Bharat Electronics Ltd Directors Report.

To the Members,

Your Directors take pleasure in presenting their Report and the Audited Financial Statements for the financial year ended 31 March 2020 together with the reports of the Statutory Auditors and the Comptroller and Auditor General of India thereon.

Financial Results and Performance Highlights

Financial results and performance highlights of the Company are summarised below:

Particulars 2019-20 2018-19
Value of Production 12,34,833 11,92,142
Turnover 12,60,776 11,78,922
Profit Before Depreciation, Interest and Tax 2,83,207 3,03,162
Finance Cost 326 1,221
Depreciation & Amortisation 34,964 31,622
Profit Before Tax 2,47,917 2,70,319
Provision for Tax 68,534 77,590
Profit After Tax 1,79,383 1,92,729
Other Comprehensive Income/(Loss) (3,814) (4,021)
Total Comprehensive Income 1,75,569 1,88,708
Dividend paid 75,534 51,168
Tax on Dividend 15,439 10,518
Transfer to General Reserve 40,000 40,000
Other Equity (Including Reserves & Surplus) 9,60,928 8,77,525
Net Worth 9,85,294 9,01,891
Earnings Per Share (in ) 7.36 7.91
Book Value Per Share (in ) 40.44 37.01

Distribution of Value of Production for 2019-20 is given below:

Particulars Amount ( Rs in Lakhs ) Percentage
Materials 6,84,573 55.44%
Employee Cost 2,05,749 16.66%
Other Expenses (Net) 61,630 4.99%
Depreciation & Amortisation 34,964 2.83%
Provision for Tax 68,534 5.55%
Profit After Tax 1,79,383 14.53%
Total 12,34,833 100.00%

Companys Turnover for the year 2019-20 has increased to Rs 12,60,776 Lakhs from Rs 11,78,922 Lakhs in 2018-19, registering a growth of 6.94%. Profit after tax for the year is Rs 1,79,383 Lakhs as compared to Rs 1,92,729 Lakhs in the previous year. Turnover from indigenously developed products is 79%. Supplies to the defence contributed to 82% of turnover in 2019-20 as compared to 68% in the previous year.

Impact of COVID-19 Pandemic

The World Health Organization declared a global pandemic of the Novel Coronavirus disease (COVID-19) on 11 February 2020. In the last month of the financial year 2019-20, the COVID-19 pandemic developed rapidly into a global crisis, forcing Governments to enforce lock-downs of all economic activity.

As per the instruction of Govt. of India, enforcing social distancing to contain the spread of the disease, work in all the Companys Units/Offices were temporarily suspended w.e.f 24.03.2020, except for essential staff. Subsequently, Bangalore Unit of the Company resumed partial operations in April 2020 for the manufacture of ventilators based on the orders received from Ministry of Health and Family Welfare adhering to all the precautionary measures and after obtaining approval from concerned authorities. The lockdown has affected the operations of the Company during end of March 2020, April 2020 and partially in the month of May 2020.

BEL has undertaken a detailed study, on the possible impact of COVID-19 on Companys operations including the financial parameters. The internal study and analysis predict that on short term, the COVID-19 may impact the Companys operations in terms of delivery schedules, however, on a long term basis, it is likely to have a less impact on the Companys operations and performance.

Defence being the major revenue segment of BEL; BEL does not foresee any fall in the demand for its products/ services due to COVID impact on a long term basis, though there may be a little delay in order acquisition in the short term. Enhanced focus of the Government of India on Self Reliance (Atmanirbhar Bharat Abhiyan), is likely to boost the Companys prospects as an leading indigenous solution provider in defence sector and will have a favourable impact on the Companys performance in the coming years.


In pursuant to 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 Companys website at Rs MId = 17& CId=527&LId=1&link=527

The Board of Directors has recommended a final dividend of Rs 1.40/- per equity share (140%), amounting to Rs 34,112 lakhs for the year 2019-20. An interim dividend of Rs 1.40 per equity share (140%) has been paid to the shareholders during 2019-20. Thus, the total dividend for the year 2019-20 is Rs 2.80/- per equity share (280%), amounting to Rs 68,224 Lakhs.

Transfer to Reserves

An amount of Rs 40,000 Lakhs is transferred to general reserves for the financial year 2019-20.

Share Capital

The Companys authorized capital is Rs 25,000 lakhs (250,00,00,000 equity shares of Rs 1/- each) and paid- up share capital is Rs 24,366 lakhs as on 31 March 2020. There was no change in the paid-up share capital during the year.

Major Orders Executed

Some of the flagship projects executed during the year for tri services and non-defence customers are Command & Control Systems, Thermal Imagers for tanks, upgrade of Communication System, Land Based EW Systems, Weapon Repair Facility, Electronic Fuzes, various Radars, Naval Airfield Integrated Security System (NAISS), Kerala Fibre Optic Network (K-FON), Smart City Projects, Delhi CCTV Project, Schilka Upgrade, Avionics Package for Light Combat Aircraft (LCA), Classroom Jammers, Realtime Train Information System (RTIS) for Railways and Part supply of Long Range Surface-to-Air Missile (LRSAM) System.


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 and professional electronics to address civilian market, which represents its core area of business.

BEL has been exporting various products and systems to foreign countries and Original Equipment Manufacturers (OEMs). Having established a healthy relationship with its current & prospective customers and based on their requirements, BEL is regularly interacting with Ministry of External Affairs & Ministry of Defence for enabling supply of various products and systems to them.

BEL is also exploring civil and medical equipments market in developed, developing & third world countries with product and solutions like Artificial Intelligence based solutions, software development for various civilian projects, post office and schools upgradation projects, smart cities, critical infrastructure development, solar power generation projects, ventilators, etc.

