To the Members,
 
 The Directors are pleased to present the 57th Annual Report of the
 Company, together with the Audited Accounts for the financial year
 ended 31st March 2011.
 
 Performance Highlights
 
 A summary of the Company''s financial results is given below :
 
                                                   (Rs. in lakhs)
 
                                                2010-11       2009-10
 
 Value of Production                         552,080.34    524,788.20
 
 Turnover (Gross)                            552,969.32    521,977.40
 
 Profit Before Depreciation, Interest 
 and Tax                                     128,362.22    116,150.06
 
 Interest                                         43.36         53.48
 
 Depreciation                                 12,204.23     11,594.23
 
 Provision for Tax                            29,967.78     32,415.25
 
 Profit After Tax                             86,146.85     72,087.10
 
 Add : Balance brought forward from previous 191,303.51    177,236.84 
 year
 
 Less : Amount transferred to Capital Reserve     41.98         90.77
 
 Balance available for Appropriation         277,408.38    249,233.17
 
 Interim Dividend @ Rs. 6 per share on 
 paid up                                       4,800.00      4,800.00
 Capital of Rs. 8,000 lakhs
 
 Proposed Final Dividend @ Rs. 15.60 per share  12,480.00     10,560.00
 on paid up Capital of Rs. 8,000 lakhs
 
 Tax on Dividend                               2,821.79      2,569.66
 
 Transfer to General Reserve                  40,000.00     40,000.00
 
 Transfer to Capital Reserve                      41.98         90.77
 
 Reserves & Surplus                          490,570.65    424,525.59
 
 Net Worth                                   498,570.65    432,525.59
 
 Earnings Per Share (in Rs.)                       107.68         90.11
 
 Book Value Per Share (in Rs.)                     623.21        540.66
 
 Distribution of Value of Production for 2010-11 is given below :
 
                                                 Amount
                                                           Percentage
                                         < Rs. in lakhs)
 
 Materials                                   313,576.95        56.80
 
 Employee Cost                               104,186.17        18.87
 
 Other Expenses (Net)                          5,955.00         1.08
 
 Depreciation                                 12,204.23         2.21
 
 Interest                                         43.36         0.01
 
 Provision for Tax                            29,967.78         5.43
 
 Profit After Tax                             86,146.85        15.60
 
 Total                                       552,080.34       100.00
 
 Company''s sales turnover during the year 2010-11 has increased to Rs.
 552,969.32 lakhs from Rs. 521,977.40 lakhs in 2009-10, registering a
 growth of 5.94 %. Profit after Tax for the year was Rs. 86,146.85 lakhs
 as against Rs. 72,087.10 lakhs, an increase of 19.50 % in spite of
 additional burden due to revision of wages for workmen. Exports
 turnover has registered a growth of 75.45% from US $ 23.67 million in
 the previous year to US $ 41.53 million during 2010-11. Supplies to the
 Defence Services contributed to 80% of the turnover. The turnover from
 indigenously developed products is 78%. All the nine manufacturing
 Units of your Company performed well and earned profits during the
 year.
 
 Other Highlights
 
 Union Defence Minister, Mr A K Antony, inaugurated BEL''s Product
 Support Centre at Kalamassery in Kochi, Kerala, on February 8, 2011.
 The Centre has been set up to provide waterfront support for the
 Southern Naval Command and to support outsourcing of Naval system
 projects to BEL''s outsourcing partner, KELTRON. It is also envisaged to
 co-ordinate equipment supply and support to the Air Defence Ship
 Project at Cochin Shipyard Limited and to support Sonar development
 projects at the National Physical & Oceanographic Laboratory (NPOL),
 Kochi, a DRDO lab.
 
 Dr V K Saraswat, Scientific Advisor to Defence Minister, inaugurated a
 modern D&E facility at BEL''s Hyderabad Unit on December 24, 2010. The
 facility is equipped with Embedded Systems Lab, Software Development
 Lab, Communication Systems and Integration Labs, Video Conferencing,
 etc.
 
 Four numbers of India''s first wholly indigenous Nuclear, Biological and
 Chemical (NBC) Recce Vehicles, designed and developed by DRDO and
 integrated with NBC instruments at BEL''s Pune Unit, were handed over to
 the Indian Army on December 21, 2010. The NBC Recce Vehicle surveys,
 detects, identifies and marks areas of radiological and chemical
 contamination.
 
 Major Orders Executed
 
 Some of the important equipment / systems supplied to customers by your
 Company during the year include : 3-D Central Acquisition Radar
 (Rohini), Surveillance Radar Element, Artillery Combat Command Control
 System, Battle Field Surveillance Radar, L-Band Surveillance Radar,
 Fire Control Systems, Shipborne Electronic Warfare System, Integrated
 Communication Network System for ships, Mobile Radar band Electronic
 Intelligence System, Mobile Communication Terminal, Handheld UHF
 Radios, Secure Communication Network, Passive Night Vision Weapon Sight
 and Doppler Weather Radar.
 
 Among the many projects executed during the year, the following merit
 special attention :
 
 Artillery Combat Command Control System - The system automates
 artillery functions with the use of latest technologies such as
 Tactical Computers integrated with communication capabilities,
 Geographical Information System (GIS) and Global Positioning System
 (GPS) to achieve quick and accurate fire.  The system has been
 developed by BEL with indigenous technology and security solution from
 DRDO.
 
 Surveillance Radar Element - It is an S band Air Traffic Control Radar
 suited for Terminal Control applications with a range of 130 km. It is
 a fully solid state modular transmitter with integrated IFF. It detects
 and automatically tracks a large number of aircraft within Local Flying
 Area under all weather conditions and is configured for high
 availability.
 
 3-D Central Acquisition Radar (Rohini) - 
 
 It is a 3- D surveillance radar in S band. It has an integrated IFF
 (Identify Friend or Foe) with co-mounted antenna and has been developed
 jointly with LRDE for the Indian Air Force.
 
