i. Freehold land consists of 2,086.13 acres (2,086.13 acres) and Leasehold land consists of 989.28 acres (989.28 acres). Freehold land includes INR 287 (Nil) [represents absolute figure] transferred to investment property during the year.

ii. Freehold land includes 5.32 acres (5.32 acres) leased to commercial / religious organisations and in their possession.

iii. Additions related to R&D assets during the year includes

A. ' 2,486 (' 2,440) in respect of the assets of Central Research Laboratories / Product Development and Innovation Centre accounted under natural code heads.

B. ' 9 (' 205) in respect of the assets of Navi Mumbai Unit accounted under natural code heads.

iv. Site Restoration Obligation

Refer Note 21 for Site Restoration Obligation in respect of Wind Mill & Solar Power Plants.

Gross Block Value of Plant & Machinery includes Site Restoration Obligation of ' 2,395 (' 2,355) in respect of Wind Mill & Solar Power Plants.

v Contractual Commitments

Refer Note 30(6) for outstanding Contractual Commitments.

vi. Deemed Cost

On transition to Ind AS (01.04.2015), the company has elected to continue with the carrying value of all its property, plant and equipment as at 1 April 2015 measured as per previous GAAP and use that carrying value as the deemed cost of the property, plant & equipment.

vii. Estimation of Useful Life of Assets

The management has estimated the useful life of the various categories of Property, Plant and Equipment (which are different from the useful life indicated in Schedule II to the Companies Act, 2013) after taking into consideration, factors like expected usage of assets, risk of technical and commercial obsolescence, etc.

viii. Depreciation / Amortisation

Depreciation is calculated on a straight-line basis over the estimated useful lives of the Assets.

Leased Assets are amortised on a straight-line basis over their estimated useful lives or their respective lease term whichever

is shorter.

ix. Method of Accounting Depreciation

Depreciation / Amortisation has been calculated as per the Accounting Policy No. 8 of the Company and recognised as

expenses in the Statement of Profit and Loss. Amount of Depreciation recognised as part of Cost of Other Asset is Nil (Nil).

x. Impairment of Assets

Refer Note 30 (4).

xi. Refer Note 12 in respect of Unadjusted Capital Advance paid towards Property, Plant & Equipment.

xii. Land acquired free of cost from the Government in some units has been accounted in line with provisions of Ind AS 101.

xiii. Details of Registration, Pending Litigation etc.,

a. Pending execution of title/sale deed and handing over physical possession of land allotted by Andhra Pradesh Industrial Infrastructure Corporation (APIIC) in respect of land admeasuring 5.60 acres (5.60 acres) in Mallapur allotted to BEL, Hyderabad and the matter being under litigation, no provision towards registration and other costs has been made in the books of account. Cost of land paid to APIIC amounting to '65 ('65) has been shown in Note 12 - Other Non current Assets to the Financial Statements under the heading Capital Advances.

b. Based on the Memorandum of Understanding reached with the Defence authorities, assets constructed on the land allotted to BEL and in possession of BEL are capitalised under respctive heads for setting up of the Hyderabad Unit. Pending finalisation of the terms and conditions by the appropriate authorities, the cost of land admeasuring 25.11 acres (25.11 acres) has not been accounted in the books of accounts.

c. Land Admeasuring 122.82 Acres (122.82 Acres) at Ibrahipatnam alloted by APIIC/TSIIC possession is given, for which sale deed is pending.

d. A demand of '648 (' 648) being 50% of the compensation amount decreed by City Civil court, Hyderabad has been received towards additional compensation from TSIIC dated 31 January 2015 for land of 22.375 acres (22.375 acres) which is part of the Freehold Land mentioned above. The demand is under dispute and hence, no provision in respect of the same has been made in the books of accounts.

e. Free hold Land to the extent of 1.22 acres (1.22 acres) which was allotted by Government Authorities in Bengaluru in return for handing over of Land measuring 1.24 acres (1.24 acres) is under litigation.

f. The Company has installed Windmill Generator at three locations. Out of which : Windmill Generator-I capitalised in the year 2006-07 on Lease Land. Lease deed in respect of aforesaid land is under litigation with high court of Karnataka. Windmill Generator - II is capitalised in the year 2007-08 on the leased land by paying upfront lease rent of ' 36. Lease Agreement for the land is pending finalisation.

g. The title deed in respect of land in Panchkula measuring 0.566 acres (0.566 acres) is under litigation. Three cases are pending in the Civil Court Ambala, SDM Cum. Assistant Collector, UT, Chandigarh and District Court Panchkula.

