Aspirational district Raichur, Karnataka

School Education and

Other: Raichur, Karnataka

556.58

0.00

0.00

Direct

 

Status: Ongoing

Healthcare

 

 

 

 

 

4

Providing Solar based Digital Classrooms in 122 Govt High Schools & Handwash platforms in 100 Govt Primary Schools of Aspirational district Yadgir, Karnataka

School Education and Healthcare

Other: Yadgir, Karnataka

560.00

0.00

0.00

Direct

 

Status: Ongoing

 

 

 

 

 

 

5

(i) Upgradation of infrastructure in adopted Govt. ITI, Kollegal

Skill India

(i) Other: Chamarajanagar Karnataka

1721.67

1720.29

1720.29

Direct

 

(ii) Training of Apprentices

 

(ii) Local: Pune & Navi Mumbai,

 

 

 

 

 

Status: Ongoing

 

Maharashtra; Machilipatnam, AP; Bengaluru, Karnataka;

 

 

 

 

 

 

 

Chennai, TN;

 

 

 

 

 

 

 

Hyderabad,

 

 

 

 

 

 

 

Telangana;

 

 

 

 

 

 

 

Ghaziabad;

 

 

 

 

 

 

 

UP; Kotdwara,

 

 

 

 

 

 

 

Uttarakhand;

 

 

 

 

 

 

 

Panchkula,

 

 

 

 

 

 

 

Haryana.

 

 

 

 

6

Vocational Skill Development Training at BEL-BG in collaboration with Electronic Sector Skill Council of India (ESSCI)

Skill India

Local: Bangalore, Karnataka

39.00

0.00

0.00

Direct

 

Status: Ongoing

 

 

 

 

 

 

7

CSR Administrative Overheads

-

-

168.70

168.70

168.70

-

8

Contribution to National Sports Development Fund (NSDF) Status: Completed

Promote Nationally recognized Sports

Other: New Delhi

50.00

50.00

50.00

Direct

9

Segregation of Household Waste for Waste Management & Fabrication of Agroshade Net Greenhouse Nursery at INS Valsura

Environmental Sustain-ability

Other: Jamnagar, Gujarat.

19.38

0.00

0.00

Direct

 

Status: Ongoing

 

 

 

 

 

 

10

Construction of community halls in 5 Villages of Dhule Status: Ongoing

Rural Development

Others: Dhule district, Maharashtra

60.00

56.12

56.12

Direct

11

Contribution to IITM Incubation Cell, Chennai Status: Ongoing

Contribution to Technology Incubator

Other: Chennai

40.00

0.00

0.00

Direct

12

Inclusive & Sustainable Development of Puching Village Status: Ongoing

Rural Development

Others: Tamenglong district, Manipur

29.18

0.00

0.00

Direct

 

TOTAL

 

 

3741.31*

2416.48

2416.48#

 

 

* Includes Rs. 198.56 Lakhs earned as interest on CSR funds.

# Rs. 106.12 Lakhs has been adjusted against opening provision.

6. In case the Company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board's Report.

In order to have a long term social impact through CSR, the Company has taken up several initiatives with project duration of more than one year with milestone based payments spread across more than one fiscal year. This is also in line with DPE guidelines on CSR which mandates CPSE's to carry out CSR programs on a project mode across more than one financial year.

Against carried forward amount of Rs. 4,161.48 lakhs of earlier financial years upto 2017-18 (earmarked against specific CSR projects), an amount of Rs. 1,269.35 lakhs has been spent in FY 2018-19. The balance amount is expected to be spent over the next two to three years.

7. The implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

 

For and on behalf of the Board

Bengaluru

M V Gowtama

7 August 2019

Chairman & Managing Director

Annexure 3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To

The Members

BHARAT ELECTRONICS LIMITED

OUTER RING ROAD

NAGAVARA, BANGALORE- 560045, KARNATAKA

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Bharat Electronics Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, We hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31 March 2019, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31 March 2019 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the Rules made there under and the relevant provisions of the Companies Act, 1956;

(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the Rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign

Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 / 2018;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1999 / Securities and Exchange Board of India (Shares Based Employee Benefits) Regulations, 2014; (Not applicable during the audit period);

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable during the audit period);

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable during the audit period) and

(h) The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines and Standards etc. as mentioned above.

