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Notes to Accounts of BEML Ltd.

Mar 31, 2023

A. Carrying value of vehicles includes equipment offered to customers for trials on No Cost No Commitment (NCNC) basis ?318.28 Lakhs (Previous Year - ?510.76 Lakhs).

B. Property, Plant and Equipment

i) Book Value of Land ?636.58 Lakhs and Buildings ?327.89 Lakhs have been transfered to M/s BEML Land Assets Ltd (BLAL), a Govt. Company, as per MCA

approved Scheme of Arrangement for demerger filed with ROC on the appointed date i.e., 25.08.2022. The same has been adjusted against retained earnings. Summary of the Land and buildings transferred is as under:

Details of Demerged assets:

Land Assets at Bengaluru, Mysore, New Delhi, Ranchi, Asansol & Bilaspur: ''636.58 Lakhs.

Building Assets at Bengaluru, Mysore, New Delhi, Ranchi, Kolkata, Goa, Bhopal, Mumbai, Chennai & Kochi:

''327.89 Lakhs.

ii) Buildings include carrying value of building at Ranchi pending registration / khatha transfer at ''10.49 Lakhs (Previous Year ''10.87 lakhs)

iii) The Company has taken land measuring 1109 acres and two workshops on lease for a period of 10 years vide Lease Agreement dated 5^thMay 2004, w.e.f. 28.04.2004 from M/s Bharat Gold Mines Limited (BGML) (A Company under orders of winding up by BIFR), and a sum of ''100 Lakhs was paid as nonrefundable deposit, (included under Other non-current assets (Note no.11)). As per the terms of the Lease agreement, this deposit shall be adjusted against the outright sale/transfer of ownership that may be fixed for the property and lessee shall be free to construct new building/alter the existing building/ lay roads/fence the land in the interest of furthering its business to suit its use and on expiry of the lease the said building shall vest with the lessor on payment of consideration

based on value prevailing on the date of handing over of the property. The Company had incurred on the above land a sum of ''1452.95 Lakhs (with carying value - ''769.48 Lakhs) on Buildings (Previous Year - ''814.27 Lakhs) included in Property, Plant and Equipment as at year end.

Vide order dated 09.07.2013, the Hon''ble Supreme Court of India upheld the decision of the Union Government to float a global tender of BGML assets with an observation about the existence of sub-lease of a portion of the land to BEML Ltd expiring on 28.04.2014 to be included in the tender documents. The Company filed an Interlocutory application before the Hon''ble Supreme Court of India, praying for exclusion of land leased to BEML from the purview of global tender, which was dismissed. Since the lease agreement provides for the continuation of the lease even after the expiry of lease period on 28.04.2014 till the final decision of the Company / Government in this regard, the operations of the company on the above land is continued. Appropriate accounting action will be considered based on the outcome of the tender process.

Meanwhile, since BEML is under strategic Disinvestment, BEML has proposed to surrender 1080.65 Acres out of 1109 Acres of land to BGML and to enter into a fresh lease agreement for the balance operational area of 28.35 Acres. However, BGML has offered BEML to outrightly purchase the land of 28.35 acres at mutually agreed price. The modalities of completeing the surrender &

purchase/ transfer process of the aforesaid land parcels are under consideration by BEML & BGML.

iv) Lease-hold Land includes 147.95 acres at Palakkad under lease from Kerala Industrial Infrastructure Development Corporation (KIIDC). During the current year, land measuring 226.21 acres out of 374.16 acres has been surrended to KIIDC against consideration of ? 2759.02 Lakhs. The book value of Lease hold land has been adjusted accordingly.

v) Lease Hold Land includes land measuring 101175.92 Sq. Mtrs taken on perpetual lease from KIADB (Bangalore Aerospace, SEZ Park) at a cost of ?5126.00 Lakhs (Previous Year - ?5126.00 Lakhs).

vi) No Provision considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

vii) Free Hold Land measuring 3.647 acres of land, surrendered to BBMP against TDR (at cost) is ?4.58 Lakhs. Free Hold Land measuring 1.937 acres of land surrendered to BBMP for

which TDR yet to be received (at cost) is ?2.43 Lakhs.

Above TDR will be utilised for further construction.

viii) Company has taken action to obtain title documents in respect of flat at Ashadeep, New Delhi - ?2.80 Lakhs.

ix) For information on estimated capital contracts pertaining to the acquisition of property, plant and equipment, refer Note no. 39 D II a.

x) Free hold at KGF does not include 114 Acres which is under reconciliation with DC,Kolar.

xi) Non current assets held for demerger

not included in PPE: (?in Lakhs)

2022-23 2021-22

1) Land carrying value - 304.39

2) Building carrying value - 45.78

Total - 350.17

C. Amount of borrowing cost capitalised on addition of assets during the year: Nil.

D. Since there is no investment property in the Company as on 31.03.2023, fair value of investment property is Nil (Previous Year - Nil).

a. BEML along with Midwest Granite Private Limited formed a joint venture company in 2007 to conduct excavation and extraction of mineral resources. The agreement was signed in September 2005 whereby BEML has a 45% share in the operations of the joint venture and the remaining 55% is held by Midwest Granite Private Limited.

b. The Joint Venture Company BEML Midwest Ltd has not prepared its financial statements as at 31^st March, 2023 due to litigation pending before National Company Law Tribunal. Hence, disclosure requirements under Ind AS-28 (Investments in Associates and Joint Ventures) could not be complied with. In the absence of financial statements of the JV, the same has not been consolidated with BEML financial statements.

c. For demerger of surplus assets of BEML, a wholly owned subsidiary- BEML Land Assets Limited (BLAL), was incorporated on 15-07-2021. MCA approved Scheme of Arrangement for demerger has been filed with ROC. The effective date of demerger was 25-08-2022 (the appointed date). M/s BLAL has ceased to be a subsidiary of BEML from the appointed date. As per the scheme of arrangement of demerger the Equity share capital of ?1 Lakh of BLAL has been cancelled and the corresponding investment of ? 1 Lakh in BEML books has been written off.

d. As per CCEA approval dtd 8^th September 2021, M/s Vignyan Industries Ltd, a subsidiary of BEML is under Voluntary Liquidation and Official Liquidator has been appointed on 11-10-2021. Movable assets have been disposed off and disposal of immovable assets is in progress. Dues of employees of VIL have been settled. As on 31-03-2023 there are no employees on the rolls of M/s VIL.

In respect of BEML Brazil Industrial Ltda , an associate the company has written to RBI through authorized dealer SBI, Overseas Branch, Bangalore for closure of Unique Identification Number (UIN) issued in respect of BBIL.

A) Adoption of Income Tax Rates

The Ministry of Law & Justice, Govt. of India vide Gazette notification dated 20.09.2019 introduced section 115BAA with an option to choose Revised Tax Structure applicable w.e.f 01.04.2019 to Domestic Companies without claiming specific deductions u/s 35(2AB), deduction under Chapter-VIA, MAT Credit benefits, Carry Forward Business Losses, Additional Depreciation u/s 32(1)(iia) and other deductions as specified in the said section.

Based on the internal assessment, the Company has decided to adopt the Revised Tax Structure u/s 115BAA w.e.f FY 2022-23. Accordingly, the tax liability for the current year and deferred tax assets/liabilities have been restated in line with the new tax structure. The impact due to adoption of new tax regime is ?2180.69 Lakhs savings in current tax and tax expenses of ?4206.00 Lakhs due to restatement of deferred tax assets at lower tax rates.

a. The Company has entered into a Consortium Agreement (MAMC Consortium) with M/s. Coal India Limited (CIL) and M/s. Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s. Mining and Allied Machinery Corporation Limited (under liquidation). The agreement, inter-alia, provided for formation of a Joint Venture company with a shareholding pattern of 48:26:26 among BEML, CIL and DVC respectively. The Company has paid the proportionate share of ?4800.00 Lakhs towards the total bid consideration of ?10000.00 Lakhs towards the said acquisition, based on the order passed by the Hon''ble High Court of Calcutta. The said assets are taken possession by the MAMC Consortium. Further, the Company has incurred a sum of ?2397.10 Lakhs (Previous Year - ?2027.18 Lakhs) towards maintenance, security and other related expenditure. The expenditure incurred by CIL and DVC on account of this proposal is not ascertained. The total sum of ?7197.10 Lakhs (Previous Year -?6827.18 Lakhs) is disclosed as ''Advance to MAMC consortium'', pending allotment of equity shares in the capital of the JV company. Since the company intends to treat this as a long term investment, no independent valuation of the assets taken over has been done and the diminution in value of investments, if any, can be ascertained only after the formulation of business plan and approval of shareholders'' agreement from MOD which is being pursued.

Further, a company in the name of ''MAMC Industries Limited'' (MIL) was formed and incorporated as a wholly-owned subsidiary company for the intended purpose of JV formation. Shareholders'' agreement, as duly approved by the Boards of all the three members of the consortium, has been submitted to Ministry of Defence for necessary approval. After obtaining the said approval, MIL, would be converted into a JV Company. The Company has advanced a sum of ?603.97 Lakhs (Previous Year - ?603.66 Lakhs) on account of MIL, which is included under the head ''Advances to related parties''.

a. Raw materials & Components include materials lying with sub contractors ?2612.23 Lakhs (Previous Year - ?2783.11 Lakhs). Out of these, confirmation from the parties is awaited for ?226.54 Lakhs (Previous Year ?214.86 Lakhs).

b. Raw materials in transit include ?1962.66 Lakhs (Previous year ?751.82 Lakhs) of materials received in the factory/depot for which quality clearance is pending.

c. The closing stock of work-in-progress and finished goods are stated at lower of standard cost, which approximates to actuals and net realisable value. The difference between the actual cost of production and the standard cost is not material.

d. Variances arising on account of difference between standard cost and the actual cost, on account of change in the nature of inputs from bought-out to internally manufactured or vice versa, timing difference between standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the cost of production in order not to carry forward the period variances to subsequent financial period.

e. Allowance towards obsolescence is made as per the Board approved provisioning norms and is based on ageing of inventory.

a. The Company earns no interest on balances with banks in current accounts.

b. Balances with bankers includes the following on which on which there were restrictions placed on use and / or held onbehalf of third parties:

(i) ESCROW account balance to be distributed among consortium members ''532.01 Lakhs (Previous Year ''341.74 Lakhs).

c. Out of the Cash Credit Limit of ''120000 Lakhs sanctioned to the company by Consortium Bankers, the amount drawn by the company as on 31^st March 2023 is ''32183.68 Lakhs (Previous Year ''54324.40 Lakhs)

d. FDRs include ''133.63 Lakhs being proceeds from surrender of 4706 Sqm of lease hold land at Hyderabad to TSIIC, ''2759.02 Lakhs from surrender of 226.21 acres of Leasehold Land to M/s. KIIDC (KINFRA) Kerala and ''50.31 Lakhs against vendor dues forming part of Short Term Deposits.

Rights and restrictions attached to equity shares

The company has only one class of share, i.e., equity shares having the face value of ''10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

No shares of the Company is held by its subsidiaries. The Company does not have any holding company.

No shares of the Company is reserved for issue under options and contracts/commitments for the sale of shares / disinvestment.

The Board of Directors have approved payment of an Interim Dividend of ?5.00 per equity share

i.e., 50% on equity shares of ?10 each on 10.02.2023 which was paid to Government of India on 15.02.2023 and to other eligible shareholders.

Secured Redeemable Non-convertible Debentures :

During May''22, the last tranche of ''10000 lakhs of Non-Convertible Debentures were redeemed by the Company. With this the entire amounts of NCDs have been fully redeemed.

The company has utilised the borrowings from banks and financial institutions for the purpose for which it was been taken.

1. For movement in the provisions during the year refer Note no. 28

2. The provision for employee benefits represents annual leave and vested long service entitlements accrued.

3. Warranty provisions are recognised on a contract-by-contract basis for goods sold over the warranty period. The provision is based on estimates of probable likelihood of product failure and returns based on current sales level and past experience.

4. Provision for unexpired obligations is towards supply of Backup Spares against guaranteed availability contracts.

Micro and Small Enterprises (MSE)

The information under MSMED Act, 2006 has been disclosed to the extent such vendors have been identified by the company. The details of amounts outstanding to them based on available information with the Company is as under :

A. 1. Revenue from operations does not include GST on sale of products and services up to

March 2023 amounting to ?71,013.46 Lakhs (Previous Year ?65326.05 Lakhs).

2. Revenue from sale of products include ?540.00 Lakhs (Previous Year ?1014.00 Lakhs) on account of Sale of 2 Nos. of equipment and ?2064.42 Lakhs for spares (previous year ?NIL) on "Bill and hold " basis recognised in accordance with Ind AS-115. This does not bear any custodian charges.

3. Revenue from sale of products and services include ?83013.14 (Previous Year ?56474.04 Lakhs) towards export sales (including deemed exports).

B. 1. Revenue is recognized "over the period of time" on the contracts wherever transfer

of control on goods/services and performance obligation satisfied over time. All other revenue is recognized at a point in time when control transfers.

2. Revenue from sale of products and services include ?78442.64 Lakhs, ?15663.66 Lakhs and ?5.42 lakhs (Previous Year - ?91651.13 Lakhs, NIL and ?122.47 Lakhs) recognised "over the period of time" in respect of (a) Contracts entered with Metro Corporations for design, manufacture, supply, testing & commissioning of metro cars, (b) Contract with M/s LORAM for supply of Rail Grinding Machines and

(c) in respect of ARV Overhauling Contracts in Defence business, respectively due to adoption of Ind AS 115 effective from 01-04-2018.

3. In case of Metro supply contracts, Rail Grinding Machine and Equipment Rehabilitation, Mining Aggregates Repairs and overhauling contract, for determination of transaction price for the purpose of recognizing revenue "over the period of time", Input Cost Method has been considered.

4. Following are the closing and opening balances of Receivables, Contract Assets and Contract liabilities (which are measured under Input Cost Method);

5. Payments under the Metro Supply Contracts and Rail Grinding Machine Contract are released by customers upon completion of milestones of cost centers identified in the contracts.

6. Payments are released by customers under Equipment Rehabilitation and Aggregates Repairs Contracts upon completion of Repair/Rehabilitation, delivery and acceptance of the items at Customer site as indicated in the Contract.

7. Warranties: In respect of Metro Contracts, Defect Liability periods are applicable from the date of taking over of Train sets by the Customers. Comprehensive warranty is provided for a period of 24 months from the date of acceptance for Defence Equipment.

8. Standard Warranty is provided for a period of 12 months or 4000 hours of satisfactory performance of Equipment (Mining & Construction) after delivery and commissioning. However, warranty for Electrical items is for 12 months/3000 hrs from the date of commissioning whichever is earlier.

9. ?150278.84 Lakhs for Metro and Rail Grinding Machine contracts and ?37.76 Lakhs for Defence Equipment (Previous Year - ?204734.69 Lakhs and ?43.19 Lakhs respectively) are the aggregate amount of transaction price allocated to the performance obligations that are unsatisfied as of end of the reporting period and Company expects to recognize this revenue in subsequent years.

A. Indian Accounting standard (Ind AS) 19, Disclosures on Employee Benefits are as follows:

a. Leave Salary

This is an unfunded employee benefit plan categorized under other long term employee benefits in terms of Ind AS 19. The obligation for compensated absence has been actuarially valued and liability provided accordingly.

b. Post Retirement Medical Scheme 1. Employees

(i) The company has a post retirement defined benefit medical scheme where an insurance policy is taken by the company for providing mediclaim benefits to the superannuated employees who opt for the scheme. The Company pays 90% insurance premium and the balance 10% is paid by superannuated employees.

The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

2. Officers

For officers, from the year 2015-16 a new Post-Retirement Medical Scheme was introduced where a percentage of Basic salary and DA of officers will be contributed to a separate fund and the fund arrange to provide medical insurance to retired officers. Company has contributed 3% of the Basic and DA of officers amounting to '' 751.81 Lakhs during FY 2022-23 (Previous year ? 718.57 Lakhs) for the scheme. Company has no further liability other than the contribution to the fund. Hence the scheme is a defined contribution plan and no actuarial valuation is done.

c. Interest Rate Guarantee on Provident Fund

Provident Fund Trust of the Company has to declare interest on Provident Fund at a rate not less than that declared by the Employees'' Provident Fund Organisation. In case the Trust is not able to meet the interest liability, Company has to make good the shortfall. This is a defined benefit plan and the Company has got the same actuarially valued and there is no additional liability that needs to be provided for the year.

d. Officers Pension Scheme

Based on the guidelines of Ministry of Defence, Company has implemented "BEML Executive Superannuation (Pension) Scheme" for Officers of the Company. The Scheme is a defined contribution plan and the contribution made is being charged off in the year of contribution. Being a defined contribution plan no actuarial valuation is done.

e. Gratuity

(i) The employees'' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

B. In terms of Notification No. S.O.802(E) dated 23-02-2018 of the Ministry of Corporate Affairs, the Board at its meeting held on 27.05.2016 has given consent with regard to non-disclosure of information as required under paragraphs 5(ii) (a) (1), 5(ii) (a) (2), 5(iii) and Para 5(viii) (a), (b), (c) and (e) of Part II to Schedule III of the Companies Act, 2013, in the Annual accounts for the Financial Year 2015-16 onwards.

C. Indian Accounting standard (Ind AS) 24 - Related Party Disclosures

In accordance with the requirements of Ind AS 24, following are details of the transactions during the year with related parties.

4. Considering the wide scope of the definition of Related Party under section 2(76), Relative under section 2(77) and Key Managerial Personnel under section 2(51) of Companies Act, 2013 and the requirement under Ind AS 24 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the disclosure with respect to Related Party transactions has been restricted to Subsidiary / Joint Venture / Associate companies and to any other Related Party as declared by Directors and Key Managerial Personnel. Accordingly, the compliance with Related Party Transactions under section 188, Ind AS 24 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been made to the extent data is available with the Company.

D. Indian Accounting standard (Ind AS) 37 - Provisions, Contingent Liabilities and

Contingent Assets

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts:

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales tax/vAT,etc.,) ?51432.35 Lakhs (Previous Year ?63048.13 Lakhs).

ii Other claims-legal cases etc., ?14936.45 Lakhs (Previous Year ?14196.86 Lakhs).

b. Other money for which the company is contingently liable - ?Nil (Previous Year - ?Nil).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital accounts and not provided for ?1838.33 Lakhs (Previous Year ?625.95 Lakhs).

b. Uncalled liability on shares and other investments partly paid - ?Nil (Previous Year - ? Nil ).

c. Other commitments (specify nature) - ?Nil (Previous Year - ?Nil ).

NOTES

1. The company does not expect any cash outflow in respect of above contingent Liabilities.

2. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in I (a) above pending resolutions of the arbitration / appellate proceedings.

F. Indian Accounting standard (Ind AS) 108 - Operating Segments

Vide Notification No. S.O.802(E) dated 23-02-2018 issued by Ministry of Corporate Affairs, exempted companies engaged in Defence Production from segmental disclosure as required under Ind AS 108 (Operating Segments), accordingly the disclosure requirements under Ind AS 108 has not been made.

G. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

H. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current year''s presentation.

J. Indian Accounting standard (Ind AS) 116 - Leases a) The Company as a lessee

The Company''s significant leasing arrangements are in respect of operating leases and leased office premises. These lease arrangements, run for a period of 3 Years to 10 Years and are generally renewable by mutual consent.

b) The Company as a lessor

The Company provides cars to employees who are eligible and enroll into such a scheme after completion of a specific period of service. Such leases are non-cancellable in nature and have been classified as operating leases.

Below are the details of carrying amounts of such vehicles recorded as property, plant and equipment:

d) Transfers between the fair value hierarchy

There were no transfers in either direction in the fair value hierarchy during the year 2022-23.

L. Financial risk management

The Company is broadly exposed to credit risk, liquidity risk and market risk as a result of financial instruments.

The Company''s Board of Directors has the overall responsibility for the establishment, monitoring and supervision of the Company''s risk management framework. Treasury Management Team in the company takes appropriate steps to mitigate financial risks within the framework set by the top management. Derivative transactions are undertaken by a specialist team with appropriate skills and experience. Company do not trade in derivatives for speculation.