h. Sale deed is pending for finalisation of the land admeasuring 913.99 acres (913.99 acres) at Palasamudram (Defence System Integration Complex - DSIC), Ananthapur Dist. AP.

i. Land measuring 12.52 acres (12.52 acres) at Sohna (Haryana),mututaion is pending with concerned Tehsildar (Ghaziabad).

xiv. Company has installed solar power plants on lease land in Ordance Factory Board at Medak, Itarsi, Bolangir, HVF Avadi, GCF Jabalpur, VFJ Jabalpur, Hazratpur, Muradnagar, Nalanda, MSF Ishapore by paying a nominal value of INR 1 (represents absolute figure) as annual lease rent for every plant.

xv. Prepaid rent for 3 MW Hassan & 8.4 MW Davangere windmill plants are capitalised as Right of Use on transition to Ind AS 116.

xvi. Land admeasuring 31.15 acres (31.15 acres) located at Devanahalli, Bengaluru is received from Karnataka Industrial Area Development Board (KIADB) and the cost of land along with the cost of registration of ' 7,974 (' 7,974) capitalised under Lease hold land. As per the terms of the lease agreement, on sucessful commencement of the project the same will be converted as freehold land.

xvii. Short term lease amount expended during the year is Nil (Nil).

xviii. Leasehold land includes 9.62 acres (9.62 acres) leased to NCRTC for use during construction and is in their possession as at the year end. (Ghaziabad)

xix. DAV Public School was provided a portion of leasehold land by the Unit. Unit has filed a case against DAV Public School for eviction (Ghaziabad Unit).

xx. Repayment of Lease for Right to Use Asset during the year amounts to ' 578 (' 433).

xxi. Lease agreement has been entered into with QUBEXPRO, Visakhapatnam towards lease of space for 2 years (non-cancellable period) with an extendable period of another 4 years (Total lease period is 6 years) and capitalised during the year 2022-23 as ROU asset for total value of ' 780. Interest expenses on lease liability is ' 54. Rate used for discounting for arriving expenses is 7.6% p.a. as per Ind AS - 116. Total cashflow for SDC-Vizag lease is ' 986.

xxii. Gross block and Accumulated Depreciation for Electronic Eqipments include ' 247 and ' 247 (' 247 & ' 247) towards assets procured out of Other Grants.

xxiii. Electronic Equipments of acquisition value ' 8,635 (' 8,342) are lying with vendors. Plant & Machinery of acquisition value '55 (' 40) is lying outside the factory premises.

iii. Impairment of Assets

Building under construction with carrying value of ' 124 is halted for more than three years as the contractor to whom the said work was awarded is in the process of winding up, and there has been no progress in the work. During the year 2021 -22 a claim of ' 1,398 submitted to official liquidator based on independent valuation report. As per the advice of Official Liquidator (High court, Madras) condonation of delay from High Court has been obtained during the year 2022-23. An amount of ' 124 was impaired in the financial year 2018-19. Refer Note 30(4).

iv. Civil Construction mainly comprises of Production related building, R&D building and Regional Product Support Centres.

vi. Estimation of Useful Life of Assets

The management has estimated the useful life of the various categories of Property, Plant and Equipment (which are different from the useful life indicated in Schedule II to the Companies Act, 2013) after taking into consideration, factors like expected usage of assets, risk of technical and commercial obsolescence, etc.

vii. Depreciation

Depreciation is calculated on a straight-line basis over the estimated useful lives of the Assets. The amount of Depreciation has been recognised as expense in the Statement of Profit and Loss.

viii. Method of Accounting Depreciation

Depreciation has been calculated as per the Accounting Policy No. 8 of the Company and recognised as expenses in the Statement of Profit and Loss.

ix. Related Party Transactions

Investment Property includes Building and land measuring 0.42 acres (0.31 acres ) given under cancellable operating lease to Subsidiary Company BEL Thales Systems Ltd. Also Refer Note 31.

x. Details of Registration, Pending Litigation etc.