We further report that, having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records in pursuance thereof, on test-check basis, the Company has complied with the following laws/guidelines/rules applicable specifically to the Company:

(i) Guidelines issued by Department of Public Enterprises;

(ii) Guidelines issued by Ministry of Defence;

(iii) Order/Regulations issued by the Govt. of India from time to time;

(iv) E-Waste (Management & Handling) Rules, 2016;

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. However as per the Regulation 17(1 )(b) of SEBI (LODR) Regulations, 2015, as the Chairman of Board of the Company is not a regular Non- executive Director, at least half of the Board of Directors shall comprise of Independent Directors. As there are two vacancies of Independent Directors, the Company does not comply with the same. For this non-compliance Stock Exchanges have imposed fine on the Company from time to time. No fine has been paid by the Company to Stock Exchanges. It is informed that the filling up of vacancies of the said Independent Directors is pending with the appointing authority namely Government of India. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views, if any are captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period there are following events/actions having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards taken place: Nil.

 

For Thirupal Gorige & Associates LLP

 

Practising Company Secretaries

 

CS Thirupal Gorige

Bengaluru

Designated Partner

22 May 2019

FCS No. 6680; CP No. 6424

Note: This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

Annexure A

To

The Members

BHARAT ELECTRONICS LIMITED

Outer Ring Road

Nagavara, Bengaluru - 560 045, Karnataka.

Our report of even date is to be read along with this letter.

(1) Maintenance of secretarial record is the responsibility of the management of the company. My responsibility is to express an opinion on these secretarial records based on our audit.

(2) We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices we followed provide a reasonable basis for our opinion.

(3) We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

(4) Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

(5) The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

(6) The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management as conducted the affairs of the Company.

 

For Thirupal Gorige & Associates LLP

 

Practising Company Secretaries

 

CS Thirupal Gorige

Bengaluru

Designated Partner

22 May 2019

FCS No. 6680; CP No. 6424

Annexure 4

EXTRACT OF ANNUAL RETURN

As on the financial year ended 31 March 2019

[Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

Form No. MGT-9

I. REGISTRATION AND OTHER DETAILS

CIN

L32309KA1954GOI000787

Registration Date

21 April 1954

Name of the Company

Bharat Electronics Limited

Category /Sub-Category of the Company

Company having Share Capital

Address of the Registered Office and contact details

Outer Ring Road, Nagavara, Bengaluru -560045 Tel. No. 080 25039300

Whether listed Company

Yes

Name, address and contact details of Registrar and Transfer Agent, if any

Integrated Registry Management Services Pvt. Ltd. #30, Ramana Residency, 4th Cross, Sampige Road, Malleswaram, Bengaluru - 560 003 Tel. No. 080 2346081 5 to 818

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the Company shall be stated:

SI. No.

Name and Description of main products /services

NIC Code of the Product /service

% to total turnover of the company

1

Communication & C4I systems

26303

(Supplies to the Defence for 2018-19 contributed to 68% of turnover)

2

Radar

26515

3

Electro Optics

26700

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SI. No.

Name and Address of the Company

CIN/GLN

Holding / Subsidiary/ Associate

% of Shares Held

Applicable Section

1

GE BE Private Limited

No. 60, Export promotion industrial park, Whitefield, Bengaluru - 560 066.

U31909KA1996PTC020482

Associate

26

2(6)

2

BEL Optronic Devices Limited

EL 30 J Block MIDC, Bhosari, Pune-411 026

U32100PN1 990GOI058096

Subsidiary (wholly owned)

100

2(87)

3

BEL-Thales Systems Limited

CNP Area, BEL Industrial Estate, Jalahalli, Bengaluru-5600013

U32106KA2014GOI076102

Subsidiary

74

2(87)

4

Defence Innovation Organisation

Centre for Learning and Development Bharat Electronics Limited, Jalahalli, Bengaluru - 560013.

U73100KA2017NPL102118

Associate

50

2(6)

IV. SHAREHOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)

i) Category-wise Shareholding

Category of Shareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change during the year

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

A. Promoters

(1) Indian

a) Individual / HUF

 

 

-

 

-

 

-

-

 

b) Central Govt.