 Combat Net Radio - It is a VHF Frequency Hopping Communication Radio,
 fitted in Armored vehicle. It has been developed with indigenous
 technology by DRDO and engineered by BEL.
 
 VPS Mk III - It is a UHF Handheld Radio, compact and light - weight,
 with built-in High Grade Digital Secrecy. Interface is provided for
 handset / headgear and Crypto key loading. The operator interface is
 user-friendly with minimum number of controls. The radio set is
 provided with various types of antenna for use in different types of
 terrains, ranges and roles.
 
 Battle Field Surveillance Radar - Medium Range (BFSR- MR) with Mast -
 It is a ground surveillance and acquisition radar capable of
 automatically detecting and displaying diverse moving targets such as
 pedestrians, vehicles, tanks, low - flying helicopters, etc.
 
 RAWL 02 Mk III - It is a long-range surveillance radar. It is designed
 for use onboard large and medium Naval ships and for shore
 establishments and provides long - range air warning and target
 detection. It has stabilised hydraulic-driven antenna platforms.
 
 Ground Based Mobile ELINT - An Electronic Intelligence Gathering System
 (Radar band) used during peacetime. The system has location-fixing and
 Radar Finger Printing capability.
 
 Composite Communication System - CCS Mk III - This system enables
 internal and external communication for Naval ships.  It has been
 developed by BEL with indigenous technology.
 
 Naval Heliborne ESM System - It is a lightweight ESM system for
 helicopters of the Navy. It has higher threat-handling capability and
 improved DF accuracy. It has been developed by BEL with indigenous
 technology.
 
 Air Defence Control & Reporting System - ADC&RS is a Command & Control
 System for integration of various Radars and other Army Systems for Air
 Defence. It has been developed by DRDO and engineered by BEL with
 indigenous technology.
 
 Advanced Naval Gun Fire Control System (LYNX U-1) -
 
 This state - of - the - art system has been developed by BEL to be
 installed onboard IN ships for short / medium range Gun Fire Control
 using high accuracy tracking radar and electro optic tracking system.
 
 Doppler Weather Radar - It is an S-band Radar, meant for long-range
 weather surveillance (up to 500 km). It can forecast storms, cyclones
 and other severe weather conditions. It uses Pulse Doppler techniques
 for accuracy and has been developed as a national initiative involving
 IMD, ISRO and BEL.
 
 Business Initiatives
 
 Business initiatives during the year include :
 
 - BEL is in the process of signing a Technology Collaboration Agreement
 (TCA) with Optelian International Corporation for establishing a
 long-term partnership between the two Companies for the manufacture and
 design of optical networking systems in India. BEL expects to address a
 business of about Rs. 60,000 lakhs in the next five years from this
 initiative.
 
 - As a proactive step for addressing the Offset business for defence
 programmes like the Medium Multi-Role Combat Aircraft (MMRCA), Very
 Short Range Air Defence (VSHORAD) and the Mine Counter Measures Vessel
 (MCMV) program, BEL has discussed and signed MoUs with OEMs
 participating in these programs. From these MoUs, an Offset business of
 approx. US $ 300 million is expected in the next 5-7 years from now.
 
 - BEL is in discussions with a reputed foreign OEM for forming an
 Indian Joint Venture in the area of civilian radars & select defence
 radars.
 
 - The business plan for setting up a JVC with BHEL for manufacture of
 Solar PV wafers, cells and modules has been finalised.
 
 - BEL is working on establishing a Company for the design, development
 and manufacture of RF and Microwave components and subsystems.
 
 From these JVCs, BEL expects a turnover of about Rs. 200,000 lakhs per
 year in four to five years from the starting of these companies.
 
 Exports
 
 Your Company''s export turnover during the year was US $ 41.53 Million,
 registering an impressive growth of 75.45% over previous year export of
 US $ 23.67 million.
 
 The range of products and sub-assemblies exported includes - Lynx II,
 Radar Warning Receivers, Composite Communication System, Night Vision
 Devices, Versatile Communication System (VCS), IFF Interrogator, LRF, X
 - Ray tube, Radar Finger Printing system, ESM system, V / UHF search
 receivers, Shelters, PCB assembly, Cable Harness, Components,
 Mechanical assemblies, etc. Countries to which the products were
 exported include Italy, USA, Sri Lanka, Switzerland, Zimbabwe,
 Philippines, UK, Malaysia, Canada, Germany, France, Israel, Namibia,
 Indonesia, etc.
 
 A very significant portion of the export is related to offset.  The
 Company executed large offset contracts for companies such as M/s
 Fincantieri, Italy, Boeing, USA and Northrop Grumman, USA.
 
 BEL has over the years taken a number of initiatives to increase
 exports. The Company plans to increase its exports through direct
 exports and offsets. It has identified African and South East Asian
 countries for special focus on product exports. It has a very
 significant opportunity in the offset business related to various
 platforms such as :
 
 - Air platform
 
 - Naval platform
 
 - Radar and Missile platforms
 
 - Gun platforms
 
 Your Company is closely working with various major foreign Aerospace
 and Defence companies to secure business under the mandatory Offset
 clause in the RFPs for Indian Defence Procurement. BEL has signed MoU /
 NDAs with various OEMs for offsets in respect of RFPs issued by Indian
 MoD. With the above initiatives the Company expects to achieve
 significant increase in export turnover in the coming years.
 
 Order Book Position
 
 The order book position of your Company as on 1 April 2011 was Rs.
 2,360,000 lakhs, out of which orders worth Rs. 560,000 lakhs are
 executable during 2011-12. The balance will get executed in 2012 - 13
 and beyond.
 
 Finance
 
 During the financial year 2010-11, your Company has met all its fund
 requirements towards additional investments on Capital equipments and
 incremental working capital needs without any borrowing. This has been
 possible through efficient cash management which has ensured that the
 Company continues to be debt free. The Company has been able to retain
 the highest rating by ICRA for both short term and long term sanctioned
 bank limits, which will help in continuing to secure the best rates for
 any of the services, availed from the consortium banks. Based on the
 user requirements many changes have been incorporated in the online ERP
 system which should help in better information fow to all concerned.
 
