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Bharat Heavy Electricals Ltd.

BSE: 500103 Sector: Engineering
NSE: BHEL ISIN Code: INE257A01026
BSE 00:00 | 06 Oct 63.85 1.90






NSE 00:00 | 06 Oct 63.85 1.85






OPEN 62.50
VOLUME 2127915
52-Week high 78.65
52-Week low 41.40
P/E 33.43
Mkt Cap.(Rs cr) 22,233
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 62.50
CLOSE 61.95
VOLUME 2127915
52-Week high 78.65
52-Week low 41.40
P/E 33.43
Mkt Cap.(Rs cr) 22,233
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharat Heavy Electricals Ltd. (BHEL) - Director Report

Company director report

Dear Members

The Board of Directors have pleasure in presenting the 57thAnnual Report on the business and operations of your Company and the Audited FinancialStatements for the year ended March 31 2021.

Financial Results

(Rs. in Crore)

For the year ended
March 31 2021 March 31 2020
Revenue 16296 20491
Revenue from operations 17308 21459
Profit/(loss) after tax (2717) (1473)
Total comprehensive income /(loss) (2697) (1747)
EPS (in Rs.) (7.80) (4.23)

Note: Figures in (Rs.) represent negative values.

State of Company Affairs

The nationwide lockdown consequent to spread of Covid 19 pandemicglobally caused disturbance & slowdown of the economic activity. This impacted theCompany's operations during the FY 2020-21 which then recouped progressively. Also theissues arising out of the geo political situation across the globe severely disrupted thesupply chains which further impacted operations. The production and supplies from unitswere also regulated in line with site progress status to maintain sequential supply andoptimisation of working capital.

For FY 2020-21 the company has incurred a loss of RS. 2717 Crore asagainst a loss of RS. 1473 Crore in FY 2019-20 mainly due to lower revenue highermaterial cost and additional merit based provisioning of about RS. 1800 Crore. Based oncomprehensive review the provisioning was done as a matter of utmost financial prudenceso as to strengthen receivables management process and improve quality of assets in thebalance sheet. However stringent budgetary control measures and reduction in operatingexpenses resulted in restricting the loss. The Company secured orders worth RS. 13472Crore in FY 2020-21. This comprises orders worth RS. 8984 Crore in the Power segment RS.4283 Crore in the Industry segment and RS. 205 Crore in International operations. Theorder book outstanding at the end of March 31 2021 was around RS. 102090 Crore againstRS. 108443 Crore as on March 31 2020. The order book figures are inclusive of applicabletaxes.

Covid 19 not only impacted the topline of the company but also led todelay in tendering/ finalization of orders by customers. There is a significant decline inthe new project proposals during FY 2020-21 which also impacted the company's orderbook. It is worthwhile to mention that there is a significant correlation between newproject proposals (as per CMIE) and the company's order booking.

Transfer to Reserve

Due to the loss in the current financial year the company has nottransferred any amount to the Reserves.


In line with the Dividend distribution policy of the company and thelosses in the current financial year the Board has not recommended any dividend for theyear 2020-21 in its meeting held on June 11 2021. The Company has a dividend distributionpolicy in place in pursuance to the requirements of Regulation 43A of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("LODR"). Dividend distribution policy is available on the Company'swebsite at https://www.bhel. com/dividend-distribution-policy-bhel-0


The Company has not accepted deposits from the public falling withinthe ambit of Section 73 of the Companies Act 2013 during FY 2020-21.

Capital & Finance

During FY 2020-21 the company has met its CAPEX and operating fundrequirements through internal accruals. As a treasury function the company investssurplus funds in available investment opportunities maximising the interest income to thecompany. To meet any intermittent operational fund requirement various short termborrowing options used by the company include commercial papers PCFC buyers credit etc.PCFC borrowings also provide a natural forex hedge to the company. Effective treasurymanagement led to the closing cash & bank balance rising by 26% in the currentfinancial year as compared to the previous period. The commercial papers of the companyare listed on NSE and BSE. The details of the commercial papers are available at Note [24]of the Standalone financial statements.

