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Notes to Accounts of Bharat Electronics Ltd.

Mar 31, 2016

1) As per the requirement of Schedule III to the Companies Act, 2013, the Operating Cycle has been determined at Strategic Business Unit (SBU) / Unit level, as applicable.

2) The Company has changed the following accounting policies with effect from FY 2015-16

a) Fixed Assets, Capital Work in Progress and Intangible Assets Under Development (Policy No. 4)

b) Depreciation / Amortisation (Policy No 5).

c) Research & Development Expenditure (Policy No 7) .

d) Technical Know-How (Policy No 17).

The above accounting policies have been changed for specifying the policy for recognition of internally generated

Intangible Assets and related issues.

The financial impact of the change in above accounting policies is as follows :

a) Decrease in expenditure by Rs. 18653.00

b) Increase in "Intangible Assets under Development" by Rs. 9546.40

c) Increase in Inventory (WIP) by Rs. 9106.60

3) The Company has analysed indications of impairment of assets of each geographical composite manufacturing unit considered as Cash Generating Units (CGU). On the basis of assessment of internal and external factors, none of the Unit has found indications of Impairment of its Assets and hence no provision is considered necessary.

4) a) The Company has been sanctioned working capital limit of Rs. 290,000 by Consortium Bankers (SBI Lead Bank). The sanctioned limit includes a sub limit of Rs. 20,000 of fund based limit (interchangable with non fund based LC limits).

b) The interest rate payable on fund based limit is linked to SBI Base Rate plus 0.25%. (Interest rate payable as on 31.03.2016 is 9.55% p.a.).

c) The amount utilised is repayable on demand. Utilisation as on 31.03.2016 is NIL ( NIL).

d) The above sanction limit is secured by hypothecation of Inventories and Trade Receivables.

5) The Company being a Defence manufacturing company, has been granted exemption by Ministry of Corporate Affairs vide Notification No:2437 (E) dated 04 September 2015 from the following disclosures required under Para 5 of Part II to Schedule III of the Companies Act, 2013 (under General Instructions for preparation of Statement of Profit and Loss) under section 129(6) of the Companies Act, 2013 in view of the sensitive nature of the information. Accordingly, the following details under Para 5 of Part II to Schedule III of the Companies Act, 2013 are not disclosed :

6) Letters requesting confirmation of balances have been sent in respect of Trade Receivables, Trade Payables, Advances and Deposits. Wherever replies have been received, reconciliation is under process and provisions / adjustments will be made wherever considered necessary.

7) In respect of Labour matters, as the matters are yet to be adjudicated, the liability, if any, is not ascertainable. However, such liability is not expected to be material.

8) (a) "Excise Duty" which is paid during the year in respect of turnover is shown as a deduction from Turnover (Gross) in the Statement of Profit and Loss . "Excise Duty - Others" which is included in Note No. 27 - "Other Expenses" represents incremental provision of Excise Duty on Finished Goods, Excise Duty paid on Sale of Scrap and Others.

(b) Consequent to issue of Notification no. 23/2015 dated 30.04.2015, certain category of Defence Sales have been become excisable with effect from 01.06.2015, leading to increase in excise duty levied as compared to previous year.

9) Ministry of Corporate Affairs has vide Notification no. 463 (E) dated 5 June 2015 exempted the Companies engaged in Defence Productions from the requirement of Segment Reporting.

10) The Value of Retention Sales (i.e., Goods retained with the Company at the Customers'' request and at their risk) included in Gross Turnover during the year is Rs. 52,147.40 (Rs. 1,01,116.92).

11) Related Party Disclosure :

(a) The related parties and their relationship with the Company are as under :

- Subsidiary Companies:

BEL Optronic Devices Ltd.(BELOP) - Equity Holding 100% (w.e.f. 30.07.2015); and BEL-THALES Systems Ltd. - Equity Holding 74.00%;

- Joint Venture Companies :

GE BE Private Ltd. - Equity Holding 26.00%;

BEL Multitone Private Ltd has been dissolved with effect from 15.09.2015 [Refer note no 31 (17)].

(b) (i) The amount of Rs. 15,624.00 received by the Company from MoD, upto 31.03.2013, on behalf of BELOP (out of total receivable of Rs. 26,040.00) towards funding of ToT cost of XD-4 II Tubes, being acquired by BELOP (Subsidiary) from PHOTONIS France S.A.S., has been passed on to BELOP as on 31.03.2014.

(ii) The Company has entered into an Agreement with BELOP in April, 2013 to temporarily fund the amount of Rs. 10,416.00 (Rs. 26,040.00 less Rs. 15,624.00) for enabling BELOP to make payment towards ToT for XD-4 II Tubes, pending receipt of balance amount from MoD. As on 31.03.2016, an amount Rs. 9,357.13 (Rs. 9357.13) has been paid to BELOP, out of which an amount of Rs. 6400.63 (Rs. 6,176.69) has been received from MoD. The balance amount ofRs. 2956.49 (Rs. 3180.44) has been shown under Other Non-Current Assets (Refer Note 16).

As per the Agreement, an amount of Rs. 304.40 (Rs. 280.48) has been recovered during the financial year from BELOP towards the cost of funds in the form of Price Reduction.

(c) Consequent to acquisition of 1,32,000 equity share held by Specified Undertaking of Unit Trust of India on 30 July 2015, BELOP has become 100 % Subsidiary of the BEL.

(d) The Company has entered into a agreement with BELOP in July 2015 to temporarily fund its Working Capital requirement to the maximum extent of Rs. 5000 which has been fully disbursed as on 31.03.2016. As per the terms and conditions : (i) The principal amount will be repaid in 12 equal installments with effects from April, 2016.

(ii) Interest will be charged on the outstanding loan amount, on monthly basis, at BEL''s rate of yield on its deposits.

(e) Management Contracts including deputation of Employees :

One Official of BEL has been deputed to BELOP (Subsidiary) and Five Officials have been deputed to BEL-THALES Systems Limited (Subsidiary) and their Salary and Other Costs is paid by BELOP and BEL-THALES respectively during the year as per terms and conditions of employment.

(f) The key management personnel & their remuneration details are as follows :

The total salary including other benefits drawn by the key management personnel during the year 2015-16 is Rs. 348.61 (Rs. 305.52) as detailed below :

12) The Honorable Karnataka High Court vide its Order no OLR 19/2015 dated 6 November 2015 has passed its final order stating that the BEL Multitone Private Ltd be dissolved with effect from 15.09.2015.

13) Pursuant to the announcement of the ICAI requiring the disclosure of "Foreign Exchange Exposure", the major currency- wise exposure as on 31 March 2016 is given below. (Previous year figures are shown in brackets).

14) Chennai Unit was affected by floods during December 2015. Insurance policy taken by the company with United India Insurance Company Limited covers flood related losses. Settlement of claims by the Insurance Company is under process. The above incident has no material impact on the operation of Unit/Company. Also Refer Note no.28.

15) Disclosure relating to CSR Expenditure

a) Gross amount required to be spent by the Company during the FY 2015-16 is Rs. 2522.94 (Rs. 2303.93)

b) Amount spent during the FY 2015-16 :

16) Previous year''s figures have been regrouped/reclassified wherever necessary. Figures in brackets relate to Previous Year.