A. Nil (Nil).

xi. Estimation of Fair Value: - The company has estimated the fair value of Investment Property based on the Government Guidance Value (municipal value) of the similar properties in the investment property's location and not based on the valuation by registered valuer. All resulting fair value estimates for the investment properties are included in level 2.

xii. Restriction on the realisability of Investment Property:- There is no restriction on the land alloted to the company by Government.

xiii. During the year 2023-24 a Building was reclassified from Investment property to Property Plant and Equipment having a gross book value of ' 6 and Accumulated Depreciation of ' 4.

i. Deemed Cost

On transition to Ind AS (01.04.2015), the company has elected to continue with the carrying value of all its other intangible assets as at 1 April 2015 measured as per previous GAAP and used that carrying value as the deemed cost of other intangible assets.

iii. Amortisation

Amortisation is calculated on a straight-line basis over the estimated useful lives of the Assets.

The amount of amortisation has been recognised as expense in the Statement of Profit and Loss.

iv. Method of Accounting Amortisation

Amortisation has been calculated as per the Accounting Policy No. 8 of the Company and recognised as expenses in the Statement of Profit and Loss.

v. Refer Note 30(6) for Contractual Commitments.

vi. Impairment of Assets

Refer Note 30(4).

vii. The restriction on the title of the assets is governed by the terms of agreement.

viii. Refer Note 30(7) for the aggregate amount of research and development expenditure recognised as an expense during the period.

ii. Impairment of Assets

An amount ' 9,666 (' 545) was provided as impairment loss since development activity is not being continued at present and also as per company's assessment the probability of generating economic benefit was not certain. An amount of ' 545 (Nil) was provided during 2022-23 was written off during Current year. (Refer Note 30(4)).

iii. An amount of Nil (' 1950) Charged off to Statement of Profit & Loss.

i. Payment Terms

A. I n majority of contracts, payment (net of advance received, if any) is due on delivery of items. However, in some contracts a portion of dues (Typically 5% to 10%) is linked to satisfaction of further performance obligation like completion of installation and commission activity etc. In respect of turnkey contracts, payment (net of advance, if any) is linked to achievement of specified milestone.

B. Advance including progressive payments received from customer are classified as contract liability and adjusted on completion of related performance obligation.

C. Amount retained by customer in respect of completed performance obligation, due to linking of payment with completion of other performance obligations in the contract, is classified as contract asset. Balance amount receivable is classified as Trade receivable.

i. Raw Materials and Components include ' 16,213 (' 27,843) being materials with sub-contractors, out of which ' 80 (' 179) of materials is subject to confirmation and reconciliation. Against ' 80 (' 179) an amount of ' 59 ( ' 163) has been provided for.

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

Shortages of ' 1,833 (' 713) and surplus of ' 428 (' 240). Pending reconciliation, an amount of ' 1,406 (' 447) has been provided for.

iii. Valuation of Inventories has been made as per Company's Accounting Policy No. 18.

iv. A. The United Nations Climate Change Secretariat has granted 15,856 (15,856) TON CO2EQ carbon credit for the

2.5 MW BEL Grid Connected Wind Power Project Davangere District, Karnataka for the verification period from 05.11.2007 to 31.03.2012 (05.11.2007 to 31.03.2009). The carbon credits are included under Finished Goods at a value of ' 2 (' 2). The CER is valued at cost as required by Guidance Note on CER issued by ICAI.

v. Security, Hypothecation etc

Refer Note 34.

vi. Impairment of Assets

Provisions for inventory has been made in line with Accounting Policy No. 18 of the Company.

vii. Amount recognised in Statement of Profit & Loss :-

Write-down of inventories to net realisable value amounted to ' 1,792 (' 945) has been recognised in the statement of profit and loss for Work in progress and Finished goods.

viii. Reversal of write down of inventories of ' 2,317 (' 885) has been made during the year, which were recognised as an expenses in the previous year for Work in progess and Finished goods.

ix. Inventory includes ' 4,503 (' 4,157) which are located physically at Customer Premises.

x. The company has received / retained the assets of the customer as per the contractual terms and those do not form part of the inventory.

x. Terms, Rights, preferences and restrictions attaching to each class of shares

A. The Company has only one class of shares viz, Equity Shares.

B. Each holder of Equity Shares is entitled to one vote on show of hands and in poll in proportion to the Number of shares held.