Loans and Investments

Details of loans and investments covered under the provisions ofSection 186 of the Companies Act 2013 form part of financial statement. Loan of RS. 3Crore towards working capital was given during 2015-16 to M/s BHEL EML BHEL'ssubsidiary company and has been already provided for impairment. The disclosure on loansand advances to subsidiary form part of note No [54] of the financial statements. Thereare no instances of investments by the loanee in the company or its subsidiary.

Credit Rating

The credit ratings of your Company are as follows:

Rating Agency Date of Rating Long Term Rating Outlook Short Term Rating
CRISIL 24-07- 2020 CRISIL AA Negative CRISIL A1+
18-06- 2021 CRISIL AA- Negative CRISIL A1+
INDIA RATINGS & RESEARCH 06-07- 2020 Ind AA Negative Ind A1+
01-07- 2021 Ind AA- Negative Ind A1+
27-06- 2020 CARE AA Stable CARE A1+
CARE 24-06- 2021 CARE AA- Stable CARE A1+

The company's long term credit rating during the financial yearwas changed to "AA-" from "AA". The revision in ratings is primarilydue to lower execution and losses caused mainly due to Covid-19 pandemic. The company hastaken stern measures to cut down its controllable costs to the extent possible. Theefforts on the cash front have also borne fruit with cash & bank balances (net ofshort term borrowings) in the current financial year rising by about 26% and tradereceivables reducing by about 38%. The funds released from working capital amount to RS.2620 Crore in FY 20-21 as against blockage of funds in the earlier years. The company isresolutely working to improve its execution levels and consequently achieve positiveEBIDTA and improve profitability accordingly.

The company's short term rating stands affirmed at A1+ (Highestsafety).

Material Changes and Commitments Affecting the Financial Position

There are no material changes and commitments affecting the financialposition of the Company between the end of the financial year and the date of this reportof FY 2020-21. There are no significant and material orders passed by the regulators orcourts or tribunals impacting the going concern status and company's operations infuture.

Suspension of Trading

The Equity Shares of the company are listed on NSE & BSE. None ofthe securities of the company have been suspended from trading during the FY 2020-21.

Directors' Responsibility Statement

Pursuant to section 134(5) of the Companies Act 2013 the Board ofDirectors confirms that:

a) In the preparation of the Annual Accounts the applicable AccountingStandards (Ind AS) have been followed along with proper explanations relating to materialdepartures;

b) The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end offinancial year and of the profit of the Company for that period;

c) The Directors have taken proper and sufficient care for maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) The Directors have prepared the Annual Accounts on a going concernbasis;

e) The Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate andoperating effectively;

f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Management Discussion & Analysis

This report conveys the Management's perspective on the externalenvironment as well as company's strategy for the future operating and financialperformance risks and concerns and initiatives taken in various areas such as revampingProject Execution Cost optimization Digitalisation Quality Development of Futuristictechnologies etc. during the financial year 2020-21. The year gone by has beenchallenging for economies across the globe. Your company has taken these challenges as anopportunity to strengthen the core with focus on improving internal systems and processes.It has also been a year of consolidation wherein many of the initiatives started in theprevious year have started maturing. For further details please refer Annexure-I tothe Board's report. AatmaNirbhar Bharat

To capitalize on the opportunities arising out of our Hon'blePrime Minister's vision of an AatmaNirbhar Bharat BHEL has taken the lead for"Make In India" and has formed a new and dedicated business group—the"Make in India Business Development Group" with the following objective:

• In-house development and manufacture of items currently beingimported by the company

• In-house development and manufacture of major items in thecountry's engineering imports basket.