Mar 31, 2015

1. LONG TERM PROVISIONS

i. The amount of Liability on long term compensated absences has been bifurcated between current and non current based on the report of Actuary.

ii. As per the provisions of Accounting Standard 15 (R), the following information is disclosed in respect of Long Term Compensated Absences :

The Company has a Long Term Compensated Absence Scheme for its employees, which is a Non-Funded Scheme. The employees of the Company are entitled to two types of Long Term Compensated Absences : Annual Leave (AL) & Half Pay Leave (HL) in case of Executives and Annual Leave (AL) & Sick Leave (SL) in case of Non-Executives . The Scheme provides compensation to employees against the unavailed Leave (AL & HL in case of Executives and AL & SL in case of Non-Executives) on attaining the age of superannuation, VRS, or death. AL can also be encashed during service or at the time of resignation.

iii. As per the provisions of Accounting Standard 15 (R), the following information is disclosed in respect of BERECHS :

The Company has a contributory health scheme for its retired employees "BEL Retired Employees' Contributory Health Scheme" (BERECHS), which is a non-funded scheme. The primary objective of the scheme is to provide medical facilities to employees retiring on attaining the age of superannuation, or on VRS. Benefits under the Scheme shall be available to the employees who become members and their spouses only. The Company takes insurance cover for inpatient treatment. In addition to the annual insurance premium, the Company bears 60% of the medicine cost and 75% of the cost of diagnostic tests for outpatient treatment and for the treatment of specified diseases, the Company bears the full cost of treatment, over and above the insurance coverage.

iv. During the year the Company has recognised an amount of Rs. 7,108.13 (Rs. 6,743.35) towards contribution to Employees Provident Fund and Pension Schemes in the Statement of Profit and Loss. The Guidance on Implementing AS 15 (Revised) issued by the Institute of Chartered Accountants of India states that provident funds setup by employers that guarantee a specified rate of return and which require interest shortfalls to be met by the employer would be defined benefit plans in accordance with the requirements of paragraph 26(b) of AS 15(R) and actuarially valued.

Pursuant to the Guidance Note, the Company has determined on the basis of Actuarial Valuation carried out as at 31 March 2015, that there is no liability towards the interest shortfall on valuation date under para 55 and 59 of AS 15 (R) (having regard to terms of plan that there is no compulsion on the part of the Trust to distribute any part of the surplus, if any, by way of additional interest on PF balances).

2. Gratuity Scheme

As per the provisions of Accounting Standard 15 (R), the following information is disclosed in respect of Gratuity :

The Company has a Gratuity Scheme for its employees, which is a funded plan. Every year, the Company remits funds to the Gratuity Trust to the extent of shortfall of the assets over the fund obligations, which is determined through actuarial valuation. As per the Gratuity Scheme, gratuity is payable to an employee on the cessation of his employment after he has rendered continuous service for not less than five years in the Company. For every completed year of service or part thereof in excess of six months, the Company shall pay gratuity to an employee at the rate of fifteen days salary based on the last drawn basic & dearness allowance.

3. Best Estimate of Contribution to be paid

The best estimate of contribution to be paid towards Gratuity during the annual period beginning after the Balance Sheet is Rs. 1,947.52 (Rs. Nil). In case of Provident Fund, there is no actuarial liability assessed for shortfall in interest as at the year end.

4. For BERECHS & Long Term Compensated Absences, Refer Note 5 for disclosure details.

i) Raw Materials and Components include Rs. 5,334.61 (Rs. 4,176.12) being materials with sub-contractors, out of which Rs. 56.55 (Rs. 50.47) of materials is subject to confirmation and reconciliation. Against Rs. 56.55 (Rs. 50.47), an amount of Rs. 49.46 (Rs. 35.58) has been provided for. The impact, if any, on consequent adjustment for the balance amount is considered not material.

ii) Stock verification discrepancies for the year are as follows :

Shortages of Rs. 163.54 (Rs. 114.26) and surplus of Rs. 126.15 (Rs. 71.01). Pending reconciliation, an amount of Rs. 66.10 (Rs. 56.47) has been provided for.

iii) Valuation of Inventories has been made as per Company's Accounting Policy. (Refer Accounting Policy 10).

iv) a. The United Nations Climate Change Secretariat has granted 15,856 (15,856) TON CO2EQ Carbon Credit for the 2.5MW BEL Grid Connected Wind Power Project at Davangere District, Karnataka for the verification period from 05.11.2007 to 31.03.2012. The carbon Credits are included under Finished Goods at a value of Rs. 1.90 (Rs. 1.90). The CER is valued at cost as required by Guidance Note on CER issued by ICAI. b. CER under Certification : Nil (Nil) CERs.

5. GENERAL NOTES TO ACCOUNTS

1) As per the requirement of Schedule III to the Companies Act, 2013, the Operating Cycle has been determined at Strategic Business Unit (SBU) / Unit level, as applicable.

2) The Company has changed the following Accounting Policies with effect from FY 2014-15 :

A) Basis of Accounting (Policy No. 1) - to take cognizance of the Companies Act, 2013.

B) Revenue Recognition (Policy No. 3) - to bring clarity on Accounting Policy relating to recognition of Service Income.

C) Depreciation / Amortisation (Policy No. 5) - to take cognizance of Schedule II to the Companies Act, 2013.

The financial impact of the change in above Accounting Policies during the Financial Year is as follows :

NIL in respect of A & B above and reduction in expenditure by Rs. 145.29 in respect of C above.

3) The Company has analysed indications of impairment of assets of each geographical composite manufacturing unit considered as Cash Generating Units (CGU). On the basis of assessment of internal and external factors, none of the Unit has found indications of Impairment of its Assets and hence no provision is considered necessary.

4) A) The Company has been sanctioned working capital limit of Rs. 290,000 by Consortium Bankers (SBI Lead Bank). The sanctioned limit includes a sub limit of Rs. 20,000 of fund based limit (interchangable with non fund based LC limits).

B) The interest rate payable on fund based limit is linked to SBI Base Rate plus 0.40%. (Interest rate payable as on 31 March 2015 is 10.40% p.a.).

C) The amount utilised is repayable on demand. Utilisation as on 31 March 2015 is NIL ( NIL).

D) The above sanction limit is secured by hypothecation of Inventories and Trade Receivables.

6. Contingent Liabilities :

Particulars 2014 - 15 2013 - 14

Claims not acknowledged as debts 17,681.39 17,930.62

Outstanding Letters of Credit 31,648.37 29,146.53

Others 523.35 560.65

Provisional Liquidated Damages upto 31 March on unexecuted customer orders 10,954.67 15,736.49 where the delivery date has expired Company has offered MTNL to get the Convergent Billing Project completed on BEL's risk and cost basis. Liability of the Company in this regard is not ascertain- able at this stage.

7. Letters requesting confirmation of balances have been sent in respect of Trade Receivables, Trade Payables, Advances and Deposits. Wherever replies have been received, reconciliation is under process and provisions / adjustments will be made wherever considered necessary.

8. In respect of Labour matters, as the matters are yet to be adjudicated, the liability, if any, is not ascertainable. However, such liability is not expected to be material.

9. "Excise Duty" which is paid during the year in respect of turnover is shown as a deduction from Turnover (Gross) in the Statement of Profit and Loss. "Excise Duty - Others" which is included in Note No. 27 - "Other Expenses" represents in- cremental provision of Excise Duty on Finished Goods, Excise Duty paid on Sale of Scrap and Others.

10. Electronic products primarily to Defence Services and hence, it would not be in public interest for the Company to present segment information. For similar reasons, the Company is being granted exemption from publication in the Annual Accounts, certain disclosures (Refer Note 30(6)). The SEBI has also granted exemption, for these reasons, to the Company from publication of segment information required under Accounting Standard 17 (AS 17) in quarterly unaudited financial results. Hence, Segment information required under AS 17 is not disclosed. Such non disclosure has no financial effect.

11. The Value of Retention Sales (i.e., Goods retained with the Company at the Customers' request and at their risk) included in Gross Turnover during the year is Rs. 1,01,116.92 (Rs. 42,539.00).

12. Related Party Disclosure :

(a) The related parties and their relationship with the Company are as under :

* Subsidiary Company viz.,

BEL Optronic Devices Ltd. - Equity Holding 92.79%; and BEL-THALES Systems Ltd. - Equity Holding 74.00%;

* Joint Venture Companies :

GE BE Private Ltd. - Equity Holding 26.00%; and BEL Multitone Private Ltd. - Equity Holding 49.00% *

(b) (i) The amount of Rs. 15,624.00 received by the Company from MoD, upto 31.03.2013, on behalf of BELOP (out of total receivable of Rs. 26,040.00) towards funding of ToT cost of XD-4 II Tubes, being acquired by BELOP (Subsidiary) from PHOTONIS France S.A.S., has been passed on to BELOP as on 31.03.2014.