 The inventory position of the Company as on 31st March 2011 was Rs.
 246,077 lakhs (Net), as against Rs. 244,871 lakhs (Net) as on 31st March
 2010. The inventory as on 31st March 2011 works out to 164 days of the
 Value of Production (DPE) for the year 2010-11 as against the
 corresponding position at 172 days as on 31st March 2010. Efforts will
 be made during the current year to reduce the inventory levels further
 without compromising the production plan for the forthcoming year.
 
 The position of sundry debtors as on 31st March 2011 was Rs. 290,325
 lakhs (Net) as against Rs. 216,836 lakhs (Net) as on 31st March 2010. The
 debtors as on 31st March 2011 works out to 192 days of the Sales for
 the year 2010-11 with the corresponding position at 152 days as on 31st
 March 2010. The increase in sundry debtors as at the end of the
 financial year is mainly due to the following reasons :
 
 (a) Higher sales in the last quarter, particularly in March as compared
 to the corresponding period of the previous year;
 
 (b) Non-realisation of bills due to budgetary constraints of the
 Customers;
 
 (c) Payment terms in the sale contracts where the release of money is
 linked to certain specific milestones, even after delivery of the items
 like Harbor Acceptance Trials / Sea Acceptance Trials, etc.
 
 The debtors realisation will continue to be closely monitored to ensure
 speedy collection which should result in a reduction in debtors in
 number of days of sales by the end of this financial year.
 
 The Company does not have any public deposit scheme at present.
 However, the matured past public deposits with the Company was Rs. 38.55
 lakhs as on 31st March 2011. Of these, 34 deposits amounting to Rs. 36.50
 lakhs are claimed but not paid as these accounts are frozen on advice
 by Karnataka Lok Ayukta.  Remaining past deposits of Rs. 2.05 lakhs as on
 31st March 2011 is unclaimed. The entire amount of public deposits
 outstanding as on 31st March 2011 is included in the current
 liabilities, Schedule No. 12 of the Balance sheet.
 
 Research & Development
 
 Research and Development is the core strength of BEL and focused
 attention was given during the year for planning and reviewing of
 development of technology modules and products. Apart from in-house
 efforts, BEL''s association with DRDO, other national research and
 development agencies and academic institutes has been further
 strengthened. Research & Product development has been carried out in
 all the business segments, namely, Radars, Naval Systems, Missile
 Systems, Communication, Encryption, Electronic Warfare, Command Control
 Systems, Opto- electronics, Tank & Weapon electronics, Fire Control
 Systems, Avionics, Civilian equipment & systems and Components during
 the year 2010-11. Development & Engineering (D&E) Divisions attached to
 the Strategic Business Units of Bangalore and Other Units outside
 Bangalore concentrated on the development of products and associated
 technologies in their respective areas of business segments.
 Central-D&E and two Central Research Laboratories of the Company
 supported the D&E Divisions of all the units by way of developing core
 technology modules and software required for the development of
 products and systems.
 
 The analysis of turn over of the Company for the year 2010-11 indicates
 that 57% of the turn over is due to BEL designed products, 21% of the
 turn over due to DRDO and other indigenous agencies developed products
 and remaining 22% is due to products for which technologies were
 acquired through foreign ToTs.
 
 During 2010 - 11, the R&D Divisions of BEL have completed development
 of more than 35 new products. Some of the new products / systems
 introduced during the year include Akash Weapon System, New Generation
 HUMSA Sonar, Mobile Communication Terminal, ATM based Integrated
 Shipboard Data Network, Semi Ruggedised Automatic Exchange MK-II, Low
 Power Jammer, Combat Management System, Integrated Fire Detection and
 Suppression System for BMP-2 / 2K, IRLM Radio etc. Brief information
 about some of the introduced products is given below :
 
 (a) Akash Weapon System : This is a surface-to-air medium range air
 defence missile system which provides air defence against multifarious
 air threats to mobile, semi-mobile and static vulnerable forces and
 areas. The system is capable of simultaneous engagement of many targets
 with multiple missiles. The system has been developed with technology
 transfer from DRDO.
 
 (b) New Generation Advanced Hull Mounted Sonar : This is an advanced
 version of the existing HUMSA sonar for fitment in naval ships. The
 system is capable of detecting, localizing, classifying and tracking
 under water targets in both active and passive modes. The system is
 capable of automatic tracking of multiple targets simultaneously and
 provides long range detection of threats. The system has been developed
 with technology transfer from DRDO.
 
 (c) ATM based Integrated Shipboard Data Network : This is a
 multi-services shipboard network designed to cover all voice traffic,
 real time video and traditional data communications onto a single
 broadband infrastructure. The system integrates all weapons, sensors
 and communication services on board the naval ship onto the single
 broadband network and provides integrated and simultaneous transmission
 of voice, video and data.
 
 (d) Semi Ruggedised Automatic Exchange MK-II : This semi-ruggedised
 Automatic Exchange is an Automatic Telephone Exchange designed to meet
 communication requirements of an Army unit or formation. The system is
 portable as well as designed for vehicle mounting. The system provides
 communication services to Auto Subscribers and ISDN subscribers and can
 be interfaced to other exchanges.
 
 (e) Low Power Jammer : This is a light vehicle based communication
 Electronic Warfare System capable of doing rapid search, detection,
 monitoring, recording, replay, analysis and jamming of hostile
 transmissions in V / UHF, GSM and extended GSM bands.
 
 (f) Combat Management System : This system facilitates automatic
 handling of tactical data from ship''s various sensors including
 helicopters / aircrafts in the fleet through data link to collate,
 process, integrate and present a comprehensive tactical picture of the
 area of operation to provide the decision support to the Command.
 