C. Each Shareholder has a right to receive the dividend declared by the Company.

D. On winding up of the Company, the equity shareholders will be entitled to get the realised value of the remaining assets of the Company, if any, after distribution of all preferential amounts as per law. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. Nature and purpose of Reserves

i. Capital Reserve

Capital Reserve is created by transfer from Retained earnings an amount equal to capital profit earned by the company. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

ii. Capital Redemption Reserve

Capital Redemption Reserve is created by transfer from General Reserve an amount equal to face value of the Shares bought back. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

iii. Equity Investment through Other Comprehensive Income (OCI)

The company has elected to recognise changes in fair value of certain equity investments in other comprehensive income. The change in fair value is accumulated in this reserve. If and when the investment is de-recognised the accumulated amount will be transferred to Retained earnings.

iv. Other Comprehensive Income (OCI)

Other comprehensive income are those gains or losses which are not yet realised and excluded from the statement of profit and loss. It mainly consists of remeasurement of the net defined benefit liability / asset (net of tax).

xii. Government of India being the Promoter holding 51.14% (51.14%) of Shares as on 31.03.2024. No. of Equity Shares held as on Balance Sheet date is 373,79,21,934 (373,79,21,934).

xiii. Nil (487,31,85,886) Bonus shares were issued during the year 2022-23 for consideration other than cash.

ii. Provision for Warranties - as per Accounting Policy No. 20 of the Company.

Provision for warranties is made in respect of products whose normal warranty period is outstanding. As the warranty provision period varies from product to product, provision is made at Strategic Business Unit (SBU) level based on average period of warranty period. Provision is made based on trend based estimate of the likely expenses to be incurred. The provision is measured at the present value of the estimated cost of Warranty.

iii. Provision for Site restoration - as per Accounting Policy No. 23 of the Company.

In accordance with the terms and conditions of the Lease agreement entered into with Lessor, the company is required to return the land in its original condition. Accordingly provision in respect of Site restoration obligation has been made. The provision required is reviewed and required adjustment made at each year end.

The provision is measured at the present value of the best estimate of the cost of restoration.

iv. Provision for Onerous contracts - as per Accounting Policy No. 23 of the Company.

In respect of certain contracts entered into by the company, it is expected that the likely cost to complete the contract would exceed the Revenue received / receivable against the contract. In such cases, provision in respect of the expected losses has been made. The provision required is reviewed and required adjustment made at each year end. The provision is measured at the present value of the best estimate of loss likely to be incurred.

v. An amount of ' 6,711 (' 6,937) has been debited against Natural Code Heads wrt Warranty Cost.

An amount of Nil (Nil) has been debited against Natural Code Heads wrt Site Restoration Obligation.

vi. Performance warranty obligation in respect of sale where back to back warranty of vendor is available, potential liability, if any, in the event of default of vendor is not ascertainable and not expected to be significant.

(A) POST EMPLOYMENT BENEFIT OBLIGATION (i) Gratuity:

The Company provides gratuity to employees in India as per payment of Gratuity Act, 1972. The Company has a Gratuity Scheme for its employees, which is a funded plan. Every year, the Company remits fund to the Gratuity Trust to the extent of shortfall of the assets over the fund obligations, which is determined through actuarial valuation. As per the Gratuity Scheme, gratuity is payable to an employee on the cessation of his employment after he has rendered continuous service for not less than five years in the Company. For every completed year of service or part thereof in excess of six months, the Company shall pay gratuity to an employee at the rate of fifteen days salary based on the last drawn basic & dearness allowance.

The following table summarises the components of net benefit expense recognised in the Statement of Profit & Loss and amounts recognised in the Balance Sheet and the movement in the net defined benefit obligation over the years as per Actuarial valuation :

(ii) BEL RETIRED EMPLOYEES CONTRIBUTORY HEALTH SCHEME (BERECHS) :

The Company has a contributory health scheme for its retired employees "BEL Retired Employees' Contributory Health Scheme" (BERECHS), which is a funded scheme. Company remits fund to the BREM Trust to the extent of shortfall of the assets over the fund obligations, which is determined through actuarial valuation.The primary objective of the scheme is to provide medical facilities to employees retiring on attaining the age of superannuation, or on VRS. Benefits under the Scheme shall be available to the employees who become member and their spouses only.

B. Long Term Compensated Absence :

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

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

iii) A description of the funding arrangements and funding policy.

a) The Gratuity plan of the company is a funded plan. 99.47% (99.49%) of the plan assets backing this plan are insurer managed assets and 0.52% (0.50%) of the plan assets are invested in Central and State Government Securities. The annual contribution to the fund is normally set equal to the deficit as disclosed by the preceding actuarial valuation of the benefit obligations.

b) The BERECHS Medical plan of the company is a funded plan. 99.99% (99.99%) of the plan assets backing this plan are insurer managed assets. The annual contribution to the fund is normally set equal to the deficit as disclosed by the preceding actuarial valuation of the benefit obligations.