BEL is focusing on the various opportunities in the area of helping OEMs to meet offset obligations in various Request for Proposals (RFPs) of Ministry of Defence 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) and Transfer of Technology of the latest systems and solution as new areas of emerging export opportunities. Further efforts are being made to establish long term supply chain relationship with global players.

BEL with concentrated effort is focusing on the various Make in India programs. BEL has offered its various products and services to major Platform OEMs and their Tier-I suppliers. This has helped the Company in leveraging partnership for co-development, co-production and similar arrangements with various OEMs to get the manufacturing of the products at the Company and utilization of services of Company not only for Indian programs but also for their Global requirements.

Company has achieved an export order acquisition worth US$ 101.47 Million during 2019-20, from various customers viz., USA, France, Germany, Switzerland, Israel, Sweden, Myanmar, Mauritius, Armenia, Namibia and Bhutan. Export order acquisition in 2019-20 was all time high in BEL and with this the export orders on hand as on 1 April 2020 is US$ 164.01 Million.

Company has achieved an export sale of US$ 48.59 Million during 2019-20, to various countries, viz., Switzerland, USA, France, Germany, Israel, Sweden, Seychelles, Mauritius, Armenia, Srilanka, Guinea, Namibia, Indonesia, China and SEZs. Major Products / Systems exported are Weapon Locating Radar, Coastal Surveillance Systems Radar, Sub Systems of Radar and EW Systems, Data Link II, Cable looms, Mechanical Parts, Communication Equipments, IFF-Interrogator, Radar Finger Printing System, EOS, Vacuum Interrupters and Radar Spares, etc.

Increase in export sale was mainly due to the concentrated efforts made by the Company and new export initiatives taken such as continuous and focused discussion with Ministry of External Affairs & Ministry of Defence and customers, proactive approach to the customers with offering new and complete systems and procedures, increase in the customers base, taking up new customized & critical projects and delivering them on time as per the requirement of customers, more directed efforts in support / services extended to customers to develop solutions based on their requirement and future threats and opportunities.

Initiatives taken to increase exports by development of new markets for products & services during the year 2019-20:

• Marketing Offices Abroad

• BEL has put in efforts for increasing the business opportunities in USA, Europe, South East Asia, Africa and Middle East by incessant engagement with customers.

• A Marketing office in Oman was established.

• New Partners / Agents were identified and arrangements were signed in various countries worldwide.

V Strategic Alliance with the Foreign OEMs

Proposed strategic alliance with foreign OEMs to address global markets by offering the best value


• IAI - Missile Systems.

• Elbit Systems Electro Optics, Israel - Electro optics.

V Major leads in pipeline for following products and systems offered to foreign countries / customers:

• Coastal Surveillance System.

• Radar.

• Upgradation of Naval Radar and Sonars.

• Contract Manufacturing.

• Communication Equipments.

• Avionics.

V The following were the scope for offset business during the year 2019-20:

• Data Link II for the Boeing Company, USA.

• IFF - Interrogator for the Boeing Company, USA.

• Radar Finger Printing Systems for the Boeing Company, USA.

• EoS CoMPASS for Elop, Israel.

• Operators Module for SAAB, Sweden.

• EW & Radar Sub-Assemblies for Thales, France.

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 the Company for the year 2018-19 has been rated as "Excellent" in terms of the MoU with the Government of India. The MoU rating for 2019-20 is under review by the Government of India.

Order Book Position

The Order Book of the Company as on 1 April 2020 is Rs 51,973 Crores. The order book comprises of mainly major programs like Long Range Surface-to-Air-Missile System, Akash, Integrated Air Command Control System,

Battlefield Surveillance System, Coastal Surveillance System (Phase-II), Advanced Composite Communication System, Command Information Decision Support System, EW Suite, Kerala-Fibre Optics Network, Smart City Projects, Integrated Perimeter Security Solution, Naval Airfield Integrated Security System, Samyukta upgrade, AMCs for Surveillance Radar Element, Software defined Radio, Commander Thermal Imaging Sights, Sonars, Shakti PH III etc.


During this year, your Company has declared dividend of 280% as compared to 340% in the previous year. Apart from the final dividend of Rs 41,422 Lakhs (170%) for the year 2018-19 which was paid out in 2019-20, interim dividends amounting to Rs 34,112 lakhs (140%) has been paid during the year 2019-20.

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 its CAPEX requirement an amount of Rs 833 lakhs is outstanding as on 31 March 2020. 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 2020 was Rs 3,96,275 Lakhs as compared to Rs 4,45,479 Lakhs as on 31 March 2019. This works out to 117 days of value of production as on 31 March 2020 as against 136 days of the previous year. This reduction has been possible due to better inventory control.

The position of trade receivables (net) as on 31 March 2020 was Rs 6,73,291 Lakhs as compared to Rs 5,36,921 Lakhs as on 31 March 2019. This works out to 195 days of turnover as on 31 March 2020 as compared 166 days of turnover achieved during the previous year. The increase in trade receivables was mainly on account of higher turnover during the last quarter of the financial year.


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 2020. Out of this, 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 2020 is unpaid due to in-sufficient documents/records produced by Depositors.

Research & Development

Companys R&D Philosophy is to enhance its pre-eminence in products / services of Defence Electronics and other chosen fields through Research & Development. Companys R&D strives for development of new products built with cutting-edge technology modules. While fully meeting the customer requirements, the products developed by Company are state-of-the-art, competitive and incorporate highest quality.

