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Bharat Heavy Electricals Ltd.

BSE: 500103 | NSE: BHEL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE257A01026 | SECTOR: Infrastructure - General

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Nov 29, 13:27
81.20 -0.20 (-0.25%)
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Annual Report

For Year :
2021 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

The Board of Directors have pleasure in presenting the 57th Annual Report on the business and operations of your Company and the Audited Financial Statements for the year ended March 31, 2021.

Financial Results

('' Crore)

For the year ended

March 31, 2021

March 31, 2020




Revenue from operations



Profit/(loss) after tax



Total comprehensive income /(loss)



EPS (in 1)



Note: Figures in () represent negative values.

State of Company Affairs

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

For FY 2020-21, the company has incurred a loss of 12717 Crore as against a loss of 11473 Crore in FY 2019-20, mainly due to lower revenue, higher material cost and additional merit based provisioning of about 11800 Crore. Based on comprehensive review, the provisioning was done as a matter of utmost financial prudence so as to strengthen receivables management process and improve quality of assets in the balance sheet. However, stringent budgetary control measures and reduction in operating expenses resulted in restricting the loss.

The Company secured orders worth 113472 Crore in FY 202021. This comprises orders worth 18984 Crore in the Power segment, 14283 Crore in the Industry segment and 1205 Crore in International operations. The order book outstanding at the end of March 31, 2021 was around 1102090 Crore against 1108443 Crore as on March 31, 2020. The order book figures are inclusive of applicable taxes.

Covid 19 not only impacted the topline of the company but also led to delay in tendering/ finalization of orders by customers. There is a significant decline in the new project proposals during FY 202021 which also impacted the company''s order book. It is worthwhile to mention that there is a significant correlation between new project 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 not transferred any amount to the Reserves.


In line with the Dividend distribution policy of the company and the losses in the current financial year, the Board has not recommended any dividend for the year 2020-21 in its meeting held on June 11, 2021.

The Company has a dividend distribution policy in place in pursuance to the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR). Dividend distribution policy is available on the Company''s website at https: /www.bhel. com/dividend-distribution-policy-bhel-0


The Company has not accepted deposits from the public falling within the 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 fund requirements through internal accruals. As a treasury function, the company invests surplus funds in available investment opportunities maximising the interest income to the company. To meet any intermittent operational fund requirement, various short term borrowing options used by the company include commercial papers, PCFC, buyers credit etc. PCFC borrowings also provide a natural forex hedge to the company. Effective treasury management led to the closing cash & bank balance rising by 26% in the current financial year as compared to the previous period.

The commercial papers of the company are 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 of Section 186 of the Companies Act, 2013 form part of financial statement. Loan of 13 Crore towards working capital was given during 2015-16 to M/s BHEL EML, BHEL''s subsidiary company, and has been already provided for impairment. The disclosure on loans and advances to subsidiary form part of note No [54] of the financial statements. There are no instances of investments by the loanee in the company or its subsidiary.

The company''s long term credit rating during the financial year was changed to “AA-“ from “AA The revision in ratings is primarily due to lower execution and losses, caused mainly due to Covid-19 pandemic. The company has taken stern measures to cut down its controllable costs to the extent possible. The efforts on the cash front have also borne fruit with cash & bank balances (net of short term borrowings) in the current financial year rising by about 26% and trade receivables reducing by about 38%. The funds released from working capital amount to 12620 Crore in FY 20-21, as against blockage of funds in the earlier years. The company is resolutely working to improve its execution levels and consequently achieve positive EBIDTA and improve profitability accordingly.

The company''s short term rating stands affirmed at A1 (Highest safety).

Material Changes and Commitments Affecting the Financial Position

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

Suspension of Trading

The Equity Shares of the company are listed on NSE & BSE. None of the 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 of Directors confirms that:

a) In the preparation of the Annual Accounts, the applicable Accounting Standards (Ind AS) have been followed along with proper explanations relating to material departures;

b) 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 fair view of the

Credit Rating

The credit ratings of your Company are as follows:



Date of Rating

Long Term Rating



















Ind AA


Ind A1



Ind AA-


Ind A1












state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

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

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

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

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Management Discussion & Analysis

This report conveys the Management''s perspective on the external environment, as well as company''s strategy for the future, operating and financial performance, risks and concerns, and initiatives taken in various areas such as revamping Project Execution, Cost optimization, Digitalisation, Quality, Development of Futuristic technologies, etc., during the financial year 2020-21.