(i) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises from credit exposures from customers, cash and cash equivalents held with banks and current and non-current debt investments.

The carrying amount of financial assets represents the Company''s maximum exposure to credit risk. No other financial assets carry a significant exposure to credit risk.

Trade receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, the management also considers the factors that may influence the credit risk of its customer base. Major Customers of the company are from Government Sector and Public Sector Companies, where credit risk is relatively low.

The management has established a system under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes external ratings, if they are available, and in some cases bank references.

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables based on factual information as on the Balance sheet date.

At 31 March 2023, the Company''s most significant customer, accounted for ''28603.00 Lakhs of the trade receivables carrying amount (31 March 2022: ''30682 Lakhs).

The movement in the loss allowance for impairment of trade receivables are disclosed in Note No. 14

Any past due from Government Customers and those fully covered by guarantees or collaterals received are not tested for impairment.

The credit quality of the financial assets is satisfactory, taking into account the allowance for doubtful trade receivables.

The Company has not received any collaterals for receivables as at reporting date.

The impairment loss allowance at 31 March 2023 related to several customers that have indication that they may not pay their outstanding balances. The Company believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on the fact that major customers are Government department, PSUs and historical payment behaviour and extensive analysis of customer credit risk, including underlying customers'' credit ratings if they are available.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset, or the risk that the Company will face difficulty in raising financial resources required to fulfill its commitments. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Liquidity risk is maintained at low levels through effective cash flow management, low borrowings and availability of adequate cash. Cash flow forecasting is performed internally by forecasts of the Company''s liquidity requirements to ensure that it has sufficient cash to meet operational needs, to fund scheduled investments and to comply with loan covenants.

To ensure continuity of funding, the Company primarily uses short-term bank facilities in the nature of bank overdraft facility, cash credit facility and short-term borrowings to fund its ongoing working capital requirements needs. The Company has also availed various noncurrent facilities in the form of secured redeemable debentures, secured term loans, intercorporate loans against the Company''s guarantee and soft loans from the Government for expansion projects and construction and development of capital assets.

Exposure to liquidity risk

The table below details the Company''s remaining contractual maturity for its financial liabilities and derivative financial liabilities. The contractual cash flows reflect the undiscounted cash flows of financial liabilities and derivative financial liabilities based on the earliest date on which the Company can be required to pay.

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity / commodity prices - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the management.

The Company''s activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rate movements (refer to notes below on currency risk and interest risk). The Company enters into forward derivative contracts to manage risks of loss arising due to foreign exchange exposure. During the year ended 31 March 2023, there was no change to the manner in which the Company managed or measured market risk.

Foreign currency risk is the risk arising from exposure to foreign currency movement that will impact the Company''s future cash flows and profitability in the ordinary course of business. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities from procuring or selling in foreign currencies and obtaining finance in foreign currencies.

The Company is exposed to currency risk on account of its borrowings and other payables in foreign currency. The functional currency of the Company is Indian Rupee. The Company uses forward exchange contracts to hedge its currency risk, mostly with a maturity of less than one year from the reporting date.

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing instruments will fluctuate because of fluctuations in market interest rates.

Exposure to interest rate risk

The Company''s interest rate risk arises from borrowings and loans made. Borrowings availed at fixed rates expose the Company to fair value interest rate risk. The interest rate profile of the Company''s interest-bearing financial instruments as reported to the management of the Company is as follows.

Fair value sensitivity analysis for fixed-rate instruments

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss, and the Company does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

(vi) Equity and commodity price risk

Price risk is the risk of fluctuations in the value of assets and liabilities as a result of changes in market prices of investments. The Company has no exposure to changes in the quoted equity securities price risk as it has investments in unquoted equity instruments only. The Company does not invest in commodities and is not exposed to commodity price risk.

M. Capital Management

The Company strives to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The board of directors seeks to maintain a balance between the higher returns and levels of borrowings and the advantages and security afforded by a sound capital position.

!Total borrowings comprises of long-term borrowings, short-term borrowing and bank overdraft facilities.

²Cash and bank balances comprises of cash in hand, cash at bank and term deposits with banks excluding consortium member balances in ESCROW account, as disclosed under Note 15 (b) and balances with bank as unclaimed dividend.

N. Derivatives

Derivatives not designated as hedging instruments

The Company uses foreign currency forward contracts to manage its exposure to foreign currency fluctuations. These forward contracts are used to hedge foreign currency payables and other future transactions. However, these foreign exchange forward contracts are not designated as qualifying hedge instruments and are entered into for periods consistent with foreign currency exposure of the underlying transactions, and are generally for a term of 3 months to 12 months.

The Company has following outstanding forward contracts as on:

31 March 2023: JPY Nil (INR Nil) [Previous Year - JPY Nil (INR Nil)]

31 March 2023: EUR Nil (INR Nil) [Previous Year - EUR Nil (INR Nil)]

31 March 2023: USD Nil (INR Nil) [Previous Year: USD Nil (INR Nil)]

O. Additional Disclosures :

i. The company does not hold any benami property held under the Benami Transaction (prohibition ) Act, 1988 (clause 45), hence the reporting clause on benami property in not applicable.

ii. The company does not fall under the willful defaulter category, hence the reporting clause on willful defaulter in not applicable.

iii. The company has not transacted with struck off companies in MCA during the year.

iv. The Company has complied with creation of charge and satisfaction of charge within the due dates and hence there are no non compliances to report.

vi. There are no charges or satisfaction pending to be registered with ROC beyond statutory period.

vii. Company has complied with the number of layers as prescribed under section 2(87) of Companies Act read with the companies (Restriction on number of layers).

viii. During the current year as well as previous year, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. During the current year as well as previous year, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Mar 31, 2022

A. Carrying value of vehicles (own use) includes equipment offered to customers for trials on No Cost No Commitment (NCNC) basis ''510.76 Lakhs (Previous Year - ''1046.80 Lakhs).

B. Property, Plant and Equipment

i) Buildings include carrying value of building at Ranchi pending registration/khatha transfer at ''10.87 Lakhs (Previous Year ''11.25 lakhs)

ii) The Company has taken land measuring 1109 acres and two workshops on lease for a period of 10 years vide Lease Agreement dated

5^th May 2004, w.e.f. 28.04.2004 from

M/s Bharat Gold Mines Limited (BGML) (A Company under orders of winding up by BIFR), and a sum of ''100 Lakhs was paid as non-refundable deposit, (included under Other non-current assets (Note no.11)). As per the terms of the Lease agreement, this deposit shall be adjusted against the outright sale/transfer of ownership that may be fixed for the property and lessee shall be free to construct new building/alter the existing building/lay roads/fence the land in the interest of furthering its business to suit its use and on expiry of the lease the

said building shall vest with the lessor on payment of consideration based on value prevailing on the date of handing over of the property. The Company had incurred on the above land a sum of ''1452.95 lakhs (with carying value - ''814.27 Lakhs) on Buildings (Previous Year - ''859.05 lakhs) included in Property, Plant and Equipment as at year end. Vide order dated 09.07.2013, the Hon''ble Supreme Court of India upheld the decision of the Union Government to float a global tender of BGML assets with an observation about the existence of sub-lease of a portion of the land to BEML Ltd expiring on 28.04.2014 to be included in the tender documents. The Company filed an Interlocutory application before the Hon''ble Supreme Court of India, praying for exclusion of land leased to BEML from the purview of global tender, which was dismissed. Since the lease agreement provides for the continuation of the lease even after the expiry of lease period on 28.04.2014 till the final decision of the Company/Government in this regard, the operations of the company on the above land is continued. Appropriate accounting action will be considered based on the outcome of the tender process.

Meanwhile, BEML has proposed to surrender 1080.65 Acres out of 1109 Acres of land to BGML and to enter into a fresh lease agreement for the balance operational area of 28.35 Acres. However, BGML has offered BEML to outrightly purchase the land of 28.35 acres at mutually agreed price. The matter is under discussion between BGML and BEML.

iii) Lease-hold Land includes land allotted by Kerala Industrial Infrastructure Development Corporation (KIIDC) measuring 374.59 acres for a lease premium of ''2547.21 Lakhs (Previous Year - ''2547.21 Lakhs) for 99 years lease period with effect from 01.07.2009. The actual land handed over by KIIDC was measuring 374.16 acres and the revised lease premium payable is ''2544.29 Lakhs only, excluding Service tax of ''273.56 lakhs.

During the year FY 2021-22, out of 374.16 acres, land measuring 226.21 acres has been mutually agreed to be surrendered by BEML to KIIDC and to enter into fresh lease agreement for the balance portion of 147.95 acres.The matter is under active consideration. Service tax of ''273.56 lakhs has been waived off by KIIDC,hence the capitalized value of the land has been reduced accordingly.

iv) Lease-hold Land includes land measuring 101175.92 Sq. Mtrs taken on perpetual lease from KIADB (Bengaluru Aerospace, SEZ Park) at a cost of ''5126.00 Lakhs (Previous Year - ''5126.00 Lakhs).

v) Lease-hold land of 4706 Sqm at Hyderabad allotted by TSIIC in July 2006 at ''129.41 lakhs for the development of showroom, has been surrendered back to TSIIC vide Deed of Cancellation dated 21st March 2022. TSIIC has refunded the cost of ''129.41 lakhs to BEML in March 2022 and accordingly the said land has been decapitalized. No penalty has been imposed by TSIIC. Further, 7092 Sqm of operational land with a value of ''212.53 lakhs which was incorrectly classified as Leasehold Land has been re-classified as Freehold land.

vi) No Provision considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

vii) Free Hold Land includes additional compensation amount paid to KIADB amounting to ''183 Lakhs for which title deeds have to be obtained from KIADB and Registration is under process. As per the Karnataka High Court Vide Order dated 11.02.2021, BEML has made total payment of ''667.56 Lakhs on 28.05.2021, which includes interest amount of ''484.56 Lakhs.

viii) Free Hold Land measuring 3.647 acres of land, surrendered to BBMP against TDR (at cost) is ''4.58 Lakhs. Free Hold Land measuring 1.937 acres of land surrendered to BBMP for which TDR yet to be received (at cost) is ''2.43 Lakhs.

Above TDR will be utilised for further construction.

ix) Company has completed the process of obtaining documents in respect of Flat at Roshan Camp, Chennai and Office building at Nagpur. Company has taken action to obtain title documents in respect of flat at Ashadeep, New Delhi - ''2.80 Lakhs.

x) The company has initiated legal action to obtain possession of 1.88 acres of Land out of 5 acres at Tatisilwai, Arra village, Ranchi.

xi) For details of property, plant and equipment hypothecated by way of a first charge against borrowings and other facilities availed, refer Note no. 20 and 24

xii) For information on estimated capital contracts pertaining to the acquisition of property, plant and equipment, refer Note no. 39 D II a.

xiii) Free hold at KGF does not include 114 Acres which is under reconciliation with DC,Kolar.

xiv) In EM division- KGF, Freehold land measuring 9 Acres valuing ''70.86 Lakhs have been capitalized during the year for Wind Mill project at Dammur Village, Karnataka.

C. Amount of borrowing cost capitalised on addition of assets during the year is as under:

- Plant & Machinery ''NIL Lakhs

D. Since there is no investment property in the Company as on 31.03.2022, fair value of investment property is Nil (Previous Year -Nil)

E. Non current assets held for demerger not included in PPE:

1) Land carrying value 304.39 Lakhs

2) Building carrying value 45.78 Lakhs

Total 350.17 Lakhs

b. The Joint Venture Company BEML Midwest Ltd has not prepared its financial statements as at 31st March, 2022 due to litigation pending before National Company Law Tribunal. Hence, disclosure requirements under Ind AS-28 (Investments in Associates and Joint Ventures) could not be complied with. In the absence of financial statements of the JV, the same has not been consolidated with BEML financial statements.

c. For demerger of surplus assets of BEML, a wholly owned subsidiary- BEML Land Assets Limited (BLAL), was incorporated on 15-07-2021. Scheme of arrangement for demerger of surplus/non-core assets from BEML to BLAL has been cleared by Stock Exchanges viz., BSE & NSE. The Scheme of arrangement of demerger has also been approved by Shareholders and Creditors (both Secured and Un-secured) of BEML. The approval of Scheme of Arrangement of demerger is under process in line with the guidelines of Ministry of Corporate Affairs, Govt. of India.

d. As per CCEA approval dtd 8th September 2021, M/s Vignyan Industries Ltd, a subsidiary of BEML is under Voluntary Liquidation and Official Liquidator has been appointed on 11.10.2021. Movable assets have been disposed off and disposal of immovable assets is in progress. Dues of employees of VIL have been settled. As on 31.03.2022 there are no employees on the rolls of VIL.

A) Adoption of Income Tax Rates

The Ministry of Law & Justice, Govt. of India vide Gazette notification dated 20.09.2019 introduced section 115BAA with an option to choose revised Tax structure applicable w.e.f 01.04.2019 to Domestic Companies without claiming specific deductions u/s 35(2AB), deduction under Chapter-VIA, MAT Credit benefits, Carry Forward Business Losses, Additional Depreciation u/s 32(1)(iia) and other deductions as specified in the said section.

Based on the internal assessment, the Company has decided not to adopt the option u/s 115BAA. However, the same will be reviewed before filing the Annual Tax Return for FY 2021-22.

a. The Company has entered into a Consortium Agreement (MAMC Consortium) with

M/s Coal India Limited (CIL) and

M/s Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s Mining and Allied Machinery Corporation Limited (under liquidation). The agreement,

inter-alia, provided for formation of a Joint Venture company with a shareholding pattern of 48:26:26 among BEML, CIL and DVC respectively. The Company has paid the proportionate share of ''4800.00 Lakhs towards the total bid consideration of ''10000.00 Lakhs towards the said acquisition,

based on the order passed by the Hon''ble High Court of Calcutta. The said assets are taken possession by the MAMC Consortium. Further, the Company has incurred a sum of ''2027.18 Lakhs (Previous Year - ''1687.40 Lakhs) towards maintenance, security and other related expenditure. The expenditure incurred by CIL and DVC on account of this proposal is not ascertained. The total sum of ''6827.18 Lakhs (Previous Year -''6487.40 Lakhs) is disclosed as ''Advance to MAMC consortium'', pending allotment of equity shares in the capital of the JV company. Since the company intends to treat this as a long term investment, no independent valuation of the assets taken over has been done and the diminution in value of investments, if any, can be ascertained only

after the formulation of business plan and approval of shareholders'' agreement from MOD which is being pursued.

Further, a company in the name of ''MAMC Industries Limited'' (MIL) was formed and incorporated as a wholly-owned subsidiary company for the intended purpose of JV formation. Shareholders'' agreement, as duly approved by the Boards of all the three members of the consortium, has been submitted to Ministry of Defence for necessary approval. After obtaining the said approval, MIL, would be converted into a JV Company. The Company has advanced a sum of ''603.66 Lakhs (Previous Year - ''603.35 Lakhs) on account of MIL, which is included under the head ''Advances to related parties''

a. Raw materials & Components include materials lying with sub contractors ''2783.11 Lakhs (Previous Year - ''2547.25 Lakhs). Of these, confirmation from the parties is awaited for ''214.86 Lakhs (Previous Year -''454.82 Lakhs).

b. The closing stock of work-in-progress and finished goods are stated at lower of standard cost, which approximates to actuals, and net realisable value. The difference between the actual cost of production and the standard cost is not material.

standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the cost of production in order not to carry forward the period variances to subsequent financial period.

d. Allowance towards obsolescence is made as per the Board approved provisioning norms and is based on ageing of inventory.

e. Board has approved new norms for obsolescence provision for R&D and Collaborator model Equipment from FY 2021-22 which are in Inventory for 5 years or more. The impact of providing obsolescence provision as per new norms in FY 2021-22 is ''15.71 lakhs.

a. The Company earns no interest on balances with banks in current accounts.

b. Balances with banks include the following on which there were restrictions placed on use and/or held on behalf of third parties:

ESCROW account balance to be distributed among consortium members ''341.74 Lakhs (Previous Year - ''329.22 Lakhs)

c. Out of the Cash Credit Limit of ''120000 Lakhs sanctioned to the company by Consortium Bankers, the amount drawn by the company as on 31^st March 2022 is ''54324.40 Lakhs (Previous Year ''54184.87 Lakhs)

d. Unpaid Dividend Balance includes TDS of ''54.78 lakhs

e. The Board of Directors had approved an Interim Dividend of ''5.00 per equity share i.e., 50% on equity shares of ''10 each on 22.03.2022 which has been paid to Government of India on 31.03.2022 and other eligible shareholders were paid during April 2022.

f. FDR includes ''129.41 Lakhs being proceeds from surrender of 4706 Sqm of Lease hold land at Hyderabad to TSIIC and ''48.04 Lakhs against vendor dues forming part of Short Term Deposit.

Rights and restrictions attached to equity shares

No shares of the Company is held by its subsidiaries. The Company does not have any holding company.

No shares of the Company is reserved for issue under options and contracts/commitments for the sale of shares/disinvestment.

The Board of Directors had approved an Interim Dividend of ''5.00 per equity share i.e., 50% on equity shares of ''10 each on 22.03.2022 which is paid to Government of India on 31.03.2022 and other eligible shareholders was paid during April 2022.

During May''21 ''10000 lakhs of Non-Convertible Debentures were redeemed by the Company. Proportionately Debenture Redemption Reserve (DRR) of ''2500 lakhs have been transferred to Reserves & Surplus from DRR.

The company has utilised the borrowings from banks and financial institutions for the purpose for which it was been taken.

1. For movement in the provisions during the year refer Note no. 28

2. The provision for employee benefits represents annual leave and vested long service entitlements accrued.

4. Provision for unexpired obligations is towards supply of Backup Spares against guaranteed availability contracts.

The company has utilised the borrowings from banks and financial institutions for the purpose for which it was taken.

Quarterly statements/Results of assets filed by the Company with banks or financial institutions are in agreement with the books of accounts and hence the need for reconciliation of differences if any does not arise.

A. Provision written back against Receivables, Advances and Income from other operational activities like insurance claims settlement, Recoveries from suppliers, warranty and unexpired obligation, provision withdrawals, Export incentives etc, have been classified as Operating Revenue since these items are part of business operations. Previous year figures have been regrouped accordingly.

B. 1. Revenue from operations does not include GST on sale of products and services up to March

2022 is ''65326.05 Lakhs (Previous Year ''59068.60 Lakhs).

2. Revenue from sale of products includes '' 1014.00 Lakhs (Previous Year: ''3718.45) on account of Sale of 7 No. of equipment on "Bill and hold sales" basis recognised in accordance with Ind AS-115. This does not bear any custodian charges.

3. Revenue from sale of products and services includes ''56474.04 lakhs (Previous Year ''46313.53 Lakhs) towards export sales (including deemed exports).

C. 1. Revenue is recognized "over the period of time" on the contracts for metro cars supply and service contracts wherever transfer of control on goods/services and performance obligation satisfied over time. All other revenue is recognized at a point in time when control transfers.

2. Revenue from sale of products and services include ''91651.13 Lakhs and ''122.47 Lakhs (Previous Year - ''79179.14 Lakhs and ''768.27 Lakhs) recognized "over the period of time" in respect of Contracts entered with Metro Corporations for design, manufacture, supply, testing & commissioning of Metro Cars and in respect of ARV Overhauling Contracts in Defence business, respectively due to adoption of Ind AS 115 effective from 01-04-2018.

3. In case of metro supply contracts and Equipment Rehabilitation, Mining Aggregates Repairs Contracts and overhauling contract, for determination of transaction price for the purpose of recognizing revenue over the period of time, Input Method has been considered .

4. Following are the closing and opening balances of Receivables, Contract Assets and Contract liabilities (which are measured under Input Method);

('' in Lakhs)
Details	Balance as on 31.03.2022	Balance as on 01.04.2021
Receivables	66,348.27	12,786.85
Contract Assets	59,217.26	63,430.72

5. Payments under the Metro Supply Contracts are released by customers upon completion of milestones of Cost centers identified in the contracts.