 (g) Integrated Fire Detection and Suppression System : This is a micro
 controller based fire detection and suppression system for armored
 vehicles and tanks. IR Sensors of the detector unit detects the fire in
 the crew compartment and the control logic sends the confirmation of
 fire to Master Control Unit, which activates the audiovisual alarm and
 actuates the squib of the fire extinguishers to extinguish the fire.
 
 Scientists from Central Research Laboratories and other R&D divisions
 of BEL have contributed 49 technical papers in the national and
 international journals during the year.  Following Awards have been
 received by R&D teams during the year :
 
 -ELCINA-EFY Award (Certificate of Merit) for Outstanding achievements
 in R&D for 2009-10
 
 -SODET Award (Gold) for Technology Innovation (2009-10)
 
 -Raksha Mantri''s Awards for Import Substitution, Design Effort and
 Innovation (2008-09)
 
 -Indian Semiconductor Association''s Technovation Award for the
 development of Best Electronic Product of the year 2011 in the
 Aerospace sector for developing High Voltage Relay Driver ASIC.
 
 New Product Development : Considering the need for developing new
 technologies and products to meet the requirements of customers, BEL
 has initiated a number of actions for providing the necessary thrust.
 Technology roadmap and a three year R&D plan have been prepared to set
 goals for all R&D divisions. Resources have been augmented and enhanced
 budgets have been sanctioned for R & D to realise the plans. A number
 of joint development programs with DRDO labs also have been initiated.
 Software Defined Radio, a futuristic communication equipment, Radio
 Relays for Military backbone networks, Military Wimax, Battle field
 Surveillance System, Combat Management System for different class of
 ships, Medium power Radar, Surface Surveillance Radar, and Tablet PCs
 are some of the important projects whose development will be completed
 in the next one to two years.
 
 Quality
 
 The Company adopted the Total Quality Management (TQM) philosophy in
 the year 1990 under the acronym TORQUE which stands for Total
 Organisational Quality Enhancement.  TORQUE is based on the premise
 that the quality of products and services is not only the
 responsibility of the production / shop foor personnel, but other
 support services also have a role to play in meeting and exceeding
 customer''s expectations through supply of quality products and
 services. Following are the thrust areas of TORQUE in BEL to improve
 operational excellence :
 
 -Deployment of Reliability & Maintainability concepts during design
 stage of product development.
 
 -Improvement in Quality of design through DFSS projects.
 
 -Continual improvement of products and processes through deployment of
 six sigma methodology.
 
 -Key processes stabilisation and capability improvement through
 Statistical Process Control (SPC) techniques.
 
 - Reduction in cycle time of key business processes.
 
 - Introduction of lean manufacturing concepts to achieve on-time
 delivery.
 
 - Employee motivation and empowerment through introduction of QCC and
 Suggestion Schemes.
 
 - Customer satisfaction surveys to measure and improve satisfaction
 level of customers.
 
 Company has adopted CII-EXIM Bank Business Excellence Model to improve
 its overall Business and strategic excellence.  Adoption of this Model
 since 2002 has helped the Company in understanding the expectations of
 various stakeholders and in enhancing their satisfaction level. During
 the year 2010-11, five of the BEL Units / SBUs participated in the
 ‘CII-EXIM Bank Award for Business Excellence''. MILCOM SBU and Kotdwara
 Unit achieved Level-II recognition i.e. ‘Commendation Certificate for
 Significant Achievement''. Components SBU, Export Manufacturing SBU and
 Panchkula Unit received ‘Commendation Certificate for Strong Commitment
 to Excel'' under this Award scheme.
 
 BEL Quality Institute has been imparting training on Six Sigma since
 July 1999 and has trained 1,264 officers so far. During the year
 2010-11, 134 Six Sigma projects were completed, resulting in cost
 reduction, process improvement and customer satisfaction.
 
 Reliability & Maintainability are essential features of a well-designed
 product. Application of the principles of R&M at design stage can
 ensure robustness of the product during its entire life cycle. Keeping
 this in mind the Company has embarked on getting its design engineers
 certified as reliability professional from Centre for Reliability, STQC
 Directorate, Chennai. During the year 2010-11, a total of 28 engineers
 were certified as Reliability Professionals by the Centre for
 Reliability.
 
 All the key and special manufacturing processes in the Company are
 being brought under Statistical Process Control (SPC) which is an
 on-line process monitoring, control and improvement technique. During
 the year 2010-11, 18 processes were identified and brought under SPC.
 Control Charts and Process Capability studies of these processes have
 been put into practice.
 
 In order to monitor the quality performance of various Units and SBUs
 of the Company, a Quality Index metric has been developed during the
 year 2010-11. The main attributes of this Index are procurement
 efficiency, manufacturing efficiency, employee involvement, customer
 related measurement and external audit / assessment scores.
 
 As a part of Company''s endeavor to enhance the customer satisfaction
 level, the Company has been conducting customer satisfaction surveys
 every year. This survey is being conducted through a third party to
 bring in objectivity. Based on the feedback obtained from the survey,
 corrective actions are taken to improve our processes so as to enhance
 the satisfaction level of customers. During the year 2010 - 11 the
 customer satisfaction survey was conducted for five products, each
 belonging to different Unit / SBU. Overall customer satisfaction index
 was found to be 80.52 %.
 
 BEL won the ELCINA-EFY Award for Excellence in Quality (first prize)
 for the year 2010-11.
 
 Another award won by the Company during the year is ‘QCI-DL Shah
 National Award on Economics of Quality'' under the Category ‘Projects
 submitted by Public Sector & Government Enterprises''. The award has
 been instituted with a view to establish that bottom line benefits are
 achieved through quality initiatives.
 
 SAP Implementation
 
 BEL has undertaken implementation of SAP across all the Units /
 Offices. Implementation of SAP R / 3 including Payroll Product
 Lifecycle Management module at all Units and Offices of BEL were
 completed in a phased manner by July 2008. A number of improvements,
 checks and validations have been incorporated in the system based on
 user feedback.
 