• Working with global OEM's for manufacturing items for Indiaas well as for exports i.e. ‘Make in India Make for the World'

• Collaborative working with PSUs for addressing their imports Thecompany believes in successful development of partners/ vendors especially MSME'swhich also forms an integral part of its growth strategy giving the twin benefit oflowering cost as well as speeding up the development process. Accordingly your company isworking towards supplier/ partner development (especially MSMEs) and has organized aworkshop- SAMVAAD under the aegis of Department of Heavy Industry for promotingcollaborations between PSUs private industry as well as R&D institutions &academia. BHEL identified items worth more than RS. 3000 Crore for import substitutionthrough development of local suppliers and hosted an EOI on its website for the same. BHELhas conducted more than ten online workshops- during December 2020 to February 2021 withthe support of Ministry of Heavy Industries (M/o HI) Department for Promotion of Industryand Internal Trade (DPIIT) and Ministry of MSME.

COVID Response

BHEL launched a speedy and comprehensive response to the COVID crisison multiple fronts including strict implementation of Government guidelines support toemployees and their families as well as the society at large and worked with localadministration to ensure continuity of work across various manufacturing units and projectsites. Your company also rose to the occasion to support the national efforts throughmonetary contributions as well as through development of multiple products for use byvarious govt. departments/ municipalities. During the first phase of COVID-19 thecompany:

• Ensured strict implementation of Standard Operating Procedure(SOP) duly incorporating Government directives on social distancing compulsory wearing offace cover in public places hygiene sanitization etc.

• Conducted regular fumigation sanitization etc. at factoriesoffices townships and nearby areas including ensuring distribution of essential suppliessuch as food medicines milk etc.

• Facilitated Work from Home through policy intervention as wellas remote access through IT network for seamlessly carrying out office activities andconducting meetings through VC

• Quick implementation of eOffice to ensure continuity of work aswell as speeding up the decision making process

• Swiftly transformed the training process and adopted onlinetraining methods including introduction of eModules to ensure continual learning ofemployees.

• Developed atomized liquid sanitizing equipment called BHELMISTER. More than 150 Nos. of BHEL MISTERs have been delivered to various parts of thecountry.

• Developed Electrostatic Disinfection Machines (EDMs) alsocalled Covid-Spray based on CSIR technology for sanitizing office spaces and hospitals.Apart from various other places the EDM machines have also been deployed at MHI NDLSRailway station among others.

During the second wave of COVID-19 apart from the numerous activitiesas continued since the first wave the company additionally supplemented the nationalefforts by:

• Supplying over 575000 cubic meters (over 80000 cylinders) ofmedical oxygen from its Bhopal and Haridwar manufacturing plants by enhancing capacitiesas well as logistics for filling oxygen cylinders from 200/300 cylinders per day to reacha maximum of 3860 cylinders per day

• Developed prototype for oxygen generating plant of 500LPM (basedon design by CSIR-IIP Dehradun) in a record time of 40 days from signing of Transfer ofTechnology and delivered the first order within 35 days from receipt of the order

• Assistance Scheme has been introduced for extending support(financial medical housing) to families of employees who succumbed to COVID 19 Pandemic.

Corporate Governance

Pursuant to Regulation 34 of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 a report on Corporate Governance (includingBoard/Committee meeting details) together with the following is given at Annexure-II tothe Board Report.

(i) Certificate of Non-Disqualification of Directors under Schedule Vof the Listing Regulations.

(ii) Auditors certificate on Corporate Governance under ListingRegulations & DPE guidelines on Corporate Governance.

(iii) Secretarial Audit Report under Section 204(1) of the CompaniesAct 2013. Department of Public Enterprises has graded BHEL as "Excellent" onthe basis of their compliance with Guidelines on Corporate Governance of CPSEs for theYear 2019-20.

Declaration of independence

Declaration under Section 149(6) of the Companies Act 2013 pertainingto criteria of Independence has been given by the Independent Directors to the Board ofDirectors. All the Independent Directors who are qualified Chartered Accountants haveregistered themselves in the online database of Indian Institute of Corporate Affairs(IICA). Shri Manish Kapoor has qualified the online proficiency self-assessment testconducted by IICA (notified under Section 150). In the opinion of the Board theIndependent Directors possess integrity and necessary expertise & experience.