7. Warranties: In respect of Metro Contracts, Defect Liability periods are applicable till taking over of Train sets by the Customer. Comprehensive warranty is provided for a period of 24 months from the date of acceptance for Defence Equipment.

9. ''204734.69 Lakhs and ''43.19 Lakhs (Previous Year - ''301621.64 Lakhs for Metro Contracts and ''165.65 Lakhs for Defence Equipment), is the aggregate amount of transaction price allocated to the performance obligations that are unsatisfied as of end of the reporting period and Company expects to recognize this revenue in subsequent years.

10. Following is the reconciliation of amount of revenue recognized in the statement of P&L on

recognition of Contract Assets; ('' in Lakhs)

Particulars	2021-22	2020-21
Opening Balance of Contract Asset	63430.72	30384.85
Add: Recognised During the Year	91773.60	79947.41
Total	155204.32	110332.26
Contract Assets Billed During the year	(95,987.06)	(46,901.54)
Contract Assets as on reporting date	59217.26	63430.72

i. The company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year under the Income tax act, 1961.

ii. Details of Crypto currency or virtual currency :

The Company has not traded in Crypto currency or virtual currency in the current financial year 2021-22.

A. Ind AS 19 (Employee Benefits)

a. Leave Salary

b. Post Retirement Medical Scheme

1. Employees

(iii) Sensitivity analysis of significant assumptions

The following table presents a sensitivity analysis to one of the relevant actuarial assumption, holding other assumptions constant, showing how the defined benefit obligation would have been affected by changes in the relevant actuarial assumptions that were reasonably possible at the reporting date.

2. Officers

For officers, from the year 2015-16 a new Post-Retirement Medical Scheme was introduced where a percentage of Basic salary and DA of officers will be contributed to a separate fund and the fund arrange to provide medical insurance to retired officers. Company has contributed 3% of the Basic and DA of officers amounting to ''718.57 Lakhs during 2021-22 for the scheme. Company has no further liability other than the contribution to the fund. Hence the scheme is a defined contribution plan and no actuarial valuation is required.

c. Interest Rate Guarantee on Provident Fund

(i) Provident Fund Trust of the Company has to declare interest on Provident Fund at a rate not less

than that declared by the Employees'' Provident Fund Organisation. In case the Trust is not able to

meet the interest liability, Company has to make good the shortfall. This is a defined benefit plan and

the Company has got the same actuarially valued and there is no additional liability that needs to be

provided for the year.

d. Officers Pension Scheme

e. Gratuity

(ii) The results of the actuarial study for the obligation for employee benefits as computed by the actuary are shown below:

Considering the wide scope of the definition of Related Party under section 2(76), Relative under section 2(77) and Key Managerial Personnel under section 2(51) of Companies Act, 2013 and the requirement under Ind AS 24 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the disclosure with respect to Related Party transactions has been restricted to Subsidiary/ Joint Venture/Associate companies and to any other Related Party as declared by Directors and Key Managerial Personnel. Accordingly, the compliance with Related Party Transactions under section 188, Ind AS 24 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been made to the extent data is available with the Company.

D. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT etc.,) ''63048.13 lakhs (Previous Year ''46692.80 Lakhs)

ii Other claims- legal cases etc. ''14196.86 Lakhs (Previous Year ''12305.47 Lakhs)

b. Other money for which the company is contingently liable - ''Nil (Previous Year - ''Nil).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for ''625.95 Lakhs (Previous Year - ''560.60 Lakhs)

b. Uncalled liability on shares and other investments partly paid - ''Nil (Previous Year - ''Nil ).

c. Other commitments (specify nature) - ''Nil (Previous Year - ''Nil ).

NOTES

1. The company does not expect any cash outflow in respect of above contingent Liabilities.

2. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in I.(a) above pending resolutions of the arbitration/appellate proceedings.

F. Ind AS 108 (Operating Segments)

G. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation. There are certain old balances pending review/adjustment. The management does not expect any significant impact upon such reconciliation.

H. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current year''s presentation.

I. Disclosures as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In compliance of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements), the required information is given as under:

J. Ind AS 116 - Leases

a) The Company as a lessee

b) The Company as a lessor

Below are the details of carrying amounts of such vehicles recorded as property, plant and equipment:

Transfers between the fair value hierarchy

There were no transfers in either direction in the fair value hierarchy during the year 2021-22.

Financial risk management

The Company is broadly exposed to credit risk, liquidity risk and market risk as a result of financial instruments.

Credit risk

The carrying amount of financial assets represents the Company''s maximum exposure to credit risk. No other financial assets carry a significant exposure to credit risk.

Trade receivables

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables based on factual information as on the Balance sheet date.

The maximum exposure to credit risk for trade receivables by geographic region was as follows.

At 31 March 2022, the Company''s most significant customer, accounted for ''30682.00 lakhs of the trade receivables carrying amount (31 March 2021: ''11100.95 Lakhs).

The movement in the loss allowance for impairment of trade receivables are disclosed in Note No. 14

Any past due from Government Customers and those fully covered by guarantees or collaterals received are not tested for impairment.

The credit quality of the financial assets is satisfactory, taking into account the allowance for doubtful trade receivables.

The Company has not received any collaterals for receivables as at reporting date.

The impairment loss allowance at 31 March 2022 related to several customers that have indication that they may not pay their outstanding balances. The Company believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on the fact that major customers are Government department, PSUs and historical payment behaviour and extensive analysis of customer credit risk, including underlying customers'' credit ratings if they are available.

(ii) Liquidity risk

To ensure continuity of funding, the Company primarily uses short-term bank facilities in the nature of bank overdraft facility, cash credit facility and short-term borrowings to fund its ongoing working capital requirements needs. The Company has also availed various non-current facilities in the form of secured redeemable debentures, secured term loans, inter-corporate loans against the Company''s guarantee and soft loans from the Government for expansion projects and construction and development of capital assets.

Exposure to liquidity risk

(iii) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity/commodity prices - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the management

The Company''s activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rate movements (refer to notes below on currency risk and interest risk). The Company enters into forward derivative contracts to manage risks of loss arising due to foreign exchange exposure. During the year ended 31 March 2022, there was no change to the manner in which the Company managed or measured market risk.

(iv) Currency risk

The Company is exposed to currency risk on account of its borrowings and other payables in foreign

currency. The functional currency of the Company is Indian Rupee. The Company uses forward exchange contracts to hedge its currency risk, mostly with a maturity of less than one year from the reporting date.

(v) Interest rate risk

Fair value sensitivity analysis for fixed-rate instruments

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

(vi) Equity and commodity price risk

M. Capital Management

Total borrowings comprises of long-term borrowings, short-term borrowing and bank overdraft facilities.

N. DerivativesDerivatives not designated as hedging instruments

The Company has following outstanding forward contracts as on

31 March 2022: JPY Nil (INR Nil) [Previous Year - JPY Nil (INR Nil)]

31 March 2022: EUR Nil (INR Nil) [Previous Year - EUR Nil (INR Nil)]

31 March 2022: USD Nil (INR Nil) [Previous Year: USD NIL (INR Nil)]

The Company has unhedged foreign currency exposure of ''18807.94 Lakhs (31 March 2021: ''18807.94 Lakhs) for payables as at reporting date.

The Company has applied the principles of Ind AS 109 for the measurement of derivative financial instruments and has classified such derivative contracts as at fair value through profit or loss.

Additional Disclosures :

i. The company does not hold any benami property held under the Benami Transaction (prohibition ) Act, 1988 (clause 45), hence the reporting clause on benami property in not applicable.

ii. The company does not fall under the willful defaulter category, hence the reporting clause on willful defaulter in not applicable.

iii. The company has not transacted with struck off companies in MCA during the year.

iv. The Company has complied with creation of charge and satisfaction of charge within the due dates and hence there are no non compliances to report.

vi. There are no charges or satisfaction pending to be registered with ROC beyond statutory period.

vii. Company has complied with the number of layers as prescribed under section 2(87) of Companies Act read with the companies (Restriction on number of layers).

like on behalf of the UltimateBeneficiaries. During the current year as well as previous year, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Mar 31, 2018

2. Officers

For officers, from the year 2015-16 a new Post Retirement Medical Scheme has been introduced where a percentage of Basic salary and DA of officers will be contributed to a separate fund and the fund arrange to provide medical insurance to retired officers. Company has contributed 3% of the basic and DA of officers amounting to ''534.75 Lakhs during 2017-18 for the scheme. Company has no further liability other than the

d. Officers Pension Scheme

c. Interest Rate Guarantee on Provident Fund

(i) Provident Fund Trust of the Company has to declare interest on Provident Fund at a rate not less than that declared by the Employees'' Provident Fund Organisation. In case the Trust is not able to meet the interest liability, Company has to make good the shortfall. This is a defined benefit plan and the Company has got the same actuarially valued and there is no additional liability that needs to be provided for the year:

e. Gratuity

(i) The employeesâ gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

(b), (c) and (e) of Part II to Schedule III of the Companies Act, 2013, in the Annual accounts for the Financial Year 2015-16 onwards.

C. Ind AS 24 - Related Parties

In accordance with the requirements of Ind AS 24, following are details of the transactions during the year with related parties.

Name of the related party Nature of relationship

Vignyan Industries Limited Subsidiary

MAMC Industries Limited Subsidiary

BEML Brazil Industrial Ltda Subsidiary

BEML Midwest Limited Joint venture

BEML PF Trust Employee benefit and administration trust fund

BEML Gratuity Trust Employee benefit and administration trust fund

BEML Death-cum-Retirement Benefit Fund Trust Employee benefit and administration trust fund

BEML Executive Superannuation (Pension) Fund Trust Employee benefit and administration trust fund

BEML Executive Superannuation (Benefit) Trust Fund Employee benefit and administration trust fund

Shri. D.K. Hota Key managerial personnel

Shri. Aniruddh Kumar Key managerial personnel

Shri. B R Viswanatha Key managerial personnel

Shri. R H Muralidhara Key managerial personnel

Shri. S V Ravi Sekhar Rao Key managerial personnel

* For part of the year.

4. Considering the wide scope of the definition of Related Party under section 2(76); Relative under section 2(77) and Key Managerial Personnel under section 2(51) of Companies Act, 2013 and the requirement under Ind AS 24 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the disclosure with respect to Related Party transactions has been restricted to Subsidiary / Joint Venture / Associate companies and to any other Related Party as declared by Directors and Key Managerial Personnel. Accordingly, the compliance with Related Party Transactions under section 188, Ind AS 24 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been made to the extent data is available with the Company.

D. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT etc.,) - Rs,65903.17 Lakhs (Previous Year -Rs,59307.40 Lakhs).

ii Other claims - legal cases etc. Rs,20794.59 Lakhs (Previous Year - Rs,15431.30 Lakhs).

b. Guarantees

Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs,1912.50 Lakhs (Previous Year -Rs,1912.50 Lakhs). The matter is subjudice.

c. Other money for which the company is contingently liable - Rs,Nil (Previous Year - Rs,Nil).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs,5249.93 Lakhs (Previous Year - Rs,5934.42 Lakhs)

b. Uncalled liability on shares and other investments partly paid - Rs,Nil (Previous Year - Rs,Nil ).

c. Other commitments (specify nature) - Rs,Nil (Previous Year - Rs,Nil ).

NOTES

1. The company does not expect any cash outflow in respect of above contingent Liabilities.

2. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in I

(a) above pending resolutions of the arbitration / appellate proceedings.

3. The cash flow in respect of matters referred to in I

(b) above is generally expected to occur within 3 years. However, the matter is under adjudication before DRT.

F. Ind AS 108 (Operating Segments)

Vide Notification No. GSR 463(E) dated 05-062015 (Serial no. 8) issued by Ministry of Corporate Affairs, exempted companies engaged in Defence Production from segmental disclosure as required under Ind AS 108 (Operating Segments), accordingly the disclosure requirements under Ind AS 108 has not been made.

G. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation and reconciliation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

arrangements, run for a period of 3 Years to 10 Years and are generally renewable by mutual consent.

J. Ind AS 17 - Leases a) The Company as a lessee

The Company''s significant leasing arrangements are in respect of operating leases and in respect of its leased office premises. These lease

H. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current yearâs presentation.

I. Disclosures as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Below are the details of carrying amounts of such vehicles recorded as property, plant and equipment:

* The Company has not disclosed the fair values for financial instruments, because their carrying amounts are a reasonable approximation of fair value.

b) The following table shows the fair values of assets and liabilities including their levels in the fair value hierarchy. It does not include fair value information for assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. The Company''s use

d) Transfers between the fair value hierarchy

There were no transfers in either direction in the fair value hierarchy during the year 2017-18.

L. Financial risk management

The Company is broadly exposed to credit risk, liquidity risk and market risk as a result of financial instruments.

The Company''s Board of Directors has the overall responsibility for the establishment, monitoring and supervision of the Company''s risk management framework. Treasury Management Team in the company take appropriate steps to mitigate financial risks within the framework set by the top management. Derivative transactions are undertaken by a specialist team with appropriate skills and experience. Company do not trade in derivatives for speculation.

(i) Credit risk

The carrying amount of financial assets represents the Company''s maximum exposure to credit risk. No other financial assets carry a significant exposure to credit risk.

Trade receivables

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, the management also considers the factors that may influence the credit risk of its customer base. Major Customers of the company are from Government Sector and Public Sector Companies, where credit risk is relatively low.

The management has established a system under which each new customer is analysed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs review includes external ratings, if they are available, and in some cases bank references.

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables based on factual information as on the Balance sheet date.

As at 31 March 2018, the Companyâs most significant customer, accounted for ''6723.72 Lakhs of the trade receivables carrying amount (Previous Year - ''6346.78 Lakhs)

The movement in the loss allowance for impairment of trade receivables are disclosed in Note No. 14.

Any past due from Government Customers and those fully covered by guarantees or collaterals received are not tested for impairment.

The credit quality of the financial assets is satisfactory, taking into account the allowance for doubtful trade receivables.

The Company has not received any collaterals for receivables as at reporting date.

The impairment loss allowance at 31 March 2018 related to several customers that have indication that they may not pay their outstanding balances. The Company believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on the fact that major customers are Government department, PSUs and historical payment behaviour and extensive analysis of customer credit risk, including underlying customersâ credit ratings if they are available.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset, or the risk that the Company will face difficulty in raising financial resources required to fulfill its commitments. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Liquidity risk is maintained at low levels through effective cash flow management, low borrowings and availability of adequate cash. Cash flow forecasting is performed internally by forecasts of the Companyâs liquidity requirements to ensure that it has sufficient cash to meet operational needs, to fund scheduled investments and to comply with loan covenants.

To ensure continuity of funding, the Company primarily uses short-term bank facilities in the nature of bank overdraft facility, cash credit facility and short-term borrowings to fund its on going working capital requirements needs. The Company has also availed various non-current facilities in the form of secured redeemable debentures, secured term loans, inter-corporate loans against the Company''s guarantee and soft loans from the Government for expansion projects and construction and development of capital assets.

Exposure to liquidity risk

The Companyâs activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rate movements (refer to notes below on currency risk and interest risk). The Company enters into forward derivative contracts to manage risks of loss arising due to foreign exchange exposure. During the year ended 31 March 2018, there was no change to the manner in which the Company managed or measured market risk.

Foreign currency risk is the risk arising from exposure to foreign currency movement that will impact the Company''s future cash flows and profitability in the ordinary course of business. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities from procuring or selling in foreign currencies and obtaining finance in foreign currencies.

Sensitivity analysis

A reasonably possible strengthening / (weakening) of the Indian Rupee against US dollars, Euro, Japanese Yen, the Pound and other currencies at 31 March 2018 and 31 March 2017 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

(vi) Equity and commodity price risk

M. Capital Management

¹ Total borrowings comprises of long-term borrowings, short-term borrowing and bank overdraft facilities.

² Cash and bank balances comprises of cash in hand, cash at bank and term deposits with banks.

N. Derivatives Derivatives not designated as hedging instruments.

The Company has following outstanding forward contracts as on

31 March 2018: JPY Nil (INR Nil) [Previous Year

- JPY Nil (INR Nil)]

31 March 2018: EUR Nil (INR Nil) [Previous Year

- EUR Nil (INR Nil)]

31 March 2018: USD Nil (INR Nil) [Previous Year: USD NIL (INR Nil)]

The Company has unhedged foreign currency exposure of ''10014.78 Lakhs (Previous Year - ''13938.55 Lakhs) for payables as at reporting date.

The Company has applied the principles of Ind AS 109 for the measurement of derivative financial instruments and has classified such derivative contracts as at fair value through profit or loss.

0. On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the following IND AS amendments vide the Companies (Indian Accounting Standards) Amendment Rules, 2018. The amendments are applicable from 1st April, 2018.

1 IND AS 12 Income Taxes

The amendment considers that:

1. Tax law determines which deductions are offset against taxable income in determining taxable income in determining taxable profits.

ii. No deferred tax asset is recognised if the reversal of the deductible temporary difference will not lead to tax deductions.

The company is evaluating the effect of this on Financial Statements, and impact thereof not yet ascertained.

2 Appendix B to IND AS 21

Foreign currency transactions & advance consideration.

Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The company is evaluating the effect of this on Financial Statements, and impact thereof not yet ascertained.

3 Ind AS 28 Investments in Associates and Joint Ventures.

The amendment to Ind AS 28 clarifies that a venture capital organization, or a mutual fund, unit trust and similar entities may elect, at initial recognition, to measure investments in an associate or joint venture at fair value through profit or loss separately for each associate or joint venture.

The impact of the above stated amendment to the Company is NIL as the same is not applicable to the Company.

4 IND AS 40 Investment Property

The amendment lays down the principle regarding when a Company should transfer to, or from, investment property. Accordingly, a transfer is made only when:

i. There is an actual change of use i.e. an asset meets or ceases to meet the definition of investment property.

ii. There is evidence of the change in use.

The impact of the above stated amendment to the Company is NIL as the same is not applicable to the Company.

5 Ind AS 112 Disclosure of Interests in Other Entities

The amendment to Ind AS 112 provide that the disclosure requirements for interests in other entities also apply to interests that are classified (or included in a disposal group that is classified) as held for sale or as discontinued operations in accordance with Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations.

The impact of the above stated amendment to the Company is NIL as the same is not applicable to the Company.

6 IND AS 115 Revenue from Contract with Customers

The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.

The company is evaluating the effect of this on Financial Statements, and impact thereof not yet ascertained.

1. We have audited the accompanying standalone Ind AS financial statements of BEML LIMITED (âthe Companyâ) which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss,(including other comprehensive income), the Statement of Cash Flow and Statement of Changes in Equity for the year then ended and a summary of the Significant Accounting Policies and other explanatory information ( herein after referred to as âstandalone Ind AS financial statementsâ)

Mar 31, 2017

Note No. 1: Corporate Information :

The accompanying financial statements comprise of the financial statements of BEML Limited (the Company) for the year ended 31 March 2017. The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at Bengaluru, Karnataka, India. The Company is a Mini Ratna Category - I public sector enterprise and is under the administrative control of the Department of Defence Production, Ministry of Defence. BEML manufactures and supplies defence ground support equipment such as Tatra based high mobility trucks, aircraft towing tractors etc. Under Mining and Construction business, the company manufactures and supplies equipment like bull dozers, excavators, dumpers, shovels, loaders and motor graders to various user segments and under Rail and Metro business, manufactures and supplies rail coaches, metro cars, ACEMUs, OHE cars, steel and aluminium wagons to the rail and metro sector. Information on other related party and nature of relationships of the Company is provided in Note 39C. These financial statements were authorised for issue in accordance with a resolution of the directors on 30-05-2017.

2.1 Basis of preparation and Statement of Compliance

a. The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of the Companies Act,2013 (the âActâ) and other relevant provisions of the Act.

For all periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2006 notified under section 133 of the Companies Act,2013 (the âActâ) and other relevant provisions of the Act (âPrevious GAAPâ), including accounting standards in accordance with the Companies (Accounting Standards) Rules, 2015 (as amended). These financial statements for the year ended 31 March 2017 with comparatives of year ended 31 March 2016 are the first the Company has prepared in accordance with Ind AS. Refer to note 39O(v) for information on how the Company has adopted Ind AS.

b. The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

- Derivative financial instruments.