(ii) The Company has entered into an Agreement with BELOP in April, 2013 to temporarily fund the amount of Rs. 10,416.00 (Rs. 26,040.00 less Rs. 15,624.00) for enabling BELOP to make payment towards ToT for XD-4 II Tubes, pending receipt of balance amount from MoD. As on 31 March 2015, an amount Rs. 9,357.13 (Rs. 8,404.88) has been paid to BELOP, out of which an amount of Rs. 6,176.69 (Rs. 6,176.69) has been received from MoD. The balance amount of Rs. 3,180.44 (Rs. 2,228.19) has been shown under Other Non-Current Assets (Refer Note 16).

As per the Agreement, an amount of Rs. 280.48 (PY Rs. 198.62) has been recovered during the financial year from BELOP towards the cost of funds in the form of Price Reduction.

(c) Management Contracts including deputation of Employees :

One Official of BEL has been deputed to BEL Optronic Devices Ltd (Subsidiary) and Four Officials have been deputed to BEL-THALES Systems Limited (Subsidiary) and their Salary and Other Costs is paid by BELOP and BEL-THALES respectively during the year as per terms and conditions of employment.

13. BEL Multitone Pvt. Ltd. (Joint Venture Company) was under liquidation consequent to Special Resolution passed by its Members on 25.11.2013 for Members' Voluntary winding up. As on 31 March 2015, all the assets of the Company have been disposed off and all dues settled. Approval for closure of winding up procedure has been accorded by its Members at General Meeting held on 31 March 2015. The liquidator has sent the report to Registrar of Companies & Official Liquidator for issuance of winding up order.

14. Previous year's figures have been regrouped/reclassified wherever necessary. Figures in brackets relate to Previous Year.


Mar 31, 2014

NOTE - 1

LONG TERM PROVISIONS

ii. The amount of Liability on long term compensated absences has been bifurcated between current and non current based on the report of Actuary.

iii. As per the provisions of Accounting Standard 15 (R), the following information is disclosed in respect of Long Term Compensated Absence:

The Company has a Long Term Compensated Absence Scheme for its employees, which is a Non-Funded Scheme. The employees of the Company are entitled to two types of Long Term Compensated Absences: Annual Leave (AL) & Half Pay Leave (HL) in case of Executives and Annual Leave (AL) & Sick Leave (SL) in case of Non-Executives . The Scheme provides for compensation to employees against the unavailed Leave (AL & HL in case of Executives and AL & SL in case of Non-Executives) on attaining the age of superannuation, VRS, or death. AL can also be encashed during service or at the time of resignation.

The following table summarises the components of net benefit expense recognised in the Statement of Profit & Loss and amount recognised in the Balance Sheet for the plan as furnished in the disclosure Report provided by the Actuary:

v. As per the provisions of Accounting Standard 15 (R), the following information is disclosed in respect of BERECHS :

The Company has a contributory health scheme for its retired employees "BEL Retired Employees'' Contributory Health Scheme" (BERECHS), which is a non-funded scheme. The primary objective of the scheme is to provide medical facilities to employees retiring on attaining the age of superannuation, or on VRS. Benefits under the Scheme shall be available to the employees who become members and their spouses only. The Company takes insurance cover for inpatient treatment. In addition to the annual insurance premium, the Company bears 60% of the medicine cost and 75% of the cost of diagnostic tests for outpatient treatment and for the treatment of specified diseases, the Company bears the full cost of treatment, over and above the insurance coverage.

The following table summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the plan as furnished in the disclosure report provided by the Actuary:

iii. Pension Scheme

Pension Scheme has been introduced for Executives (including TC Personnel) with effect from 01.01.2007 subsequent to receipt of approval for the Scheme from MoD. The Company has set up a Trust under the name of "Bharat Electronics Limited Superannuation (Pension) Trust" to administer the Scheme. Against a provision of Rs. 11,807.01 as on 31.03.2013, an amount of Rs. 9,298.83 has been ascertained as payable to the Trust for the period from 01.01.2007 to 31.03.2013. The balance amount of Rs. 2,508.18 has been withdrawn/adjusted during the FY 2013-14. Amount of Rs. 10,617.92 (including contribution of Rs. 2,403.45 for FY 2013-14) has been remitted to the Trust during FY 2013-14. The outstanding liability of Rs. 1,134.75 represents Rs. 1,122.17 in respect of contribution to be made towards Retired Executives and Rs. 12.58 in respect of Existing Executives is shown under Other Current Liabilities.

iv. Gratuity Scheme

As per the provisions of Accounting Standard 15 (R), the following information is disclosed in respect of Gratuity:

"The Company has a Gratuity Scheme for its employees, which is a funded plan. Every year, the Company remits funds to the Gratuity Trust to the extent of shortfall of the assets over the fund obligations, which is determined through actuarial valuation. As per the Gratuity Scheme, gratuity is payable to an employee on the cessation of his employment after he has rendered continuous service for not less than 5 (five) years in the Company. For every completed year of service or part thereof in excess of six months, the Company shall pay gratuity to an employee at the rate of 15 (fifteen) days salary based on the last drawn basic & dearness allowance. The following table summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the plan as furnished in the Disclosure Report provided by the actuary:"

v. Experience adjustments for funded schemes

The disclosure with respect to paragraph 120 (n) of AS-15(R) towards experience adjustments are being made for funded schemes viz., Gratuity. [As long term compensated absence and BERECHS are not funded, such disclosure is not required].

vi. Best Estimate of Contribution to be paid

The best estimate of contribution to be paid towards Gratuity during the annual period beginning after the Balance Sheet is Rs. Nil (Rs. 2,196.45). In case of Provident Fund, there is no actuarial liability assessed for shortfall in interest as at year end.

vii. For BERECHS & Long Term Compensated Absence, Refer Note 5 for disclosure details.

FIXED ASSETS-TANGIBLE

i) a) In respect of Freehold Land pertaining to Machilipatnam Unit admeasuring 0.516 acres valuing Rs. 3.75 (0.516 acres valuing Rs. 3.75), execution of title/sale Deed by the appropriate authorities is pending. Pending finalisation of formal deeds, no provision towards registration and other costs have been made.

b) Deeds containing the terms of transfer / grant of land from State Governments / State Undertakings have not been finalised in respect of 86.78 acres valuing Rs. 181.63 (86.78 acres valuing Rs. 181.63) pertaining to Panchkula Unit. Out of this, title in respect of land measuring 0.300 acres (0.962 acres) is under litigation. Pending finalisation of formal deeds, no provision towards registration and other costs have been made.

c) Pending execution of title/sale deeds and handing over of physical possession of land allotted to BEL Hyderabad Unit by Andhra Pradesh Industrial Infrastructure Corporation (APIIC) in respect of land admeasuring 5.60 acres (5.60 acres) in Mallapur, Hyderabad and the matter being under litigation, no provision towards registration and other cost has been made in the books of accounts. Cost of land paid to APIIC amounting to Rs. 65.12 (Rs. 65.12) is included in Long Term Loans & Advances.

d) Based on the Memorandum of Understanding reached with the Defence authorities, expenditure on civil works was incurred on land allotted to BEL for setting up of the Hyderabad Unit. Pending finalisation of the terms and conditions by the appropriate authorities, the cost of land measuring 25.11 acres (25.11 acres) has not been accounted in the books of accounts.

e) Land acquired free of cost from the Government in some units has been accounted at a notional value by corresponding credit to Capital Reserve.

