A n n u A l R e p o R t2 0 1 2 - 1 3

1. LettertoShareholders 22. BoardofDirectors 33. ManagementCommittee 44. CorporateOrganisationalStructure 65. CorporateProfile 86. YearataGlance 157. Awards 188. Directors’Report 19 – ManagementDiscussionandAnalysis 25 – BriefResumeofDirectors 62 – CorporateGovernance 64 – ConservationofEnergy 91 – StatementPursuanttoSection212oftheCompaniesAct,1956 93 – IndependentAuditors’Report 94 – CommentsofC&AG 1009. AnnualAccounts(Standalone) 101 – AuditedAccountswithCashFlowStatement&Notes 103 – SignificantAccountingPolicies 12010. SubsidiaryCompanies 147 BharatHeavyPlateandVesselsLimited – Directors’Report 149 – Auditors’Report 162 – CommentsofC&AG 167 – AuditedAccountswithCashFlowStatement&Notes 168 – SignificantAccountingPolicies 186 BHELElectricalMachinesLimited – Directors’Report 197 – Auditors’Report 199 – CommentsofC&AG 203 – AuditedAccountswithCashFlowStatement&Notes 204 – SignificantAccountingPolicies 21511. ConsolidatedFinancialStatements 221 – IndependentAuditors’Report 223 – AuditedAccountswithCashFlowStatement&Notes 225 – SignificantAccountingPolicies 24312. AdditionalInformationforStakeholders 259 – TenYearsFinancials 261 – NetIncomeunderUSGAAP 263 – EconomicValueAdded(EVA) 265 – ValueAdditionStatement 266 – PerformanceAnnualPlan 267 – ContributiontoExchequer 267 – ProductProfile 268 – BHELinIndia 277 – GlobalBusiness 27813. BusinessResponsibilityReportofBHEL:2012-13 28014.Notice 28515.CorporateSocialResponsibility 295

Contents

2

Dear Shareholders,ThepastyearhasbeenadefiningoneforyourcompanyBHELaswebecamea‘Maharatna’company,crossed` 50,000Croreturnovermarkandachievedthehighest ever addition of 10,340MW to India’s electricity generation capacitywhile navigating through one of the most difficult economic and businessenvironmentofourtimes.DespiteachallengingenvironmentforIndianindustry,yourcompanyhasnotlostitsfocusoncreatingshareholders’value.Thefollowingoutlinesthemilestoneswehaveachievedduringtheyear2012-13:• BHEL has achieved the highest ever turnover of ` 50,156 Crore during

2012-13registeringagrowthof1%despiteadversebusinessconditions.WiththeNetProfitof` 6,615Crore,wewereabletomaintainthelevelofpreviousfiveyears(2007-12)averageprofitmarginsof14%onthebackofstrongfocusonmanufacturingefficiencies.

• Recognising the consistent performance over a longer period of time,yourcompanyhasbeenbestowedwiththecoveted‘Maharatna’statusbyGovt.ofIndia,resultinginfurtherempowermentoftheBoardforgreaterbusinessagility.

• Atotalof` 31,650Croreoforderswerereceivedbyyourcompany,whichwasan increaseof43%over2011-12. It included8nos.ofTG,9nos.ofBoilers and 7 nos. of ESP packages for supercritical sets. Interestinglywithmarketshareof67%inpowersector,BHELcontinuestomaintainitsleadershippositioninIndianmarketdespiterisingintensityofcompetition.

• Various initiatives takenby your company in recent past for acceleratedprojectexecutionhavestartedfetchingresults.Wewereabletosynchronise/commissionalltimehigh10,340MWofpowerplantequipmentincluding9,328MW in utility segment. Your company successfully commissionedIndia’sfirstindigenouslymanufacturedsubcriticalsetof600MWratingonEPCbasisatNorthChennai.

• With the objectiveof becoming an innovativedeveloper of clean, efficient,reliable and affordable products, systems and technologies,we continue torelentlessly strengthen our technology and innovation capabilities. BHELinvested` 1,252CroreinR&Dduringtheyear.Thehighestever385patentsandcopyrightswerefiledraisingtheintellectualcapitalofBHELto2,170.

• Your company has signed MoU with Indian Railways for setting up agreenfield coach factory forMainlineElectricMultipleUnitatBhilwara,Rajasthan.Thisisasignificantstepinourdiversificationendeavours.