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments),

- Defined benefit and other long-term employee benefits obligations.

c. The financial statements are presented in Indian Rupee (INR) which is the functional and the presentation currency of the Company and all values are rounded to the nearest lakhs (INR 00,000), except when otherwise indicated.

d. Preparation of the financial statements in conformity with Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the Financial Statements are prudent and reasonable. Future results could differ due to these estimates.

e. Assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Companyâs operating cycle is considered as twelve months for the purpose of current / non-current classification of assets and liabilities.

f. The Company revises its accounting policies if the change is required due to a change in Ind AS or if the change will provide more relevant and reliable information to the users of the financial statements. Changes in accounting policies are applied retrospectively. A change in an accounting estimate that results in changes in the carrying amounts of recognised assets or liabilities or to profit or loss is applied prospectively in the period(s) of change. Discovery of errors results in revisions retrospectively by restating the comparative amounts of assets, liabilities and equity of the earliest prior period in which the error is discovered. The opening balances of the earliest period presented are also restated.

Note 3: Property, Plant and Equipment

A. (i) Carrying value of vehicles own use includes equipment offered to customers for trials on No Cost No Commitment (NCNC) basis Rs.137.98 Lakhs (PreviousYear-â58.62Lakhs).

(ii) Carrying value of plant and equipment includes equipment offered to customers for trials on No Cost No Commitment (NCNC) basis Rs.94.29 Lakhs (Previous Year - Rs.Nil).

B. Property, Plant and Equipment

i) Buildings include carrying value of building at Mumbai and Ranchi pending registration / katha transfer at Rs.16.92 Lakhs (Previous Year - Rs.17.45 Lakhs)

ii) The Company has taken land measuring 1109 acres and two workshops on lease for a period of 10 years vide Lease Agreement dated 5th May 2004, w.e.f. 28.04.2004 from M/s Bharat Gold Mines Limited (BGML) (A Company under orders of winding up by BIFR), and a sum of Rs.100 Lakhs was paid as non-refundable deposit, (included under Other non-current assets (Note no.11)). As per the terms of the Lease agreement, this deposit shall be adjusted against the outright sale/transfer of ownership that may be fixed for the property and lessee shall be free to construct new building/ alter the existing building/lay roads/fence the land in the interest of furthering its business to suit its use and on expiry of the lease the said building shall vest with the lessor on payment of consideration based on value prevailing on the date of handing over of the property. The Company had incurred on the above land a sum of Rs.1452.95 lakhs [carrying value âRs.1044.44 Lakhs (Previous Year - Rs.1093.18 lakhs)] on Buildings included in Property. Plant and Equipment as at year end.

Vide order dated 09.07.2013, the Honâble Supreme Court of India upheld the decision of the Union Government to float a global tender of BGML assets with an observation about the existence of sublease of a portion of the land to BEML Ltd expiring on 28.04.2014 to be included in the tender documents. The Company filed an Interlocutory application before the Honâble Supreme Court of India, praying for exclusion of land leased to BEML from the purview of global tender, which was dismissed. Since the lease agreement provides for the continuation of the lease even after the expiry of lease period on 28.04.2014 till the final decision of the Company / Government in this regard, the operations of the company on the above land is continued. Appropriate accounting action will be considered based on the outcome of the tender process.

iii) Lease hold Land includes leased land allotted by Kerala Industrial Infrastructure Development Corporation (KIIDC) measuring 374.59 acres for a lease premium of Rs.2547.21 Lakhs (excluding Service Tax) (Previous Year - Rs.2547.21 Lakhs excluding Service Tax) for 99 years lease period with effect from 01.07.2009. The actual land handed over by KIIDC was measuring 374.16 acres and the revised lease premium payable is Rs.2544.29 Lakhs only. Adjustment in financial statement will be made on formal amendment of lease agreement by KIIDC.

iv) Lease Hold Land includes land measuring 101175.92 Sq. Mtrs taken on perpetual lease from KIADB (Bangalore Aerospace, SEZ Park) at a cost of Rs.5126.00 Lakhs (Previous Year - Rs.5126.00 Lakhs).

v) Lease Hold Land includes land at cost Rs.129.41 Lakhs at Hyderabad for which registration will be completed after development of showroom.

vi) No Provision considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

vii) Free Hold Land includes land measuring 555.37 acres at Mysore costing Rs.321.23 Lakhs (including additional compensation ofRs.183.57 Lakhs demanded by KIADB) for which title deeds have to be obtained from KIADB. As per the demand of KIADB, provision of interest amounting to Rs.509.08 Lakhs (Previous Year - Rs.486.60 Lakhs) up to period 31st March 2017 has been made. However, matter has been taken up with KIADB for waiving of interest which is pending before KIADB Board. Liability for both interest and additional compensation has been created. Registration will be made once the matter is settled with KIADB Board.

viii) Free Hold Land measuring 3.647 acres of land, surrendered to BBMP against TDR (at cost) is Rs.4.58 Lakhs. Free Hold Land measuring 1.937 acres of land surrendered to BBMP for which TDR yet to be received (at cost) is Rs.2.43 Lakhs. Above TDR will be utilised for further construction.

ix) Company has taken action to obtain title documents in respect of the following immovable properties.

(1) Flat at Roshan comp, Madras - Rs.4.04 Lakhs.

(2) Flat at Ashadeep, New Delhi - Rs.2.80 Lakhs.

(3) Office building at Nagpur - Rs.27.18 Lakhs.

(4) Lease Hold Land at Singrauli - Rs.1.75 Lakhs.

x) For details of property, plant and equipment hypothecated by way of a first charge against borrowings and other facilities availed, refer Note no. 20 and 24

xi) For information on estimated capital contracts pertaining to the acquisition of property, plant and equipment, refer Note no. 39 D II a.

C. Amount of borrowing cost capitalised on addition of assets during the year is as under:

- Plant & Machinery Rs.169.28 Lakhs

D. Since there is no investment property in the Company as on 31.03.2017, fair value of investment property is Nil (Previous Year - Nil)

b. The Joint Venture Company BEML Midwest Ltd. has not prepared its financial statements as at 31st March, 2017 due to litigation pending before National Company Law Tribunal. Hence, disclosure requirements under Ind AS-28 (Investments in Associates and Joint Ventures) could not be complied with. In the absence of financial statements of the JV, the same has not been consolidated with BEML financial statements.

c. The company had issued corporate guarantee to Bank for facilities extended to BEML Midwest Limited, for Rs.1912.50 Lakhs. Since BEML Midwest Limited failed to pay, the Bank concerned invoked the corporate guarantee and claimed from the company. However the company has refused to pay the claim on the ground that the claim relating to forward contracts were entered into without the approval of board of BEML Midwest Limited and that the majority shareholder has misappropriated and acted beyond the mandate without complying with the terms and conditions specified by the Board of BEML Midwest Limited. The matter is pending before Debt Recovery Tribunal (DRT). The company does not envisage any cash outflow in this regard.

Lease deposits represent deposits paid as security for office space and flats taken on rent.

Inter Corporate Loan balance as on 31.03.2017 represent outstanding loan to M/s JK Tyres Ltd. The loan carry interest at the rate of SBI PLR less 2.25%. Currently 11.75% (Previous Year 11.80%) and are unsecured from borrowers. Against this loan the company has received Inter Corporate Loan from M/s Coal India Ltd. which is accounted as unsecured loan in Note No. 20.

Note 4: Income taxes

The substantively enacted tax rate as on 31 March 2017 is 34.61% and as on 31 March 2016 was 34.61% for deferred tax purposes.

a. The Company has entered into a Consortium Agreement (MAMC Consortium) with M/s. Coal India Limited (CIL) and M/s. Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s. Mining and Allied Machinery Corporation Limited (under liquidation). The agreement, inter-alia, provided for formation of a Joint Venture company with a shareholding pattern of 48:26:26 among BEML, CIL and DVC respectively. The Company has paid the proportionate share of Rs.4800.00 Lakhs towards the total bid consideration of Rs.10000.00 Lakhs towards the said acquisition, based on the order passed by the Honâble High Court of Calcutta. The said assets are taken possession by the MAMC Consortium. Further, the Company has incurred a sum of Rs.944.31 Lakhs (Previous Year - Rs.875.68 Lakhs) towards maintenance, security and other related expenditure. The expenditure incurred by CIL and DVC on account of this proposal is not ascertained. The total sum ofâ5744.31 Lakhs (Previous Year - Rs.5675.68 Lakhs) is disclosed as âAdvance to MAMC consortiumâ, pending allotment of equity shares in the capital of the JV company. Since the company intends to treat this as a long term investment, independent valuation of the assets taken over has been done and there is no diminution in value of investments. Formulation of business plan and approval of shareholdersâ agreement from MOD is being pursued.

Further, a company in the name of âMAMC Industries Limitedâ (MIL) was formed and incorporated as a wholly-owned subsidiary company for the intended purpose of JV formation. Shareholdersâ agreement, as duly approved by the Boards of all the three members of the consortium, has been submitted to Ministry of Defence for necessary approval. After obtaining the said approval, MIL, would be converted into a JV Company. The Company has advanced a sum of Rs.601.76 Lakhs (Previous Year - Rs.601.44 Lakhs) on account of MIL, which is included under the head âAdvances to related partiesâ.

Note 5: Inventories (Lower of cost and Net realisable value)

a. Raw materials & Components include materials lying with sub contractors Rs.1855.05 Lakhs (Previous Year - Rs.2087.38 Lakhs). Of these, confirmation from the parties is awaited for Rs.588.75 lakhs (Previous Year - Rs.137.94 Lakhs).

c. Variances arising on account of difference between standard cost and the actual cost, on account of change in the nature of inputs from bought-out to internally manufactured or vice versa, timing difference between standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the cost of production in order not to carry forward the period variances to subsequent financial period.

d. Allowance towards obsolescence is made as per the provisioning norms and is based on ageing of inventory.

e. The Carbon Credits are included under Finished Goods at a total value of Rs.1.42 Lakhs (Rs.21.58 per unit of Verified Emission Reductions (VERs)). Total VERs certified and pending for realization is 6589 units. The Certified Emission Reduction (CER) is valued at cost as required by Guidance Note on CER issued by ICAI.

BEML has formed a 100% owned subsidiary in Brazil with the intention of penetrating demand in the local market and provide high quality machinery and equipment in the construction and mining industry. BEML commenced operations via its wholly owned subsidiary but found stiff competition in the Brazilian market with competitors possessing higher market and consumer knowledge and conducting operations by means of easier access to resources. As there is no operations in âBEML Brazil Industrial Ltdaâ presently, BEML is examining future course of action for the subsidiary company. The subsidiary has bank deposits in the local bank that earns a compounding interest and the expenses of administration and other overhead charges of the subsidiary are incurred from such deposits.

Note 6: Trade receivables

*i. Trade receivables - Outstanding for period exceeding six months include Rs.925.87 Lakhs (Previous Year - Rs.925.87 Lakhs) towards interest rate difference on advance amount received from Ministry of Defence (MoD). This amount pertains to interest rate difference between deposit rate and interest recovered at the rate of 9.50% by MoD during FY 2006-07, 2007-08 and 2009-10 from various bills. The matter has been taken up with MoD and it is under their consideration.

ii. Trade receivables - Outstanding for period exceeding six months include Rs.4899.99 Lakhs (Previous Year Rs.4899.99 Lakhs) towards exchange rate difference and escalation for import of components in respect of a long term contract for Design, Development and Supply, entered into with Ministry of Defence (MoD) in 2001. This contract provided for import content denominated in US Dollar with a clause for escalation and exchange rate variation. As the import of materials was from a country in the European Union which adopted Euro as its International transaction currency, the company was forced to import in Euro currency from January, 2007 to meet its obligations under the contract. The Euro as a trading currency was not contemplated at the time of entering the contract placed by the customer. The request for amendment from US Dollar to Euro and the consequential Escalation and Exchange Rate variation is pending with the customer. The company does not expect any material impact on this account, sequel to the reassessment of the escalation and exchange rate variation, based on an acceptable formula for the customer.

Note 7: Cash and cash equivalents

a. The Company earns no interest on balances with banks in current accounts.

b. Balances with banks include the following on which there were restrictions placed on use and / or held on behalf of third parties:

ESCROW account balance to be distributed among consortium members Rs.174.79 Lakhs (Previous Year Rs.5189.58 Lakhs) & BEML share is Rs.9.80 Lakhs (Previous Year Rs.Nil)

c. Out ofthe Cash Credit Limit of Rs.100000 Lakhs sanctioned to the company by Consortium Bankers, the amount drawn by the company as on 31st March is Rs.11285.16 Lakhs (Previous Year Rs.15367.44 Lakhs)

d. For the purpose ofthe cash flow statement, cash and cash equivalents comprise the following:

Rights and restrictions attached to equity shares

The company has only one class of share, i.e., equity shares having the face value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recommended by the Board of Directors

No shares of the Company is held by its subsidiaries. The Company does not have any holding company.

No shares of the Company is reserved for issue under options and contracts/commitments for the sale of shares / disinvestment.

The Board of Directors in their meeting held on is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

30th May 2017 recommended a dividend of Rs.8/per equity share (i.e., 80%) for the financial year ended 31st March 2017, subject to the approval of shareholders at the ensuing Annual General Meeting. If approved, this would result in a cash outflow of approximately Rs.4009.79 Lakhs including corporate dividend tax.

1. For movement in the provisions during the year refer Note No. 28.

2. The provision for employee benefits represents annual leave and vested long service entitlements accrued.

4. Provision for unexpired obligations is towards supply of Backup Spares against guaranteed availability contracts.

Note 8: Other non-current liabilities

The government grant income is amortised to profit or loss on a straight line basis over the term of interest free loan (Note 31).

a. Company received an interest free loan of Rs.944.00 Lakhs from Government of Kerala (Note 20). The same has been initially recognised at fair value and the difference between the proceeds and fair value is recognised as deferred government grant.

Micro and Small Enterprises (MSE)

i. The company has entered into a consortium agreement with one international partner for the supply of Metro coaches to Delhi Metro Rail Corporation Ltd, (DMRCL). As per the agreement, the company is responsible to raise the bills at the full value ofthe contract including consortium scope on DMRCL, as terminal excise duty and CST thereon is discharged by the company.

A. Ind AS 19 (Employee Benefits)

a. Leave Salary

b. Post Retirement Medical Scheme

1. Employees

(i) The company has a post retirement defined benefit medical scheme where an insurance policy is taken by the company for providing mediclaim benefits to the superannuated employees who opt for the scheme. The Company pays 2/3 rd insurance premium and the balance is paid by the superannuated employees.

(ii) The results of the actuarial study for the obligation of the medical benefit as computed by the actuary are shown below:

(iii) Sensitivity analysis of significant assumptions

The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

2. Officers

For officers, from the year 2015-16 a new Post Retirement Medical Scheme has been introduced where a percentage of Basic salary and DA of officers will be contributed to a separate fund and the fund arrange to provide medical insurance to retired officers. Company has contributed 3% of the basic and DA of officers amounting to Rs.527.42 Lakhs during 2016-17 for the scheme. Company has no further liability other than the contribution to the fund. Hence the scheme is a defined contribution plan and no actuarial valuation is required.

c. Interest Rate Guarantee on Provident Fund

(i) Provident Fund Trust of the Company has to declare interest on Provident Fund at a rate not less than that declared by the Employeesâ Provident Fund Organisation. In case the Trust is not able to meet the interest liability, Company has to make good the shortfall. This is a defined benefit plan and the Company has got the same actuarially valued and there is no additional liability that needs to be provided for the year.

d. Officers Pension Scheme

Based on the guidelines of Ministry of Defence, Company has implemented âBEML Executive Superannuation (Pension) Schemeâ for Officers of the Company. The Scheme is a defined contribution plan and the contribution made is being charged off in the year of contribution. Being a defined contribution plan no actuarial valuation is done.

e. Gratuity

(ii) The results of the actuarial study for the obligation for employee benefits as computed by the actuary are shown below:

(iii) Sensitivity analysis of significant assumptions

The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

(v) Investment details

The plan assets under the fund are deposited under approved securities as follows:

Ind AS 23 (Borrowing Costs)

The amount of interest capitalized during the Year is Rs.169.28 Lakhs (Previous Year - Rs.699.97 Lakhs).

Note 9: Other Disclosures

A. Basic / Diluted Earnings Per Equity Share

B. In terms of Notification No. S.O.2437(E) dated 04-09-2015 of the Ministry of Corporate Affairs, the Board at its meeting held on 27.05.2016 has given consent with regard to non-disclosure of information as required under paragraphs 5(ii) (a) (1), 5(ii) (a) (2), 5(iii) and Para 5(viii) (a), (b), (c) and (e) of Part II to Schedule III of the Companies Act, 2013, in the Annual accounts for the Financial Year 2015-16 onwards.

C. Ind AS 24 - Related Parties

In accordance with the requirements of Ind AS 24, following are details of the transactions during the year with related parties.

Transactions with related parties

1. The details of related party transactions entered into by the Company are as follows: i. Name of the Subsidiary Company M/s. Vignyan Industries Limited, (VIL) Tarikere

iii. Name of the Joint Venture Company - M/s. BEML Midwest Limited, Hyderabad. Shareholding 45%.

iv. Name of the Subsidiary - M/s. BEML Brazil Industrial Ltda

D. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT etc.,) - Rs.59307.40 Lakhs (Previous Year âRs.57046.22 Lakhs).

ii Other claims - legal cases etc. Rs.15431.30 Lakhs (Previous Year - Rs.52629.58 Lakhs).

b. Guarantees

Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs.1912.50 Lakhs (Previous Year -Rs.1912.50 Lakhs). The matter is subjudice.

c. Other money for which the company is contingently liable - Rs.Nil (Previous Year -âNil).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.5934.42 Lakhs (Previous Year - Rs.2270.81 Lakhs)

b. Uncalled liability on shares and other investments partly paid - Rs.Nil (Previous Year - Rs.Nil ).

c. Other commitments (specify nature) - Rs.Nil (Previous Year - Rs.Nil ).

NOTES

1. The company does not expect any cash outflow in respect of above contingent Liabilities.

2. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in I (a) above pending resolutions of the arbitration / appellate proceedings.

3. The cash flow in respect of matters referred to in I (b) above is generally expected to occur within 3 years. However, the matter is under adjudication before DRT.

F. Ind AS 108 (Operating Segments)

G. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation and reconciliation. There are certain old balances pending review / adjustment. The management run for a period of 3 Years to 10 Years and are generally renewable by mutual consent.

J. Leases

a) The Company as a lessee

The Companyâs significant leasing arrangements are in respect of operating leases and in respect of its leased office premises. These lease arrangements, does not expect any significant impact upon such reconciliation.

b) The Company as a lessor

The Company provides cars to employees who are eligible and enrol into such a scheme after completion of a specific period of service. Such leases are non-cancellable in nature and have been classified as operating leases.

c) Lease income and expenditure

The gross amounts of operating lease income and expenditure recognised in profit or loss is as below.

H. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current yearâs presentation.

I. Disclosures as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In compliance of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements), the required information is given as under:

Future minimum lease payments under non-cancellable operating leases are summarised below:

Below are the details of carrying amounts of such vehicles recorded as property, plant and equipment:

a) The following table shows the fair values of assets and liabilities including their levels in the fair value hierarchy. It does not include fair value information for assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. The Companyâs use of quoted market prices (Level 1), valuation model using observable market information as inputs (Level 2) and valuation models without observable market information as inputs (Level 3) in the valuation of securities and contracts by type of issuer was as follows:

b) Measurement of fair values

Valuation techniques and significant unobservable inputs:

c) Transfers between the fair value hierarchy

There were no transfers in either direction in the fair value hierarchy during the year 2016-17.

L. Financial risk management

The Company is broadly exposed to credit risk, liquidity risk and market risk as a result of financial instruments.