f) The Company has installed Windmill Generator at two locations. The leasehold land of the Windmill Generator-I is capitalised in the year 2007-08 at the nominal value of Rs. 5 (Five Rupees only) as the upfront lease cost is Nil. The leasehold land of Windmill Generator-II is capitalised in the year 2007-08 at the cost of Rs. 114. In both the cases, the Lease Agreement for the land is pending finalisation.

g) Freehold land of Pune Unit measuring 1.10 acres (Cost Rs. 0.56) is handed over to Pimpri-Chinchwad Municipal Corporation during the FY 2013-14 for the purpose of road widening. Compensation of Rs. 434.69 has been received in FY 2012-13 based on the rates fixed by Moolya Nirdharan Suchi of Government of Maharashtra.

h) Approval for extension of lease period from DRDO in respect of Land admeasuring 26.994 acres (Pune Unit) is under process.

ii) a) In pursuance of the Companies (Amendment) Act, 1988 and Schedule XIV thereof, increased rates of depreciation on straight line method in accordance with the Schedule XIV have been adopted wherever required, only on additions on or after 01.04.1987.

b) Wherever the rates of depreciation applied prior to 01.04.1987 are higher than the rates specified in Schedule XIV to the Companies Act, 1956, they have been continued. However, additions forming part of existing machines are depreciated on the same basis as the original machines.

c) Depreciation for multiple shifts is charged on block of assets for the full year.

NOTE - 30

GENERAL NOTES TO ACCOUNTS

1) As per the requirement of Schedule VI to the Companies Act, 1956, the Operating Cycle Period has been determined at individual contract level.

2) The Company has changed the following Accounting Policies with effect from FY 2013-14:

A) Basis of Accounting (Policy No. 1) - to take cognizance of the Companies Act, 2013 (to the extent applicable)

B) Foreign Currency Transactions (Policy No. 14) - to take cognizance of the Foreign Exchange Risk Management Policy which has been introduced with effect from FY 2013-14.

C) Employee Benefits (Policy No. 15) - to take cognizance of introduction of Half Pay Leave in respect of Executives. The financial impact of the change in above Accounting Policies during the Financial Year is as follows: NIL in respect of A & B above and an additional expenditure of Rs. 1,123.90 in respect of C above.

3) The Company has analysed indications of impairment of assets of each geographical composite manufacturing unit considered as Cash Generating Units (CGU). On the basis of assessment of internal and external factors, none of the Unit has found indications of Impairment of its Assets and hence no provision is considered necessary.

4) A) The Company has been sanctioned working capital limit of Rs. 290,000 by Consortium Bankers (SBI Lead Bank). The sanctioned limit includes a sub limit of Rs. 20,000 of fund based limit (interchangeable with non fund based LC limits).

B) The interest rate payable on fund based limit is linked to SBI Base Rate plus 0.40%. (Interest rate payable as on 31.03.2014 is 10.40% p.a.).

C) The amount utilised is repayable on demand. Utilisation as on 31.03.2014 is NIL (NIL).

D) The above sanction limit is secured by hypothecation of Inventories and Trade Receivables.

5) Contingent Liabilities:

Particulars 2013 - 14 2012 - 13

Claims not acknowledged as debts 17,930.62 19,111.76

Outstanding Letters of Credit 29,146.53 22,838.78

Others 560.65 1,093.66

Provisional Liquidated Damages upto 31 March on unexecuted customer orders where 15,736.49 11,152.96 the delivery date has expired

Company has offered MTNL to get the Convergent Billing Project completed on BEL''s risk and cost basis. Liability of the Company in this regard is not ascertainable at this stage.

6) Letters requesting confirmation of balances have been sent in respect of Trade Receivables, Trade Payables, Advances and Deposits. Wherever replies have been received, reconciliation is under process and provisions / adjustments will be made wherever considered necessary.

7) In respect of Labour matters, as the matters are yet to be adjudicated, the liability, if any, is not ascertainable. However, such liability is not expected to be material.

8) "Excise Duty" which is paid during the year in respect of turnover is shown as a deduction from Turnover (Gross) in the State- ment of Profit and Loss . "Excise Duty - Others" which is included in Note No. 27 - "Other Expenses" represents incremental provision of Excise Duty on Finished Goods, Excise Duty paid on Sale of Scrap and Others.

9) The Company is engaged in manufacture and supply of strategic electronic products primarily to Defence Services and hence, it would not be in public interest for the Company to present segment information. For similar reasons, the Company has been granted exemption from publication in the Annual Accounts, the quantitative particulars required under Schedule VI to the Companies Act, 1956. The SEBI has also granted exemption, for these reasons, to the Company from publication of segment information required under Accounting Standard 17 (AS 17) in quarterly unaudited financial results. Hence, Segment information required under AS 17 is not disclosed. Such non disclosure has no financial effect.

10) The Value of Retention Sales (i.e., Goods retained with the Company at the Customers'' request and at their risk) included in Gross Turnover during the year is Rs. 42,539.00 (Rs. 9,073.00).

11) Related Party Disclosure:

(a) The related parties and their relationship with the Company are as under:

- Subsidiary Company viz., BEL Optronic Devices Ltd. (Equity Holding 92.79%) ;

- Joint Venture Companies :

GE BE Private Ltd. (Equity Holding 26%); and BEL Multitone Private Ltd. (Equity Holding 49%)

(b) (i) The amount of Rs. 15,624.00 received by the Company from MoD, upto 31.03.2013, on behalf of BELOP (out of total receivable ofRs. 26,040.00) towards funding of ToT cost of XD-4 II Tubes, being acquired by BELOP (Subsidiary) from PHOTONIS France S.A.S., has been passed on to BELOP as on 31.03.2014.

(ii) The Company has entered into an Agreement with BELOP in April, 2013 to temporarily fund the amount of Rs. 10,416.00 (Rs. 26,040.00 less Rs. 15,624.00) for enabling BELOP to make payment towards ToT for XD-4 II Tubes, pending receipt of balance amount from MoD. As on 31.03.2014, an amount Rs. 8,404.88 has been paid to BELOP, out of which an amount of Rs. 6,176.69 has been received from MoD. The balance amount of Rs. 2,228.19 has been shown under Other Non-Current Assets (Refer Note 16). As per the Agreement, an amount of Rs. 198.62 has been recovered from BELOP towards the cost of funds in the form of Price Reduction during the FY 2013-14.

(c) Management Contracts including deputation of Employees :-

Two Officials of BEL have been deputed to BEL Optronic Devices Ltd. (Subsidiary) and their Salary and Other Costs is paid by BELOP during the year as per terms and conditions of employment.

12) BEL Multitone Pvt. Ltd. (Joint Venture Company) is under liquidation consequent to Special Resolution passed by its Members on 25.11.2013 for Members'' Voluntary winding up.

13) Previous year''s figures have been regrouped / reclassified wherever necessary. Figures in brackets relate to previous year.


Mar 31, 2013

1) The Operating Cycle Period, as per Revised Schedule VI requirement has been determined at individual contract level.

2) The Company has analysed indications of impairment of assets of each geographical composite manufacturing unit considered as Cash Generating Units (CGU). On the basis of assessment of internal and external factors, none of the Unit has found indications of Impairment of its Assets and hence no provision is considered necessary.

3) a) The Company has been sanctioned working capital limit of Rs. 1,80,000 by Consortium Bankers (SBI Lead Bank). The sanctioned limit includes a sub limit of Rs. 20,000 of fund based limit (interchangeable with non fund based LC limits).

b) The interest rate payable on fund based limit is linked to SBI Base Rate plus 1%. (Interest rate payable as on 31.03.2013 is 10.70% p.a.).

c) The amount utilised is re-payable on demand. Utilisation as on 31.03.2013 is NIL ( NIL).

d) The above sanction limit is secured by hypothecation of Inventories and Trade Receivables.

4) Letters requesting confirmation of balances have been sent in respect of Trade Receivables, Trade Payables, Advances and Deposits. Wherever replies have been received, reconciliation is under process and provisions / adjustments will be made wherever considered necessary.