Company has established three-tier R&D Structure, namely, Central Research Laboratories (CRLs), a central Product Design & Innovation Centre (PD&IC) and Design and Engineering (D&E) functions attached to various Units/SBUs. The Central Research Laboratories (CRLs) at Bengaluru and Ghaziabad are involved in conducting futuristic R&D in core business areas of the Company and in developing technology modules for use by SBUs/Units. PD&IC at Bengaluru develops common technology modules, subsystems and products in areas of Radar Signal Processing, RF & Microwave Components, Energy Solutions, Electro-optics and Lasers, Encryption Modules, MMICs, Embedded Systems etc. that can be used as building blocks by SBUs/ Units. The D&E groups at SBUs / Units provide Systems and System of Systems solutions to the end users. Towards this, they get necessary technology modules and subsystems developed through CRLs, PD&IC and collaborative R&D partners. They conduct all evaluations and trials needed in the process of inducting these systems into the service. They also extend technical support during the entire product life-cycle and also take care of obsolescence management.

D&E Projects Initiated During 2019-20: Several R&D projects have been initiated during the year 2019-20 both through in-house developments and collaborative efforts (mainly with DRDO). Major projects initiated in 2019-20 are Akash Prime, Development of IRST, 2-Vehicle Rohini, Long Range Surface to Air Missiles, development of indigenous ASR-MSSR, High Power Radar, ECM Jammer MK III, MKIIA MSSR and Active Phased Array based configurable Tactical Surveillance Radar.

D&E Projects Realised During 2019-20: Some of the major projects realized / completed during the year 2019-20 are BELs Indigenous SoC, Application Software for MRSAM, Sub 1M Ku-Band Manpack Satcom Terminal, Digital Radar Warning Receiver (Tarang Mk-II), DFCC Mk1A Prototype, SDR-TAC, CMS15, USHUS-2 and completion of NC NC trials of ASR & MSSR for Navy.

Important R&D awards/recognitions received during 2019-20 are Indian Chamber of Commerce PSE Excellence award for R&D and IETEs Young Scientist Award won by Mr Vikas Negi, Manager of Ghaziabad Unit.

BEL has met all the MoU parameters w.r.t R&D by timely completion of the following:

• Indigenous development of System on Chip (SoC) and offering it to customers.

• Development of Indigenous X Band LNA MMIC for Radar application and submitting it to DRDO for evaluation/ Field trials.

• Completion of four AI enabled projects ("Proof of Concept" of Object detection and tracking, Social Network Analysis: development, testing & getting first order, Robotic Surveillance Platform: development, testing & getting first order, Proof of Concept Human Face Recognition: development, testing & its first billing).

• System integration and readiness of Compact Gun Fire Control System and offering to Customer for Trial.

• System readiness of LTE based customized eNodeB and offering to customer for Trial.

BEL has set up a Research Park at IIT-Madras for facilitating research projects in collaboration with Academic Institutions/Startups. BEL has also set up a Research cell at Kochi which is currently focusing in research towards development of Side Scan Sonars.

New products developed through in-house / collaborative development efforts during the year 2019-20 are as follows:

1. Weapon Locating Radar (WLR) Export Version:

Weapon Locating Radar is a Field Artillery Radar System for locating missile batteries, mortars, guns, rocket launchers and guiding direction of fire from friendly guns, rockets and batteries. It has been developed by the Company jointly with DRDO and has been customized for export.

2. Ship to Shore Communication System: The project is state-of-the art multi-layer IP based Wide Area Network (WAN) communication system, which has the capability of Satellite Communication on The Move (SOTM) for transportation of mission critical data, voice and video from ship to shore terminal in real time with reliability and security.

3. Systems for Akash NG: Multi-Function Radar, Command Control Unit subsystems including communication equipment and network for Akash- NG have been developed by the Company jointly with DRDO.

4. Dip Brazed Chassis for Digital Flight Control Computer (DFCC): The chassis for DFCC has so far been imported. It has aircraft interface connectors (24 Nos.) mounted on front panel making assembly and disassembly of DFCC on/ from aircraft a laborious and time-consuming process. The new and indigenously designed chassis is 1 ATR chassis and has connectors on the rear panel for ease of assembly & disassembly on / from aircraft.

5. Battlefield Surveillance System High Altitude Area (BSS HAA): BSS HAA is a mobile automated surveillance system capable of integrating inputs from all battlefield surveillance devices/sensors at division and corps level and processing them to confirm their veracity, prevent duplication, fusing them with other inputs and databases to produce a battlefield scenario to aid the commander in decision making. This version of BSS has been developed for operation in high altitude areas.

6. CDMA Based Wireless Communication System:

CDMA based wireless communication link is a long-range wireless communication link for ground to air communication. The wireless communication link provides one-way uplink from ground based transmitter stations to airborne receiver systems. The communication link covers a range of 450 kms.

7. Software Defined Radio (SDR)-TAC: SDR-TAC is a multi-mode, multi-role & multi-channel Software Defined Radio with both voice & data operations to cater to communication need of network-centric warfare operations. This radio has been developed by the Company jointly with DRDO, is designed for both ship and shore deployments. It can be configured for different combinations of frequency bands as per the user requirements. It provides both narrowband and wideband point-to-point and networked communication.

8. Missile Data Link Unit (MDLU) MK II: MDLU MK II is an enhanced version of MDLU with enhanced range.

9. R118 for Trainer Aircraft: It is a Radar Warning Receiver (RWR) designed by DARE and manufactured by the Company originally for use on fighter aircraft. The original R118 has been customized for use on Trainer aircraft.

10. Tethered Unmanned Aerial Vehicle: A Tethered Unmanned Aerial Vehicle (TUAV) - PATANG with EO sensor payload is used for day & night aerial surveillance purpose. Powered from ground, the system can provide 24X7 operations. TUAV can be hoisted to a height of 100m and the day/night camera can be controlled from Ground Control Station. This System is developed in partnership with academia.

11. Hand Held Function Signal Generator: It is a portable, fully programmable test device for Go - No Go testing of various types of RWR systems deployed in the field.