 Pilot implementation of the following new dimension modules of SAP was
 done in 2010-11.
 
 - Supplier Relationship Management (SRM)
 
 - Knowledge Management (C Folders)
 
 - Employee Self Service (ESS)
 
 - Strategic Enterprise Management (SEM) Consolidation
 
 - Business Objects Reporting Tool
 
 - Procurement for Public Sector (PPS) module
 
 SRM version 5.0 was upgraded to SRM version 7.0 to implement
 Procurement for Public Sector (PPS) module. This module facilitates
 e-procurement with 2 Part Bidding, Accounting of Earnest Money Deposit,
 opening of Bids by Tender Opening Committee etc. Customer Relationship
 Management (CRM), and Supply Chain Management (SCM) are in final stages
 of implementation and testing. Standard SAP package does not cater to
 several requirements such as Consignment Receipt Report, Export
 Documentation etc. These features have been developed in SAP platform.
 A number of process improvements such as automation of accounting of
 inter unit transactions, bar code for issue and accounting of materials
 from stores etc.
 
 Security measures, such as, Firewall and Intrusion Prevention Systems
 have been implemented to secure Data Centre and DR site which are in
 BEL''s Intranet. Similarly, security measures, such as, Web Application
 Firewall, Reverse Proxy, Firewall, Intrusion Prevention System are
 under implementation for secure Internet access by customers and
 vendors to SRM and CRM servers.
 
 Human Resources
 
 Your Company employed 11,180 persons as on 31st March 2011 as against
 11,545 as on 31st March 2010. Of this, 3,670 were engineers /
 scientists. Women employees were 2,366 as on 31st March 2011. A total
 of 353 executives consisting of engineers, scientists and other
 professionals were inducted during the year.
 
 The particulars of SC / ST and other categories of employees as on 31st
 March 2011 are as under :
 
                              Executives           Non-Executives
 Category of Employees  
                          Group ‘A''  Group ‘B''  Group ‘C''  Group ‘D''
 
 Scheduled Caste              796       64        1172        115
 
 Scheduled Tribe              235        8         125         29
 
 OBC                          782       67         934         66
 
 Ex-Servicemen                 91      149         309        113
 
 Physically Handicapped        79        7         164         18
 
 In order to address the learning and organisation development needs,
 various management development programmes as well as technology
 programmes were organised during 2010-11 through premier training
 institutions for all grades of executives.  The Company-wide per capita
 training man-days for the year 2010-11 was 3.37 as against 3 in
 2009-10. A detailed write up on Company''s HR philosophy and specific HR
 initiatives during the year is provided separately in the Management
 Discussion and Analysis Report attached.
 
 Employee Relation & Welfare
 
 Employee relations continued to be conducive marked by industrial
 harmony and mutual trust. Regular interactions take place among the
 management, executives and the workmen through the apex forums, viz.
 the Joint Standing Committee consisting of Negotiating Trade Unions and
 Apex Joint Council consisting of Officers Associations and TC Cadre and
 also separately with respective Trade Unions and Officers Associations.
 Revised wage scales, allowances and perquisites for workmen were
 discussed and settled during the year for a period of 10 years w.e.f.
 1.1.2007.
 
 Various programmes were organised for the benefit of all sections of
 employees and their families, some of which were
 
 exclusively for women employees, SC / ST employees and differently
 abled employees to improve their awareness in legal issues, safety
 matters, etc., and to address matters specific to these sections of
 employees. Various cultural programmes were organised by the Fine Arts
 Clubs in the Units for recreation of employees and their families.
 Various summer camps / sports programmes were organised for the
 employees'' children.
 
 Your Company''s comprehensive medical scheme covers all employees, their
 dependent family members as well as retired employees and their
 spouses. BEL Hospital at Bangalore extends outpatient medical treatment
 to the residents of neighbouring villages and employees of BEL
 associate institutions / societies in addition to its own employees,
 their dependents and retired employees / their spouses. Welfare
 programmes organised by BEL Hospital during the year includes : Pulse
 Polio Immunisation programme, Uro - Gynaecology camp, screening
 programmes for Respiratory diseases, Eye camps for employees, their
 dependants and retired employees covered under BERECHS, etc.  BEL
 Hospital also conducted Growth and Development medical camp for the
 kids between 9 to 11 years of age and prizes were awarded to the
 healthy children.
 
 Educational institutions run by the Company for education of children
 of employees and also of neighboring villages, performed well during
 the year.
 
 Awards & Recognition
 
 Important Awards and recognitions received during the year by your
 Company and its employees include :
 
 -Standing Conference of Public Enterprises (SCOPE) Meritorious Award
 for Corporate Governance for the year 2009-10.
 
 -SCOPE Award for R&D, Technology Development & Innovation for the year
 2007-08.
 
 -Raksha Mantri''s Awards in the categories of Best Performing Division,
 Import Substitution, Design Effort and Innovation for the year 2008-09.
 
 -Selected as the top Indian Company under the Electrical & Electronic
 Equipment, Technology Development sector for the Dun & Bradstreet-Rolta
 Corporate Awards 2010.
 
 -International Aerospace Awards 2011 under the categories of ‘Most
 Influential Company of the Year'' and ‘Excellence in Innovation''.
 
 -Gold prize in the Heavy Industries category of DNA-Dainik Bhaskar
 India Pride Award (2010) for ‘Excellence in PSUs''.
 
 -BEL employees received the prestigious Prime Minister''s Shram Awards
 for the year 2005, 2006 and 2007 in the categories of Shram Bhushan,
 Shram Devi, Shram Vir / Veerangana and Shram Shree, respectively. A
 Senior Technical Assistant of Bangalore Complex has been selected for
 the Prime Minister''s Shram Ratna for the year 2008.
 