PositioningforFutureWeareatacritical juncture inourhistoryasweendeavour tosustaingrowthmomentum, increase shareholder wealth and fulfil our vision of becominga global engineeringenterprise.Weareproudof thework your companyhasdone to augmentmanufacturing capacity, enhance pace of project execution,strengthenengineeringandtechnologycapabilities,andpeopledevelopment.• TheCompanyhasadopted itsStrategicPlan2012-17.Theplanattempts

tosteerthecompanytowardsbecomingaglobalengineeringenterprise.KeydriversofoursuccessareexpandingourofferingsinPowerSectorby

buildingEPCcapability,focusonIndustrybusinesses,expansionofspares&servicesandadoptionofcollaborativeapproach.

• Powersectorwillcontinuetoremainmajorcontributorinourtoplinewithtransportationand transmissionemerging as next big business verticals.StrategiesareinplacetostrengthenourpresenceinNuclear,RenewableandWatersegments.

• Effortsarebeingmadetomakesupplychainagileandaccelerateprojectexecutionthroughsustained focusonvendorbaseexpansion, scalingupprocurement through technology initiatives, advanced manufacturingaction,globalsourcingetc.

• We areworking towards developing lower rating sets with supercriticalparametersprovidingalternativestotheUtilitiestotakeadvantageofthiseco-friendlyandfuelefficienttechnology.

• Toexpandournuclearenergyportfoilo,effortstoincreasescopebyofferingproductsbeyondconventionalislandinNuclearbusinessareunderway.

• BHEL’s collaborative initiatives to address the growingdemandpotentialin Railway Transportation includingMetro & Suburban Railways includeinitiativewithIndianRailwaysforsettingupagreenfieldMainlineElectricalMultipleUnit(MEMU)CoachFactoryinRajasthan.

• ConsideringtheNationalActionPlanonClimateChangetargeting15%ofelectricitygenerationfromrenewablesby2020,BHEL is lookingtowardsexpandingitscapacitytomanufacturephotovoltaicmodules&cells.

• We have constituted R&M Systems Group (RMSG) to address emergingopportunitiesinRenovationandModernisationofPowerPlants.

• Inabidtoaddresstheaspirationsofthecompanytobecomeapreeminentsupplier of Industrial Boiler, Nuclear Steam Generator & supplier ofequipment for process Industries, merger of BHPV Vizag with BHEL isunderway.Further, inabid tomakeheadway innewproductareas likeAlternatorsforTractionapplicationsetc.facilitiesofBHEL-EMLKasargod,ajointventureofBHELandKeralaGovt.,arebeingleveraged.

• ‘Engineering and Technology’ is our strength. To uphold our reputationforexcellenceinourcorecapability,wewillcontinuetoupgradeexistingproducts to contemporary levels and develop new products throughcontinuous in-house efforts as well as through acquisition of newtechnologies.

Conclusion

Lookingahead, theBoardandManagementof your companywill continue toexecutevariousstrategiestodevelopexistingassets,optimizebusinessportfoliothroughdiversification,strengthenfinancialperformanceanddriveoperationalefficiencies throughout the organization. I am confident that our strategicendeavourswouldgeneratesustainablegrowth,strongercashflows,andbetterreturnsoncapitalandgreatlyimproveshareholderwealth.

I would like to thank my fellow Directors and members of the ManagementCommitteefor theirwisdomandsupport. Iwouldalso like toextendaspecialthankstoeachandeveryshareholderofBHEL,whosetrustandconfidencehavebeenthemotivatingforce inallourendeavours. I thankallourcustomersandbusinessassociatesinIndiaandabroadfortheirunstintedloyaltyandsteadfastpatronageof our products and services. VariousMinistries ofGoI, particularlytheDepartmentofHeavyIndustry,havebeenprovidingvaluableguidanceandsupportinourefforts.Finally,awordofthankstomorethan48,000employeesofBHELwhoaremakingthesesuccesseshappen.Iamextremelyproudoftheiroutstandingperformanceoverthisperiodandhavefullconfidenceintheirabilitytodeliverevengreatersuccessgoingforward.

With all the ingredients of success, dedicated people, engineering andtechnologicalexcellenceandrightbusinessstrategiesinplace,yourcompanyiswellpositionedtomeetthedemandsofagrowingindustryanddeliverthetypeofconsistentresultsforwhichthiscompanyisknownfor.

I look forward to your unwavering support while continuing the growthmomentumincomingyearstoo.