C. Pension Scheme :

The Company has got a defined contribution pension benefit plan for the benefit of its employees in respect of which contribution is made on an annual basis to a Trust setup for this purpose.

The benefit under the scheme are available for the employees as per the rules laid down in this regard.

i) A narrative description of the specific or unusual risks arising from a defined benefit plan (i.e. Gratuity and BERECHS) The specific risk relating to defined benefit plans are as follows :-

The specific risk relating to defined benefit plans are as follows :-

Movement in long term government bond rate between two reporting periods which will impact discount rate and consequently the present value of obligations.

Risk of higher / lower salary escalation / benefit as considered for valuation vis-a-vis the actual experience through the Financial Year. However, both the risks are mitigated on a regular basis i.e. yearly as valuations are done after every year based on updated assumptions.

ii) A narrative description of any asset-liability matching strategies.

The gratuity Plan and BERECHS Medical Plan of the company is a funded plan. The assets backing this plan are predominantly insurer-managed funds. Hence the company has limited flexibility in terms of implementing asset-liability matching strategies for this plan.

Satisfaction of performance obligation

A. In majority of the contract, performance obligation is satisfied "at a point in time" which is primarily determined on customer obtaining control of the asset. One of the prime indicator considered for this is transfer of significant risk and rewards to the customer based on Inco terms. Where a contract involves multiple performance obligation, the criteria specified in Ind AS 115 is applied to determine the point in time when the performance obligation is satisfied.

B. Under "Bill and hold" arrangement performance obligation is satisfied on unconditional appropriation of the goods to the contract. Normally no obligation towards custodial service exists.

C. Contract with the customer normally do not contain significant financing component and any advance payment received and /or amount retained by customer is with intention of protecting either parties to the contract.

D. Variable consideration primarily consists of amount receivable/reimbursable against foreign exchange variation clause. The amount of revenue recognised in respect of the same is determined based on the methodology specified in the contract. The amount is recognised as revenue on accrual/admittance of claim by customer.

E. The company's turnover mainly includes supply of defence electronics equipments and systems.

F. Contract entered into with customer, typically do not have a return/refund clause.

G. Warranties provided are primarily in the nature of performance warranty.

H. The company normally uses the input method to recognise revenue in respect of contracts in which performance obligation are satisfied over a period of time. For revenue recognition, the percentage of completion method is adopted where in the percentage of actual cost incurred to total estimated cost is applied to the contract price for arriving at the quantum of revenue to be recognised.

I. Contract with customer (other than AMC) in respect of which revenue is recognised over a period of time typically involves multiple activities of different nature like construction of building, supply and installation of equipments, networking of equipment and system etc. Due to this it is not possible to quantify in physical terms the quantum of work done (i.e. output) reliably. Whereas, under input method, the cost incurred in respect of these varied activities can be captured and compared to the total estimated cost to be incurred (which can be estimated reliably), for arriving at the percentage of completion. In case of AMC contracts, output method is used to recognise revenue where passage of time is the criteria for satisfaction of performance obligation.

J. For revenue recognition in respect of performance obligation satisfied at a "point in time" the following criteria is used for determining whether customer has obtained "Control on asset"

• Control is not retained

• Customer has legal title to the asset

• The entity has transferred physical possession of the asset

• Customer has accepted the asset

• Entity has the present right to payment for the asset

K. Transaction price is typically determined based on contract entered into with customer. Allocation of transaction price in respect to multiple obligation is based on relative standalone selling price.

L. No non-cash considerations are received/given during the current/previous year.

iii. Retention Sale

The Value of Retention Sales (i.e., Goods retained with the Company at the Customers' request and at their risk) included in Turnover during the year is ' 29,219 (' 76,411). Out of the above the Value of Ex-works Sales is ' 807 (' 10,008).

2 Statement of Compliances

The standalone financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) [as notified under section 133 of the Companies Act, 2013 (the "Act") read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.] and other relevant provision of the Act.

The Company's standalone financial statements up to and for the year ended 31 March 2016 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act.

3 Operating Cycle

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

4 Impairment of Assets

The Company has analysed Indications of impairment of assets of each geographical composite manufacturing unit considered as Cash Generating Units (CGU). On the basis of assessment of internal and external factors, an accumulated amount of ' 17,003 (' 7,882) is provided as provision for impairment as on Balance Sheet date. During the year an amount of ' 9,666 (' 545) has been provided as impairment of asset.