 Environment Management
 
 Over the years, commitment to maintaining clean and green environment
 has taken deep roots in the organisation as evidenced by improved
 results in prevention of pollution, energy conservation, water
 conservation, use of renewable energy and hazardous waste reduction,
 besides introduction of eco - friendly processes and materials.
 Sustenance of Zero discharge, Legal compliance, measurement and
 monitoring, verdant surroundings and afforestation are a way of life in
 BEL. The Company, with its ISO 14001 (2004) certified Environmental
 Management System, addresses environmental issues in a wider
 perspective with a firm resolve to reduce all forms of pollution. The
 workforce, aware of the consequences of environmental degradation,
 passionately participates in our environmental endeavours to promote an
 environment free of pollution. Some of the initiatives taken are
 presented below :
 
 Cleaner Technology
 
 Relentless effort to introduce cleaner technologies in manufacturing
 processes has reduced the generation of pollutants to a large extent.
 BEL has recognised that a more effective contribution to clean
 environment begins at design stage itself. Our Research and Development
 Departments search and introduce environment - friendly components.
 Further our Corporate Standards published guidelines connected to
 environment - friendly materials, components and manufacturing process
 to be used across the Company. Corporate standards have already
 commenced standardisation and introduction of many RoHS (Restriction of
 Certain Hazardous Substance) items complaint to European and other
 International directives. Based on the above guidelines, many of the
 RoHS compliant processes have been introduced in PCB manufacturing and
 metal finishing process. Low smoke halogen cables have been introduced
 in manufacturing of Naval based electronic equipments. Low VOC metal
 finishing operation (Poly urethane) and anti IR coating system are
 adopted in the process to contain pollution.  Eco - friendly Chorine -
 free copier paper for photocopying and laser printing has been
 standardised for lower environmental impact.
 
 Emission To Air
 
 Emission to air from processes is much below the pollution control
 norms. Even this low level of emission is checked through stack
 monitoring and with appropriate air pollution control equipments.
 
 The results are substantiated with ambient air quality measured at
 different locations within the factory. Not to leave out any possible
 improvement opportunity, Lead fume extraction systems have been
 introduced at soldering stations to prevent release of fumes containing
 lead and flux vapour to atmosphere.
 
 Water Pollution
 
 Waste water generated in the processes are treated to meet reusable
 standards and recycled for production purpose.  We have an in-built
 capacity to treat about 900 Kilo Litres of process wastewater per day
 (KLPD). In the same way domestic wastewater generated in the factory
 and colony is treated and recycled for horticulture purpose. We have an
 in-built capacity to treat about 1800 Kilo Litres of domestic waste
 water per day (KLPD) at Bangalore Complex.
 
 Hazardous Waste Management System
 
 By introduction of appropriate chemicals that generate less hazardous
 sludge in detoxification of wastewater and by adaption of cleaner
 technology, hazardous waste generation has been reduced at the process
 level itself. Besides introduction of Cyanide-free Zinc and Copper
 plating processes, use of sodium hydrides, sodium hypochlorite and
 sodium Meta bisulphate in place of lime, bleaching powder and ferrous
 sulphate, help in reduction of large volume of hazardous sludge.
 Hazardous wastes generated are disposed of scientifically as per the
 direction of the State Pollution Control Board. There is a drastic
 reduction in sludge-generation as a result of several process
 improvements carried out.
 
 Biomedical Waste
 
 Biomedical wastes generated in BEL hospital and medical centres are
 collected and disposed of scientifically as per regulatory guidelines.
 
 Solid Waste Management
 
 BEL is taking utmost care by disposing of Municipal Solid Waste in a
 scientific manner. BEL was quick enough to understand the issues posed
 by unscientific methods of disposal of municipal and other solid waste.
 Presently such waste is sent for processing at a well-established solid
 waste treatment facility in Bangalore.
 
 On Site Emergency Plan and Systems
 
 In our effort to reduce the impact of storage of hazardous materials, a
 significant move was made in eliminating the hazards in storing
 inflammable gas by changing over from LPG bullet system to LPG manifold
 system.
 
 Water Management
 
 There is a consistent reduction of water consumption every year in the
 past ten years, which is mainly due to implementation of number of
 water conservation projects. Our consumption of potable water stood at
 888 ML in 2010 - 11 against 906 ML in 2009 - 10. Rainwater harvesting
 and innovative recharging of bore wells enable us to collect the runoff
 water and recharge the ground water table. The large-scale
 rainwater-harvesting reservoir at Bangalore unit has a capacity of 170
 million litres with expected annual yield of around 234 million litres.
 By rainwater harvesting and recharging of bore wells ground water yield
 has improved.
 
 BEL has been awarded ‘Excellent Water Management Industry'' under
 ‘Within the Fence'' competition and ‘Efficient Water Management
 Industry'' under ‘Beyond the Fence'' by CII - Godrej in 2010-11.
 
 OHSAS 18001(2007)
 
 In addition to caring for the environment, BEL equally respects the
 well being of its workforce through OHSAS 18001(2007) implementation.
 
 Subsidiary / Joint Ventures
 
 Your Company''s subsidiary at Pune, BEL Optronic Devices Ltd (BELOP)
 recorded a turnover of Rs. 5,236.06 lakhs as against the turnover of Rs.
 5,874.48 lakhs in the previous year. BELOP achieved Profit After Tax of
 Rs. 445.23 lakhs as against Rs. 227.43 lakhs in the previous year. BELOP
 manufactures mainly Image Intensifier Tubes (I.I. Tubes). These Tubes
 are supplied to the Defence customers and also used in the Night Vision
 Devices manufactured by BEL.
 