Withbestwishes,

New Delhi (B. Prasada Rao)August14,2013 Chairman&ManagingDirector

LettertoShareholders

A N N U A L R E P O R T2 0 1 2 - 1 3

3

Shri B. Prasada RaoChairman&ManagingDirector

ShriI.P.SinghCompanySecretary

ShriTrimbakdasS.ZanwarDirector

ShriW.V.K.KrishnaShankarDirector(IS&P)

Shri S. RaviDirector

ShriAtulSarayaDirector(Power)

Shri P.K. BajpaiDirector(Finance)

ShriR.KrishnanDirector(HR)

Ms.KusumjitSidhuAdditionalSecretary&

FinancialAdviser

ShriAmbujSharmaJointSecretary

BoardofDirectorsAson01.08.2013

4

ManagementCommitteeAson18.07.2013

Stan

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.K.G

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Sitting

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:K.C.Ram

amurthy,S.C.M

ittal,D

r.Su

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huja,N

.K.B

ansal,AtulSob

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:P.K.Upp

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.V.K

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n,P.K.B

ajpa

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A n n u A l R e p o R t2 0 1 2 - 1 3

5

B.PrasadaRao -

--

---

---

-

Chairman&ManagingDirector AdditionalChargeof: Engineering,Research&Development CorporateEngineering&ProductDevelopment CorporateResearch&DevelopmentAdvanceResearchProjects CorporateManufacturingTechnology&InvestmentPlanning CorporateMonitoring CorporateMaterialsManagement TechnologyLicensing&JointVenturesandM&A CentralisedStampingUnitandFabricationPlant

AtulSaraya - PowerSectorBusiness (Marketing,ProjectEngineering,E&C,ProjectManagement,TechnicalServices,Spares&Services)

M.K.Dube -

----

IndustrialSystems&ProductsBusiness (CaptivePowerPlants,Transmission,Transportation,Defence,Mechanicals,Electricals,Renewables,ProjectManagement) CeramicBusiness ComponentFabricationPlant ProjectEngineering&SystemsDivision RegionalOperationsDivision

P.K.Bajpai ---------

CorporateFinance Budgeting&Control CostManagement TreasuryManagement Accounts&Audit Taxation ForexManagement InternalAudit FinancialServices

R.Krishnan ---

-

HumanResource CorporateCommunicationCorpoarteSystemsandInformationTechnology CSR,Health,Safety&Environment

A.V.Krishnan ----

HighPressureBoilerPlant SeamlessSteelTubePlant IndustrialValvesPlant WeldingResearchInstitute