In addition to focus on many other areas the company has also relookedinto its compliance of systems and processes and wherever there was an opportunity forimprovement company further strengthened its finance and non-finance compliance process& systems for the better satisfaction of stakeholders. As regards preparation offinancial statements the company ensures that preparation and presentation are compliantwith the Indian Accounting Standards (Ind AS) Guidance Notes and other authoritativeliterature issued by the ICAI Companies Act 2013 CSR regulations and other applicablestatutes. The Company discloses full information and fulfils its compliance obligationsunder applicable Taxation Laws. Being a listed company Compliances with the SEBI ListingObligations and Disclosure Requirement Regulations are also being ensured. There is noadverse comment from SEBI for the FY 2020-21 on any compliance related matter. The Companyendeavours to transcend beyond the regulatory requirements of corporate governance andconsiders sound Corporate Governance as one of its core values and is committed tomaintaining high degree of transparency in disclosures. The company has endeavoured toconstantly improve its disclosures and transparency standards and the statutory auditorshave also commended the compliances and the quality of disclosures in the FinancialStatements.

Contribution to the Exchequer

The Company over the years has been making a significant contributionto the Exchequer. During the current year the Company contributed close to RS. 2948 CroreThe Company has adopted guiding tax principle to maintain high standards of integrity withrespect to tax compliances and reporting.

The company has been discharging all its GST and other dues on time andeven before the due date [ out of the GST liability for the month of March 2021 RS. 119Crore. has been deposited on March 31 2021 itself ].

The Company participated in Direct Tax Vivad Se Vishwas Scheme (VsVs)2020 promulgated by the GOI and exercised the option by settling eight Income Tax appealsunder VsVs which ended ambiguity around the likely outcome of disputes bringing anexpeditious end to protracted litigation and helped in resolving legacy issues.

Audit Committee

The Company has in place a Board Level Audit Committee in terms of therequirements of the Companies Act 2013 read with rules made thereunder and Regulation 18of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 thedetails in respect of which are given in the Corporate Governance Report. For the firsttime all the three independent directors being chairman/ members of BLAC are also membersof Institute of Chartered Accountants of India having diverse experience. All the issuesare fairly and transparently deliberated in the meetings which are held at regularintervals. The views and suggestions of BLAC members are positively taken into account andimbibed into the company's processes. Further there has been no instance where theBoard of Directors have not accepted the recommendations of the Audit Committee.

Compliance with Secretarial Standards

The Company has complied with applicable Secretarial Standards.

Details of changes in Directors & Key Managerial PersonnelAppointment

Shri Amit Mehta Joint Secretary Ministry of Heavy Industries wasappointed as Part-time Official Director w.e.f. September 2 2020. In line with Section161 of the Companies Act 2013 and Article 67(iv) of the Articles of Association of theCompany Shri Amit Mehta was appointed as additional director to hold directorship uptothe ensuing Annual General Meeting. He was subsequently appointed as Director in the 56thAnnual General Meeting of the Company. Ms. Renuka Gera has been appointed as Whole Time(Functional) Director w.e.f. December 1 2020 to take charge of the office of Director(Industrial Systems & Products).

Shri Jeetendra Singh Joint Secretary Ministry of Heavy Industries wasappointed as Part-time Official Director w.e.f. June 18 2021. In accordance with Section161 of the Companies Act 2013 and Article 67(iv) of the Articles of Association of theCompany Ms. Renuka Gera and Shri Jeetendra Singh having been appointed as additionaldirectors shall hold directorship upto the 57th Annual General Meeting of theCompany and are eligible for appointment as Directors at the Meeting.


Shri Amit Varadan Joint Secretary Ministry of Heavy Industries whowas appointed as Part-time Official Director on March 27 2019 ceased to be Part-timeOfficial Director on September 2 2020.

Shri Desh Deepak Goel and Shri Ranjit Rae who were appointed asPart-time Non-official (Independent) Directors on September 23 2017 ceased to beDirectors of the Company on completion of their tenure on September 11 2020.

Shri S. Balakrishnan who was appointed as Director (Industrial Systems& Products) on June 1 2018 ceased to be a Director of the Company on attaining theage of superannuation on November 30 2020.