The Companyâs Board of Directors has the overall responsibility for the establishment, monitoring and supervision of the Companyâs risk management framework. Treasury Management Team in the company take appropriate steps to mitigate financial risks within the framework set by the top management. Derivative transactions are undertaken by a specialist team with appropriate skills and experience. Company do not trade in derivatives for speculation.

(i) Credit risk

The Company regularly follow up the receivable to minimise losses arising from credit exposure from credit customers. Credit control assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Deposits and cash balances are placed with reputable scheduled banks. The carrying amount of financial assets represents the Companyâs maximum exposure to credit risk. No other financial assets carry a significant exposure to credit risk.

Trade receivables

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables based on factual information as on the Balance sheet date.

As at 31 March 2017, the Companyâs most significant customer, accounted for Rs.6346.78 lakhs of the trade receivables carrying amount (31 March 2016: Rs.6305.00 lakhs, 1 April 2015: Rs.4449.00 lakhs).

The movement in the loss allowance for impairment of trade receivables are disclosed in Note No. 14 Any past due from Government Customers and those fully covered by guarantees or collaterals received are not tested for impairment.

The credit quality of the financial assets is satisfactory, taking into account the allowance for doubtful trade receivables.

The Company has not received any collaterals for receivables as at reporting date.

The impairment loss allowance at 31 March 2017 related to several customers that have indication that they may not pay their outstanding balances. The Company believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on the fact that major customers are Government department, PSUs and historical payment behaviour and extensive analysis of customer credit risk, including underlying customersâ credit ratings if they are available.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset, or the risk that the Company will face difficulty in raising financial resources required to fulfil its commitments. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Liquidity risk is maintained at low levels through effective cash flow management, low borrowings and availability of adequate cash. Cash flow forecasting is performed internally by forecasts of the Companyâs liquidity requirements to ensure that it has sufficient cash to meet operational needs, to fund scheduled investments and to comply with loan covenants.

To ensure continuity of funding, the Company primarily uses short-term bank facilities in the nature of bank overdraft facility, cash credit facility and short-term borrowings to fund its ongoing working capital requirement needs. The Company has also availed various noncurrent facilities in the form of secured redeemable debentures, secured term loans, inter-corporate loans against the Companyâs guarantee and soft loans from the Government for expansion projects and construction and development of capital assets.

Exposure to liquidity risk

The table below details the Companyâs remaining contractual maturity for its financial liabilities and derivative financial liabilities. The contractual cash flows reflect the undiscounted cash flows of financial liabilities and derivative financial liabilities based on the earliest date on which the Company can be required to pay.

(iii)Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity / commodity prices â will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the management. The Companyâs activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rate movements (refer to notes below on currency risk and interest risk). The Company enters into forward derivative contracts to manage risks of loss arising due to foreign exchange exposure. During the year ended 31 March 2017, there was no change to the manner in which the Company managed or measured market risk.

(iv) Currency risk

Foreign currency risk is the risk arising from exposure to foreign currency movement that will impact the Companyâs future cash flows and profitability in the ordinary course of business. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities from procuring or selling in foreign currencies and obtaining finance in foreign currencies.

¹ As the foreign currency borrowing exposures are fully hedged, a strengthening or weakening of USD will have no impact on profit or loss or equity. At 31 March 2016, the Company had no exposure to foreign exchange risk on the above foreign currency borrowings, which has been repaid on the maturity date of 13 January 2017.

The Company operates domestically and is currently a party to borrowings in foreign currencies (USD) which is fully hedged through cross currency swaps until maturity. Foreign exchange risk also arises from future commercial transactions. To manage foreign exchange risk arising from future commercial transactions, the Company may use forward contracts, transacted by the Companyâs Treasury. The Companyâs risk management policy is to fully hedge foreign currency exposures related to borrowings and to hedge foreign currency exposures relating to revenue, operating expenditure and capital expenditure over certain thresholds.

The Company has availed a foreign currency term loan which is fully hedged through cross currency swaps until maturity of the ECB.

The Company does not use derivative financial instruments for trading or speculative purposes. Following is the information on derivative financial instruments to hedge the foreign exchange rate risk as on dates are as below:

Sensitivity analysis

A reasonably possible strengthening / (weakening) of the Indian Rupee against US dollars, Euro, Japanese Yen, the Pound and other currencies at 31 March 2017 and 31 March 2016 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

(v) Interest rate risk

Exposure to interest rate risk

The Companyâs interest rate risk arises from borrowings and loans made. Borrowings availed at fixed rates expose the Company to fair value interest rate risk. The interest rate profile of the Companyâs interest-bearing financial instruments as reported to the management of the Company is as follows.

Fair value sensitivity analysis for fixed-rate instruments

(vi) Equity and commodity price risk

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

M. Capital Management

The Company strives is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The board of directors seeks to maintain a balance between the higher returns and levels of borrowings and the advantages and security afforded by a sound capital position.

N. Derivatives

Derivatives not designated as hedging instruments

The Company has unhedged foreign currency exposure of Rs.13938.55 Lakhs (31 March 2016: Rs.2398.23 Lakhs, 01 April 2015: Rs.5160.06 Lakhs) for payables as at reporting date.

The Company has applied the principles of Ind AS 109 for the measurement of derivative financial instruments and has classified such derivative contracts as at fair value through profit or loss.

O. Transition to Ind AS

As stated in Note 2.1, these are the Companyâs first financial statements prepared in accordance with Ind AS. The transition to Ind AS has resulted in changes in the presentation of financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in âNote 2. Significant accounting policiesâ have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening balance sheet as at 1 April 2015 (the âtransition dateâ).

The Company has following outstanding forward contracts as on 31 March 2017: JPY Nil (INR Nil) [31 March 2016: JPY 18811.32 Lakhs (INR 10536.54 Lakhs)] [01 April 2015: JPY 10338.68 Lakhs (INR 5584.54 Lakhs)] 31 March 2017: EUR Nil (INR Nil) [31 March 2016: EUR 47.41 Lakhs (INR 3500.74 lakhs)] [01 April 2015: EUR 23.73 Lakhs (INR 1796.28 Lakhs)] 31 March 2017: USD Nil (INR Nil) [31 March 2016: USD NIL (INR Nil)] [01 April 2015: USD 57.72 Lakhs (INR 3652.27 Lakhs)]

For the purpose of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 (first time adoption of Indian Accounting Standards), with 1 April 2015 as the transition date from the previous GAAP. In preparing our opening Ind AS Balance sheet, we have adjusted amounts reported in financial statements prepared in accordance with previous GAAP. An explanation of how the transition from Previous GAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under previous GAAP except where required by Ind AS.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and previous GAAP as of the transition date have been recognized directly in equity at the transition date.

(iii) Material adjustments to the statement of cash flows for the year ended 31 March 2016

There are no material differences between the statement of cash flows presented under Ind AS and the statement of cash flows presented under previous GAAP.

(iv) Notes to reconciliation

a Property, plant and equipment

Under Ind AS, special tools have been recognised as property, plant and equipment since they meet the definition of property, plant and equipment as per Ind AS 16. This category of assets was classified as other non- current assets under previous GAAP. This reclassification has no impact on the total comprehensive income for the year ended 31 March 2016 and on equity as at that date.

The carrying amount of special tools reclassified to property, plant and equipment on the transition date is Rs.397.35 Lakhs and as on 31 March 2016 Rs.424.21 Lakhs. The depreciation charge on special tools for the year ended 31 March 2016 Rs.255.44 Lakhs which was earlier presented as amortisation of special tools and classified as part of other expenses.

b Financial assets at amortised cost

Under Ind AS certain financial assets such as redeemable deposits receivable are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial assets are measured at amortised cost using the effective interest method. Under previous GAAP. such financial assets were carried at cost till maturity and interest, if any was accounted on the outstanding principal amount.

c Buyerâs credit facilities

The measurement of outstanding foreign currency buyerâs credit facility has to be restated at each reporting date for movements in the spot rate between the functional currency of the Company and the foreign currency. In accordance with Ind AS 21, such changes in spot exchange rates have to be recognised in profit or loss. The Company has entered into various forward contracts to hedge this currency exposure. According to Ind AS 109, all derivative financial instruments must be measured at each reporting date at fair value. Under previous GAAP, the buyerâs credit facility was measured at the forward rate of settlement of derivatives and such derivative instruments were not recognised.

d. Proposed dividend

Under previous GAAP, dividends proposed by Board of Directors after the reporting date but before the approval of financial statements were considered to be an adjusting event and accordingly recognised (along with related dividend distribution tax) as liabilities at the reporting date. Under Ind AS, dividends so proposed by the Board are considered to be a non-adjusting event. Accordingly, provision for proposed dividend and dividend distribution tax recognised under previous GAAP has been reversed.

g. Employee benefits expense

Under Ind AS, the Company recognises all re-measurement gains and losses arising from post-retirement defined benefit plans in other comprehensive income in the period in which they occur. Under previous GAAP the Company recognised re-measurement gains and losses in the statement of profit or loss in the period in which they occurred. At the date of transition, all previously recognised cumulative re-measurement gains and losses were recognised in retained earnings and hence, has no impact on equity as at the transition date. Re-measurement loss of Rs.1335.94 Lakhs has been presented in UCI tor the year ended 31 March 2016 and corresponding tax effect for such an adjustment was Rs.285.11 Lakhs.

h. Prior period adjustments

Prior period adjustments under previous GAAP were reported in the statement of profit or loss in the period in which they were discovered. According to Ind AS 8, material prior period adjustments are required to be rectified retrospectively in the periods in which they occurred. On the date of transition to Ind AS, prior period errors of the effect of Rs.89.11 Lakhs were adjusted to opening retained earnings.

(v) First-time adoption exemptions

In preparing these financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101 as explained below.

a) De-recognition of financial assets and financial liabilities:

The Company has applied the de-recognition criteria as per Ind AS 109 prospectively and has not recognised any previously derecognised non-derivative financial assets and financial liabilities prior to 1 April 2015 that may qualify for recognition as per Ind AS.

b) Government loan:

The Company has applied the mandatory exception to account for the soft loan received from the Government of Kerala retrospectively by not measuring the carrying amount of the loan at fair value on the transition date. The loan is carried at the transaction value in accordance with Previous GAAP for each reporting period.

c) Deemed cost:

The Company has elected to apply the deemed cost exemption in Ind AS 101 whereby the Company has the option to carry all items and classes of property, plant and equipment on the date of transition to Ind AS as per the carrying amounts prevailing as per previous GAAP. Once this exemption is applied, no adjustment pertaining to property, plant and equipment on the date of transition for effects of retrospective application of other standards is made.

d) Leases:

The Company has evaluated leases of land and buildings separately and accounted for each element on the basis of the classification as per Ind AS 17 prospectively from 1 April 2015.

e) Designation of previously recognised financial instruments:

The Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

f) Fair value of financial instruments:

The fair value of transactions entered into after the transition date qualifying as financial instruments is measured as such prospectively from 1 April 2015.

g) Impairment of financial assets:

The Company has adopted the exemption in the recognition of a loss allowance for financial assets with a significant increase in credit risk prospectively from the date of transition to Ind AS since initial recognition such a determination would require undue cost or effort for retrospective application.

Mar 31, 2016

Basis of Preparation of Financial Statements

Assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company''s operating cycle is considered as twelve months for the purpose of current / non current classification of assets and liabilities.

Rights and restrictions attached to equity shares

The Company has only one class of share, i.e., equity shares having the face value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

A. Useful life adopted by the Company for calculation of Depreciation in respect of the following assets are less than the useful life prescribed under S chedule II of the C ompanies A ct, 2 01 3 . The reduced useful life has been adopted in view of large number of small value assets involved and faster rate of wear and tear for Jigs & Fixtures.

i) Individual assets costing less than Rs.5000 - useful life 1 year.

ii) Jigs & Fixtures valued more than Rs.5.00 Lakhs capitalised - useful life 3 years.

B. Accounting Standard 19 ( Leases )

i) Office premises taken on lease

The Company''s significant leasing arrangements are in respect of operating leases in respect of its leased office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No. 28.

ii) Cars given on Lease on non cancellable basis

I. a) Gross Carrying amount Rs.716.52 Lakhs (Previous Year -Rs.487.17 Lakhs)

b) Accumulated depreciation Rs.313.12 Lakhs (Previous Year -Rs.251.12 Lakhs)

c) Accumulated impairment losses Rs.Nil

d) (i) Depreciation recognized in the

Statement of Profit & Loss Rs.96.07 Lakhs (Previous Year -Rs.69.07Lakhs)

(ii) Impairment losses recognized in the

Statement of Profit & Loss Rs.Nil (Previous Year -Rs.Nil)

(iii) Impairment losses reversed in the

Statement of Profit & Loss Rs.Nil (Previous Year -Rs.Nil)

II. Future minimum lease payments under non-cancellable operating leases - Leased cars

(i) Not later than one year Rs.47.24 Lakhs (Previous Year -Rs.53.73Lakhs)

(ii) Later than one year but not later than five years Rs.177.76 Lakhs (Previous Year -Rs.162.76Lakhs)

(iii) Later than five years Rs.155.57 Lakhs (Previous Year -Rs.49.52Lakhs)

III. Total rent recognized as income in the

Statement ofProfit & Loss Rs.64.86 Lakhs (Previous Year -Rs.45.88Lakhs)

C. Gross value of vehicles own use includes equipment offered to customers for trials on No Cost No Commitment (NCNC) basis Rs.132.05 Lakhs (WDV - Rs.58.62 Lakhs) [Previous Year - Gross Block Rs.763.68 Lakhs (WDV - Rs.110.96 Lakhs)].

D. Fixed Assets

i) Buildings include cost of building at Mumbai and Ranchi pending registration / katha transfer at Rs.33.00 Lakhs (Previous Year - Rs.33.00 Lakhs).

ii) The Company has taken land measuring 1109 acres and two workshops on lease for a period of 10 years vide Lease Agreement dated 5th May 2004, w.e.f. 28.04.2004 from M/s Bharat Gold Mines Limited (BGML) (A Company under orders of winding up by BIFR), and a sum of Rs.100 Lakhs was paid as non- refundable deposit [included under Long Term Loans and Advances (Note 14)]. As per the terms of the Lease agreement, this deposit shall be adjusted against the outright sale/transfer of ownership that may be fixed for the property and lessee shall be free to construct new building/alter the existing building/lay roads/fence the land in the interest of furthering its business to suit its use and on expiry of the lease the said building shall vest with the lessor on payment of consideration based on value prevailing on the date of handing over of the property. The Company had incurred on the above land a sum of Rs.1452.95 lakhs (WDV - Rs.1093.18 Lakhs) on Buildings [Previous Year - Rs.1452.95 Lakhs (WDV - Rs.1141.93 lakhs)] included in Fixed Assets (Note 10) as at year end.

Vide order dated 09.07.2013, the Hon''ble Supreme Court of India upheld the decision of the Union Government, to float a global tender of BGML assets with an observation about the existence of sub-lease of a portion of the land to BEML Ltd expiring on 28.04.2014 to be included in the tender documents. The Company filed an Interlocutory application before the Hon''ble Supreme Court of India, praying for exclusion of land leased to BEML from the purview of global tender, which was dismissed. Since the lease agreement provides for the continuation ofthe lease even after the expiry of lease period on 28.04.2014 till the final decision of the Company / Government in this regard, the operations of the company on the above land is continued. Appropriate accounting action will be considered based on the outcome of the tender process.

iii) Lease hold Land includes leased land allotted by Kerala Industrial Infrastructure Development Corporation (KIIDC) measuring 374.59 acres for a lease premium of Rs.2547.21 Lakhs (excluding Service Tax) (Previous Year - Rs.2547.21 Lakhs excluding Service Tax) for 99 years lease period with effect from 01.07.2009. The actual land handed over by KIIDC was measuring 374.16 acres and the revised lease premium payable is Rs.2544.29 Lakhs only. Adjustment in financial statement will be made on formal amendment of lease agreement by KIIDC.

iv) Lease Hold Land includes land measuring 101175.92 Sq. Mtrs taken on perpetual lease from KIADB (Bangalore Aerospace, SEZ Park) at a cost of Rs.5126.00 Lakhs (Previous Year - Rs.5126.00 Lakhs).

v) Lease Hold Land includes land at cost Rs.129.41 Lakhs at Hyderabad for which registration will be completed after development of showroom.

vi) No Provision considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

vii) Free Hold Land includes land measuring 555.37 acres at Mysore costing Rs.321.23 Lakhs (including additional compensation of Rs.183.57 Lakhs demanded by KIADB) for which title deeds have to be obtained from KIADB. As per the demand of KIADB, provision of interest amounting to Rs.486.60 Lakhs (Previous Year - Rs.464.12 Lakhs) up to period 31st March 2016 has been made. However, matter has been taken up with KIADB for waiving of interest which is pending before KIADB. Liability for both interest and additional compensation has been created. Registration will be made once the matter is settled with KIADB.

viii) Free Hold Land measuring 3.647 acres of land, surrendered to BBMP against TDR (at cost) is Rs.4.58 Lakhs. Free Hold Land measuring 1.937 acres of land surrendered to BBMP for which TDR yet to be received (at cost) is Rs.2.43 Lakhs.

Above TDR will be utilised for further construction.

ix) Company has taken action to obtain title documents in respect of the following immovable properties.

(1) Flat at Roshan comp, Madras - Rs.4.04 Lakhs.

(2) Flat at Ashadeep, New Delhi - Rs.2.80 Lakhs.

(3) Office building at Nagpur - Rs.27.18 Lakhs.

(4) Lease Hold Land at Singrauli - Rs.1.75 Lakhs.

E. Amount of borrowing cost capitalised on addition of assets during the year is as under:- Plant &Machinery Rs.510.51 Lakhs

Buildings Rs.104.88 Lakhs

Electrical Installations Rs.17.92 Lakhs

Technical Know how Rs.330.09 Lakhs

F. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT etc.,) - Rs.57046.22 Lakhs (Previous Year - Rs.47797.57 Lakhs).

ii Other claims - legal cases etc. Rs.52629.58 Lakhs (Previous Year - Rs.50409.61 Lakhs). (This include a claim amounting to Rs.38681.39 Lakhs against which the company has lodged a counter claim of Rs.31403.92 Lakhs).

b. Guarantees

Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs.1912.50 Lakhs (Previous Year - Rs.1912.50 Lakhs). The matter is subjudice.

c. Other money for which the company is contingently liable - Rs.Nil (Previous Year - Rs.11.29 Lakhs).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.2270.81 Lakhs (Previous Year - Rs.1964.44 Lakhs)

b. Uncalled liability on shares and other investments partly paid - Rs.Nil (Previous Year - Rs.Nil ).

c. Other commitments (specify nature) - Rs.Nil (Previous Year - Rs.Nil).

G. Accounting Standard 17 (Segment Reporting)

In view ofNotification No. GSR 463(E) dated 05-06-2015 (Serial no. 8) issued by Ministry of Corporate Affairs, exempting companies engaged in Defence Production from the application of Accounting Standard 17 (Segment Reporting), disclosure requirements under AS - 17 has not been made.

H. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

I. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current year''s presentation.

Mar 31, 2014

Basis of Preparation of Financial Statements

Assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company''s operating cycle is considered as twelve months for the purpose of current / non current classification of assets and liabilities.