5) Liability, if any, in respect of labour matters under dispute before various judicial authorities is not ascertainable, but is expected to be not material.

6) "Excise Duty" which is paid during the year in respect of turnover is shown as a deduction from turnover (Gross) in the Statement of Profit and Loss. "Excise Duty - Others" which is included in Note No. 28 - "Other Expenses" represents incremental provision of Excise Duty on Finished Goods, Excise Duty on Sale of Scrap, etc.

7) The Company is engaged in manufacture and supply of strategic electronic products primarily to Defence Services and hence, it would not be in public interest for the Company to present segment information. For similar reasons, the Company has been granted exemption from publication in the Annual Accounts, the quantitative particulars required under Schedule VI to the Companies Act, 1956. The SEBI has also granted exemption, for these reasons, to the Company from publication of segment information required under Accounting Standard 17 (AS 17) in quarterly unaudited financial results. Hence Segment information required under Accounting Standard 17 (AS 17) is not disclosed. Such non-disclosure has no financial effect.

8) Trade Receivables as on 31.03.2013 includes Rs. 14,595.66 (P.Y. Rs. 14,615.13) which has not been billed to MTNL pending completion of installation and commissioning activity in respect of Convergent Billing Project.

9) Related Party Disclosure:

(a) The related parties and their relationship with the Company are as under:

- Subsidiary Company viz., BEL Optronic Devices Ltd. (Equity Holding 92.79%);

- Joint Venture Companies:

GE BE Private Ltd. (Equity Holding 26%); and BEL Multitone Private Ltd. (Equity Holding 49%)

(b) During the Financial Year 2012-13, BEL has received an amount of Rs. 15624.00 from MoD, on behalf of BEL Optronic Devices Ltd (Subsidiary), towards funding of ToT cost of XD-4 II Tubes being acquired by BEL Optronic Devices Ltd (Subsidiary) from PHOTONIS France S.A.S. Out of the above, an amount of Rs. 15489.00 has been passed on to BELOP during the F.Y. 2012-13.

(c) Management Contracts including deputation of Employees:-

One Official (Manager) of BEL has been deputed to BEL Optronic Devices Ltd (Subsidiary) and his salary, etc. is paid by BELOP during the year as per terms and conditions of employment.

(d) The key management personnel & their remuneration details are as follows:

The total salary including other benefits drawn by the key management personnel as detailed below during the year 2012-13 is Rs. 238.62 (Rs. 267.55 ) as detailed below:

10) Previous year''s figures have been regrouped / reclassified wherever necessary. Figures in brackets relate to previous year.


Mar 31, 2012

1) The operating cycle period, as per Revised Schedule VI requirement has been determined at individual contract level.

2) The Company has made modifications to the following Accounting Policies with effect from 2011 - 12 and onwards mainly to incorporate the change in terminologies and regrouping requirements under Revised Schedule VI as compared to Pre - revised Schedule VI.

a) Fixed Assets, Capital Work in Progress and Intangible Assets under development [previously "Fixed Assets, Capital Work in Progress] (Policy No. 4)

b) Research & Development Expenditure (Policy No. 7)

c) Government Grants (Policy No. 8)

d) Investments (Policy No. 9)

e) Trade Receivables and Other Receivables [previously "Sundry Debtors"] (Policy No. 11)

f) Income Tax (Policy No. 12)

g) Foreign Currency Transactions (Policy No. 14)

h) Technical Know How (Policy No. 17)

All the above modifications have no impact on profit for the year nor are they expected to have a material effect in later years.

3) a) The Company has been sanctioned working capital limit of Rs. 1,80,000 by Consortium Bankers (SBI Lead Bank). The sanctioned limit includes a sub limit of Rs. 20,000 of fund based limit (interchangeable with non fund based LC limits).

b) The interest rate payable on fund based limit is linked to SBI Base Rate plus 1%. (Interest rate payable as on 31.03.2012 is 11% p.a.).

c) The amount utilised is re-payable on demand. Utilisation as on 31.03.2012 is NIL ( NIL)

d) The above sanction limit is secured by hypothecation of Inventories and Trade Receivables.

4) Letters requesting confirmation of balances have been sent in respect of Trade Receivables, Trade Payables, Advances and Deposits. Wherever replies have been received, reconciliation has been done and provisions / adjustments have been made wherever considered necessary.

5) Liability, if any, in respect of labour matters under dispute before various judicial authorities is not ascertainable, but is expected to be not material.

6) "Excise Duty" which is paid during the year in respect of turnover is shown as a deduction from turnover (Gross) in the Statement of Profit and Loss. "Excise Duty - Others" which is included in Note No. 28 - "Other Expenses" represents incremental provision of Excise Duty on Finished Goods, Excise Duty on Sale of Scrap, etc.

7) The Company is engaged in manufacture and supply of strategic electronic products primarily to Defence Services and hence, it would not be in public interest for the Company to present segment information. For similar reasons, the Company has been granted exemption from publication in the annual accounts, the quantitative particulars required under Schedule VI to the Companies Act, 1956. The SEBI has also granted exemption, for these reasons, to the Company from publication of segment information required under Accounting Standard 17 (AS 17) in quarterly unaudited financial results. Hence Segment information required under Accounting Standard 17 (AS 17) is not disclosed. Such non-disclosure has no financial effect.

8) Trade Receivables as on 31.03.2012 includes Rs. 14,615 which has not been billed to MTNL pending completion of installation and commissioning activity in respect of Convergent Billing Project.

9) Related Party Disclosure :

(a) The related parties and their relationship with the Company are as under :

- Subsidiary Company viz., BEL Optronic Devices Ltd., (Equity Holding 92.79% );

- Joint Venture Companies:

GE BE Private Ltd., (Equity Holding 26% ); and BEL Multitone Private Ltd., (Equity Holding 49% )

(b) Management Contracts including deputation of Employees : Two Officials (Managers) of BEL have been deputed to BELOP (Subsidiary) and their salary, etc., is paid by BELOP during the year as per terms and conditions of employment. As on 31 March 2012, One Official (Manager) is on deputation with BELOP.

10) The Company has prepared these financial statements as per the format prescribed by Revised Schedule VI to the Companies Act, 1956 issued by Ministry of Corporate Affairs. Previous year's figures have been regrouped / reclassified to conform to the classification required by the Revised Schedule VI. Previous year's figures have also been regrouped / reclassified wherever otherwise considered necessary. Figures in brackets relate to previous year.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on Capital Account and not provided for amounts to Rs. 15,438.01 (Rs. 11,524.66).

2. "The MCA vide its Notification No. S.O. 301(E) dated 08.02.2011 has exempted companies producing "Defence Equipments" from compliance with the following provisions contained in Part II of Schedule VI to the Companies Act, 1956, as amended" :

Paragraph Particulars

3(i)a Details regarding sales in respect of each class of goods with quantities thereof.

3(ii)(a)(1) Value of raw materials consumed giving item- wise break-up & quantities thereof.

3(ii)(a)(2) Opening and closing stock of goods produced giving break up in respect of each class of goods with quantities thereof.

3(ii)(d) Value of Opening and Closing stock of goods, purchases, sales & consumption of raw materials with quantitative break up & Gross Income from services rendered.

4 - C Details regarding licensed capacity, installed capacity and actual production in respect of each class of goods manufactured.

4 - D (a) Value of imports calculated on CIF basis for the year in respect of raw materials, components, spares and Capital goods.

4 - D (b) Expenditure in foreign currency during the financial year on account of royalty, know - how, professional, consultant fees, interest and other matters.

4 - D (c) Value of imported & indigenous raw materials, components and spares consumed & percentage of each to the total consumption.

4 - D (e) Earnings in foreign exchange classified under the following heads, namely ;

(i) export of goods calculated on FOB basis

(ii) royalty, know - how, professional and consultant fees;

(iii) interest and dividends;

(iv) other income, indicating the nature thereof.