Shri Manoj Kumar Varma who was appointed as Director (Power) onDecember 19 2018 ceased to be a Director of the Company on attaining the age ofsuperannuation on January 31 2021.

Shri Amit Mehta Joint Secretary Ministry of Heavy Industries who wasappointed as Part-time Official Director on September 2 2020 ceased to be Part-timeOfficial Director on June 18 2021.

Shri Kamalesh Das who was appointed as Director (ER&D) on March1 2019 ceased to be a Director of the Company on attaining the age of superannuation onJuly 31 2021.

The Board of Directors place on record their deep appreciation for thevaluable services rendered as well as advice and guidance provided by S/ shri AmitVaradan Desh Deepak Goel Ranjit Rae S. Balakrishnan Manoj Kumar Varma Amit Mehta andKamalesh Das during their tenure.

Further pursuant to Section 152 of the Companies Act 2013 and Article67(i) of the Articles of Association of the Company Shri Subodh Gupta and Shri ShashankPriya will retire by rotation at the Annual General Meeting and being eligible offerthemselves for reappointment.

In compliance with Regulation 36(3) of the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 brief resume of the Directors proposedfor appointment and re-appointment along with the nature of their expertise in specificfunctional areas and names of companies in which the person also holds directorship alongwith the membership of the Committees of the Board are given in the explanatory statement/annexure to the Notice.

CEO/CFO Certificate

CEO/CFO certificate as per Regulation 17(8) of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 is placed at Annexure- IIIto the Board's Report. Consolidated Financial Statements

The brief on consolidated financial statements prepared pursuant tosection 129 (3) of the Companies Act 2013 and Regulation 34 of the SEBI (ListingObligations & Disclosure Requirement) Regulations 2015 is given in para 1.5.4 underManagement Discussion & Analysis.

Sustainable Development

Sustainable Development tenets are ingrained in the business processesof BHEL and our mission statement – "Providing Sustainable business solutions inthe fields of Energy Industry & Infrastructure"bears the testimonial of thesame.

Sustainability is a continuous journey which helps us in reaching newersummits of corporate excellence through implementing sound corporate governance frameworkenhancing stakeholder value reducing environmental footprint of our products &services as well as internal processes promoting inclusive growth in the society andenhancing brand equity.

The brief of these activities conducted during 2020-21 (including CSRpolicy - also available at https:// are given in Annexure – IVto the Board's report.

Business Responsibility Report

In line with the requirement of the listing regulations BusinessResponsibility Report describing the initiatives taken by the company from environmentalsocial and governance perspectives as per the suggested format is enclosed at AnnexureV to the Board's Report.

Achievements of R & D and Technological Development

BHEL has a robust innovation and R&D framework in place to addressthe technology challenges emanating from business requirements. The R&D expenditure ofthe company for 2020-21 was RS. 726 Crore approx. 4.45% of the revenue. The company filed526 patent and copyright applications during the year enhancing the company'sintellectual capital to more than 5000. More than 24% of the company's revenue hasbeen achieved from its in-house developed products. Additionally the company has alsocreated a technology innovation platform (Sanrachna) for finding innovative solutions byinvolvement of students academia experts etc. a step towards self-reliance intechnology.

Further details are available in Annexure-VI to the Board'sReport. Implementation of Official Language

Official Language Implementation Committees are constituted in allunits / divisions of BHEL and regular quarterly meetings were held in all units /divisions including corporate office. To speed up the pace of implementation of OfficialLanguage in the company more than 30 nos. of Rajbhasha Chakra were formed across theCompany. Various activities/ programmes on Rajbhasha implementation were held during theyear. Company was awarded with many Rajbhasha awards for excellent efforts towardsRajbhasha implementation. Further details have been provided in Annexure-VIIA tothe Board's Report.

Vigil Mechanism

Transparency fairness and objectivity form the basis for all decisionmaking processes for the company.

The Company has in place a full-fledged Vigil Mechanism consisting ofVigilance Department Internal Audit Whistle-blower Policy mechanism IndependentExternal Monitor(s) as well as Board Level Audit Committee.