Rights and restrictions attached to equity shares

The company has only one class of share, i.e., equity shares having the face value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all external liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

A. Accounting Standard 19 ( Leases )

i ) Office premises taken on lease

The Company''s significant leasing arrangements are in respect of operating leases in respect of its leased office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No. 28.

ii) Cars given on Lease on non cancellable basis

I. a) Gross Carrying amount Rs. 491.67 Lakhs (Previous Year - 535.36 Lakhs)

b) Accumulated depreciation Rs. 183.74 Lakhs (Previous Year - 150.04 Lakhs)

c) Accumulated impairment losses Rs. Nil

(i) Depreciation recognized in the Statement of Profit & Loss Account Rs. 48.83 Lakhs (Previous Year - 50.98 Lakhs)

(ii) Impairment losses recognized in the Statement of Profit & Loss Account (Previous Year - Nil)

(iii)Impairment losses reversed in the Statement of Profit & Loss Account Nil (Prevrious Year - Nil)

II. Future minimum lease payments under non-cancellable operating leases - Leased cars

(i) Not later than one year 59.26 Lakhs (Previous Year - Rs. 68.10 Lakhs)

(ii) Later than one year but not later than five years Rs. 194.02 Lakhs (Previous Year - Rs. 209.93 Lakhs)

(iii) Later than five years Rs. 88.32 Lakhs (Previous Year - Rs. 107.29 Lakhs)

III. Total rent recognized as income in the Statement of Profit & Loss Account Rs. 47.45 Lakhs (Previous Year - Rs. 58.66 Lakhs)

B. Gross value of vehicles own use includes equipment offered to customers for trials on No Cost No Commitment (NCNC) basis Rs. 471.68 Lakhs (WDV - Rs. 316.48 Lakhs) (Previous Year - Rs.Nil).

C. Fixed Assets

i) Buildings includes cost of building at Kolkota Rs. 26.82 Lakhs (Previous Year - Rs. 26.82 Lakhs) on lease with an option to buy for a nominal sum of Rs. 0.15 Lakhs at the end of 99 years from the date of taking possession viz., FebruaryRs. 83 / AprilRs. 84.

ii) Buildings includes cost of building at Mumbai and Ranchi pending registration / khatha transfer at Rs. 33.00 Lakhs (Previous Year - Rs. 33.00 Lakhs)

iii) The company has taken land measuring 1109 acres and two workshops on lease initially for a period of 10 years vide Lease Agreement dated 5th May 2004 w.e.f 28.04.2004 from M/s Bharat Gold Mines Limited (A Company under orders of winding up by BIFR), and a sum of Rs. 100 Lakhs was paid as non-refundable deposit, (included under Long Term Loans and Advances (Note 14)). As per the terms of the Lease agreement, this deposit shall be adjusted against the outright sale / transfer of ownership that may be fixed for the property and the lessee shall be free to construct new building / alter the existing building / lay roads / fence the land in the interest of furthering its business to suit its use and on expiry of the lease the said building shall vest with lessor on payment of consideration based on value prevailing on the date of handing over of the property. The Company had incurred on the above land, a sum of Rs. 1452.95 Lakhs (WDV Rs. 1191.95 Lakhs) on building (Previous Year - Rs. 1452.95 Lakhs (WDV Rs. 1239.33 Lakhs)) included in Fixed Assets (Note 10) as at year end.

During the year, vide order dated 09.07.2013, the Hon''ble Supreme Court of India upheld the decision of the Union Government to float a global tender of BGML assets with an observation about the existence of sub-lease of a portion of the land to BEML Ltd expiring on 28.04.2014 to be included in the tender documents. The Company filed an Interlocutory application before the Hon''ble Supreme Court of India, praying for exclusion of land leased to BEML from the purview of global tender, which was dismissed. Since the lease agreement provides for the continuation of the lease even after the expiry of lease period on 28.04.2014 till the final decision of the Company / Government in this regard, the operations of the company on the above land is continued. Appropriate accounting action will be considered based on the outcome of the tender process.

iv) Lease hold Land includes leased land allotted by Kerala Industrial Infrastructure Development Corporation (KIIDC) measuring 374.59 acres for a lease premium of Rs. 2547.21 Lakhs (Previous Year - Rs. 2547.21 Lakhs) for 99 years lease period with effect from 01.07.2009. The actual land handed over by KIIDC was measuring 374.16 acres and the revised lease premium payable is Rs. 2544.29 Lakhs only. Adjustment in financial statement will be made on formal amendment of lease agreement by KIIDC.

v) Lease Hold Land includes land measuring 101175.92 Sq. Mtrs taken on perpetual lease from KIADB (Bangalore Aerospace, SEZ Park) at a cost of Rs. 5126.00 Lakhs (Previous Year - Rs. 5126.00 Lakhs).

vi) Free Hold Land include land at cost Rs. 134.27 Lakhs at Hyderabad for which registration is pending.

vii) No Provision considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

viii) As per the demand of KIADB, provision of interest amounting to Rs. 441.64 Lakhs up to period 31st March 2014 has been made. However, matter has been taken up with KIADB for waiving of interest which is pending before KIADB Board. Additional compensation demanded by KIADB authority amounting to Rs. 183.57 Lakhs has been capitalised and liability for both interest and additional compensation has been created. Registration will be made once the matter is settled with KIADB Board.

D. Amount of borrowing cost capitalised on addition of assets during the year is as under:

* Plant & Machinery Rs. 1.00 Lakh

* Any other asset (should be specified) Rs. Nil

a. The Joint Venture Company BEML Midwest Ltd. has not prepared its financial statements as at 31st March, 2014 due to litigation pending before Company Law Board. Hence, disclosure requirements under AS-27 (Financial Reporting of Interests in Joint Ventures) with regard to the Company''s share in assets, liabilities, income & expenditure and its share in the contingent liabilities could not be complied with.

b. The company had issued corporate guarantee to Bank for facilities extended to BEML Midwest Limited, for Rs. 1912.50 Lakhs. Since BEML Midwest failed to pay, the Bank concerned invoked the corporate guarantee and claimed from the company. However the company has refused to pay the claim on the ground that the claim relating to forward contracts were entered into without the approval of board of BEML Midwest Limited and that the majority shareholder has misappropriated and acted beyond the mandate without complying with the terms and conditions specified by the Board of BEML Midwest Limited. The matter is pending before Debt Recovery Tribunal (DRT). The company does not envisage any cash outflow in this regard.

c. The Company has entered into a Consortium Agreement (MAMC Consortium) with M/s. Coal India Limited (CIL) and M/s. Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s. Mining and Allied Machinery Corporation Limited (under liquidation). The agreement, inter-alia, provided for formation of a Joint Venture company with a shareholding pattern of 48:26:26 among BEML, CIL and DVC respectively. The Company has paid the proportionate share of Rs. 4800.00 Lakhs towards the total bid consideration of Rs. 10000.00 Lakhs towards the said acquisition, based on the order passed by the Hon''ble High Court of Calcutta. The said assets are taken possession by the MAMC Consortium. Further, the Company has incurred a sum of Rs. 768.29 Lakhs (Previous Year - Rs. 714.02 Lakhs) towards maintenance, security and other related expenditure. The expenditure incurred by CIL and DVC on account of this proposal is not ascertained. The total sum of Rs. 5568.29 Lakhs (Previous Year

* Rs. 5514.02 Lakhs) is included under the head ÂOther Loans and Advances'', pending allotment of equity shares in the capital of the JV company. Since the company intends to treat this as a long term investment, no independent valuation of the assets taken over has been done and the diminution in value of investments, if any, can be ascertained only after the formulation of business plan and approval of shareholders'' agreement from MOD and consequential share allotment.

Further, a company in the name of ÂMAMC Industries Limited'' (MIL) was formed and incorporated as a wholly-owned subsidiary company for the intended purpose of JV formation. Shareholders'' agreement, as duly approved by the Boards of all the three members of the consortium, has been submitted to Ministry of Defence for necessary approval. After obtaining the said approval, MIL, would be converted into a JV Company. The Company has advanced a sum of Rs. 600.93 Lakhs (Previous Year - Rs. 599.56 Lakhs) on account of MIL, which is included under the head ÂLoans and Advances to related parties''.

a. Negative work orders amounting to Rs. 722.60 Lakhs (Previous Year - Rs. 624.56 Lakhs) were reduced to arrive at the closing value of Work in progress and the company does not expect to have any material impact on cost of production on this account.

b. Raw materials & Components includes materials lying with sub contractors Rs. 1052.93 Lakhs (Previous Year - Rs. 1910.63 Lakhs).

c. The closing stock of work-in-progress and finished goods are stated at lower of standard cost, which approximates to actuals, and net realisable value. The difference between the actual cost of production and the standard cost is not material.

d. Variances arising on account of difference between standard cost and the actual cost, on account of change in the nature of inputs from bought-out to internally manufactured or vice versa, timing difference between standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the cost of production in order not to carry forward the period variances to subsequent financial period.

e. Provision towards obsolescence is made as per provisioning norms consistently followed and is based on ageing of inventory.

f. The inventory does not include the value of materials received free of cost from customers and supplies against LOI which are held in trust.

i. Trade Receivables - Outstanding for period exceeding six months include Rs. 499.60 Lakhs (Previous Year - Rs. 499.60 Lakhs) due from Railway Board, on the amount billed, relating to certain expenses incurred by the company on the supply of wheel sets. The Railway Board has agreed vide its amendment to sale order dated 18.10.12 to reimburse this claim at the lower of actual paid by BEML as per documentary evidence or at the rates being paid by Ministry of Railways, subject to unconditional acceptance by the company. The company is yet to give its acceptance, pending clarification from Railway Board / the paying authority of Railway Board on the rates paid by them. The company does not expect any material impact on the final realization of this receivable.

ii. The company is having factoring arrangement with banks. Trade receivables amounting Rs. Nil (Previous Year - Rs. 17189.83 Lakhs) has been sold to the banks. This amount has been reduced from trade receivables ''Others'' as on 31st March, 2014. [The factoring cost incurred is Rs. 652.58 Lakhs. (Previous Year - Rs. 1093.74 Lakhs), included in Bank charges].

*iii.Trade receivables - Outstanding for period exceeding six months include Rs. 925.87 Lakhs (Previous Year - Rs. 925.87 Lakhs) towards interest rate difference on advance amount received from Ministry of Defence (MoD). This amount pertains to interest rate difference between deposit rate and interest recovered at the rate of 9.50% by MoD during FY 2006-07, 2007-08 and 2009-10 from various bills. The matter has been taken up with MoD and it is under their consideration.

iv. Trade receivables - Outstanding for period exceeding six months include Rs. 4139.92 Lakhs (Previous Year Rs. 4139.92 Lakhs) towards exchange rate difference and escalation for import of components in respect of a long term contract for Design, Development and Supply, entered into with Ministry of Defence (MoD) in 2001. This contract provided for import content denominated in US Dollar with a clause for escalation and exchange rate variation.

As the import of materials was from a country in the European Union which adopted Euro as its International transaction currency, the company was forced to import in Euro currency from January, 2007 to meet its obligations under the contract. The Euro as a trading currency was not contemplated at the time of entering the contract placed by the customer.

The request for amendment for US Dollar to Euro and the consequential Escalation and Exchange Rate variation is pending with the customer. The company does not expect any material impact on this account, sequel to the reassessment of the escalation and exchange rate variation, based on an acceptable formula for the customer.

J. Claims receivable includes:

a. Cost of additional material consumed for rail coaches (over and above the design specification based on which the revenue was recognized) amounting to Rs. 3181.51 Lakhs (Previous Year - Rs. 124.15 Lakhs), awaiting final price to be fixed by customer. The provisional price as per contract does not include the cost of additional material required for the change in the design specification. Once the final price is fixed, the claim receivable will be adjusted and corresponding revenue accounted.

b. Cost of additional material consumed against variation order of Metro contract (RS1 & RS6) amounting to Rs. 512.33 Lakhs (Previous Year - Rs. 258.37 Lakhs) awaiting customer NOC.

c. Claim Lodged pending under reconciliation amounting to Rs. 436.80 Lakhs (Previous Year - Rs. 252.18 lakhs).

d. Claim lodged with Railway Board for excise duty and corresponding sale tax claim of Rs. 764.78 Lakhs (Previous Year - Rs. 817.83 Lakhs).

The Company doesn''t expect any material impact on the final realization of the above amounts.

ii. Unbilled revenue include Rs. 7820.63 Lakhs (Previous Year - Rs. 11709.84 Lakhs) on account of additional provisional price accounted based on recommendation (for the years 2010-11 & 2011-12) by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Rail Board.

i. Revenue including Excise Duty include Rs. 3259.13 Lakhs (Previous Year - Rs. 3891.36 Lakhs) recognised as additional provisional price in terms of Accounting Policy No. 7(iii) based on the price recommended for Rail coaches for the year 2011-12 by the Chief Advisor (Cost), Ministry of Finance (which is under consideration by the Rail Board). The difference, if any, is accounted in the year of finalisation of price.

ii. Revenue including Excise Duty includes revenue recognized for Rs. 7244.49 Lakhs (Previous Year - Rs. 12823.28 Lakhs) in respect of FOR destination contracts, in accordance with Accounting Standard 9 - Revenue Recognition, on the basis of custodian certificates accepting billing and title to the goods, having a profit of Rs. 1454.47 Lakhs (Previous Year - Rs. 791.47 Lakhs) for the transactions.

iii. The company has entered into a consortium agreement with three international partners for the supply of Metro coaches to Bangalore Metro Rail Corporation Ltd, (BMRCL). As per the agreement, the company is responsible to raise the bills at the full value of the contract including consortium scope on BMRCL and terminal excise duty and VAT thereon is discharged by the company.

K. Accounting Standard 15 (Employee Benefits)

a. Leave Salary

This is an unfunded defined benefit plan categorized under other long term employee benefits in terms of Revised Accounting Standard 15. The defined benefit obligation for compensated absence has been actuarially valued and liability provided accordingly.

b. Post Retirement Contributory Medical Scheme

The company has a post retirement contributory medical scheme where an insurance policy is taken by the company for providing mediclaim benefits to the superannuated officers / workers who opt for the scheme. Company pays 2/3 rd insurance premium and the balance is paid by the superannuated officers / workers. The scheme was actuarially valued during the year and liability has been provided for.

c. Interest Rate Guarantee on Provident Fund

Provident Fund Trust of the Company has to declare interest on Provident Fund at a rate not less than that declared by the Employees'' Provident Fund Organisation. In case the Trust is not able to meet the interest liability, Company has to make good the shortfall. Company has got the same actuarially valued and there is no additional liability that need to be provided for the year.

d. Gratuity

The employees'' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

e. The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors The above information is certified by the actuary.

L. In terms of the Notification No.S.O. 301 (E) dt.08.02.2011 of the Ministry of Corporate Affairs, the Board at its meeting held on 18.05.2012 had given consent with regard to non-disclosure of quantitative information relating to purchases, sales, consumption of raw materials, gross income from services rendered, work-in-progress etc, to be shown under Broad heads, as required under paragraphs 5(ii) (d); 5 (iii); and 5 (viii) (a) to (e) except (d) of Part-II of Schedule VI of the Companies Act, 1956, in the Annual accounts for the Financial Year 2011-12 and onwards.

M. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT) - Rs. 40217.09 Lakhs (Previous Year - Rs. 5452.75 Lakhs).

ii Other claims - legal cases etc. Rs. 47077.13 Lakhs (Previous Year - Rs. 5116.17 Lakhs).

(This include a claim amounting to Rs. 35527.00 Lakhs against which the company has lodged a counter claim of Rs. 52365.00 Lakhs).

b. Guarantees

Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs. 1912.50 Lakhs (Previous Year - Rs. 1912.50 Lakhs).

c. Other money for which the company is contingently liable - Rs. Nil (Previous Year - Rs. Nil).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 1977.52 Lakhs (Previous Year - Rs. 2414.20 Lakhs)

b. Uncalled liability on shares and other investments partly paid - Rs. Nil (Previous Year - Rs. Nil ).

c. Other commitments (specify nature) - Rs. Nil (Previous Year - Rs. Nil ).

Notes

1. The company does not expect any re-imbursement in respect of above contingent Liabilities.

2. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in I (a) above pending resolutions of the arbitration / appellate proceedings.

3. The cash flow in respect of matters referred to in I (b) above is generally expected to occur within 3 years.

b. Segmental Capital Employed:

Fixed assets used in Company''s business or liabilities incurred have not been identified to any of the reportable segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

c. Secondary Reporting Since, more than 90% of total sales is within India, geographical reporting is considered not applicable

O. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

P. Figures of previous year have been regrouped / reclassified / recast wherever necessary to conform to current year''s presentation.

Mar 31, 2013

Basis of Preparation of Accounts

Assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company''s operating cycle is considered as twelve months for the purpose of current / non current classification of assets and liabilities.

Rights and restrictions attached to equity shares

The company has only one class of share, i.e., equity shares having the face value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all external liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

Micro, Small and Medium Enterprises

The information under MSMED Act, has been disclosed to the extent such vendors have been identified by the company during the year. The details of amounts outstanding to them based on available information with the Company is as under :

A. Accounting Standard 19 (Leases)

i) Office premises taken on lease

The Company''s significant leasing arrangements are in respect of operating leases in respect of its leased office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No. 28.

ii) Cars given on Lease on non cancellable basis

I. a) Gross Carrying amount Rs. 535.36 Lakhs (Previous Year - Rs. 519.64 Lakhs)

b) Accumulated depreciation Rs. 150.04 Lakhs (Previous Year - Rs. 110.29 Lakhs)

c) Accumulated impairment losses Rs. Nil

(i) Depreciation recognized in the Statement of Profit & Loss Account Rs. 50 98 Lakhs (Previous Year - Rs. 53.67 Lakhs)

(ii) Impairment losses recognized in the Statement of Profit & Loss Account Rs. Ni1 (Previous Year - Rs. Nil)

(iii) Impairment losses reversed in the Statement of Profit & Loss Account Rs. Ni1 (Previous Year - Rs. Nil)

II. Future minimum lease payments under non-cancellable operating leases - Leased cars

(i) Not later than one year Rs. 68.10 Lakhs (Previous Year - Rs. 52.10 Lakhs)

(ii) Later than one year but not later than five years Rs. 209.93 Lakhs (Previous Year - Rs. 191.20 Lakhs)

(iii) Later than five years Rs. 107.29 Lakhs (Previous Year - Rs. 136.64 Lakhs)

III. Total rent recognized as income in the Statement of Profit & Loss Account Rs. 58.66 Lakhs (Previous Year - Rs. 42.49 Lakhs)

B. Fixed Assets

i) Buildings includes Cost of building at Kolkotta Rs.26.82 Lakhs (Previous Year - Rs.26.82 Lakhs) on lease with an option to buy for a nominal sum of Rs.0.15 Lakhs at the end of 99 years from the date of taking possession viz., February''83 / April''84.

ii) Buildings includes cost of building at Mumbai and Ranchi pending registration / khatha transfer at Rs.33.00 Lakhs (Previous Year - Rs.33.00 Lakhs)

iii) The total amount towards Lease/Sale of facilities comprising mostly land, belonging to Bharat Gold Mines Limited ( a Company under orders of winding up by BIFR) is yet to be ascertained. The Company has started utilising the facilities from May 2005 and a sum of Rs.100 Lakhs has been paid, which is included under Long Term Loans & Advances (Note No.14). As the nature of transaction is undecided, no amount has been charged to the profit and loss account till date. The company has incurred an expenditure towards creation of fixed Assets for a gross value of Rs.1452.95 Lakhs (Previous Year - Rs.1395.95 Lakhs) included under Note No.10 & Rs. Nil (Previous Year - Rs.15.31 Lakhs) as capital work in progress included under Note No.11 totaling to Rs.1452.95 Lakhs (Previous Year - Rs.1411.26 Lakhs).

iv) Lease Hold Land includes Leased land allotted by Kerala Industrial Infrastructure Development Corporation measuring 374.59 acres on Lease premium of Rs.2547.21 Lakhs for 99 years lease period with effect from 01.07.2009. Whereas actual land handed over by Kerala Industrial Infrastructure Development Corporation was measuring 374.16 acres after exclusions and revised the Lease Premium payable as Rs.2544.29 Lakhs. Adjustment in financial statement will be made on formal amendment of Lease Agreement by Kerala Industrial Infrastructure Development Corporation.

v) Free Hold Land include land at cost Rs.134.27 Lakhs at Hyderabad for which registration is pending.

vi) No Provision was considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

C. Accounting Standard 15 (Employee Benefits)

a. Leave Salary

This is an unfunded defined benefit plan categorized under other long term employee benefits in terms of Revised Accounting Standard 15. The defined benefit obligation for compensated absence has been actuarially valued and liability provided accordingly.

b. Post Retirement Contributory Medical Scheme

The company has a post retirement contributory medical scheme where an insurance policy is taken by the company for providing mediclaim benefits to the superannuated officers / workers who opt for the scheme. Company pays 2/3 rd insurance premium and the balance is paid by the superannuated officers / workers. The scheme was actuarially valued during the year and liability has been provided for.

c. Interest Rate Guarantee on Provident Fund

Provident Fund Trust of the Company has to declare interest on Provident Fund at a rate not less than that declared by the Employees'' Provident Fund Organisation. In case the Trust is not able to meet the interest liability, Company has to make good the shortfall. Company has got the same actuarially valued and there is no additional liability that need to be provided for the year.

d. Gratuity

The employees'' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

e. The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors The above information is certified by the actuary.