1627374928

-

1627374928

66.79

1433326432

-

1433326432

58.83

(7.96)

c) State Govt.(s)

 

 

-

 

-

 

-

-

 

d) Bodies Corporate

 

 

-

 

-

 

-

-

 

e) Banks / Fl

 

 

-

 

-

 

-

-

 

f) Any Other....

 

 

-

 

-

 

-

-

 

Sub-Total (A)(1):

1627374928

-

1627374928

66.79

1433326432

-

1433326432

58.83

(7.96)

(2) Foreign

a) NRIs- Individuals

 

 

-

 

-

 

-

-

 

b) Other -Individuals

 

 

-

 

-

 

-

-

 

c) Bodies Corporate

 

 

-

 

-

 

-

-

 

d) Banks / Fl

 

 

-

 

-

 

-

-

 

e) Any Other. .

 

 

-

 

-

 

-

-

 

Sub-Total (A)(2):

 

 

-

 

-

 

-

-

 

Total Shareholding of Promoters (A)=(A)(1)+(A)(2)

1627374928

-

1627374928

66.79

1433326432

-

1433326432

58.83

(7.96)

B. Public Shareholding

(1) Institutions

a) Mutual Funds / UTI

317854095

69,600

317923695

13.05

446737355

69,600

446806955

18.34

5.29

b) Banks / Fl

8336028

 

8336028

0.34

10106655

 

10106655

0.41

0.07

c) Central Govt.

 

 

-

 

-

 

-

-

 

d) State Govt.(s)

 

 

-

 

-

 

-

-

 

e) Venture Capital Funds

 

 

-

 

-

 

-

-

 

f) Alternate Investment Funds

1114563

 

1114563

0.05

117604

 

117604

0.00

(0.05)

g) Insurance Companies

107590489

 

107590489

4.42

100357764

 

100357764

4.12

(0.30)

h) FIIs

156860836

 

156860836

6.44

182605873

 

182605873

7.49

1.05

i) Foreign Venture Capital Funds

 

 

-

 

-

 

-

-

-

j) Others (specify)

 

 

-

 

-

 

-

-

 

Sub-Total (B)(1):

591756011

69600

591825611

24.29

739925251

69600

739994851

30.37

6.08

(2) Non-Institutions

 

 

 

 

 

 

 

 

 

a) Bodies Corporate

82114665

9933

82124598

3.37

66879812

9900

66889712

2.75

(0.62)

b) Individuals

 

 

-

 

-

 

-

-

-

i) Individual Shareholders holding nominal share capital upto Rs. 1 lakh

102203653

280314

102483967

4.21

151000430

241407

151241837

6.21

2.00

ii) Individual Shareholders holding nominal share capital in excess of Rs. 1 lakh

10753884

 

10753884

0.44

13167054

 

13167054

0.54

0.10

c) Others (specify)

 

 

 

 

 

 

 

 

 

i) Trusts

10999957

-

10999957

0.45

6230817

-

6230817

0.26

(0.19)

ii) NRI

7668544

-

7668544

0.31

14130290

225

14130515

0.58

0.27

iii) Clearing Members

3352811

-

3352811

0.14

11601892

-

11601892

0.48

0.34

iv) LLP

927

-

927

0.00

7

-

7

0.00

0.00

v) IEPF Account

7210

-

7210

0.00

9320

-

9320

0.00

0.00

vi) Foreign National

506

-

506

0.00

506

-

506

0.00

0.00

Sub-Total (B)(2):

217102157

290247

217392404

8.92

263020128

251532

263271660

10.80

1.88

Total Public Shareholding (B)=(B)(1)+(B)(2)

808858168

359847

809218015

33.21

1002945379

321132

1003266511

41.17

7.96

C. Shares held by Custodian for GDRs & ADRs

-

-

-

-

-

-

-

-

-

Grand Total (A+B+C)

2436233096

359847

2436592943

100.00

2436271811

321132

2436592943

100.00

 

 

 

ii) Shareholding of Promoters

 

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in shareholding during the year

Shareholders Name

No. of Shares

% of total shares of the Company

% of shares Pledged / encumbered to total shares

No. of Shares

% of total shares of the Company

% of shares Pledged / encumbered to total shares

President of India

1627371628

66.79

0.00

1433323132

58.82

0.00

(7.97)

Prem Kumar Kataria

3300

0.00

0.00

3300

0.00

0.00

0.00

Total

1627374928

66.79

0.00

1433326432

58.83

0.00

(7.96)

 

iii) Change in Promoters' Shareholding (Please specify, if there is no change)

SL No.