The year gone by has been challenging for economies across the globe. Your company has taken these challenges as an opportunity 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 the previous year have started maturing. For further details, please refer Annexure-I to the Board''s report. AatmaNirbhar Bharat

To capitalize on the opportunities arising out of our Hon''ble Prime 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 being imported by the company

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

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

• Collaborative working with PSUs for addressing their imports

The company believes in successful development of partners/ vendors, especially MSME''s, which also forms an integral part of its growth strategy giving the twin benefit of lowering cost as well as speeding up the development process. Accordingly, your company is working towards supplier/ partner development (especially MSMEs), and has organized a workshop- SAMVAAD under the aegis of Department of Heavy Industry, for promoting collaborations between PSUs, private industry as well as R&D institutions & academia. BHEL identified items worth more than 13,000 Crore for import substitution through development of local suppliers and hosted an EOI on its website for the same. BHEL has conducted more than ten online workshops- during December 2020 to February 2021, with the support of Ministry of Heavy Industries (M/o HI), Department for Promotion of Industry and Internal Trade (DPIIT) and Ministry of MSME.

COVID Response

BHEL launched a speedy and comprehensive response to the COVID crisis on multiple fronts, including strict implementation of Government guidelines, support to employees and their families as well as the society at large and worked with local administration to ensure continuity of work across various manufacturing units and project sites. Your company also rose to the occasion to support the national efforts through monetary contributions as well as through development of multiple products for use by various govt. departments/ municipalities.

During the first phase of COVID-19, the company:

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

• Conducted regular fumigation, sanitization, etc., at factories, offices, townships and nearby areas including ensuring distribution of essential supplies such as food, medicines, milk etc.

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

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

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

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

• Developed Electrostatic Disinfection Machines (EDMs), also called 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, NDLS Railway station, among others.

During the second wave of COVID-19, apart from the numerous activities as continued since the first wave, the company additionally supplemented the national efforts by:

• Supplying over 5,75,000 cubic meters (over 80,000 cylinders) of medical oxygen from its Bhopal and Haridwar manufacturing plants by enhancing capacities as well as logistics for filling oxygen cylinders from 200/300 cylinders per day to reach a maximum of 3,860 cylinders per day

• Developed prototype for oxygen generating plant of 500LPM (based on design by CSIR-IIP, Dehradun) in a record time of 40 days from signing of Transfer of Technology 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 (including Board/Committee meeting details) together with the following, is given at Annexure-II to the Board Report.

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

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

(iii) Secretarial Audit Report under Section 204(1) of the Companies Act, 2013.

Department of Public Enterprises has graded BHEL as Excellent on the basis of their compliance with Guidelines on Corporate Governance of CPSEs for the Year 2019-20.

Declaration of independence

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


In addition to focus on many other areas, the company has also relooked into its compliance of systems and processes and wherever, there was an opportunity for improvement, company further strengthened its finance and non-finance compliance process & systems for the better satisfaction of stakeholders. As regards preparation of financial statements, the company ensures that preparation and presentation are compliant with the Indian Accounting Standards (Ind AS), Guidance Notes and other authoritative literature issued by the ICAI, Companies Act 2013, CSR regulations and other applicable statutes. The Company discloses full information and fulfils its compliance obligations under applicable Taxation Laws. Being a listed company, Compliances with the SEBI Listing Obligations and Disclosure Requirement Regulations are also being ensured. There is no adverse comment from SEBI for the FY 2020-21 on any compliance related matter. The Company endeavours to transcend beyond the regulatory requirements of corporate governance and considers sound Corporate Governance as one of its core values and is committed to maintaining high degree of transparency in disclosures.

The company has endeavoured to constantly improve its disclosures and transparency standards and the statutory auditors have also commended the compliances and the quality of disclosures in the Financial Statements.

Contribution to the Exchequer

The Company, over the years, has been making a significant contribution to the Exchequer. During the current year, the Company contributed close to 12948 Crore The Company has adopted guiding tax principle to maintain high standards of integrity with respect to tax compliances and reporting.

The company has been discharging all its GST and other dues on time and even before the due date [ out of the GST liability for the month of March 2021,1119 Crore. 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 appeals under VsVs, which ended ambiguity around the likely outcome of disputes, bringing an expeditious 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 the requirements of the Companies Act, 2013 read with rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the details in respect of which are given in the Corporate Governance Report. For the first time all the three independent directors being chairman/ members of BLAC, are also members of Institute of Chartered Accountants of India having diverse experience. All the issues are fairly and transparently deliberated in the meetings which are held at regular intervals. The views and suggestions of BLAC members are positively taken into account and imbibed into the company''s processes. Further, there has been no instance where the Board 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 Personnel Appointment

Shri Amit Mehta, Joint Secretary, Ministry of Heavy Industries was appointed as Part-time Official Director w.e.f. September 2, 2020. In line with Section 161 of the Companies Act, 2013 and Article 67(iv) of the Articles of Association of the Company, Shri Amit Mehta was appointed as additional director to hold directorship upto the ensuing Annual General Meeting. He was subsequently appointed as Director in the 56th Annual 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 was appointed as Part-time Official Director w.e.f. June 18, 2021.