D. In terms of the Notification No.S.O. 301 (E) dt.08.02.2011 of the Ministry of Corporate Affairs, the Board at its meeting held on 18.05.2012 had given consent with regard to non-disclosure of quantitative information relating to purchases, sales, consumption of raw materials, gross income from services rendered, work-in-progress etc, to be shown under Broad heads, as required under paragraphs 5(ii) (d); 5 (iii); and 5 (viii) (a) to (e) except (d) of Part-II of Schedule VI of the Companies Act, 1956, in the Annual accounts for the Financial Year 2011-12 and onwards.

E. I. Change in Accounting Policy

During the year Company changed its Accounting Policy on the following:

1. i. To comply with the statutory requirement for treating the jigs & fixtures as fixed assets and as opined by the Expert Advisory Committee of ICAI, the Company changed its Accounting Policy adopted in the previous years of classifying all the jigs & fixtures as "Other non-current assets" and amortizing the same based on technical assessment.

As per the revised accounting policy, the Jigs & fixtures of unit value of Rs.5.00 Lakhs and above are capitalized as ''Fixed Assets'' and depreciated over a period of three years and of Unit value of below Rs.5.00 lakhs are charged in the statement of profit and loss.

ii. Due to the above change in the accounting policy :

The Gross block of the fixed asset is increased by Rs.1449.58 Lakhs, Accumulated depreciation increased by Rs.1025.21 Lakhs and the net block of fixed assets increased by Rs.424.37 Lakhs, Depreciation for the year increased by Rs.285.65 Lakhs, Other Non-current assets decreased by Rs.306.59 Lakhs and the loss for the year increased by Rs.133.76 Lakhs. Had the company continued the earlier accounting policy, the ''Amortization of jigs & fixtures under Other expenses'' would have been higher by Rs.382.73 Lakhs and the Loss would have been higher by Rs.248.97 Lakhs.

2. i. Similarly to comply with the statutory requirement for treating the Special Tools as Non-current assets and as opined by the Expert Advisory Committee of ICAI, the Company changed its Accounting Policy adopted in the previous years of amortising the Cost of Special Tools on the basis of technical assessment.

As per the revised accounting policy, Special Tools up to the unit value of Rs.5000 are charged off in the year of incurrence and those above unit value of Rs.5000 are amortised over a period of 3 years.

ii. In view of the adoption of new Accounting Policy the following amounts are charged to Statement of Profit & Loss

a. Value of Special Tools with unit value less than Rs. 5000 charged off during the year. Rs. 314.85 Lakhs

b. Amortisation during the year increased / (decreased) by Rs. 254.77 Lakhs Total Rs. 569.62 Lakhs

Since, no technical assessment for amortisation of Special Tools under the old policy was carried out for the year, the impact of the change in the financial statement is not ascertainable.

F. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i . Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT) Rs.5452.75 Lakhs (Previous Year - Rs.2459.40 Lakhs).

ii. Other claims - legal cases etc. Rs.5116.17 Lakhs (Previous Year - Rs.3196.17 Lakhs).

b. Guarantees

Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs.1912.50 Lakhs (Previous Year - Rs.1912.50 Lakhs).

c. Other money for which the company is contingently liable - Rs.Nil (Previous Year - Rs.Nil).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.2414.20 Lakhs (Previous Year - Rs.12934.25 Lakhs)

b. Uncalled liability on shares and other investments partly paid - Rs.Nil (Previous Year - Rs.Nil ).

c. Other commitments (specify nature) - Rs.Nil (Previous Year - Rs.Nil).

NOTES

1. The company does not expect any re-imbursement in respect of above contingent Liabilities.

2. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in I (a) above pending resolutions of the arbitration / appellate proceedings.

3. The cash flow in respect of matters referred to in I (b) above is generally expected to occur within 3 years.

G. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

H. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current year''s presentation.

Mar 31, 2012

Basis of Preparation of Accounts

Assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company's operating cycle as twelve months for the purpose of current/ non current classification of assets and liabilities.

Rights and restrictions attached to equity shares

The company has only one class of share, i.e., equity shares having the face value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recomended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. During the year ended 31st March 2012, per share dividend paid as distribution to equity shareholders was Rs.10/- (Previous year Rs.10/-). In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all external liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

No shares of the Company is held by its subsidiaries. The Company does not have any holding company. No shares of the Company is reserved for issue under options and contracts/commitments for the sale of shares/disinvestment.

Micro, Small and Medium Enterprises

The information under MSMED Act, has been disclosed to the extent such vendors have been identified by the company based on the certificates produced by them. The details of amounts outstanding to them based on available information with the Company is as under :

B. Accounting Standard 19 (Leases)

i) Office premises taken on lease

The Company's significant leasing arrangements are in respect of operating leases relating to its leased office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No. 27.

C. Fixed Assets

i) Includes Cost of building at Kolkata valued at Rs. 26.82 lakhs (Previous Year Rs. 26.82 lakhs) on lease with an option to buy for a nominal sum of Rs. 0.15 lakhs at the end of 99 years from the date of taking possession viz., February'83 / April'84.

ii) Includes cost of building at Mumbai and Ranchi pending registration / khatha transfer valued at Rs. 33.00 lakhs (Previous Year Rs. 33.00 lakhs)

iii) The total amount towards Lease/Sale of facilities comprising mostly land, belonging to Bharat Gold Mines Limited (a Company under orders of winding up by BIFR) is yet to be ascertained. The Company has started utilising the facilities from May 2005 and a sum of Rs. 100 lakhs has been paid, which is included under Loans & Advances (Note No.14). As the nature of transaction is undecided, no amount has been charged to the profit and loss account till date. The company has incurred an expenditure towards creation of fixed assets for a gross value of Rs. 1395.95 lakhs (Previous Year Rs. 1209.01 lakhs) included under Note No.10 & Rs.15.31 lakhs (Previous Year Rs.31.90 lakhs) as capital work in progress included under Note No.11 totaling to Rs. 1411.26 lakhs (Previous Year Rs.1240.91 lakhs).

iv) No provision was considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

The Joint Venture Company BEML Midwest Ltd. has not prepared its financial statements due to litigation pending before Company Law Board as at 31st March, 2012. Hence, disclosure requirements under AS-27 with regard to the Company's share in assets, liabilities, income & expenditure and its share in the contingent liabilities could not be complied with.

a. The company has entered into a Consortium Agreement with Coal India Limited (CIL) and Damodar Valley Corporation (DVC) on 08-06-2010 for acquiring specified assets of M/s. Mining and Allied

Machinery Corporation Limited (under liquidation) through Hon'ble High Court auction. Accordingly, a company in the name of 'MAMC Industries Limited' was formed and incorporated on 25.08.2010. Terms of shareholders' agreement is under negotiation. Upon finalisation, the said new company will be converted into a Joint Venture Company by allotting shares in the proportion 48:26:26 to BEML, CIL and DVC respectively. In this connection the company has incurred a sum of Rs. 5980.86 lakhs (Previous year Rs. 5208.12 lakhs) (net of amount received from M/s. CIL & DVC as on 31st March, 2012). The other venturers have also incurred expenditure on behalf of the Joint Venture, the details of which is not known. The control in this company is intended to be temporary till the finalisation of Joint Venture agreement. Pending negotiation as above, this sum is included in advances recoverable in cash or kind or for value to be received, under Note no. 14.

The identification of the value of Jigs (presently shown under Other Non-Current Assets) to be disclosed under Fixed Assets as per the opinion of the Expert Advisory Committee of Institute of Chartered Accountants of India is pending. These special tools and jigs are amortised based on technical assessement in terms of Accounting Policy No: 17(i), and such amortisation charge is not less than depreciation otherwise chargeable under plant and machinery. Hence the present treatment by the company results in more appropriate recognition and presentation in the financial statement. The value of special tools and jigs is not material.

a. Negative work orders amounting to Rs. 817.13 lakhs (Previous Year Rs. 2025.88 Lakhs) were reduced to arrive at the closing value of Work in progress and the company does not expect to have any material impact on cost of production on this account for the financial year 2011-12.

b. Raw materials & Components includes materials lying with sub contractors Rs. 3463.00 lakhs (Previous Year Rs. 2033.40 lakhs) and with customers for trials etc Rs. Nil Lakhs (Previous Year Rs. 33.62 lakhs). Of these, confirmation from the parties is awaited for Rs. 1798.61 lakhs (Previous Year Rs.1137.32 lakhs).

c. The closing stock of work-in-progress and finished goods are stated at lower of standard cost, which approximates to actuals, and net realisable value. The difference between the actual cost of production and the standard cost is not material.

d. Variances arising on account of difference between standard cost and the actual cost, on account of change in the nature of inputs from bought-out to internally manufactured or vice versa, timing difference between standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the cost of production in order not to carry forward the period variances to subsequent financial period.

e. Provision towards obsolescence is made as per provisioning norms consistently followed and is based on ageing of inventory.

f. The inventory does not include the value of materials received free of cost from customers and held in trust for utilisation in manufacture of their products.

i. Trade Receivables include Rs. 7618.19 lakhs (Previous Year Rs. 6631.38 lakhs) on account of additional provisional price accounted based on recommendation by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Railway Board.

ii. Trade Receivables includes an amount of Rs. 1480.60 lakhs (Previous Year Rs. 1480.60 lakhs) being the differential amount claimed as reimbursement and the amount allowed by Railway Board on the wheel sets procured as per their terms of contract, in respect of contracts executed during the period from 2007-08 to 2009-10. Normally the Wheel Sets were supplied by the Railway Board as a free supply item till then and the Railway Board changed supply policy due to severe capacity constraints. The disallowed amount relates to freight, sales tax and part of cost incurred. The Company has taken up this matter with the Railway Board to appoint an arbitrator as per contract. Railway Board sought information from ICF to resolve the issue.

iii. Trade Receivables include Rs. 14855.74 lakhs (Previous Year Rs. 13563.53 lakhs) in respect of escalation claims as per the contracts, is under consideration by Ministry of Defence (MoD).

iv. The Company is having factoring arrangement with banks. Trade receivables amounting Rs. 20412.91 lakhs (Previous year Rs. 13370.43 lakhs) has been sold to the banks. This amount has been reduced from trade receivables 'others' as on 31st March, 2012. [The factoring cost incurred is Rs. 1506.07 lakhs. (Previous year Rs. 180.75 lakhs)].

v. Trade Receivables (including a sum of Rs. 37219.00 lakhs) (Previous Year Rs. 35570.24 lakhs) outstanding for more than one year which in the opinion of management is realisable.

vi. Trade Receivables is net of unbilled receivables of Rs. 21432.71 lakhs (Previous year Rs. 12036.46 lakhs) disclosed under Note No. 20 - Other Current Assets.

vii. Trade receivables include Rs. 925.87 lakhs towards interest rate difference on advance amount received from MoD. This amount pertains to interest rate difference between deposit rate and interest recovered at the rate of 9.50% by MoD during FY 2006-07, 2007-08 and 2009-10 from various bills. The matter has been taken up with MoD and the amount in the opinion of the management is realisable.

a. On account of the trading business carried out during the year, out of the amount paid towards procurement and other recoverables, a sum of Rs. 3358.40 lakhs is outstanding as the intended export was held up on account of various reasons including change in policy by Government of Goa and the need to obtain fresh licenses. This amount is included in "Other Loans and Advances" above and will be recovered / adjusted during the Financial Year 2012-13.

i. Revenue from operations include Rs. 7258.70 lakhs (Previous Year Rs. 2814.60 lakhs) recognised as additional provisional price in terms of accounting policy No. 7(iv) based on the price recommended for Rail coaches by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Rail Board. The difference, if any, is accounted in the year of finalisation of price.

ii. Company has recognised sale from joint venture operation in respect of sale of metro cars only to the extent of its share in the revenue as required under Accounting Standard 27 ' Financial reporting of interest in joint ventures', though as per accounting policy 7(ix) requires recognising / presenting such revenue at full value and deducting there from cost of items supplied by other members of the consortium.

NOTE 21A :

The company has entered into a consortium agreement with three international partners for the supply of metro coaches to Bangalore Metro Rail Corporation Ltd,(BMRCL). As per the agreement, the company is responsible to raise the bills at the full value of the contract including consortium scope on BMRCL and terminal excise duty and VAT thereon is discharged by the company. Accordingly the total amount invoiced including the value of consortium scope of supply is as under:

A. Accounting Standard 15 (Employee Benefits)

a. Leave Salary

This is an unfunded defined benefit plan categorized under other long term employee benefits in terms of Revised Accounting Standard 15. The defined benefit obligation for compensated absence has been actuarially valued and liability provided accordingly.

b. Post Retirement Contributory Medical Scheme

The company has a post retirement contributory medical scheme where an insurance policy is taken by the company for providing mediclaim benefits to the superannuated officers / workers who opt for the scheme. Company pays 2/3rd insurance premium and the balance is paid by the superannuated officers / workers. The scheme was actuarially valued during the year and liability has been provided for.

c. Gratuity

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

a. Accounting Standard 11 (Foreign Exchange Fluctuations)

Effect of Foreign Currency Fluctuation included in the Miscellaneous Expenses for the year is Rs.1345.61 lakhs. (Previous Year Rs. 295.22 lakhs included in Miscellaneous income).

B. In terms of the Notification No.S.O. 301 (E) dt.08.02.2011 of the Ministry of Corporate Affairs, the Board at its meeting held on 18.05.2012 had given consent with regard to non-disclosure of quantitative information relating to purchases, sales, consumption of raw materials, gross income from services rendered, work-in-progress etc, to be shown under Broad heads, as required under paragraphs 5(ii) (d); 5 (iii); and 5 (viii) (a) to (e) except (d) of Part-II of Schedule VI of the Companies Act, 1956, in the Annual accounts for the Financial Year 2011-12 and onwards.

D. Commitments & Contingent Liabilities

a. Commitments, Guarantees etc. (Amount Rs. Lakhs)

Current Previous Particulars Year Year

Estimated amount of contracts remaining to be executed on capital account and not provided for 12,934.25 5,233.10

b. Counter guarantees given to banks for guarantees issued on behalf of the company is Rs.108249.25 lakhs. (Previous Year Rs. 65465.44 lakhs)

c. Claims against the Company not acknowledged as debts (net of provisions, to the extent ascertainable):

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT) Rs. 2459.40 lakhs (Previous Year Rs. 6592.06 lakhs).

ii Other claims- legal cases etc. Rs. 3196.17 lakhs (Previous Year Rs. 3433.01 lakhs).

d. Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs. 1912.50 lakhs (Previous Year Rs. 1912.50 lakhs).

e. Corporate Guarantees issued to bankers on behalf of M/s. Vignyan Industries Limited (subsidiary company) Rs. 750.00 lakhs ( Previous Year Rs. 750.00 lakhs).

NOTES

1. The Company does not expect any re-imbursement in respect of above Contingent Liabilities.

2. The cash flow in respect of matters referred to in (b), (d) and (e) above is generally expected to occur within 3 years.

3. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in (c) above pending resolutions of the arbitration / appellate proceedings.

E. Pending completion of legal formalities as per foreign laws, in respect of foreign offices / companies, the expenditure incurred thereof has been recorded in the company's books of accounts.

Revenue under Railway customer does not include Rs.72779 lakhs (Previous year Rs.82091 lakhs) biiled on behalf of the consortium by the company.

b. Segmental Capital Employed:

Fixed assets used in Company's business or liabilities incurred have not been identified to any of the reportable segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous

c. Secondary Reporting

Since, more than 90% of total sales is within India, geographical reporting is considered not applicable.

G. Advances, balances with government departments, trade payables and receivables, other loans and advances and deposits classified under non curent and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

H. The Accounts for the year approved by the Board of Directors and certified by the Statutory Auditors on 31.05.2012 were revised in the light of the C&AG's observations under section 619(4) of the Companies Act, 1956 by adding Note No. 19.a. There is no impact on the financial figures.

I. Figures of previous year have been regrouped / reclassified / recast wherever necessary to conform to current year's presentation.

Mar 31, 2011

A.l. BASIS OF ACCOUNTING

The Financial statements are prepared and presented under the historical cost convention, in accordance with Generally Accepted Accounting Principles in India (GAAP), on accrual basis of accounting except as stated herein. GAAP comprises of mandatory Accounting Standards (AS) covered by the Companies (Accounting Standards) Rules 2006 issued by the Central Government, to the extent applicable, the provisions of Companies Act, 1956 and these have been consistently applied.

A.2. USE OF ESTIMATES

The preparation of the Financial Statements in conformity with GAAP, requires that the Management to make estimates and assumptions that affect the reported amount of Assets and Liabilities, disclosure of contingent liability as at the date of financial statements and the reported amount of revenue and expenses during the reporting period. Although such estimates are made on a reasonable and prudent basis taking into account all available information, actual results could differ from these estimates and such differences are recognised in the period in which the results are ascertained.

B. DISCLOSURE UNDER MANDATORY ACCOUNTING STANDARDS

1. Accounting Standard 5 (Net Profit or Loss for the period. Prior period items and Changes in Accounting Policies)

(a) Company has commenced recognizing Expenditure on Software which is not an integral part of hardware, as Intangible Asset as against the previous practice of charging such expenditure to revenue. Due to the change in the Accounting Policy, the profit for the year is increased by Rs. 481.32 lakhs.

3. Accounting Standard 11 (Foreign Exchange Fluctuations)

Effect of Foreign Currency Fluctuation included in the Profit & Loss account for the year is Rs. 295.22 lakhs (Cr) [Previous Year Rs. 1529.77 lakhs (Cr)]

4. Accounting Standard 15 (Employee Benefits)

(a) Leave Salary

This is an unfunded defined benefit plan categorized under other long term employee benefits in terms of Revised Accounting Standard 15. The defined benefit obligation for compensated absence has been actuarially valued and liability provided accordingly.

(b) Gratuity

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

5. Accounting Standard 16 (Borrowing Cost)

The amount of interest capitalized during the year is Rs.95.66 Lakhs ( Previous Year Rs. NIL). Out of this a sum of Rs. 6.56 Lakhs relates to previous years.

(b) Segmental Capital Employed:

Fixed assets used in Company's business or liabilities have not been identified to any of the reportable segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

(c) Secondary Reporting:

Since, more than 90% of total sales is within India, geographical reporting is considered not applicable.

8. Accounting Standard 19 (Leases)

i) Office premises taken on lease

The Company's significant leasing arrangements are in respect of operating leases in respect of some of its office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid are disclosed under rent in Schedule 20.

B. Intangible Assets:

Intangible Assets included in Schedule 4 (b) like Expenditure on Software & Technical Knowhow Fee are amortised over a period not exceeding ten years based on technical assessment.

12. Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures)

The Joint Venture Company, BEML Midwest Ltd., has not prepared its Financial Statements as on 31st March, 2011. Hence, disclosure requirements under AS-27 could not be complied with.

13. Accounting Standard 28 (Impairment of assets)

No provision was considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

(b) Counter guarantees given to banks for guarantees issued on behalf of the Company is Rs. 65465.44 lakhs. (Previous Year Rs. 53780.70 lakhs)

(c) Claims against the Company not acknowledged as debts (net of provisions, to the extent ascertainable):

i. Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT) Rs. 6592.06 lakhs (Previous Year Rs. 7252.05 lakhs)

ii. Other claims- legal cases etc. Rs. 3433.01 lakhs (Previous Year Rs. 2237.06 lakhs)

(d) Corporate Guarantee issued to bankers on behalf of BEML Midwest Ltd (Joint Venture Company) Rs. 1912.50 lakhs (Previous Year Rs. 1912.50 lakhs)

(e) Corporate Guarantee issued to bankers on behalf of Vignyan Industries Limited (Subsidiary Company) Rs. 750.00 lakhs (Previous Year Rs .750.00 lakhs).