 The Company has availed the general exemption under Section 212(8) of
 the Companies Act 1956 granted vide Ministry of Corporate Affairs
 Circular No. 5/12/2007-CL-III dated 8th February 2011. Hence, Annual
 Accounts of the Subsidiary Company, BEL Optronic Devices Ltd, are not
 attached to the Balance Sheet of BEL. A copy of the Annual Accounts of
 BELOP and the related information will be made available upon request
 by any member of BEL or BELOP. The Annual Accounts of BELOP are kept
 for inspection by investors at the registered office of BEL and BELOP.
 Any investor interested to inspect the same may please contact the
 Company Secretary of BEL or BELOP. A statement as per Section 212 of
 the Act relating to the Subsidiary Company, BELOP, is annexed to this
 report. Further, the information required to be disclosed as per the
 directions contained in the MCA Circular No. 5/12/2007-CL-III dated 8th
 February 2011 is also provided in this Annual Report.
 
 The Joint Venture Company (JVC) with General Electric, USA, viz., GE BE
 Pvt Ltd., manufacturing CT Max and other latest version X-Ray Tubes
 continues to perform well. BEL supplies some parts required for the
 products manufactured by this JVC.  GE BE Pvt Ltd achieved a turnover
 ofRs. 44,239.20 lakhs as against Rs. 50,928.95 lakhs in the previous year.
 The Profit After Tax was Rs. 5,754.79 lakhs as against Rs. 6,608.33 lakhs
 in the previous year.  The JVC declared 100% dividend for the year
 2010-11 and accordingly BEL received Rs. 260 lakhs as dividend from this
 JVC on BEL''s share of investment.
 
 The other JVC, viz., BEL Multitone Pvt. Ltd., jointly promoted by BEL
 and Multitone plc, UK was set up to supply, install and service Private
 Paging Systems and Pagers. The JVC is presently in shell stage with no
 business transactions being effected, and action is in progress to
 close down this Company, as there are no business prospects for paging
 systems in the Country.
 
 Consolidated Accounts
 
 Consolidated Financial Statements of your Company and its Subsidiary
 and Joint Venture Companies are attached to this Report.
 
 Vigilance
 
 The performance of Vigilance Department during 2010-11 has been
 satisfactory. 99.8% of the Executives of the Company have fled their
 Annual Property Returns.  1400 Purchase
 
 Orders / Contracts and 451 high value Orders / Contracts were reviewed
 / scrutinised during the year and found to be in order.  As per the CVC
 / CTE Guidelines, 2 teams for Inspection of Works Contracts and 2 teams
 for Inspection of Purchase Orders have been constituted. During
 2010-11, 11 Works Contracts and 16 high value POs have been inspected
 by in-house inspection teams. During the year, 2630 regular / surprise
 inspections were conducted.
 
 During the year 219 Executives and 15 Non-executives have taken part in
 Vigilance Awareness Training Programme.  2 Executives have been trained
 in the Principles of Natural Justice & Domestic Enquiry Training
 Programme (for Dy. Mgrs. & above). 39 Executives & 32 Non Executives
 working in sensitive areas for 3 years and above have been moved to
 different posts.
 
 In terms of CVC''s guidelines for Leveraging Technology to ensure
 transparency through effective use of website, the following
 information has been made available in the BEL website :
 
 - Application forms for Registration of Subcontractors / Vendors online
 for being included in the Approved Vendors List and applications for
 recruitment have also been facilitated online.
 
 - Details of awarded Contracts / Purchase Orders valuing more than Rs.
 10 lakhs in respect of works contracts, service contracts, capital
 items and non-production items are being published on BEL website.
 
 - Details of awarded Contracts / Purchase Orders issued on nomination /
 single tender basis value exceeding Rs. 5 lakhs are being published on
 BEL website.
 
 - Details of awarded Purchase Orders / Sub Contract Orders for
 production items with a threshold value of Rs. One Crore and above are
 being published on BEL website.
 
 - Vendor Payments Information System is made available on BEL website.
 
 In addition to the above, a new Vigilance page has been put on BEL
 website (www.bel-india.com). E-procurement is under development and it
 is expected to be implemented shortly.
 
 In addition to revised Purchase Procedure Manual released during
 December 2009, BEL has revised the Sub Contract Procedure and issued an
 Office Order on 01.07.2010 for adoption by all Units of BEL. The
 Company has also revised its Works Contract Manual and issued an Office
 Order on 09.07.2010 for adoption by all Units of BEL.
 
 BEL has adopted Integrity Pact on 31.07.2010 for all Orders / Contracts
 of value Rs. 20 Crores and above. As per CVC''s recommendation, BEL has
 appointed Mr N K Sinha, IAS (Retd.), former Secretary, Planning
 Commission and former Chairman, PESB as one of the IEM for BEL.
 
 Implementation of Official Language
 
 The Committee of Parliament on Official Language visited BEL, Ghaziabad
 Unit on 31st May 2010 and BEL Regional Office, Mumbai on 25th June
 2010. Your Company is committed to adhere with the OL policies of the
 Government of India.  Official Language Implementation is a continuous
 process in the Company. During the year, two more Units, viz. Bangalore
 Complex and Hyderabad Unit were notified under rule 10 (4) of OL rules.
 With this, total 11 Units / Offices have been notified under rule 10
 (4) of OL rules. Orders have been issued under rule 8 (4) of OL Rules
 for those having proficiency in Hindi to do their Official work in
 Hindi. Hindi workshops for those having working knowledge in Hindi were
 conducted. Action plan has been made for Unicode activation on all the
 PCs Company wide and training sessions covering Executives and
 Employees.  Process is on for giving Indian names for all BEL Products.
 
 Implementation of RTI Act
 
 The information required to be provided to citizens under Section
 4(1)(b) of the RTI Act 2005 has been posted on the website of Company,
 www.bel-india.com. The information posted on the website contains
 general information about the Company, powers and duties of employees,
 information about decision- making, rules, regulations, manuals and
 records held by BEL, directory of the Company''s officers, pay scales,
 procedure for requesting additional information about the Company by
 citizens and associated request formats. During the year 2010-11 the
 Company received and attended to 184 requests for information under
 RTIA.
 