5 Short Term Borrowings

a The Company has been sanctioned working capital limit of ' 5,00,000 (' 5,00,000) by Consortium Bankers (SBI Lead Bank). The sanctioned limit includes fund based limit of ' 50,000 (' 50,000) and non fund based limit of ' 4,50,000 (' 4,50,000).

b The interest rate payable on fund based limit is linked to SBI 3 Months MCLR Rate. [Interest rate payable as on 31 March 2024 is 8.20 % p.a. (8.10%)].

c The amount utilised is repayable on demand. Utilisation as on 31 March 2024 is Nil (Nil).

d The above sanction limit is secured by hypothecation of Current Assets of the Company (Refer Note 34).

10 Confirmation of Balances

Letters requesting confirmation of balances have been sent in respect of Trade Receivables, Trade Payables, Advances and Deposits. Wherever replies have been received, reconciliation is under process and impact on Financial Statements is not expected to be material.

11 The date on which the code of Social Security, 2020 will come to effect has not been notified and the company will assess the impact of the code when it comes into effect and will record the impact in the period the code becomes effective.

12 Leases

Adoption of Ind AS 116

Effective 1 April 2019, the company has adopted Ind AS 116 "Leases" using modified retrospective approach. The adoption of the standard did not have any material impact on the financial statements of the company.

ii) The company has Leased out few portions of Land to different organisations under non-cancellable Operating Lease. Lease period is spread over from the year 1967 to 2077. The leases have various terms, escalation clause, lease renewal rights etc. On renewal, the terms of the lease are renegotiated.

The company has not recognised any income as contingent rent.

b) As a Lessee:

The Company has leases that were classified as finance lease applying Ind AS 17, for such leases the carrying amount of the right of use asset at the date of initial application of Ind AS 116 is the carrying amount of the lease on the transition date as measured applying Ind AS 17. Accordingly an amount of ' 1,275 has been reclassified from property plant and equipment to right of use assets.

On transition, the company recognises right of use asset representing its right to use the underlying asset for the unexpired lease period.

The right of use asset is recognised at :

a) The carrying amount of prepaid rent when no future lease payments are payable; or

b) At the carrying amount and discounted at incremental borrowing rate. Accordingly right of use asset is ' 365 and Corresponding lease liability ' 365 has been recognised. On application of Ind AS 116 in respect of these assets, nature of expenses has been reclassified from lease rent to depreciation cost for right of use asset and finance cost for interest accrued on lease liability.

The above lease contracts, entered by company pertains to land taken on lease for generation of power through solar project and buildings for business purposes. The company has restriction with respect to disposal of these assets.

The company has not recognised any expenses as contingent rent.

The maturity analysis of Contractual Cash flows of Lease Liabilities is disclosed in Note 34.

13 Segment Reporting

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

14 Foreign Exchange Exposure

The disclosure of "Foreign Exchange Exposure", the major currency-wise exposure as on 31 March 2024 is given below. [Foreign currencies are shown in Lakhs]. (Previous year figures are shown in brackets).

16 In view of ongoing conflict in Israel, the Company has analysed the existing contract/agreements with companies based in Israel. In our opinion there is no material financial impact as on 31.03.2024.

17 Dividend not recognised at the end of the reporting period

The directors have recommended a final dividend of INR 0.80 (INR 0.60) per share. [Represents absolute figure].

The proposed dividend is subject to approval of shareholders in the ensuing Annual General Meeting and if approved would results in cash outflow of approximately of ' 58,478 (' 43,859).

18 An amount of ' 27 (' 26) has been contributed to Defence production IT Division which has been created as one of the division of HAL to implement IT related initiatives in Dept. of Defence production including Ordnance Factory Board (OFB) and Defence Public Sector Units.

19 Value of remaining Performance Obligations (pending orders to be executed)

Unrecognised revenue from contracts with customer which are partially satisfied or unsatisfied (Pending orders to be executed)

c The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (RoC) beyond the statutory period.

d The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

e The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign

entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

f The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

g The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

22 Receivable other than trade receivable includes, a fraud on the company by the employees during the year 2018-19 amounting to ' 1,000 has been detected during the routine internal audit. Out of the said amount, ' 64 has been recovered and the balance amount of ' 936 is recognised as receivable, pending recovery, the same has been provided for as doubtful in the Statement of Profit and Loss. The company has filed civil suits on respective employees and vendor. During the Financial Year 2022-23, ' 54 has been incurred towards court fees for filing civil suits.