12. Naval Airfield Integrated Security System (NAISS): It is a system developed to strengthen the perimeter security of naval air stations. It includes an anti-climbing fence, drain detection intrusion systems, a CCTV network and under-vehicle surveillance.

13. Integrated Perimeter Security System (IPSS): It is a system developed for the IAF. It includes a smart fence, surveillance systems, thermal cameras, motion detectors and a central control and command center.

14. Varunastra Acoustic System (VAS): Varunastra is a first indigenous heavy weight torpedo of India, designed by NSTL (DRDO Lab) and developed by BEL. It is ships "fire and forget" type of weapon against submarines. VAS is the homing electronics for Torpedo.

15. Bharani Mk-II Radar: It is a compact, low level, lightweight solid-state 2D surveillance Radar. It has been designed and developed by the Company along with LRDE, DRDO. It has an integral IFF Mk XII with mode-S capability for identification of hostile aircrafts.

16. IFF MK-XII(S) for RAN 40L: Interrogator for Friend or Foe is designed for Indian navy. It has six different modes of operation and an instrumented range of 450Kms. It also has mono pulse capability.

17. The Advanced Torpedo Decoy System (ATDS) Maareech: This is a comprehensive system for defence against vintage and modern torpedoes on board ASW and non-ASW platforms. The ATDS system is designed by DRDO Labs and manufactured by BEL. The ATDS system consists of ATDS Sonar and ATDS FCS (Fire Control System).

18. Indigenous Ku Band SOTM: Satellite on The Move has a 3 Axis Stabilized Antenna System mounted on a vehicle to track the Satellite even when the vehicle is moving and providing high speed communication. It provides voice, video and data capabilities from aboard a moving vehicle. The system has built-in GPS & IMU to auto-point to chosen satellite with fine tuning aided by beacon tracking. It is mountable on various military & commercial vehicles.

19. NFS Satellite Terminal: NFS Satellite terminal is developed for the NFS Network. NFS is pan India network with Geo Redundant Hubs, Static and Suitcase based terminals. It acts as backup to NFS terrestrial network at about 164 locations whereas it is a primary medium of communication at 55 sites where NFS terrestrial connectivity is not available. NFS satellite terminal supports voice, video and data services.

20. Indian Regional Navigation Satellite System (IRNSS) Receiver, also known as NavIC (Navigation in Indian Constellation) has been designed and developed by the Company based on design inputs from ISRO. It provides navigational parameters (latitude, longitude and altitude) and timing information as output. The receiver has been developed to work in SPS (Standard Positioning Service) mode in the present version. The timing server is also designed using NavIC Receiver, which can be used to generate and disseminate accurate timing information to a network that needs to be synchronized.

21. MWIR (Mid Wave Infra-Red) Sight for SHAR:

Indigenous MWIR sight has been developed for SHAR center/ISRO as replacement for an imported camera for tracking Satellite Launch Vehicle.The system is capable of producing clear IR signature of the Satellite Launch Vehicle up to range of 1200 Kms.

22. Surveillance Remotely Operated Vehicle (SROV):

This Surveillance Robotic Platform is a miniature, tracked platform designed for carrying out surveillance covertly. It is developed based on design from Research & Development Establishment (Engineers), Pune. It can be deployed within buildings for carrying out surveillance during counter-terrorist or counterinsurgency operations. It is capable of providing video feedback in real time.

Future Plan of Action: BEL plans to continue investing in R&D for meeting the continuously emerging requirements of its customers as well as diversification. Collaborations with academia and national labs will be strengthened, while a major thrust would be for in-house developments in order to overcome the challenges of Lock-in for proprietary technologies. Artificial Intelligence, Cyber Security, IoT, Robotics, Drones & their payloads and various EW technologies will continue to be the focus of the Company. These technologies will be adapted in products and solutions being developed across the Company. In addition, SoC based products, EV battery developments, e-Governance projects and several other developments will be undertaken.

New Facilities Established

In our endeavour to maintain the infrastructure on par with International Standards, specific groups in all Units/SBUs continuously scan technology changes across the global market that are taking place and identify new processes for acquisition. During the year 2019-20, Company has spent Rs 51,297 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:

• Product Development & Innovation Centre (PD&IC) inaugurated by Honble Raksha Mantri at Bengaluru Unit.

• New State-of-the-art manufacturing facility for Composite Material, Environmental Testing & Finishing inaugurated by Honble Raksha Rajya Mantri at Navi Mumbai Unit.

• New Production Building at BEL, Hyderabad Unit.

• Secure Triple Play Services at BEL, Bengaluru Unit.

• 2100 Litre Climatic Chamber with 60 TR Chillers at BEL Kotdwara Unit.

SAP Implementation and other IT Initiatives:

In SAP various new processes have been introduced for the automation of employee related services. OYO hotels booking to payment and OLA booking to payment process have been integrated with SAP. Comprehensive Cyber Crisis Management Plan (CCMP) for BEL has been implemented in line with the guidelines of CERT-in and covering people, processes and technology issues. The CCMP outlines a framework for dealing with cyber related incidents for a co-ordinated, multi-disciplinary and broad based approach for rapid identification, information exchange, swift response and remedial actions to mitigate and recover from malicious cyber related incidents impacting critical national processes.

As part of the CCMP, Centralized Internet Gateway and Security Operations Centre (SOC) for monitoring traffic on internet infrastructure. The setup includes next generation firewalls including intrusion prevention system, network data leakage prevention, anti- advanced persistent threat. Security Information and Event Management (SIEM) has been implemented for incident monitoring, alerting, tracking, response and closure.

For centralized management and monitoring of network assets of all units, Network Monitoring & Management System (NMS) tool has been deployed centrally at IS department for WAN and LAN. The tool provides Centralized topology for all units in a single dashboard for easy troubleshooting of network outages, periodical backup of critical devices, regular health checks, proactive monitoring and historical reporting.