In accordance with Section 161 of the Companies Act, 2013 and Article 67(iv) of the Articles of Association of the Company, Ms. Renuka Gera and Shri Jeetendra Singh having been appointed as additional directors, shall hold directorship upto the 57th Annual General Meeting of the Company and are eligible for appointment as Directors at the Meeting.


Shri Amit Varadan, Joint Secretary, Ministry of Heavy Industries, who was appointed as Part-time Official Director on March 27,

2019, ceased to be Part-time Official Director on September 2,


Shri Desh Deepak Goel and Shri Ranjit Rae, who were appointed as Part-time Non-official (Independent) Directors on September 23, 2017, ceased to be Directors 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 the age of superannuation on November 30, 2020.

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

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

Shri Kamalesh Das, who was appointed as Director (E,R&D) on March 1, 2019, ceased to be a Director of the Company on attaining the age of superannuation on July 31, 2021.

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

Further, pursuant to Section 152 of the Companies Act, 2013 and Article 67(i) of the Articles of Association of the Company, Shri Subodh Gupta and Shri Shashank Priya will retire by rotation at the Annual General Meeting and being eligible, offer themselves for reappointment.

In compliance with Regulation 36(3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, brief resume of the Directors proposed for appointment and re-appointment along with the nature of their expertise in specific functional areas and names of companies in which the person also holds directorship along with 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 (Listing Obligations & Disclosure Requirements) Regulations, 2015 is placed at Annexure- III to the Board''s Report.

Consolidated Financial Statements

The brief on consolidated financial statements prepared pursuant to section 129 (3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirement) Regulations 2015, is given in para 1.5.4 under Management Discussion & Analysis.

Sustainable Development

Sustainable Development tenets are ingrained in the business processes of BHEL and our mission statement - “Providing Sustainable business solutions in the fields of Energy, Industry & Infrastructurebears the testimonial of the same.

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

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

Business Responsibility Report

In line with the requirement of the listing regulations, Business Responsibility Report describing the initiatives taken by the company from environmental, social and governance perspectives as per the suggested format is enclosed at Annexure V to the Board''s Report.

Achievements of R & D and Technological Development

BHEL has a robust innovation and R&D framework in place to address the technology challenges emanating from business requirements. The R&D expenditure of the company for 2020-21 was 1726 Crore, approx. 4.45% of the revenue. The company filed 526 patent and copyright applications during the year, enhancing the company''s intellectual capital to more than 5000. More than 24% of the company''s revenue has been achieved from its in-house developed products.

Additionally, the company has also created a technology innovation platform (Sanrachna) for finding innovative solutions by involvement of students, academia, experts, etc., a step towards self-reliance in technology.

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

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

Vigil Mechanism

Transparency, fairness and objectivity form the basis for all decision making processes for the company.

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

The Vigilance function of BHEL is headed by Chief Vigilance Officer who acts 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 the CVO.

Preventive Vigilance has been the focus area of BHEL as proactive vigilance is better than the re-active one and it reduces the chances of corruption. The main objective is to progressively reduce ambiguity and discretion in the process by plugging the loopholes in the system, thereby making decision making process more and more objective & transparent and also reducing the scope for engaging in malpractices. The audit reports (internal, statutory and CAG reports) relating to BHEL are regularly scrutinized so as to determine whether there is any vigilance angle involved in respect of the irregularities brought out in such reports.

A panel of two Independent External Monitors (lEMs) has been appointed to oversee implementation of Integrity Pact and address any concerns related to the same.

The company encourages reporting of unfair and unethical practices and has a Whistle-blower Policy mechanism which provides adequate safeguard against victimisation to the complainant.

The Board Level Audit Committee reviews the functioning of the Whistle Blower/ Vigil mechanism.

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

Health, Safety & Environment (HSE)

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

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

It is our firm belief that safe and healthy workplace not only boosts people''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 in this pandemic situation i.e. guidelines were issued, SOPs were prepared, DO''s and DON''Ts were circulated, regular hygiene audits were conducted etc. Also, BHEL has taken initiatives which helped not only its employees and their families but also proved boon for the society. Further details have been provided in Annexure-VIIA to the Board''s Report.