The Vigilance function of BHEL is headed by Chief Vigilance Officer whoacts as an extended arm of Central Vigilance Commission (CVC) in the Company. All units& divisions of BHEL have a Vigilance setup headed by a Senior Officer reporting to theCVO.

Preventive Vigilance has been the focus area of BHEL as proactivevigilance is better than the re-active one and it reduces the chances of corruption. Themain objective is to progressively reduce ambiguity and discretion in the process byplugging the loopholes in the system thereby making decision making process more and moreobjective & transparent and also reducing the scope for engaging in malpractices. Theaudit reports (internal statutory and CAG reports) relating to BHEL are regularlyscrutinized so as to determine whether there is any vigilance angle involved in respect ofthe irregularities brought out in such reports. A panel of two Independent ExternalMonitors (IEMs) has been appointed to oversee implementation of Integrity Pact and addressany concerns related to the same.

The company encourages reporting of unfair and unethical practices andhas a Whistle-blower Policy mechanism which provides adequate safeguard againstvictimisation to the complainant. The Board Level Audit Committee reviews the functioningof the Whistle Blower/ Vigil mechanism.

Further details have been provided in Annexure-VIIA to theBoard's Report.

Health Safety & Environment (HSE)

BHEL is committed to providing a safe and healthy working environmentand achieving an injury and illness-free work place. BHEL conducts all its activities in amanner that is protective for the environment and in ensuring the health and safety ofits employees contractors visitors and the community around which it operates.

In recognition of this BHEL has been awarded the ISO 14001Environmental Management Systems Certification and OHSAS 18001 / ISO 45001 OccupationalHealth & Safety Management Systems Certification.

It is our firm belief that safe and healthy workplace not only boostspeople's morale but is also a precondition for greater productivity at workplace.BHEL has taken all possible preventive measures to ensure health of their employees inthis pandemic situation i.e. guidelines were issued SOPs were prepared DO's andDON'Ts were circulated regular hygiene audits were conducted etc. Also BHEL hastaken initiatives which helped not only its employees and their families but also provedboon for the society. Further details have been provided in Annexure-VIIA to theBoard's Report.

Data and Cyber Security

BHEL deploys multi-layered protection for its IT assets and data withstate-of-the-art security features such as firewalls at Internet gateways secured emailgateways integrated with on premise sandboxing solution and end-point protection. AllInternet traffic going in and coming out of BHEL is monitored through a Cyber SecurityOperations Centre (C-SOC) integrated with Global Threat Intelligence. User awareness andsensitization is continuously ensured through interventions like phishing simulationexercises training programmes communications etc. across the company. Compliance tosecurity advisories from agencies like Indian Computer Emergency Response Team (CERT-In)and National Critical Information Infrastructure Protection Centre (NCIIPC) is ensured.

The overarching initiative in the field of information security in BHELis the implementation of the Information Security Management System (ISMS) since 2005 toensure the Confidentiality Integrity and Availability of its information systems.Auditors from the Standardization Testing and Quality Certification (STQC) Directoratean organization under the Ministry of Electronics and Information Technology Governmentof India audit the information security infrastructure of the organization and certify itagainst ISO27001:2013 periodically in addition to internal audits. Integration ofpan-India BHEL ISMS achieved in February 2021 is a manifestation of the maturity of thisinitiative. All BHEL units are now certified against a common policy framework which willresult in improved compliance & cyber security enforcement of common policiesprocedures & formats.

The Covid-19 pandemic and the resultant lockdown which requiredemployees to Work From Home added a new dimension to the cyber threat landscape. Despiteno prior experience of Work from Home culture and managing geographically spread IToperations on a huge scale BHEL adapted quickly to the changed scenario and ensuredsecurity of the entire gamut of IT operations.

Other disclosures

Information in accordance with the provisions of Section 134(3)(m) ofthe Companies Act 2013 read with Companies (Accounts) Rules 2014 regarding conservationof energy technology absorption and foreign exchange earnings and outgo is given at Annexure-VIIto the Board's Report.