Quality, Technology and Innovation are three guiding pillars of BELs 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, Statistical Process Control (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 / Strategic Business Units (SBUs) / Common Services Groups (CSGs) are accredited to ISO 9001 Quality Management System (QMS). Thirteen Units / SBUs of the Company have upgraded their QMS to Aerospace Standard, AS 9100D. All Units of the Company are committed to Environment Management System through ISO 14001 Certification. Ghaziabad Unit is upgraded its OHSAS from ISO 18001 to ISO 45001. Seven Units/SBUs/ Divisions of the Company are certified for Information Security Management System ISMS ISO 27001.

Test Equipments Calibration and Maintenance departments of Bangalore Complex, Ghaziabad and Panchkula Units are certified by National Accreditation Board for Testing and Calibration Laboratories (NABL) in accordance with ISO / IEC 17025 Standard. BEL Software Technology Centre at Bangalore Complex is CMMi level 5 certified. D&E-Network Centric System and CRL-Ghaziabad, Chennai, Hyderabad Units are certified for CMMi level 3.

EFQM (European Foundation of Quality Management) Model for Business Excellence is being followed in BEL since 2002. During 2019-20, Ghaziabad and Hyderabad Units received CII Exim Platinum Awards based on EFQM Model.

Continual improvements in products and processes are being brought out through various approaches, one such approach is Six Sigma Methodology. Junior and Middle level executives select Sig Sigma projects from different areas of concern related to products and processes to bring about improvements.

During the year, 24 senior executives from various units have been trained for Six Sigma Black Belt by Indian Statistical Institute, Bengaluru. These Black Belts guide other Green Belt executives in their Six Sigma Projects. Total 495 Six Sigma Projects have been completed during the year 2019-20. Out of 31 Six Sigma projects nominated for Regional/National level competitions, 15 projects received regional level awards and 16 projects received national level championships awards.

The Company has facilitated involvement of Non-executives in the Quality Movement through Quality Control Circles (QCC). During the year 2019-20, 761 QCC Presentations were made by various QCCs. Many QCC circles were nominated to participate in national competitions and all were adjudged for various categories of Awards. One QCC Team URJA from Navy Mumbai Unit of the Company, represented the Company in the International Convention ICQCC 2019, held at Tokyo, Japan and won the "Gold Award".

Another approach for Quality Improvement is through Suggestion Scheme, wherein employees from Non executives to Managers provide suggestions for which they are suitably rewarded on implementation of their suggestions. Around 4244 suggestions were awarded in the year 2019-20. Selected BEL employees participated at 30th National Convention conducted by Indian National Suggestion Schemes Association (INSSAN). During the year, Bangalore Complex has received 1st Prize under Engineering Industry Category in "Excellence in Suggestion Scheme contest: 2018-19" organised by INSSAN.

The Company has nominated D&E Engineers for Global Certification on Reliability "Certified Reliability Engineer (CRE)" by American Society for Quality (ASQ). During the year, 35 D&E Engineers have been certified for CRE. The Company has also nominated D&E Engineers for Design for Six Sigma Green Belt (DFSS-GB) Certification by Indian Statistical Institute. During the year 59 D&E Engineers have been certified as "DFSS Green Belts".

During the year, 43 operating level Quality Engineers in various SBUs / Units have been certified as "Certified Quality Engineers (CQE)" by ASQ. Certified Manager for Quality and Organisation Excellence (CMQ&OE) by ASQ for Senior level executives, has also been conducted 13 Senior executives have been certified.

Quality Recognition Award (QRA) is awarded for best performing Unit/SBU in 7 key business processes. Panchkula Unit, MR SBU, and EW&A SBU, received 1st, 2nd and 3rd awards respectively.

In order to inculcate a culture of Project Management, training programs for Project Management Professionals (PMP) were conducted. During the year 65 PMPs have been certified by Project Management Institute (PMI).

This year, the Company has finalized Integrated Customer satisfaction survey process for capturing holistic perceptions of customers right from ordering agencies through execution till the end users with PDCA approach. Export Product Quality Audit process is institutionalized and Audit Manual is released. SAP module is developed and implemented for conducting internal audits for QMS, EMS, ISMS and OHSAS.

Human Resources

Your Company employed 9,279 persons as on 31 March 2020 as compared to 9,612 persons as on 31 March 2019. Out of these employees, 4,973 were engineers / scientists and 1,991 were women employees as on 31 March 2020. A total of 29 employees were inducted during the year. 3 employees belonging to SC, 1 employees belonging to ST, 6 employees belonging to OBC and 4 employees belonging to the minority community were recruited during the year.

Your Company has been complying with the Government directives on reservation. The particulars of SC/ST and other categories of employees as on 31 March 2020 are

as under:

Category of Employees



Group A Group B Group C Group D
Scheduled Caste 1,035 28 566 33
Scheduled Tribe 349 12 132 21
OBC 1,297 37 791 37
Ex-Servicemen 87 1 261 50
Physically Challenged 94 5 115 2

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. A detailed write up on ( 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 Woman at Workplace (Prevention,

I 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 Companys intranet portal. All women, permanent, temporary or contractual including those of the service 1 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 I 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 are provided in the Business Responsibility Report which forms part of this report.

Awards and Accolades

Your Company continues to be a highly trusted organisation for its product quality and innovation based on strong consumer insights and the ability to engage with consumers across the country. During the year, your Company has received following various Awards and accolades:

• Jamnalal Bajaj Fair Business Practices Award.

• Indias Best PSU Award 2018 by Dalal Street Investment Journal.

• Digital India Award 2019.

• Karnataka State Export Excellence Award.

• ICC PSE Excellence Awards for R&D, Operational Performance & HR.