Data and Cyber Security

BHEL deploys multi-layered protection for its IT assets and data, with state-of-the-art security features such as firewalls at Internet gateways, secured email gateways integrated with on premise sandboxing solution and end-point protection. All Internet traffic going in and coming out of BHEL is monitored through a Cyber Security Operations Centre (C-SOC), integrated with Global Threat Intelligence. User awareness and sensitization is continuously ensured through interventions like phishing simulation exercises, training programmes, communications etc. across the company. Compliance to security 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 BHEL is the implementation of the Information Security Management System (ISMS) since 2005 to ensure the Confidentiality, Integrity and Availability of its information systems. Auditors from the Standardization, Testing and Quality Certification (STQC) Directorate, an organization under the Ministry of Electronics and Information Technology, Government of India, audit the information security infrastructure of the organization and certify it against ISO27001:2013 periodically in addition to internal audits. Integration of pan-India BHEL ISMS achieved in February, 2021 is a manifestation of the maturity of this initiative. All BHEL units are now certified against a common policy framework which will result in improved compliance & cyber security, enforcement of common policies, procedures & formats.

The Covid-19 pandemic and the resultant lockdown which required employees to Work From Home added a new dimension to the cyber threat landscape. Despite no prior experience of Work from Home culture and managing geographically spread IT operations on a huge scale, BHEL adapted quickly to the changed scenario and

ensured security of the entire gamut of IT operations

Other disclosures

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

As per provisions of section 197 of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the details of the remuneration of the Directors 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 are exempted from complying with provisions of section 197 of the Companies Act, 2013. BHEL being a Government Company, such particulars are not included as part of Board''s Report.

Statement pursuant to Section 129 of the Companies Act, 2013 (Form AOC-1) relating to 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 given at Annexure-VIII to the Board''s Report.


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

Auditors'' Report on the Accounts

The Auditors'' Report on Standalone and Consolidated Financial Statements for FY 2020-21 of the Company are given at Annexure- IX to the Board''s Report. There is no qualification in the Auditors report on the Financial Statements of the Company. During FY 2020-21, there has not been any fraud reported by the Auditors of the company. The Supplementary Audit report under section 143(6) read with section 129(4) of the Companies Act,2013 issued by the Comptroller & Auditor General of India also forms part of Annexure IX.

Secretarial Audit

In terms of Section 204(1) of the Companies Act, 2013, the Company engaged M/s P.P. Agarwal & Co., Company Secretaries in whole-time practice, as Secretarial Auditors for conducting Secretarial Audit for FY 2020-21 and their report is forming part of Corporate Governance section.

Secretarial Auditor in his Audit report has observed regarding the non-compliance in composition of the Board of Directors as per Regulation 17(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Para 3.1.4 of the DPE Guidelines on Corporate Governance as the Company did not have requisite number of independent directors including at least one independent woman director on its Board.

The Management noted the observation and explained that BHEL, being a Government Company, the independent directors are selected by Govt of India and the Company is in constant communication for the appointment of requisite number of independent 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 as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, approved the appointment of seven firms of Cost Accountants as Cost Auditors for auditing the cost accounts of your Company for FY 2020-21. Cost accounts and records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 have been properly maintained and complied with.

The detail of cost auditors appointed for FY 2020-21 are given separately in the Annual Report. The Cost Audit Report for FY 2019-20 has been filed under XBRL mode on September 24, 2020, well within the due date of filing and there was no qualification in the cost audit report.

Appreciation and Acknowledgement

Your Directors gratefully acknowledge all the support and guidance extended by Ministry of Heavy Industries and all other departments and agencies of the Government of India in the Company''s operations and developmental plans. The Directors also express their gratitude to the Comptroller and Auditor General of India, Chairman and Members of Audit Board, Professional bodies, Statutory Auditors, Branch Auditors, Secretarial Auditor and Cost Auditors for constructive suggestions and continuous cooperation.

The Directors place on record their sincere appreciation towards the Company''s valued customers in India and abroad and esteemed shareholders for the support and confidence reposed by them in the management of the Company and look forward to the continuance of this mutually supportive relationship in future.

The Directors also wish to place on record their appreciation for the continued cooperation received from all the technology collaborators, suppliers, contractors and for the support provided by the financial institutions, bankers and stock exchanges.

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

For and on behalf of the Board of Directors of BHARAT HEAVY ELECTRICALS LTD.

Dr. Nalin Shinghal

Chairman & Managing Director

Place: New Delhi Dated: 27.08.2021

Director’s Report