4. The Company has discontinued the LTC scheme for non executives during the year 2010 - 11 and hence, no actuarial valuation of this liability is required. To reflect this change, Accounting Policy No. 15 (Employee Benefits) has been amended.

5. Letters requesting confirmation of Balances have been sent in respect of Sundry Debtors, Sundry Creditors, Advances and Deposits. Wherever replies have been received, reconciliation has been done and provisions / adjustments have been made wherever considered necessary.

6. The Company has analysed indications of impairment of assets of each geographical composite manufacturing unit considered as Cash Generating Units (CGU). On the basis of assessment of internal and external factors, none of the Units has found indications of impairment of its assets and hence no provision is considered necessary.

Deeds containing the terms of transfer / grant of land from State Governments / State Undertakings have not been finalised in respect of 86.78 acres valuing Rs. 181.63 (86.78 acres valuing Rs. 181.63) pertaining to Panchkula Unit. Out of this, title in respect of land measuring 0.962 acres (0.962 acres) is under litigation.

Pending finalisation of formal deeds, no provision towards registration and other costs have been made.

b) Pending execution of title / sale deeds and handing over of physical possession of land allotted to BEL Hyderbad by Andhra Pradesh Industrial Infrastructure Corporation (APIIC) admeasuring 5.60 acres (5.60 acres) in Mallapur, Hyderabad, no provision towards registration and other cost has been made in the books of accounts. Cost of land paid to APIIC amounting to Rs. 65.12 (Rs. 65.12) is included in Capital WIP-Advances.

c) Based on the Memorandum of Understanding reached with the Defence authorities, expenditure on civil works was incurred on land allotted to BEL for setting up of the Hyderabad Unit. Pending finalisation of the terms and conditions by the appropriate authorities, the cost of land measuring 25.11 acres (25.11 acres) has not been provided in the books of accounts.

d) Land acquired free of cost from the Government in some units has been accounted at a notional value by corresponding credit to Capital Reserve.

e) The Company has installed Windmill Generator at two locations. The leasehold land of the Windmill Generator-I is capitalised at the nominal value of Rs. 5 (Five Rupees only) as the upfront lease cost is Nil. The leasehold land of Windmill Generator-II is capitalised in the year 2007-08 at the cost of Rs. 114. In both the cases, the lease agreement for the land is pending finalisation.

f) Freehold land of Pune Unit measuring 3,897.52 square meters (cost Rs. 0.48) is to be handed over to Pimpri -Chinchwad Municipal Corporation for the purpose of road widening at an estimated provisional compensation of Rs. 209.04 based on the rates fixed by Moolya Nirdharan Suchi of Government of Maharastra.

7. a) In pursuance of the Companies (Amendment) Act, 1988 and Schedule XIV thereof, increased rates of depreciation on straight line method in accordance with the Schedule XIV have been adopted wherever required, only on additions on or after 01.04.1987.

b) Wherever the rates of depreciation applied prior to 01.04.1987 are higher than the rates specified in Schedule

XIV to the Companies Act, 1956, they have been continued. However, additions forming part of existing machines are depreciated on the same basis as the original machines.

c) Depreciation for multiple shifts is charged on block of assets for the full year.

8. a) Raw Materials and Components include Rs. 2,670.24 (Rs. 2,765.88) being materials with subcontractors, out of which Rs. 90.19 (Rs. 163.38) of material is subject to confirmation and reconciliation. The impact, if any, on consequent adjustment is considered not material.

b) Pending reconciliation, stock verification discrepancies for the year [shortages of Rs. 42.24 (Rs. 141.36) and surplus of Rs. 16.13 (Rs. 82.30)] have not been adjusted in the accounts.

9. Liability, if any, in respect of labour matters under dispute before various judicial authorities is not ascertainable, but is expected to be not material.

10. The exchange rate variations arising on transactions in foreign currency between the date of recording of such transactions and the settlement / the Balance Sheet date resulting in a net exchange gain of Rs. 2,648.84 (gain Rs. 6,663.21) during the year have been included in the Profit and Loss Account in Schedule No. 14 - "Other Revenues".

11. "Excise Duty which is paid during the year in respect of turnover is shown as a deduction from turnover (Gross) in the Profit and Loss Account. "Excise Duty - Others" which is included in the Schedule 17 - "Other Expenses of Manufacturing, Administration, Selling & Distribution" represents incremental provision of Excise Duty on Finished Goods, Excise Duty on Sale of Scrap, etc.

iii) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Act: Rs. 1.17 (Rs. 0.17).

iv) The amount of interest accrued and remaining unpaid at the end of the year ending 31st March 2011 : Rs. 2.45 (Rs. 2.84).

v) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 23 of MSMED Act : Rs. 0.55 (Rs. 2.50)

The information has been given in respect of such suppliers to the extent they could be identified as Micro & Small Enterprises on the basis of information available with the Company.

12. Contingent Liabilities :

a. Claims not Rs. 10,834.02 (Rs. 8,654.70) acknowledged as debts

b. Outstanding Rs. 26,774.99 (Rs. 22,658.62) Letters of Credit c. Others Rs. 397.30 (Rs. 291.81)

d. Provisional Liquidated Damages upto 31.03.2011 on unexecuted customer orders where the delivery date has expired is Rs. 8,698.05 (Rs. 4,873.96)

13. The following disclosure is made as per AS-7 (Accounting for Construction Contracts) in respect of accounting policy 3 (i) (c) relating to revenue recognition on contracts :

a) Contract revenue recognised during the year Rs. Nil (Rs. Nil)

b) No Contract Revenue is recognised in the current year. Upto year 2008 - 09, contract revenue was recognised using the percentage of completion method. Ratio of the actual cost incurred on the contracts upto 31.03.2009 to the estimated total cost of the contracts, was used to determine the stage of completion.

c) Aggregate amount of cost incurred : Rs. 43,009.84 (Rs. 43,009.84).

d) Recognised profit upto 31.03.2011 (net of provision for contingency): Rs. 3,522.08 (Rs. 2,923.33).

e) Amount of advances received and Outstanding as at 31.03.2011 -Rs.48.85 (Rs.48.85)

f) The amount of retention -Rs. 1,466.65 (Rs. 1,404.70)

14. a) Wage revision in respect of non - executives has been implemented during the year 2010 - 11.

b) As per the guidelines issued by the Department of Public Enterprises (DPE), GOI on the pay revision for Officers of PSUs, the company has submitted a proposal to the Ministry of Defence, GOI for a Pension Scheme (Defined Contribution Scheme) for Executives which has been duly considered by the Board of Directors. Pending approval by the Administrative Ministry, a provision for Rs. 6,900.91 has been made in the accounts upto the year 2010 - 11.

15. As per the provisions of Accounting Standard 15 (R), the following information is disclosed in respect of Employee Benefits :

Gratuity Scheme :

The Company has a Gratuity Scheme for its employees, which is a funded plan. Every year, the Company remits funds to the gratuity trust to the extent of shortfall of the assets over the fund obligations, which is determined through actuarial valuation. As per the Gratuity Scheme, gratuity is payable to an employee on the cessation of his employment after he has rendered continuous service for not less than 5 (five) years in the Company. For every completed year of service or part thereof in excess of six months, the Company shall pay gratuity to an employee at the rate of 15 (fifteen) days salary based on the last drawn basic & dearness allowance.

BEL Retired Employees' Contributory Health Scheme (BERECHS) :

The Company has a contributory health scheme for its retired employees "BEL Retired Employees' Contributory Health Scheme" (BERECHS), which is a non-funded scheme. The primary objective of the scheme is to provide medical facilities to employees retiring on attaining the age of superannuation, or on VRS. Benefits under the Scheme shall be available to the employees who become members and their spouses only. The Company takes insurance cover for in-patient treatment. In addition to the annual insurance premium, the Company bears 50% of the medicine cost and 75% of the cost of diagnostic tests for outpatient treatment and for the treatment of specified diseases, the Company bears the full cost of treatment, over and above the insurance coverage.