23 Fi gure in brackets relate to previous years.

24 All fig ures in financial statements are rounded off to nearest Lakhs unless otherwise mentioned.

25 The standalone Ind AS financial statements were approved for issue on 20 May 2024 by the Board of Directors.

Directors sitting fees :

The sitting fees paid to Non Executive Directors is ' 45 during the Financial Year 2023-24 and ' 32 during the Financial Year 2022-23.

e. All transactions dealt with related parties are on arm's length basis. In respect of loan to subsidiary (BELOP) refer note "g" below.

f. All Outstanding balances are Unsecured. All Outstanding balances (Other than loan) is repayable in cash within next 6 months. For Outstanding balance of loans refer note "g" below.

g. Loans to Related Parties

1. The Company has entered into an agreement with BELOP in August 2016 to fund a Term Loan of ' 4,600 out of which ' 2,935 has been disbursed as on 31.03.2024 and an amount of Nil (Nil) is outstanding as on 31.03.2024.

h. Management Contracts including deputation of Employees

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

i. Transaction with Government and Government Related Entities

As BEL is a government entity under the control of Ministry of Defence (MoD), the company has availed exemption from detailed disclosures required under Ind AS 24 wrt related party transactions with government and government related entities. However as required under Ind AS 24, following are the individually significant transactions : -

Nil (249,19,47,956) number of Bonus Shares were Issued.

An amount of ' 74,765 (' 63,546) was paid as Dividend during the FY 2023-24.

In addition to the above, around 94% (96%) of the Company's Turnover, around 93% (97%) of Trade Receivables and around 98% (99%) of Customer's Advance is with respect to government and government related entities.

j. Investment with respect to BELOP includes fair valuation of loan.

k. Defence Innovation Organisation (DIO) was incorporated on 10 April 2017 as a 'Not for Profit' Company as per the provisions of Section 8 of the Companies Act, 2013 with an authorised share capital of ' 100 (BEL: 50%; HAL: 50%) with an objective of funding innovation in defence sector. The registered office of the company is situated in BEL's premises in Bengaluru.

Level 1: Level 1 hierarchy includes Financial instruments measured using quoted prices.

Level 2: The fair value of Financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case of unlisted equity shares.

3 Valuation technique used to determine Fair Value

a. LIC Investment - (Level 2)

Based on valuation report of the Scheme provided by LIC.

b. Mana Effluent Treatment Plant Ltd - (Level 3)

BEL has invested in equity securities of Mana Effluent Treatment Plant Ltd. which is an unlisted company. The Company's cost of investment in Mana Effluent Treatment Plant Ltd is only ' 5 (out of issued Share Capital of ' 205). The company has opted for Net Asset Value method for fair valuation.

Note 33 - Financial risk managementi) Risk Management framework and policies

The Company is broadly exposed to credit risk, liquidity risk and market risk (fluctuations in exchange rates, interest rates and price risk) as a result of financial instruments.

Board of Directors have the overall responsibility for the establishment, monitoring and supervision of the Company's Risk Management framework. The Board has set up a Risk Management Committee, for this purpose, which is responsible for developing and monitoring the risk management policies. The Company has an established Risk Management Policy that outlines risk management structure and provides a comprehensive frame work for identification, evaluation, prioritization, treatment of various risks associated with different areas of finance and operations.

The company has a centralized Treasury function which is responsible to undertake appropriate measures to mitigate financial risk in accordance with the policies and procedures formulated by the Board. Hedging transactions are undertaken by a team with appropriate skills and experience in consultation with an external expert. The Company does not trade in derivatives for speculation.

ii) Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company's activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rate movements (refer to notes below on currency risk and interest risk).

iii) Currency Risk

BEL is exposed to foreign exchange risk arising from foreign currency transactions primarily relating to purchases and sales made in foreign currencies such as USD, Euro, Great Britain Pound, Swiss franc and Japanese Yen. Foreign exchange risk arises from existing and future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company's functional currency (INR).

The Company has a Board approved currency risk management policy implemented by a Risk Management Committee that reviews the Company's exposure to this risk on a regular basis. The Risk Management Policy recommends hedging upto 50% of the open foreign currency exposure. However the decision to enter into a hedging arrangement is made by the Risk Management Committee based on the relevant data inputs and the advice of the external specialist consultant retained for this purpose.

The Company's export proceeds are realized mostly by remittance into an Export Earners Foreign Currency account (EEFC) which is then utilised for payments to be made in foreign currency, thereby mitigating the currency risk on exports. Imports to the extent of around 13% (12%) of annual foreign exchange outgo are not covered by the Exchange Rate Variation (ERV) clause in the related customer contract and hence are open to currency risk. These imports are benchmarked as per the policy and appropriate decision on covering the risk is taken on a case to case basis. The Company's currency risk policy advocates forward contract hedging for mitigating risk wherever required.