 Directorate
 
 Following changes took place in the Directorate of your Company since
 the last report. Five Independent Directors, viz. (i) Prof Anurag
 Kumar, Professor, IISc, Bangalore, (ii) Dr S N Dash, former Secretary
 to Government of India, (iii) Prof G Madhavan Nair, former Chairman,
 ISRO, (iv) Mr N Sitaram, former Chief Controller (R&D), DRDO and (v)
 Prof R Venkata Rao, Vice - Chancellor, National Law School of India
 University, Bangalore, have been appointed w.e.f. 20th Dec 2010. Air
 Marshal P K Barbora, PVSM, VM, ADC, Vice Chief of Air Staff and
 Permanent Special Invitee to BEL Board Meetings exited the Board on his
 retirement from Service on 31st Dec 2010. Subsequently, Government has
 nominated Air Marshal N A K Browne, PVSM, AVSM, VM, ADC, Vice Chief of
 Air Staff as Permanent Special Invitee to BEL Board Meetings.
 Government has nominated Mr P K Kataria, Addl. Financial Adviser &
 Joint Secretary, Ministry of Defence also as one more Permanent Special
 Invitee to BEL Board Meetings.
 
 Directors'' Responsibility Statement
 
 Pursuant to the provisions under Section 217(2AA) of the Companies Act,
 1956 your Directors state :
 
 (i) that in the preparation of the annual accounts, the applicable
 Accounting Standards have been followed and in respect of Accounting
 Standard 17, necessary explanation for departure has been given in Note
 No. 18 of the Notes to Accounts (Schedule 21) ;
 
 (ii) that the directors have selected such accounting policies and
 applied them consistently and made judgments and estimates that are
 reasonable and prudent so as to give a true and a fair view of the
 state of affairs of the Company at the end of the financial year and of
 the Profit of the Company for the year ;
 
 (iii) that the directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act 1956 for safeguarding the Assets of the
 Company and for preventing and detecting fraud and other irregularities
 
 (iv) that the directors have prepared the annual accounts on a going
 concern basis.
 
 Auditors
 
 Pursuant to Section 619(2) of the Companies Act 1956, the Comptroller
 and Auditor General of India re-appointed M/s R G N Price & Co.,
 Chartered Accountants, Chennai as Statutory Auditors for the year 2010
 - 11 for audit of accounts of Bangalore Complex, Hyderabad and Chennai
 Units and Corporate Office. M/s Mittal Gupta & Co., Chartered
 Accountants, New Delhi, were appointed as Branch Auditors of Ghaziabad,
 Panchkula and Kotdwara Units for 2010 - 11.  M/s Argade Shyam & Co,
 Chartered Accountants, Pune were reappointed as Branch Auditors for
 Pune and Taloja Units for 2010-11. M/s N Koteswara Rao & Co, Chartered
 Accountants, Guntur were reappointed as Branch Auditors for
 Machilipatnam Unit for 2010 - 11.
 
 Auditors'' Report
 
 Auditors'' Report on the Annual Accounts for the financial year 2010 -
 11 and Comments of the Comptroller & Auditor General of India under
 section 619(4) of the Companies Act, 1956 on the Annual Accounts are
 appended to this report.
 
 Corporate Governance
 
 Your Directors are happy to inform you that your Company has won the
 Standing Conference of Public Enterprises (SCOPE) Award for Corporate
 Governance 2009 - 10. The SCOPE Awards 2009 - 10 were decided by an
 Independent panel of Judges under the Chairmanship of Justice P N
 Bhagwati, former Chief Justice of India and included Dr Abid Hussain,
 former Ambassador to USA, Dr M B Athreya, a well known Management
 Consultant, Mr M A Pathan, former Chairman, IOC, Mr C P Jain, former
 CMD, NTPC, Dr U D Choubey, DG, SCOPE and Prof B K Srivastava and his
 team of professors from International Management Institute.
 
 A report on Corporate Governance along with a Compliance Certificate
 from the Auditors as prescribed under the Listing Agreements with the
 Stock Exchanges on which BEL''s shares are listed as well as Govt.
 Guidelines on Corporate Governance for Central Public Enterprises, is
 annexed to this Report.
 
 Management Discussion and Analysis Report
 
 Management Discussion and Analysis Report required under the Listing
 Agreements with the Stock Exchanges on which BEL''s shares are listed as
 well as Government Guidelines on Corporate Governance for Central
 Public Enterprises, is annexed to this Report.
 
 Other Disclosures
 
 Information required to be disclosed in accordance with Section 217 (1)
 (e) of the Companies Act 1956 read with Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules 1988 regarding
 conservation of energy, technology absorption and foreign exchange
 earnings and outgo, is attached to this report.
 
 The particulars of employees to be furnished as per Section 217 (2A) of
 the Companies Act 1956, read with the Companies (Particulars of
 Employees) Rules 1975, as amended, are ‘NIL'' for 2010-11.
 
 Acknowledgement
 
 Your Directors acknowledge with a deep sense of appreciation the
 support and co-operation received from the Government of India,
 Ministry of Defence, Departments of Defence
 
 Production, Defence Acquisition, Defence Finance and Defence Research &
 Development Organisation. The Board also gratefully acknowledges the
 patronage extended to the Company by its esteemed customers,
 particularly the Indian Army, the Indian Navy, the Indian Air Force,
 the para-military forces and others.  We thank the Comptroller and
 Auditor General of India, Chairman, Members and employees of the Audit
 Board, Statutory Auditors and Branch Auditors, Company''s Bankers,
 collaborators and vendors. The Board appreciates the untiring efforts
 and contribution by the employees at all levels, which enabled your
 Company to achieve the significant performance during the year. The
 Board of Directors also wishes to place on record its appreciation and
 gratitude to all the shareholders / investors for the trust and
 confidence reposed in the Company and look forward to their continued
 support and participation in sustaining the growth of your Company in
 the coming years.
 
                                        For and on behalf of the Board
 
 Place : Bangalore                                  Ashwani Kumar Datt
 
 Date : 12th August 2011                  Chairman & Managing Director