The following tables summarise the components of net benefit expense recognised in the Profit and Loss Account and the funded status and amounts recognised in the Balance Sheet for the plan as furnished in the disclosure report provided by the actuary.

Long Term Compensated Absence Scheme :

The Company has a Long Term Compensated Absence Scheme for its employees, which is a Non - Funded Scheme. The employees of the Company are entitled to two types of Long Term Compensated Absences : Annual Leave (AL) and Sick Leave (SL). The Scheme provides for compensation to employees against the unavailed Leave (both AL & SL) on attaining the age of superannuation, VRS, resignation (only AL) and death. AL can also be encashed during service.

Provident Fund Contribution :

During the year the Company has recognised an amount of Rs. 6,083.69 (^ 5,633.16) towards contribution to Employees Provident Fund and Pension Schemes in the Profit and Loss Account. The guidance on implementing AS 15 (R) issued by the Institute of Chartered Accountants of India states that provident funds setup by employers that guarantee a specified rate of return and which require interest shortfalls to be met by the employer would be defined benefit plans in accordance with the requirements of paragraph 26(b) of AS 15(R) and actuarially valued.

Pursuant to the Guidance Note, the Company has determined on the basis of actuarial valuation carried out as at 31st March 2011, that there is no liability towards the interest shortfall on valuation date under para 55 and 59 of AS 15 (R) (having regard to terms of plan that there is no compulsion on the part of the Trust to distribute any part of the surplus, if any, by way of additional interest on PF balances).

Experience adjustments for funded schemes

The disclosure with respect to paragraph 120 (n) of AS - 15(R) towards experience adjustments are being made for funded schemes viz., Gratuity. As long term compensated absence and BERECHS are not funded, such disclosure is not required.

The best estimate of contribution to be paid towards Gratuity during the annual period beginning after the Balance Sheet is Rs.2,811.22 (Rs. 3,198.76). In case of Provident Fund, there is no actuarial liability assessed for shortfall in interest as at year end.

16. The Company is engaged in manufacture and supply of strategic electronic products primarily to Defence Services and hence, it would not be in public interest for the Company to present segment information. For similar reasons, the Company has been granted exemption from publication in the annual accounts, the quantitative particulars required under Schedule VI to the Companies Act, 1956. The SEBI has also granted exemption, for these reasons, to the Company from publication of segment information required under Accounting Standard 17 (AS 17) in quarterly unaudited financial results. Hence segment information required under Accounting Standard 17 (AS 17) is not disclosed. Such non - disclosure has no financial effect.

19. As per the provisions of Accounting Standard 19, the following information is disclosed in respect of Finance Lease :

a) The net carrying amount (WDV) at the Balance Sheet date in respect of vehicles taken on lease is Rs. 32.95 (Rs. 63.44).

b) Total minimum lease payments as at the Balance Sheet date is Rs. 45.74 (Rs. 85.49) and the present value is Rs. 41.05 (Rs. 72.61).

17. Related Party Disclosure :

(a) The related parties and their relationship with the Company are as under :

Subsidiary Company viz., BEL Optronic Devices Ltd. (Equity Holding 92.79 %) ;

Joint Venture Companies :

GE BE Private Ltd. (Equity Holding 26 %); and BEL Multitone Private Ltd. (Equity Holding 49 %)

(b) Management Contracts including deputation of Employees :

Two Officials (Managers) of BEL have been deputed to BELOP (Subsidiary) and their salary, etc., is paid by BELOP during the year as per terms and conditions of employment.

18. Previous year's figures have been regrouped wherever necessary. Figures in brackets relate to previous year.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on Capital Account and not provided for amounts to Rs. 11,524.66 (Rs. 6,581.64).

2. a) Expenditure in foreign exchange on account of royalty, know how, interest and other maters (on payment basis) amounted to Rs. 335.86 (Rs. 555.44).

b) Earnings in foreign exchange on account of exports on FOB basis amounted to Rs. 9,936.71 (Rs. 7,227.96).

3. The Company has made certain modificatons / changes to Accounting policies during the year 2009-10 which are generally clarifcatory in nature except in respect of policy on Employee Benefits. The changes made in Employee Benefits and the impact thereof is as under:

- Leave Travel Concessions benefit given to employees were hitherto treated as short-term benefits and accounted on payment basis. As per the expert opinion given by Expert Advisory Commitee (EAC) of The Insttute of Chartered Accountants of India (ICAI), the liability towards this is a long-term benefit and accordingly should be actuarially valued. As per the actuarial valuaton, the liability as on 31st March 2010 is Rs. 202.75 and this has been accounted in 2009-10.

- As per AS-15®, the liability, if any, towards shortall in payment of minimum interest by the Company managed Provident Funds is to be actuarially valued and provided for. Accordingly the Company actuarially valued the positon as on 31st March 2010 and as per Actuarys report, no additonal liability exists on this account as on 31st March 2010 (31st March 2009 - Rs. Nil).

4. Leters requestng confrmaton of Balances have been sent in respect of Sundry Debtors, Sundry Creditors, Advances and Deposits. Wherever replies have been received, reconciliaton has been done and provisions / adjustments have been made wherever considered necessary.

5. The Company has analysed indicatons of impairment of assets of each geographical composite manufacturing unit considered as Cash Generatng Units (CGU). On the basis of assessment of internal and external factors, none of the Units has found indicatons of impairment of its assets and hence no provision is considered necessary.

6. a) In respect of certain Fixed Assets mentoned below, executon of ttle / sale Deed by the appropriate authorites is pending.

(i) Freehold land Rs. 3.75 (Rs. 3.75)

(Machilipatnam - 0.516 acres) (ii) Leasehold land Rs. 0.18 (Rs. 0.18) (Ghaziabad)

(iii) Buildings Rs. 0.16 (Rs. 0.16) (Ghaziabad)

Deeds containing the terms of transfer / grant of land from State Governments / State Undertakings have not been fnalised in respect of 86.78 acres (86.78 acres) pertaining to Panchkula Unit. Out of this, ttle in respect of land measuring 0.962 acres is under litgaton.

Pending finalisation of formal deeds, no provision towards registration and other costs have been made.

b) Pending executon of title / sale deeds and handing over of physical possession of land alloted to BEL Hyderbad by Andhra Pradesh Industrial Infrastruture Corporation (APIIC) admeasuring 5.60 acres (5.60 acres) in Mallapur, Hyderabad, no provision towards registration and other cost has been made in the books of accounts. Cost of land paid to APIIC amountng to Rs. 65.12 (Rs. 65.12) is included in Capital WIP-Advances.

c) Based on a Memorandum of Understanding reached with the Defence authorites, expenditure on civil works was incurred on land alloted to BEL for setng up of the Hyderabad Unit. Pending finalisation of the terms and conditons by the appropriate authorites, the cost of land measuring 25.110 (25.110) acres has not been provided in the books of accounts.

d) Land acquired free of cost from the Government in some units has been accounted at a notonal value by corresponding credit to Capital Reserve.

e) The Company has installed Windmill Generatior at two locatons. The leasehold land of the Windmill Generatior-I is capitalised at the nominal value of Rs. 5 (Five Rupees only) as the upfront lease cost is nil. The leasehold land of Windmill Generatior-II is capitalised at the cost of Rs. 114.00. In both the cases the lease agreement for the land is pending finalisation.

f) Freehold land of Pune Unit measuring 3897.52 square meters (cost Rs. 0.48) is to be handed over to Pimpri Chinchwad Municipal Corporation for the purpose of road widening at an estmated provisional compensaton of Rs. 245.00 based on the rates fxed by Moolya Nirdharan Suchi of Government of Maharastra. Approval from Ministry of Defence, Government of India is awaited.