• IPC First India Award.

• Platinum Level recognition for Ghaziabad & Hyderabad Units in CII EXIM Bank Business Excellence Awards.

• Aerospace & Defence Awards for Excellence in Exports & CSR.

• Governance Now Awards for Research & Innovation.

Other Significant Achievements During the Year

• The Company has achieved highest ever turnover of Rs 12,608 Crores during the financial year 2019-20 despite the on-going crisis due to COVID-19 Pandemic.

• BEL has achieved an Export turnover of USD 48.59 Million [Major items: Weapon Locating Radar (WLR)- Armenia, Compact Multi-Purpose Advanced Stabilization System (CoMPASS), Electro-Mechanical parts, Radar Finger Printing System (RFPS) etc.].

• Rs 13,500 Crores worth orders received [Major orders include Akash, Coastal Surveillance Ph-II, Samyukta Upgrade, Software Defined Radio-Naval Configuration (SDR-NC), Coastal Surveillance System (CSS)- Myanmar, Product Support & AMC for Surveillance Radar Element (SRE), Rohini etc.].

• Strategic partnership with Global players like LIG NEX1 (Korea), Lockheed Martin (USA), Elbit (Israel) in the international segment.

• Strategic partnership with ISRO, IIT Madras, RailTel, Tamil Nadu Industrial Explosives Ltd., Tejas Networks, Tech Mahindra etc., in the domestic segment towards development of various technologies/products.

• Commissioned a 2MW Solar Power Plant at Ordnance Factory, Muradnagar (UP).

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 of Rs 2,832.69 Lakhs (11,65,716 equity shares of Rs 100/- each at a premium of Rs 143/- per share) during the year by subscribing to right issue for equity shares made by BELOP. BELOP achieved a turnover of Rs 3,721 Lakhs for the year as compared to Rs 10,325 Lakhs in the previous year. The profit after tax (PAT) for the year was Rs 301 Lakhs as compared to Rs 1,418 Lakhs in the previous year.

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 4,056 Lakhs as compared to Rs 672 lakhs in the previous year. The profit after tax (PAT) for the year was Rs 334 Lakhs as compared to Rs 104 Lakhs in the previous year.

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. GE BE Pvt. Ltd. recorded a turnover of Rs 1,17,685 Lakhs for the year as compared to Rs 105,851 Lakhs in the previous year. The profit after tax (PAT) was Rs 12,369 Lakhs for the year as compared to Rs 14,862 Lakhs in the previous year.

Defence Innovation Organization (DIO), is 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, 2013, read with Rule 5 of Companies (Accounts)

Rules, 2014, the statement containing salient features of the financials statement of Subsidiaries/ Associate/ Joint Ventures is attached to the Financial Statements.

Further, pursuant to the provisions of Section 136 of the the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company

Consolidated Financial Statements

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


The Companys Vigilance Department is headed by a Chief Vigilance Officer (CVO), an IAS Officer from Haryana cadre (1991 batch). Permanent Vigilance Officers were posted in each of the Units and 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 is a Vigilance Committee at the Corporate Office, where Chairman and 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 Department and the same received focused attention during the current year. The Vigilance Department examines procurement/sub-contract contracts and processes on continual basis, conducts regular and surprise inspections and investigates instances of any suspected transactions referred to it. An employee or third parties can refer any suspected transaction to the notice of CVO for investigations 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 Companys website

During the year, 1,417 high value 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 61 high value procurements contracts has been taken up. Regular and surprise checks and inspections have also been conducted by the field Vigilance Officers. During the year, 30 Complaints including Complaints referred by CVC/ MOD/CBI were received. A total of 37 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. 2 Complaints are pending with CBI, Ghaziabad and 1 complaint is pending with CBI, Bengaluru for detailed investigation.

During the year, 896 Executives and 254 Non-executives were given basic awareness program on Vigilance. 79 Executives & 34 Non-executives working in sensitive areas for more than 3 years have been job rotated and the percentage coverage is 80.7%.

Vigilance department is continued to be certified for ISO 9001/2015 certification for the vigilance function of the Company.

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 the Companys website

• E Procurement - about 93% 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 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 website.

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

• File Life Cycle Management System (FLM) has been implemented across the Company and the coverage is about 99% of the total files generated in the Company.

• Online 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 the Company has been continuously endeavouring 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:

1) Vigilance Awareness Week 2019 was conducted during October/November 2019. The observance of the Week was marked with special address by eminent personalities. Gram Sabha was organized as part of the outreach activities in Tyamgondlu Village, Bengaluru District. Skit plays and video films portraying national integration and anti corruption messages were shown to school and college students located near the location of BEL Factories. Similar anti corruption awareness program in the form of skit plays and inspirational video films were arranged for the school students of BELs 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 the Companys employees, Vigilance Walk by employees of Bengaluru based PSUs, PSBs and series of lecture by distinguished personalities and competitions were organized as part of the observance of the Vigilance Awareness Week.

2) 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 with 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 and above.

The Integrity 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 (resigned in February 2020) for monitoring implementation of Integrity Pact in the Company. During the financial year 2019-20 the Independent External Monitors (IEMs) reviewed 371 contracts and held structured meetings with the Chairman & Managing Director.

Procurement from Micro & Small Enterprises (MSEs)

Your Company has been providing increased thrust on enhancing procurement from Micro & Small Enterprises (MSEs) and is implementing Public Procurement Policy for MSEs as per the guidelines / notification issued by the Ministry of MSMEs. During the year 2019-20, the Company has complied with the mandate of Governments Public Procurement Policy for MSEs.

The Company has on-boarded on TReDS Platform, Government e-marketplace (GeM), MSME Sambandh, MSME Samadhaan Portals complying with Government Guidelines.