(f) Contingent liability on availment of factoring receivables facility - Rs. 13370.43 lakhs (Previous Year Rs. NIL)

C. DISCLOSURE UNDER STATUTE

2. The information under MSMED Act, has been disclosed only to the extent such vendors have been identified by the Company based on the certificates produced by them.

3. Depreciation rate adopted by the Company in respect of following assets is significantly higher than the statutory minimum rates prescribed under the Companies Act, 1956.

4. The Company has been exempted by the Ministry of Corporate Affairs vide letter dt.28.01.2011 from disclosure requirements in compliance of paras 3(i)(a), 3(h) (a) to (d), 4-C and 4-D of Part II, Schedule VI to the Companies Act, 1956 relating to sales in respect of each class of goods, quantitative details licensed capacity, installed capacity, actual production, value of imports on CIF basis etc.

D. GENERAL

1. SALES

(i) Sales include revenue recognized in terms of Accounting Policy No.5(i) representing Sales covered by Goods Carrier Notes amounting to Rs. NIL lakhs (Previous Year. Rs. 12260.92 lakhs) and Custodian Certificate cases, as per customers' request, amounting to Rs. 6790.78 lakhs (Previous Year Rs. 17560.76 lakhs) for which necessary excise duty has been provided, where the equipments were lying in the Company premises as at 31 "'March, 2011.

(ii) Sales include revenue recognized in terms of Accounting Policy No.5(i) amounting to Rs. NIL lakhs (Previous Year Rs. 8660.16 lakhs) representing sales on FOR Destination basis in respect of which the goods have been handed over to transporter on or before 31st March, 2011 and are in transit as on 31stMarch 2011.

(iii) Sales include Rs. 82090.41 lakhs (Previous Year Rs. 58302.41 lakhs) representing revenue recognized under Accounting Policy No 5(ix) in respect of Metro coaches supplied to Metro customers in terms of Supplementary Consortium Agreement entered into between the Members of the Consortium authorizing the Company to make sale of whole of the scope under the main contract awarded to the Consortium and on which the terminal taxes and duties are being discharged by the Company under the applicable laws.

(iv) Sales include Rs. 2814.60 lakhs (Previous Year Rs. 3534.66 lakhs) recognised as additional provisional price in terms of Accounting Policy No. 5(iv) based on the price recommended for Rail coaches by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Railway Board. The adjustment, if any, on flnalisation of price will be accounted in the year of finalisation.

(v) As per the terms of the sale order from Ministry of Defence for specialized vehicles, date of offer for inspection of the vehicles to Inspecting Authority is to be treated as date of delivery subject to successful acceptance. The inspection is carried out by Inspecting Authority, essentially road and endurance tests. Invariably, there is a considerable time lag between the offer for and the actual inspection due to various reasons. Company is supplying vehicles for more than two decades and there is no rejection of any vehicle till now. More over this being an ex-works contract, on successful inspection, the date of delivery relates back to the date of offer for inspection. Since the company has manufactured the vehicles as per the specification of the customer and the delay in formal inspection is beyond the control of the company, the Company is recognizing sales when accepted for inspection by the Inspecting Authority. The value of sales recognized during the year in respect of these vehicles, based on the offer and acceptance for inspection, pending formal acceptance, is Rs. 24489.00 lakhs (Previous Year Rs. 18492.00 lakhs)

(vi) Company supplies certain intermediary products to a Defence Research Establishment for the manufacture of sensitive / critical defence systems. These products are sent to a third party for the next stage of production on behalf of this establishment after the provisional clearance from the Inspecting Authority. The final inspection note from the Inspecting Authority will be issued only for the final system assembly, after various sub-assemblies from various establishments, engaged by this Defence Research Establishment are integrated, over which company has no control. Company is recognizing sale of these intermediary products based on the provisional clearance, as the delay in issuing the final certificate is beyond the control of the Company in view of the special complexities involved in the manufacture of the sensitive systems. The value of such sales recognized, pending final inspection certificate, during the year is Rs. 4928.00 lakhs (Previous Year Rs. Nil).

2. INVENTORIES

(a) Negative work orders amounting to Rs. 2025.88 lakhs (Previous Year Rs. 3488.37 lakhs) were reduced to arrive at the closing value of Work in progress and the company does not expect to have any material impact on Cost of Production for the Financial Year 2010-11.

(b) Includes materials lying with sub contractors Rs. 2033.40 lakhs (Previous Year Rs. 2469.95 lakhs) and with customers for trials etc Rs. 33.62 Lakhs (Previous Year Rs. Nil). Of these, confirmation from the parties is awaited for Rs. 1137.32 lakhs (Previous Year Rs. 1638.90 lakhs).

(c) The identification of the value of Jigs (presently shown under Other Current Assets) to be disclosed under Fixed Assets as per the opinion of the Expert Advisory Committee of Institute of Chartered Accountants of India is pending/not feasible/not possible/not practicable. However there will be no impact on the Profit and Loss Account as the company is amortizing the expenditure incurred (which would be equivalent to the depreciation to be charged) in terms ofAccounting Policy No: 14(1).

(d) The Company had accounted a receipt of Rs. 327.77 lakhs towards manufacture of Radio Control Dozer and Disaster management Equipment under Project funded by Technology Information and Forecasting and Assessment Control (TIFAC) which was kept under liabilities and the equipment was lying under FGI (after deration) at Rs. 78.66 lakhs till last year. Since the stipulated events as per agreement have taken place, the net amount of Rs. 249.11 lakhs has been treated as income during the year.

(e) The closing stock of work-in-progress and finished goods are stated at standard cost which is nearly to actuals and the difference, if any, is not material.

(f) Variances arising on account of difference between Standard Cost and the actual cost, on account of change in the nature of inputs from bought-out to internally manufactured or vice versa, timing difference between standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the Cost of Production in order not to carry forward the period variances to subsequent financial period.

(g) Provision towards Obsolescence is made as per provisioning norms consistently followed and is based on ageing of inventory.

(h) The Company has received materials free of cost with no value indicated and is held in trust for utilisation in manufacture of their products only.

3. SUNDRY DEBTORS

(i) Debtors include Rs. 6631.38 lakhs (Previous Year Rs. 3676.05 lakhs) including VAT on account of additional provisional price accounted based on recommendation by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Railway Board.

(ii) Debtors includes an amount of Rs. 1480.60 lakhs (Previous Year Rs. 1376.41 lakhs) being the differential amount claimed as reimbursement and the amount allowed by Railway Board on the wheel sets procured as per their terms of contract, in respect of contracts executed during the period from 2007-08 to 2009-10. Normally the Wheel Sets were supplied by the Railway Board as a free supply item till then and the change in policy by Railway Board was due to severe capacity constraint. The disallowed amount relates to freight, sales tax and part of cost incurred. The Company has taken up this matter with the Appropriate Authority. The Company is of the view that, these claims are legally enforceable as they were made as per the terms of contract and hence confident of realizing the amount through appropriate representation before higher Authorities.

(iii) Debtors include reimbursement claim of Rs. 82.84 lakhs (Previous Year Rs. NIL) from Railway Board towards the Excise Duty and VAT thereof Rs. 4.14 lakhs on the Rail coaches manufactured, consequent to the amendmentin the Finance Act, 2011, imposing Excise Duty on rail coach for the first time w.e.f. 1st March, 2011. The claim is under consideration by the Railway Board.

(iv) Debtors include Rs. 13563.53 lakhs (Previous Year Rs. 9555.27 lakhs) in respect of certain escalation claim as per the contract which is under consideration by Ministry of Defence.

(v) During the year the Company entered into a factoring arrangement with banks and sundry debtors amounting to Rs. 13370.43 lakhs (Previous year Rs. Nil) has been sold to the banks. This amount has been reduced from Sundry Debtors as on 31st March, 2011. The factoring cost incurred for the same is Rs. 180.75 lakhs. (Previous year Rs. Nil).

4 FIXED ASSETS:

i) Includes expenditure on development of land at KGF (1849 acres and 5 guntas) received free of cost from Government of Karnataka.

ii) Includes Cost of building at Kolkata valued at Rs. 26.82 lakhs (Previous Year Rs. 26.82 lakhs) on lease with an option to buy for a nominal sum of Rs. 0.15 lakhs at the end of 99 years from the date of taking possession viz., February'83 / April'84.

iii) Includes cost of building at Mumbai and Ranchi pending registration / khatha transfer valued at Rs. 33.00 lakhs (Previous Year Rs. 33.00 lakhs).

iv) Includes leased land measuring 374.59 acres taken from Kerala Industrial Infrastructure Development Corporation on a lease premium of Rs. 2547 lakhs for 99 years lease period with effect from 1.07.2009.

v) Reconditioning cost included in Fixed Assets Rs. 99.55 lakhs (Previous Year Rs. Nil)

5. The total amount towards Lease/Sale of facilities comprising mostly land, belonging to Bharat Gold Mines Limited (a Company under orders of winding up by BIFR)isyettobe ascertained. The Company has started utilising the facilities from May 2005 and a sum ofRs. 100 lakhs has been paid, which is included under Loans & Advances (Schedule 11). As the nature of transaction is undecided, no amount has been charged to the profit and loss account till date. The Company has incurred an expenditure towards creation of fixed Assets for a gross value of Rs. 1209.01 lakhs (Previous Year Rs. 1133.65 lakhs) included under Schedule 4 &Rs. 31.90 lakhs (Previous Year Rs. NIL) as capital work in progress included under Schedule 5 totalling to Rs. 1240.91 lakhs (Previous Year Rs. 1133.65 lakhs).

7. i) Sundry Debtors (including a sum of Rs. 35570.24 lakhs) (Previous Year Rs. 31539.00 lakhs) outstanding for more than one year which in the opinion of management is realisable, advances, balances with government departments, sundry creditors and deposits are subject to confirmation. There are certain old balances pending review/adjustment. The Management does not expect any significant impact upon such reconciliation.

ii) Balance available in Provision for Contractual Obligations amounting to Rs. 10662.47 lakhs outstanding as on 01.04.2010 pertaining to certain Defence Order has been withdrawn as no longer required as the first set of the equipment has been successfully accepted by the customer, and no further liability is anticipated on this account.

8. INTER CORPORATE LOANS:

As on 31s' March 2011, the Company has received Rs. 14166.00 lakhs from M/s. Coal India Ltd, against Company's Corporate guarantee, as a partial funding for a back to back financing of the term loan of Rs. 7500.00 lakhs given by the Company to M/s. JK Industries Ltd, and Rs. 7500.00 Lakhs to M/s. Apollo Tyres Ltd, (which is to be secured against first charge on the assets to be created by way of hypothecation in favour of the Company). These back to back loans are for setting up of additional manufacturing facility for OTR tyres in order to ensure uninterrupted supply of such tyres for equipment to be supplied by the Company to M/s. Coal India Ltd. The balance loans and interest outstanding as on 31st March, 2011 Rs. 14090.44 lakhs (Previous Year Rs. 15549.86 lakhs) are disclosed under Unsecured Loans - Schedule 3A and balance of loans given and interest amounting to Rs. 14779.56 lakhs (Previous Year Rs. 16250.41 lakhs) are included under Loans and Advances Schedule 11.

10. Pending completion of legal formalities as per foreign laws, in respect of foreign offices/ companies, the expenditure incurred thereof has been recorded in the Company's books of accounts.

11. Loans and Advances includes Rs. 1067 lakhs (Previous Year Rs. 1067 lakhs) incurred by the Company during 2005-06 on behalf of the R&D Centre of Excellence Society, a Society formed under the Karnataka Societies Registration Act, 1960, on reimbursement basis, for acquiring certain Hardware & Software. This amount will be returned by the Centre as and when the Grant is received from the Government of India, which is pending finalisation of the constitution of various members of the Society.

12. The Company has entered into a Consortium Agreement with Coal India Limited (CIL) and Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s Mining and Allied Machinery Corporation Limited (under liquidation) through Hon'ble High Court auction. Accordingly, a Company in the name of 'MAMC Industries Limited' was formed and incorporated on 25.08.2010. Terms of Shareholders' Agreement is negotiated and finalised and the same would be executed shortly. Upon such execution, the said new Company will be converted into a Joint Venture Company by allotting shares in the proportion 48:26:26 to BEML, CIL and DVC respectively. In this connection the Company has incurred a sum of Rs. 5208.12 lakhs (net of amount received from M/s CIL & M/s DVC as on 31st March, 2011). Pending allotment of shares as above, this sum is included in advances recoverable in cash or kind or for value to be received, under Schedule 11.

13. The Company has invested in 54,22,500 equity shares at Rs. 10/- each in M/s BEML Midwest Limited which was incorporated on 18.04.2007 at Hyderabad. The investment value comes to Rs. 542 Lakhs and this represents 45% share of the JV.

However, due to certain unauthorised transactions by the Directors appointed by the other JV Partner, Midwest Granite Private Limited (MGPL), and the oppression and mis-management by the nominees of MGPL, the Company has filed a petition under section 397 & 398 of the Companies Act, 1956 seeking suitable relief in the matter, which is pending before Honourable Company Law Board.

Further, the said Directors, against whom the above oppression and mis-management charges have been levelled, have substantial net worth. The Company is confident that the un-authorised transfer of funds made can be recovered and other issues resolved leading to further operations and hence no diminution in the value of this investment other than temporary, is anticipated and accordingly no provision has been made in the accounts for decline in the value other than temporary.

14. During the year, Company settled wage revision for workmen. This has impacted the expenses under the head of Employee Remuneration and Benefits by Rs. 12063 lakhs (net of provision), which include Rs. 5580 lakhs for the current year and Rs. 6483 lakhs (net of provision) for the earlier years. Employee Remuneration and Benefits also include Rs. 414 lakhs towards provision for officers' pension contribution.

15. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current year's presentation.

Mar 31, 2010

1. Sales

(i) Sales include revenue recognised in terms of Accounting Policy No.4(i) representing Sales covered by Goods Carrier Notes amounting to Rs 12260.92 lakhs (Pr. Yr. Rs. 11985.80 lakhs) and Custodian Certificate cases amounting to Rs 17560.76 lakhs (Pr. Yr. Rs 5427.46 lakhs) for which necessary excise duty has been provided, where the equipments were lying in the Company premises as at 31/03/2010.

(ii) Sales include revenue recognized in terms of Accounting Policy No.4(i) amounting to Rs. 8660.16 lakhs representing sales on FOR Destination basis in respect of which the goods have been handed over to transporter on or before 31/03/2010 and are in transit as on 31/03/2010.

(iii) Sales include Rs. NIL lakhs (Pr. Yr. Rs. 3408.50 lakhs) revenue recognised in terms of Significant Accounting Policy 4(i) representing Sale of ACEMU Coaches stabled pending fitment of Wheel sets to be supplied free of cost by the customer.

(iv) Sales include Rs. 58302.41 lakhs (Pr. Yr. 8256.90 lakhs) representing revenue recognized under Accounting Policy No 4(ix) in respect of Metro coaches supplied to customer in terms of Supplementary Consortium Agreement dated 6.6.2008 entered in to between the Members of the Consortium authorizing the Company to make sale of whole of the scope under the main contract awarded to the Consortium and on which the terminal taxes and duties are being discharged by the Company under the applicable laws.

2. Inventories

(a) Negative work orders amounting to Rs. 3488.37 lakhs (Pr. Yr. Rs. 2015.36 Lakhs) are reduced to arrive at the closing value of Work in progress and the company does not expect to have any material impact on Cost of production for the F. Y.2009-10.

(b) Includes materials lying with sub contractors Rs. 2469.95 lakhs (Pr. Yr. Rs. 2701.54 lakhs) and with customers for trials etc., Rs. NIL lakhs (Pr. Yr. Rs. Nil). Of these, confirmation from the parties is awaited for Rs 1638.90 lakhs. (Pr.Yr. Rs.768.66 Lakhs).

(c) The identification of the value of Jigs (presently shown under Other Current Assets) to be disclosed under Fixed Assets as per the opinion of the Expert Advisory Committee of Institute of Chartered Accountants of India is pending/not feasible/not possible/ not practicable. However there will be no impact on the Profit and Loss Account as the company is amortizing the expenditure incurred (which would be equivalent to the depreciation to be charged) in terms of Accounting Policy No. 13(i).

(d) Finished goods includes equipment worth Rs. 78.66 lakhs (Pr. Yr. Rs.78.66 lakhs) developed for the development of Radio Control Dozer and Disaster Management Equipment under Project funded by Technology Information Forecasting and Assessment Council (TIFAC) (a Government body), and presently held for demonstration. The funds received from TIFAC

shown under liabilities are to be refunded in five equal installments in the event of commercial production and in case of sale of technology, 50% of the sale value has to be refunded to TIFAC. None of the events have taken place as on the Balance Sheet date.

(e) The company has received materials free of cost with no value indicated and is held in trust for utilisation in manufacture of their products only

3. Fixed Assets:

i) Includes expenditure on development of land at KGF (1849 acres and 5 guntas) received free of cost from Government of Karnataka

ii) Includes Cost of building valued at Rs. 26.82 lakhs (Pr. Yr. Rs. 26.82 lakhs) on lease with an option to buy for a nominal sum of Rs. 0.15 lakhs at the end of 99 years from the date of taking possession viz., February83 /April84.

iii) Includes cost of building pending registration / khatha transfer valued at Rs. 33.00 lakhs (Pr.Yr.Rs. 33.00 lakhs)

4. The total amount towards Lease / Sale of facilities, comprising mostly land, belonging to Bharat Gold Mines Limited (a company under orders of winding up by BIFR) is yet to be ascertained. The company has started utilizing the facilities from May 2005 and a sum of Rs.100 lakhs has been paid, which is included under capital work-in-progress (sch.6). As the nature of transaction is undecided no amount has been charged to the Profit and Loss Account till date. This amount is not likely to be material. The Company has incurred an expenditure of Rs. 1133.65 lakhs (Pr.Yr. 786.87 lakhs) (Gross block) for civil works on the said land which is included in Schedule 6.

The unspent amount of Rs. 9642.09 Lakhs (PY Rs. 16298.56 Lakhs)is deposited in short term fixed deposits with Scheduled Banks and is included in Schedule No: 10 Cash and Bank Balances.

(*) Reappropriated out of Funds earmarked for VRS in FPO,as approved by 45,h Annual General Meeting held on 25.09.2009.

5. (i) Sundry Debtors (including a sum of Rs.31539 lakhs outstanding for more than one year which in the opinion of management is realisable), advances, sundry creditors and deposits are subject to confirmation. There are certain old balances pending review/ adjustment. The Management does not expect any significant impact upon such reconciliation.

(ii) Consequent upon receipt of Bulk Production clearance from the customer, no further provision has been made during the current year. Provision amounting to Rs.2026.41 lakhs has been withdrawn as no longer required out of the amount of contractual obligations provided in the Accounts amounting to Rs. 12688.88 lakhs on the basis of supplies made under the project since no further liability is anticipated on those supplies.

6. Inter Corporate Loans:

As on 31sMarch 2010, the company has received Rs.14166.00 lakhs from M/S. Coal India Ltd, against Companys Corporate guarantee, as a partial funding for a back to back financing of the term loan of Rs 7500.00 lakhs given by the company to M/S. JK Industries Ltd, and Rs. 7500.00 Lakhs to M/S Apollo Tyres Ltd, (which is secured against first charge on the assets to be created by way of hypothecation in favour of the company). These back to back loans are for setting up of additional manufacturing facility for OTR tyres in order to ensure uninterrupted supply of such tyres for equipment to be supplied by the company to Coal India Ltd,. The loans received are disclosed under Unsecured Loans - Schedule 3 A and loans are included under Loans and Advances Schedule 12.

7. Pending completion of legal formalities as per foreign laws, in respect of foreign offices/ companies, the expenditure incurred thereof has been recorded in the companys books of accounts.

8. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current years presentation.

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