7. a) In pursuance of the Companies (Amendment) Act, 1988 and Schedule XIV thereof increased rates of depreciaton on straight line method in accordance with the Schedule XIV have been adopted wherever required, only on additons afer 1.4.1987.

b) Wherever the rates of depreciaton applied prior to 1.4.1987 are higher than the rates specifed in Schedule XIV to the Companies Act, 1956 they have been contnued. However, additons forming part of existng machines are depreciated on the same basis as the original machines.

c) Depreciaton for multple shifs is charged on block of assets for the full year.

8. a) Raw Materials and Components include Rs. 2,765.88 (Rs. 1,869.89) being materials with subcontractors, out of which Rs. 163.38 (Rs. 160.75) of material is subject to confrmaton and reconciliaton. The impact, if any, on consequent adjustment is considered not material.

b) Pending reconciliaton, stock verifcaton discrepancies for the year [shortages of Rs. 141.36 (Rs.63.99) and surplus of Rs. 82.30 (Rs. 16.28)] have not been adjusted in the accounts.

9. Liability, if any, in respect of labour maters under dispute before various judicial authorites is not ascertainable, but is expected to be not material.

10. The exchange rate variatons arising on transactons in foreign currency between the date of recording of such transactons and the setlement / the Balance Sheet date resultng in a net exchange gain of Rs. 6663.21 (Loss Rs. 3,763.21) during the year have been included in the Profit and Loss Account in Schedule No. 14 - "Other Revenues" [Previous Year: in Schedule No. 17 - "Other Expenses of Manufacturing, Administration, Selling & Distributon"].

11. "Excise Duty, which is included in turnover (Gross) is shown as a deducton from turnover (Gross) in the Profit and Loss Account. "Excise Duty - Others" included in the Schedule 17 - "Other Expenses of Manufacturing, Administration, Selling & Distributon" represents incremental provision of Excise Duty on Finished Goods, Excise Duty on Sale of Scrap etc.

12. The informaton regarding amounts due to Micro and Small Enterprises as required under Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 as on 31st March 2010 is furnished below:

i) The principal amount and the interest due thereon remaining unpaid to any supplier as at 31st March 2010:

Principal Amount Rs. 163.95 (Rs. 153.62)

Interest Rs. 1.74 (Rs. 0.47)

ii) The amount of interest paid by the Company along with the amount of the payment made to the supplier beyond the appointed day during the year ending 31st March 2010:

Principal Amount Rs. 7.85 (30.89)

Interest Rs. 0.80 (0.33)

iii) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specifed under the Act: Rs. 0.17 (0.79).

iv) The amount of interest accrued and remaining unpaid at the end of the year ending 31st March 2010: Rs. 2.84 (Rs. 1.36)

v) The amount of further interest remaining due and payable even in the succeeding years, untl such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductble expenditure under Section 23 of MSMED Act: Rs. 2.50 (Rs. 1.20)

The informaton has been given in respect of such suppliers to the extent they could be identfed as Micro & Small Enterprises on the basis of informaton available with the Company.

(Rupees in Lakhs)

13. Contngent Liabilites:

a. Claims not Rs. 8,654.70 (Rs. 4,506.46) acknowledged as debts

b. Outstanding Rs. 22,658.62 (Rs. 33,714.78) Leters of Credit

c. Others Rs. 397.30 (Rs. 291.81)

d. Provisional Liquidated Damages up to 31.03.2010 on unexecuted customer orders where the delivery date has expired is Rs. 4,873.96 (Rs. 6,852.52).

14. The following disclosure is made as per AS-7 (Accounting for Constructon Contracts) in respect of Accounting policy 3i(c) relating to revenue recogniton on contracts:

a) Contract revenue recognised during the year Rs. Nil (Rs. 1,908.50).

b) No contract revenue is recognised in the current year. In the previous year, contract revenue was recognised using the percentage of completon method. ratio of the actual cost incurred on the contracts upto 31.03.2009 to the estmated total cost of the contracts, was used to determine the stage of completon.

c) Aggregate amount of cost incurred: Rs. 43,009.84 (Rs. 70,613.40).

d) Recognised profit upto 31.03.2010 (net of provision for contngency): Rs. 2,817.66 (Rs. 15,829.10).

e) Amount of advances received and outstanding as at 31.03.10 - Rs. 48.85 (Rs. 48.88)

f) The amount of retenton Rs. 1,404.70 (Rs. 8,111.26)

17. Provision for wage revision in respect of non-executves has been made in the accounts of 2009-10 based on the wage setlement reached with Negotatng Trade Unions (NTUs) during May 2010. This includes Rs. 7,987.35 pertaining to the period upto 31st March 2009.

As per the guidelines issued by the Department of Public Enterprises (DPE), GOI on the pay revision for Ofcers of PSUs, the Company has submited a proposal to the Ministry of Defence, GOI for a Pension Scheme (Defined Contributon Scheme) for Executves which has been duly considered by the Board of Directors. Pending approval by the Administratve Ministry, a provision for Rs. 4,817.56 has been made in the accounts of 2009- 10 which includes Rs. 3,134.91 being the past liability towards management contributon to Pension Scheme for the period up to 31.03.2009 and the same has been treated as an Exceptonal item in the Profit and Loss Account.

Further, as per the DPE guidelines the Company has formulated a new incentve scheme in lieu of the existng Executve Performance Incentve Scheme (EPI Scheme) for Executves viz. Performance Related Pay (PRP Scheme) efectve from the Financial Year 2007-08 which has been duly recommended by the Remuneration Commitee and approved by the Board of Directors. Necessary provision on this account has been made in the accounts of 2009-10.

15. As per the provisions of revised Accounting Standard 15, the following informaton is disclosed in respect of Employee Benefits:

Gratuity Scheme:

The Company has a gratuity scheme for its employees, which is a funded plan. Every year the Company remits funds to the gratuity trust to the extent of shortall of the assets over the fund obligatons, which is determined through actuarial valuaton. As per the gratuity scheme, gratuity is payable to an employee on the cessaton of his employment afer he has rendered contnuous service for not less than 5 (fve) years in the Company. For every completed year of service or part thereof in excess of six months, the Company shall pay gratuity to an employee at the rate of 15 (ffeen) days salary based on the last drawn basic & dearness allowance.

The following tables summarise the components of net benefit expense recognised in the Profit and Loss Account and the funded status and amounts recognised in the Balance Sheet for the plan as furnished in the Disclosure Report provided by the actuary:

16. The Company is engaged in manufacture and supply of strategic electronic products primarily to Defence Services and hence it would not be in public interest for the Company to present segment informaton. For similar reasons the Company has been granted exempton from publicaton in the annual accounts the quanttatve partculars required under Schedule VI to the Companies Act, 1956. The SEBI has also granted exempton, for these reasons, to the Company from publicaton of segment informaton required under Accounting Standard 17 (AS 17) in quarterly unaudited financial results. Hence Segment informaton required under Accounting Standard 17 (AS 17) is not disclosed. Such non-disclosure has no financial efect.

17. As per the provisions of Accounting Standard 19, the following informaton is disclosed in respect of Finance Lease:

a) The net carrying amount (WDV) at the Balance Sheet date in respect of vehicles taken on lease is Rs. 63.44 (Rs. 113.06).

b) Total minimum lease payments as at the Balance Sheet date is Rs. 85.49 (Rs. 149.46) and the present value is Rs. 72.61 (Rs. 121.08).

18. Related Party Disclosure:

(a) The related partes and their relatonship with the Company are as under:

- Subsidiary Company viz. BEL Optronic Devices Ltd.,

(Equity Holding 92.79%);

- Joint Venture Companies:

GE BE Private Ltd. (Equity Holding 26%); and BEL Multtone Private Ltd., (Equity Holding 49%)

19. Disclosure as required under AS 29 - Provisions, contngent liabilites and contngent assets:

20. Previous years fgures have been regrouped wherever necessary. Figures in brackets relate to previous year.

 
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