The Company actively participated in various Vendor Development Programs held across the country including Defence Exhibition Organisation (Defexpo.) BEL showcased various items for indigenization for domestic vendors including MSEs.

Implementation of Official Language Policy

Your Company is committed to adhere to the Official Language (OL) policy of the Government of India (Gol). During 2019-20, the company has achieved the various targets prescribed in the Annual Program 2019-20 issued by Dept. of OL, Ministry of Home Affairs (MHA), GoI 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 Ghaziabad Unit on 10.01.2020 and Corporate Office on 26.02.2020. MoD officials conducted OL inspections of 04 Units and Corporate OL audit team conducted 06 OL inspections of Units/Offices.

Bilingualisation: All Units and Offices of the Company including Corporate Office are issuing documents in bilingual as per the Section 3(3) of Official Language Act, 1963. Usage of Hindi is being encouraged in correspondence and on computers. Individual orders under OL Rule 10 (4) were issued by CMD to officers/employees who are having proficiency in Hindi to do their complete work in Hindi. Also, a circular on creation of check points under Rule 12(1) of OL Rules was issued.

Computerisation and Website: Updated information pertaining to OL is being communicated through OL Portal GARIMA introduced by OL Dept. of Corporate Office. Quarterly progress reports from Units/Offices are being received online through SAP. Hindi notings are being written in File Life-cycle Management (FLM). Companys website is also available in Hindi.

Training and Reporting: Roster is maintained for Hindi language training and computer training which is updated from time to time. As per the roster, employees are imparted training. Quarterly/half yearly reports are sent to OL Dept., MHA, GoI, MoD, Hindi teaching scheme and Town Official Language Implementation Committee (TOLIC) as per schedule.

Hindi Month Celebrations: Hindi Month and Hindi Day was observed during September month in all the Units and Offices of the Company. During the month, employees of the Company participated enthusiastically in various programs / competitions.

Meetings/Workshops: Official Language Implementation Committee (OLIC) meetings, Hindi workshops and technical talks in Hindi were conducted in all Units / Offices on quarterly basis.

Incentives and Awards: Incentive Schemes are propagated among all employees and number of employees who took part in these schemes were awarded with cash prize. Employees have participated in the TOLIC competitions and won prizes.

Publications: Hindi journals/maganizes are being published in Units/Corporate Office of the Company to propagate usage of Hindi.

New Initiatives: Corporate OL has initiated to compile BEL specific Defence Electronic Terminology in co-ordination with Commission for Scientific and Technical Terminology (CSTT)/ MHRD, New Delhi and its first meeting was conducted from 13 to 17 January, 2020 at Ghaziabad. A dedicated section for OL is being introduced in the Companys website. Hindi books are being provided to local school students from our library.

Efforts are in progress to ensure OL implementation and achieving progressive usage of Hindi across the Company.

Implementation of Right to Information Act, 2005

In consonance with the provisions of the Right to Information Act, 2005 (the RTI Act), your Company has well-defined mechanism in place to address the provisions of the RTI Act. Your Company has a designated General Manager level officer as a "Nodal Officer" to oversee the implementation. The requests received are processed by 14 senior personnel designated as "Central Public Information Officers (CPIOs)" including one at Corporate Office and each at the Units/Regional Offices of the Company. The Company has a designated General Manager level officer as a "First Appellate Authority" (FAA) to dispose of first appeals filed under the RTI Act. In compliance to Government directives, the Company is successfully processing the applications under the RTI Act, online.

The information to be provided as per Section 4(1) (b) of the RTI Act has been posted on the website of company

The FAA, CPIOs and other internal stakeholders involved are sensitized about their obligations under the Act through training and workshops.

The Company received 345 applications (including 59 transferred by other Public Authorities to BEL) during the period from April 2019 to March 2020, and 15 RTI applications were carried forward from the year 2018-19. A total of 350 applications were responded to including 40 applications that were rejected, out of a total of 360 applications. Your Company received 107 First Appeals during the period, out of which 106 were disposed-off. Quarterly RTI returns for all the four (4) quarters have been submitted to the Central Information Commission.

Board Meetings, Change in Directors & Key Managerial Personnel and their Shareholding

During the year eight 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 year 2019-20:

Name of the Director(s)/ KMPs Designation Date of Appointment Date of Cessation
1 Mr R N Bagdalkar Director (Human Resources) Not Applicable 31.05.2019
2 Mr Shivakumaran K M Director (Human Resources) 11. 06.2019 Not Applicable
3 Mr Sunil Kumar Kohli Independent Director 18.07.2019 Not Applicable
4 Mr Nataraj Krishnappa Director (Other Units) Not Applicable 30.11.2019
5 Mrs Shikha Gupta Director (Other Units) 01.12.2019 Not Applicable
6 Dr Bhaskar Ramamurthi Independent Director Not Applicable 01.12.2019
7 Dr R K Shevgaonkar Independent Director Not Applicable 01.12.2019
8 Mrs Usha Mathur Independent Director Not Applicable 22.12.2019
9 Mr Sharad Shyam Sanghi Independent Director Not Applicable 06.01.2020

During the year 2019-20, 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.

Mrs Shikha Gupta, Director (Other Units) was appointed as Additional Director w.e.f 1 December 2019 in place of Mr Nataraj Krishnappa who retired from his services on 30 November 2019 on attaining the age of superannuation. Mr Dinesh Kumar Batra, Director (Finance) & CFO was appointed as Additional Director w.e.f 1 August 2020 in place of Mr Koshy Alexander who retired from his services on 31 July 2020 on attaining the age of superannuation. Mr M V Rajasekhar, Director (R&D) was appointed as Additional Director w.e.f 1 September 2020 in place of Mr Mahesh V who retired from his services on 31 August 2020 on attaining the age of superannuation.