As on 31 March 2024, there are no outstanding forward contracts.

in the nature of bank overdraft facility, cash credit facility and short-term borrowings to fund its ongoing working capital requirements and growth needs when necessary.

The Company meets its liquidity requirement mainly through internally generated cash flows which is monitored centrally by treasury. There is an established process of rolling cash forecasts from various operating units which form the basis for mapping expected cash inflows, to meet the liabilities.

The table below analyses the company's financial liabilities based on their contractual maturities. The amounts disclosed are contractual undiscounted cash flows.

v) Interest rate risk

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

vi) Variable Rate Borrowing:

The company has been sanctioned a working capital limit of ' 5,00,000 (' 5,00,000). The sanctioned limit includes fund based limit of ' 50,000 (' 50,000) and non fund based limit of ' 4,50,000 (' 4,50,000). The fund based limit of ' 50,000 has not been utilised during the year [Outstanding as on 31 March 2024 is Nil (31 March 2023 is Nil)]. The outstanding balance as on 31.03.2024 with respect to non fund based limit is ' 3,20,500 (' 2,37,600). The interest is payable based on SBI's 3 months MCLR rate. As the borrowing is nil there is no impact on likely change in interest rates.

vii) Equity Price Risk

The company's exposure to equity price risk is negligible as its equity investment (other than in Subsidiaries and Associate) is negligible.

viii) Liquidity Risk

Liquidity Risk is the risk that a Company could encounter if it faces difficulty in meeting the obligations associated with financial liabilities by delivering cash and other financial asset or the risk that the Company will face difficulty in raising financial resources required to fulfill its commitments. The Company's exposure to liquidity risk is very minimal as it has a prudent liquidity risk management process in place which ensures maintaining adequate cash and marketable securities to pay its liabilities when they are due. To ensure continuity of funding, the Company has access to short-term bank facilities

ix) Credit Risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises from credit exposures from customers, cash and cash equivalent with banks, security deposits and loans.

The credit risk of the Company is managed at a corporate level by the risk management committee which has established the credit policy norms for its customers and other receivables. Significant amount of trade receivables are due from Government / Government Departments, Public Sector Companies (PSUs) consequent to which the Company does not have a credit risk associated with such receivables. In case of non Government trade receivables, sales are generally carried out based on Letter of Credit established by the customer thereby reducing the credit risk.

In a few cases credit is extended to customers based on market conditions after assessing the solvency of the customer and the necessary due diligence to determine credit worthiness. Advance payments are made against bank guarantee which safeguards the credit risk associated with such payments. Impairment losses on financial assets (representing mainly liquidated damages leviable for delayed deliveries and other disallowances) have been made after factoring contractual terms, etc and other indicators.

Note 35 - Critical estimates and judgments

While preparing the financial statements, management has made certain judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Judgments made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements and estimates that have a significant risk of resulting in a material adjustment are as under:

i. Research and Development Expenditure - Accounting Policy No. 10 - (Refer Note 5 and 12)

Developmental expenditure incurred with respect to No Cost No Commitment (NCNC) Projects and Joint developmental projects which are not fully compensated by the development partner are carried forward till the completion of project.

ii. Estimation of defined benefit obligation - Key actuarial assumptions - (Refer Note 21)iii. Estimation of provision for warranty claims - (Refer Note 21)

Warranty provision computation involves estimation of average warranty cost based on trend based analysis. If the estimations made varies, the same will impact the expense recognised.

iv. Recognition of Revenue - (Refer Note 23)

Input methods towards performance obligations over time involves estimation of Stage of completion based on actual costs incurred to the estimated total costs expected to complete the contract. If the estimations made varies, the same will impact the Revenue recognised.

v. Intangible assets (Refer Note 4 and 5)

Amount carried forward as other intangible assets and Intangible assets under development are tested for impairment annually with respect to certainity of future economic benefits.

vi. Lease (Refer Note 1)

The company evaluates if an arrangement qualifies to be a lease as per the requirement of Ind AS 116. Identification of lease requires significant judgements. The company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated.

Note 36 - Recent accounting pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time.

For the year ended March 31, 2024, MCA has not notified any new Accounting Standards or Ammendments to the existing Standards applicable to the company.