As per provisions of section 197 of the Companies Act 2013 read withthe Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 every listed company is required to disclose the details of the remuneration of theDirectors etc. in the Board's report. However as per Notification No. GSR 463(E)dated June 5 2015 issued by the Ministry of Corporate Affairs Government Companies areexempted from complying with provisions of section 197 of the Companies Act 2013. BHELbeing a Government Company such particulars are not included as part of Board'sReport. Statement pursuant to Section 129 of the Companies Act 2013 (Form AOC-1) relatingto subsidiary companies & joint ventures and Form AOC-2 pursuant to section 134(3)(h)of the Companies Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 is givenat Annexure-VIII to the Board's Report. Auditors

The Statutory Auditors of your Company are appointed by the Comptrollerand Auditor General of India. Three firms of statutory auditors were appointed as jointstatutory auditors and four firms were appointed as branch auditors. The names of auditfirms appointed for FY 2020-21 are given separately in the Annual Report.

Auditors' Report on the Accounts

The Auditors' Report on Standalone and Consolidated FinancialStatements for FY 2020-21 of the Company are given at Annexure- IX to theBoard's Report. There is no qualification in the Auditors report on the FinancialStatements of the Company. During FY 2020-21 there has not been any fraud reported by theAuditors of the company. The Supplementary Audit report under section 143(6) read withsection 129(4) of the Companies Act2013 issued by the Comptroller & Auditor Generalof India also forms part of Annexure IX.

Secretarial Audit

In terms of Section 204(1) of the Companies Act 2013 the Companyengaged M/s P.P. Agarwal & Co. Company Secretaries in whole-time practice asSecretarial Auditors for conducting Secretarial Audit for FY 2020-21 and their report isforming part of Corporate Governance section. Secretarial Auditor in his Audit report hasobserved regarding the non-compliance in composition of the Board of Directors as perRegulation 17(1) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and Para 3.1.4 of the DPE Guidelines onCorporate Governance as the Company did not have requisite number of independent directorsincluding at least one independent woman director on its Board.

The Management noted the observation and explained that BHEL being aGovernment Company the independent directors are selected by Govt of India and theCompany is in constant communication for the appointment of requisite number ofindependent directors including at least one independent woman director on its Board.

Cost Auditors

In terms of provisions of Section 148 of the Companies Act 2013 and asper the Companies (Cost Records and Audit) Rules 2014 and amendments thereof the Boardon the recommendation of the Audit Committee approved the appointment of seven firms ofCost Accountants as Cost Auditors for auditing the cost accounts of your Company for FY2020-21. Cost accounts and records as specified by the Central Government undersub-section (1) of section 148 of the Companies Act 2013 have been properly maintainedand complied with.

The detail of cost auditors appointed for FY 2020-21 are givenseparately in the Annual Report. The Cost Audit Report for FY 2019-20 has been filed underXBRL mode on September 24 2020 well within the due date of filing and there was noqualification in the cost audit report.

Appreciation and Acknowledgement

Your Directors gratefully acknowledge all the support and guidanceextended by Ministry of Heavy Industries and all other departments and agencies of theGovernment of India in the Company's operations and developmental plans. TheDirectors also express their gratitude to the Comptroller and Auditor General of IndiaChairman and Members of Audit Board Professional bodies Statutory Auditors BranchAuditors Secretarial Auditor and Cost Auditors for constructive suggestions andcontinuous cooperation. The Directors place on record their sincere appreciation towardsthe Company's valued customers in India and abroad and esteemed shareholders for thesupport and confidence reposed by them in the management of the Company and look forwardto the continuance of this mutually supportive relationship in future.

The Directors also wish to place on record their appreciation for thecontinued cooperation received from all the technology collaborators supplierscontractors and for the support provided by the financial institutions bankers and stockexchanges.

Your Directors also wish to place on record their sincere appreciationfor the diligent efforts hard work and commitment put in by all BHEL employees.

For and on behalf of the Board of Directors of
Place: New Delhi Dr. Nalin Shinghal
Dated: 27.08.2021 Chairman & Managing Director