Shareholders Name

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares

% of total shares of the company

Date

Increase / decrease in Share holding

Reason

No. of Shares

% of total shares of the Company

1

President of India

1627371628

66.79

01.04.2018

-

-

1627371628

66.79

15.06.2018

(13994485)

TRANSFER

1613377143

66.21

22.06.2018

(4939231)

TRANSFER

1608437912

66.01

06.07.2018

(1963921)

TRANSFER

1610401833

66.09

30.11.2018

(321630268)

TRANSFER

1288771565

52.89

14.12.2018

220285392

TRANSFER

1509056957

61.93

22.02.2019

(28841057)

TRANSFER

1480215900

60.75

22.03.2019

(55152188)

TRANSFER

1425063712

58.49

31.03.2019

8259420

TRANSFER

1433323132

58.82

2

Prem Kumar Kataria

3300

0.00

01.04.2018

-

-

3300

0.00

31.03.2019

-

-

3300

0.00

 

iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)

SL. No.

Name of the Shareholders

Shareholding at the Beginning of the Year -01.04.2018

Cumulative Shareholding During the Year -31.03.2019

No. of Shares

% of Total Shares of the Company

No. of Shares

% of Total Shares of the Company

1

Life Insurance Corporation Of India

At the beginning of the Year

87,916,268

3.61

87,916,268

3.61

Transfer/Sale / Buyback / Bonus issue of shares during the year

-

-

-

-

At the end of the Year

-

-

87,916,268

3.61

2

Birla Sun Life Trustee Company Private Limited

At the beginning of the Year

52,975,802

2.17

52,975,802

2.17

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

16,341,753

0.67

69,317,555

2.84

At the end of the Year

-

-

69,317,555

2.84

3

ICICI Prudential Value Discovery Fund

At the beginning of the Year

42,218,811

1.73

42,218,811

1.73

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

452,906

0.02

4,2671,717

1.75

At the end of the Year

-

-

42,671,717

1.75

4

HDFC Trustee Co Ltd A/C HDFC Focused Equity Fund

At the beginning of the Year

41,174,788

1.69

41,174,788

1.69

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

16,672,370

0.68

57,847,158

2.37

At the end of the Year

-

-

57,847,158

2.37

5

Reliance Capital Trustee Co. Ltd A/c Reliance Capital

At the beginning of the Year

32,175,308

1.32

32,175,308

1.32

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

72,992,335

3.00

105,167,643

4.32

At the end of the Year

-

-

105,167,643

4.32

6

SBI Arbitrage Opportunities Fund

At the beginning of the Year

30,362,776

1.25

30,362,776

1.25

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

1,497,790

0.06

31,860,566

1.31

At the end of the Year

-

-

31,860,566

1.31

7

L&T Mutual Fund Trustee Limited-L&T Business Cycle

At the beginning of the Year

21,443,174

0.88

21,443,174

0.88

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

8,344,991

0.34

29,788,165

1.22

At the end of the Year

-

-

29,788,165

1.22

8

Kotak Infrastructure & Economic Reform Fund

At the beginning of the Year

21,141,526

0.87

21,141,526

0.87

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

26,819,920

1.10

47,961,446

1.97

At the end of the Year

-

-

47,961,446

1.97

9

DSP Blackrock Equity Savings Fund

At the beginning of the Year

20,533,509

0.84

20,533,509

0.84

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

(19,655,809)

(0.80)

877,700

0.04

At the end of the Year

-

-

877,700

0.04

10

HDFCSL Shareholders Solvency Margin Account

At the beginning of the Year

15,060,878

0.62

15,060,878

0.62

Transfer /Sale/ Buyback/ Bonus issue of shares during the year

(251,479)

(0.01)

14,809,399

0.61

At the end of the Year

-

-

14,809,399

0.61

V. SHAREHOLDING OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

For Each of Directors and Key Managerial Personnel

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares

% of total shares of the Company

No. of Shares

% of total shares of the Company

Mr M V Gowtama

 

 

 

 

At the beginning of the year

1,263

0.00

1,263

0.00

Date wise Increase / Decrease in shareholding during the year specifying the reasons for increase / decrease:

-

-

-

-

At the end of the year

-

-

1263

0.00

Mr Nataraj Krishnappa

 

 

 

 

At the beginning of the year

1,263

0.00

1,263

0.00

Date wise Increase / Decrease in shareholding during the year specifying the reasons for increase / decrease:

-

-

-

-

At the end of the year

-

-

1,263

0.00

Mrs Anandi Ramalingam

 

 

 

 

At the beginning of the year

1,263

0.00

1,263

0.00

Date wise Increase / Decrease in shareholding during the year specifying the reasons for increase / decrease:

-

-

-

-

At the end of the year

-

-

1,263

0.00

MrRN Bagdalkar

 

 

 

 

At the beginning of the year

1,263

0.00

1,263

0.00

Date wise Increase / Decrease in shareholding during the year specifying the reasons for increase / decrease:

-

-

-

-

At the end of the year

-

-

1,263

0.00

Mr Koshy Alexander

 

 

 

 

At the beginning of the year

1265

0.00

1265

0.00

Date wise Increase / Decrease in shareholding during the year specifying the reasons for increase / decrease:

-

-

-

-

At the end of the year

-

-

1265

0.00

Mr Mahesh V

 

 

 

 

At the beginning of the year

1,265

0.00

1,265

0.00

Date wise Increase / Decrease in shareholding during the year specifying the reasons for increase / decrease:

-

-

-

-

At the end of the year

-

-

1,265

0.00

Mr Vinay Kumar Katyal

 

 

 

 

At the beginning of the year

1,263

0.00

1,263

0.00

Date wise Increase / Decrease in shareholding during the year specifying the reasons for increase / decrease:

"

"

"

"

At the end of the year

-

-

1,263

0.00

Mr S Sreenivas

 

 

 

 

At the beginning of the year

1,263

0.00

1,263

0.00

Date wise Increase / Decrease in shareholding during the year specifying the reasons for increase / decrease:

-

-

-

-

At the end of the year

-

-

1,263

0.00

VI. INDEBTEDNESS

(Rs. In Lakhs)

 

Secured Loans excluding deposits

Unsecured Loans

Deposits

Total Indebtedness

Indebtedness at the beginning of the financial year

 

 

 

 

i) Principal Amount

6,667

-

37

6,704

ii) Interest due but not paid

Nil

-

2

2

iii) Interest accrued but not due

Nil

-

-

0

Total (i+ii+iii)

6,667

-

39

6,706

Change in Indebtedness during the financial year

 

 

 

 

Addition

-

-

-

-

Reduction

(3,333)

-

-

(3,333)

Net Change

3,333

-

-

3,333

Indebtedness at the end of the financial year

 

 

 

 

i) Principal Amount

3,334

-

37

3,371

ii) Interest due but not paid

29

-

2

31

iii) Interest accrued but not due

-

-

-

-

Total (i+ii+iii)

3,363

-

39

3,402

VII. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

 A. Remuneration of MD, WTD and / or Manager

(Amount in

SI. No.

Particulars of Remuneration

MV Gowtama

Ajit T Kalghatgi (upto 31.05.2018)

R N Bagdalkar

Nataraj Krishnappa

Anandi Ramalingam

Koshy Alexander*

1.

Gross Salary

 

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961

55,01,871

18,79,297

41,06,119

44,45,536

43,93,061

50,73,915

(b) Value of perquisites under Section 17(2) Income Tax Act, 1961

39,600

1,15,875

4,79,231

5,06,748

5,09,068

32,400

(c) Profit in lieu of salary under Section 17(3) Income Tax Act, 1961

Nil

Nil

Nil

Nil

Nil

Nil

2.

Stock Options

Nil

Nil

Nil

Nil

Nil

Nil

3.

Sweat Equity

Nil

Nil

Nil

Nil

Nil

Nil

4.

Commission

 

 

 

 

 

 

- as % of profit

Nil

Nil

Nil

Nil

Nil

Nil

- others

Nil

Nil

Nil

Nil

Nil

Nil

5.

Lease accommodation, retirement & other benefits

10,86,335

1,58,030

11,74,407

12,30,685

12,73,200

3,99,550

 

Total

66,27,806

21,53,202

57,59,757

61,82,969

61,75,329

55,05,865

 

SI. No.