Mrs Shikha Gupta, Mr Dinesh Kumar Batra and Mr M V Rajasekhar, Additional Directors are being appointed as Directors on terms as set-out in the Notice of the 66th Annual General Meeting.

Mrs. Anandi Ramalingam, Director (Marketing), retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

The details of Directors and Key Managerial Personnel who are holding shares in the Company as on 31 March 2020 are given below:

Name Designation No. of Equity Shares Held
1 Mr M V Gowtama Chairman and Managing Director 1,263
2 Mrs Anandi Ramalingam Director (Marketing) 1,263
3 Mr Koshy Alexander Director (Finance) 1,265
4 Mr Mahesh V Director (R&D) 1,265
5 Mr Vinay Kumar Katyal Director (Bangalore Complex) 1,263
6 Mr Shivakumaran K M Director (HR) 1,263
7 Mr S Sreenivas Company Secretary 1,263

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

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 have 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 2020 and of the profit of the Company for the year ended 31 March 2020;

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 internal financial controls were adequate and were operating effectively; and

f) the Directors have devised proper 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 Companys 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 2020 and date of signing of this Report.

Related Party Transactions

There were no materially significant related party transactions with the Companys 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 arms 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 Companys website 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 Corporate Social Responsibility (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 Companys website

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 School Education, Healthcare, Rural Development, Environmental Sustainability & Vocational Skill Development.

During the year 2019-20, DPE Guidelines for CSR Expenditure stipulate CPSEs to take up focussed CSR interventions on the common theme of School Education, Healthcare and Nutrition with preference being given to Aspirational Districts identified by NITI Aayog. Accordingly, around 53.49% of the CSR budget has been allocated for thematic CSR programmes. Further, CSR project that imparts technical & employability skill training to rural youth is 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 the financial year 2019-20 is annexed herewith as "Annexure-2”.

Statutory Auditors

Pursuant to Section 139(5) of the Companies Act, 2013, the Comptroller and Auditor General of India (C&AG) for the financial year 2019-20 appointed M/s SURI & CO., Chartered Accountants, Bengaluru, as Statutory Auditors of the Company 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. M/s J P Kapur & Uberai, Chartered Accountants, New Delhi, were appointed as Branch Auditors of Ghaziabad, Panchkula and Kotdwara Units. M/s Tungala & Co., Chartered Accountants, Machilipatnam were appointed as Branch Auditors for Machilipatnam Unit.

Cost Auditors

Your Company appointed M/s GNV & Associates, Cost Accountants, Bengaluru, as Cost Auditors of the Company for the financial year 2019-20 for conducting the audit of cost records of the Company. The Company maintains Cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013, in respect of its manufacturing activities.

Secretarial Auditors

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 2019-20 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 including one Woman Independent Director as per the requirements of the SEBI (LODR) 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

The Statutory Auditors Report on financial statements for the financial year 2019-20 is appended to annual report. The Comments of the Comptroller & Auditor General of India (C&AG) under section 143(6)(b) of the Companies Act, 2013 on the financial statement including consolidated financial statement along with Management replies on the comments of C&AG are appended at page no. 98 & 193 to the annual report.

Reporting of Frauds by Auditors

During the year, neither the Statutory Auditor nor the Secretarial Auditor have 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 needs to be mentioned in the Boards 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"

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, which forms part of this 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, which forms part of this report.

Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism named Whistle Blower Policy to deal with instance of fraud, mismanagement and unethical behaviour, 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 Directors of the Company under Section 149(7) of the Companies Act, 2013 and regulation 16(1)(b) of SEBI (LODR) Regulations, 2015 that the Independent Directors of the Company meet with the criteria of their Independence laid down in the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

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

In terms of Circular No. GSR 463(E) dated 5 June 2015 issued by Ministry of Corporate Affairs, Government of India, the Company being a Government Company engaged in Defence production is exempt from Section 186 of Companies Act, 2013.

Particulars of Employees and Related Disclosures

The provisions of Section 197 of the Companies Act and the relevant Rules regarding particulars of employees drawing remuneration in excess of the limits specified are exempted for Government Company, in view of the Gazette Notification No. GSR 463 (E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India.

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, which forms part of this report.

Composition of Audit Committee

The Audit Committee comprises of Independent Directors viz., Mr Mukka Harish Babu, Chairman of the Committee, Mr Surendra Singh Sirohi and Mr Sunil Kumar Kohli as its Members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.

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 the year 2018-19. In terms of Regulation 34 of the SEBI (LODR) Regulations, 2015 and DPE Guidelines, a Report on Corporate Governance along with Compliance Certificate issued by the Statutory Auditors of the Company is attached to this report as "Annexure-6".

Sustainability Report

The DPE Guidelines on Sustainable Development for CPSEs mandates 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 Companys efforts on "Sustainable Development" is attached to this Report as "Annexure-7”.

Business Responsibility Report

SEBI (LODR) Regulations, 2015 has mandated inclusion of Business Responsibility Report ("BR Report") as part of the Annual Reports for the top 1000 listed entities based on market capitalization. In terms of Regulation 34(2)(f) of Listing Regulations, a Business Responsibility Report (BRR) for the year 2019-20 describing the initiatives taken by the Company on environmental, social and governance perspective, in the format as specified by SEBI from time to time 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 Central Public Sector Enterprise (CPSE).


Your Directors place on record their deep appreciation and gratitude for the valuable support received from all the customers, particularly the Defence Services & the para-military forces and look forward for 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 and Development Organisation (DRDO) and the various Research Laboratories under DRDO, particularly in thejoint development programmes and new products. Your Directors express their sincere thanks to the Comptroller and Auditor General of India, Statutory Auditors, Branch Auditors, Cost Auditors, Secretarial Auditors, Companys 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 September 2020 Chairman & Managing Director