Particulars of Remuneration

Mahesh V (w.e.f. 01.06.2018)

Vinay Kumar Katyal (w.e.f. 27.11.2018)

Total

1.

Gross Salary

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961

33,95,994

13,37,994

3,01,33,787

(b) Value of perquisites under Section 17(2) Income Tax Act, 1961

9,550

2,09,955

19,02,427

(c) Profit in lieu of salary under Section 17(3) Income Tax Act, 1961

Nil

Nil

Nil

2.

Stock Options

Nil

Nil

Nil

3.

Sweat Equity

Nil

Nil

Nil

4.

Commission

 

 

 

- as % of profit

Nil

Nil

Nil

- others, specify....

Nil

Nil

Nil

5.

Lease accommodation, retirement & other benefits

10,80,279

11,30,770

75,33,256

 

Total

44,85,823

26,78,719

3,95,69,470

* Mr Koshy Alexander is Director (Finance) and CFO.

B. Remuneration to other Directors

(Amount in

1. Independent Directors

SI. No.

Particulars of Remuneration

Name of Directors

Total Amount

Dr Bhaskar Ramamurthi

Dr R K Shevgaonkar

Mrs Usha Mathur

Mr Sharad Shyam Sanghi

Mr Surendra S Sirohi

Mr Mukka Harishbabu

Dr Vijay S Madan

1.

- Fee for attending Board / Committee Meetings

2,00,000

2,80,000

2,80,000

1,20,000

2,40,000

2,60,000

1,20,000

15,00,000

2.

- Commission

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

3.

- Others, please specify

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

 

Total (B)(1)

2,00,000

2,80,000

2,80,000

1,20,000

2,40,000

2,60,000

1,20,000

15,00,000

 

2. Other Non Executive Directors

SI. No.

Particulars of Remuneration

Name of Directors

Total Amount

Dr Amit Sahai

Ms J Manjula

1.

- Fee for attending Board / Committee Meetings

Nil

Nil

Nil

2.

- Commission

Nil

Nil

Nil

3.

- Others, please specify

Nil

Nil

Nil

 

Total (B)(2)

Nil

Nil

Nil

 

Total (B)=(B)(1)+(B)(2)

Nil

Nil

15,00,000

C. Remuneration to Key Managerial Personnel other than MD/WTD/Manager

SI. No.

Particulars of Remuneration

Key Managerial Personnel

CEO

CFO**

Company Secretary

Total

1.

Gross Salary

 

 

 

 

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961

-

-

16,65,902

16,65,902

(b) Value of perquisites under Section 17(2) Income Tax Act, 1961

-

-

2,21,925

2,21,925

(c) Profit in lieu of salary under Section 17(3) Income Tax Act, 1961

-

-

Nil

Nil

2.

Stock Options

-

-

Nil

Nil

3.

Sweat Equity

-

-

Nil

Nil

4.

Commission

 

 

 

 

- as % of profit

-

-

Nil

Nil

- others

-

-

Nil

Nil

5.

Lease accommodation, retirement & other benefits

-

-

7,62,656

7,62,656

 

Total

-

-

26,50,483

26,50,483

** Included in Part A. VIM. PENALTIES/ PUNISHMENTS / COMPOUNDING OF OFFENCES

Type

Section of the Companies Act

Brief Description

Details of Penalty/ Punishment / Compounding fees imposed

Authority

Appeal made if any (give Details)

A. COMPANY

 

 

 

 

 

Penalty

Nil

Nil

Nil

Nil

Nil

Punishment

Nil

Nil

Nil

Nil

Nil

Compounding

Nil

Nil

Nil

Nil

Nil

B. DIRECTORS

 

 

 

 

 

Penalty

Nil

Nil

Nil

Nil

Nil

Punishment

Nil

Nil

Nil

Nil

Nil

Compounding

Nil

Nil

Nil

Nil

Nil

C. OTHER OFFICERS IN DEFAULT

 

 

 

 

Penalty

Nil

Nil

Nil

Nil

Nil

Punishment

Nil

Nil

Nil

Nil

Nil

Compounding

Nil

Nil

Nil

Nil

Nil

 


For and on behalf of the Board

Bengaluru

M V Gowtama

7 August 2019

Chairman & Managing Director