M.RajivKumar - PowerSector-EasternRegion

P.K.Uppal - InternationalOperations

SubodhGupta ---

CaptivePowerPlantBusiness DefenceBusiness IndustrySector-ProjectManagement

JainenderKumar - PowerSector-ProjectManagement

B.Shankar - HumanResource&Corporate Communication

T.N.Veeraraghavan - BoilerAuxiliariesPlant

W.V.K.KrishnaShankar - IndustrySector

A.Dasgupta - CorporateSystemsandInformation Technology

UmeshMathur - TransmissionBusiness

A.K.Dave - TransformerPlant

C.K.Srikhande - PowerSector-NorthernRegion

K.S.Mathur - PowerSector-ManagementServices

AtulSobti - IndustrialSystemsGroup

N.K.Bansal - PowerSector-TechnicalServices

AnilAhuja -

-

IndustrialsProductsBusiness(Elect.&Mech.) TransportationBusiness

Dr.SukulLomash - OfficeronSpecialDuty-Corp.Office

S.C.Mittal --

Finance-ReceivablesManagement ContractClosing

K.C.Ramamurthy --

ElectronicsDivision ElectronicsSystemsDivision

S.Gopinath --

PipingCentre PowerPlantPipingUnit,Thirumayam

RajivPuri - ProjectEngineeringManagement

A.K.Ghosh - PowerSector-SouthernRegion

ArvindGupta - ProjectEngineering&SystemsDivision

V.K.Midha - Renewables&WaterBusiness

A.S.Nagaraja - CeramicBusiness

S.R.Prasad --

HeavyElectricalplant ElectricalMachinesRepairPlant

RakeshMathur - PowerSector-Marketing

N.Ravichander - HeavyPowerEquipmentPlant

AnujBhatnagar - CorporateQuality

PrakashChand --

HeavyElectricalEquipmentPlant PollutionControlResearchInstitute

AkhilJoshi --

TechnologyLicensing&JointVentures Mergers&Acquisitions

ArunSinghal - PowerSector-WesternRegion

Dr.S.Sekar - CorporateResearch&Development

S.V.S.Narayana - CentralFoundryForgePlant

RajeevSrivastava ---

SparesandServicesBusiness HeavyEquipmentRepairPlant Renovation&Modernisation

K.S.Shivaprasad - Secretary,ManagementCommittee

6

CORPORATE FUNCTIONS BUSINESS SECTORS OPERATIONS

• Corporate R&D, Hyderabad• Ceramic Tech. Institute, Bangalore• ASSCP, Gurgaon

• Tech. Licensing & Joint Ventures• Mergers & Acquisitions

• Corp. Manufacturing Technology &Investment Planning

• Corp. Monitoring• Corp. Materials Management

• Centralized Stamping Unit, Jagdishpur• Fabrication Plant, Jagdishpur

• Corp. Engg. & Product Development• Advanced Research Projects

• Receivables Management• Exim Policy• Establishment

• Corp. Finance• Budgeting & Budgetary Control• Cost Management• Banking & Insurance• Treasury Management• Project Finance• Accounts & Audit• Indirect Taxation• Forex Management• Financial Planning & Policies• Financial Services• Direct Taxation

• Human Resource• Corporate Communication• Corp. Productivity Group• Medical Services• Legal

• Corp. Systems & Information Technology

• Human Resource Development Institute

• Corp Social Responsibility• Health Safety & Environment• Administration• Security

• Vigilance

• Strategic Planning• MoU with Government• Management Committee-Secretariat• Committee of Functional Directors- Secretariat• Parliament Matters• Investor Relations• Transformation Programme Office

• New Quality Initiatives• Total Quality Management• Quality Certification

• Secretarial Compliances & Investor ServicesCompanies Act & Listing Agreement•AGM, Board & Board Level committee Meetings•

• Power Sector – Marketing

• PS– Marketing, Hydro & Nuclear

• Project Engineering Management

• PS Eastern Region, Kolkata

• PS Northern Region, NOIDA

• PS Western Region, Nagpur

• PS Southern Region, Chennai

• Management Services• PS HQ- Quality, Safety & MM

• Captive Power Plant Business• Defence Business• Project Management Group

• Transmission Business Group

• Transportation Business• Transportation Systems Group• Industrial Products Business (Elect & Mech.)

• Regional Operations Division

• Component Fabrication Plant, Rudrapur

• Electro Porcelains Division, Bangalore

• Insulator Plant, Jagdishpur

• Project Engg. & Systems Division,Hyderabad

• Overseas Business

$ Matrix reporting to Director(IS&P) for Industry sector Business

Presently report to CMD*

• Heavy Electrical Plant, Bhopal• Centre for Electric Transportation, Bhopal

• EMRP, Mumbai

• Transformer Plant, Jhansi

• Heavy Electrical Equipment Plant,Haridwar

• Pollution Control Research Institute,Haridwar

• Central Foundry Forge Plant, Haridwar

• Heavy Power Equipment Plant,Hyderabad

• High Pressure Boiler Plant, Trichy• Seamless Steel Tube Plant, Trichy• Welding Research Institute, Trichy

• Industrial Valves Plant, Goindwal

• Piping Centre, Chennai

• Power Plant Piping Unit, Thirumayam

• Boiler Auxilliary Plant, Ranipet

• Electronics Division, Bangalore• Electronics Systems Division, Bangalore

• Industrial Systems Group, Bangalore

BOARD OF DIRECTORS

CHAIRMAN &

MANAGING DIRECTOR

COMMITTEE OF FUNCTIONAL

DIRECTORSMANAGEMENT COMMITTEE

ED / TL & JV, M&A

ED / Finance & CCG

ED / HR & CC

ED / CS & IT

ED / OSD

ED / CQ

Company Secretary

DirectorIndustrial Systems

& Products

ED / Hydro & Nuclear

ED / PS-ProjectManagement

ED / PS-SSBG

ED / PS-PEM

ED / PS-NR

ED / PS-WR

ED / PS-SR

ED / PS-Marketing

ED / PS-ER

ED / CPP, Defence,PMG

ED / TBG

ED / TBD, IPM & IPE

ED / CBU

ED / PE&SD

ED / Bhopal

ED / Jhansi

ED / HEEP,Haridwar

ED / HPEP,Hyderabad

ED / Trichy

ED / Thirumayam& PC

ED / BAP,Ranipet

ED / EDN,Bangalore

ED / ISG,Bangalore

ED / InternationalOperations

DirectorPower

DirectorEngineering, R&D

DirectorFinance

DirectorHuman Resource

Chief VigilanceOfficer

ED / Corp R&D

• Contract Closing Group

• Internal Audit

• Central Public Information Office

• Risk Management

• Project Management

• Technical Services

ED / MSX, SCT, IT

• PS-Human Resources

• Renewables & Water Business

ED / ROD & CFP

• Spares &Services Business Group• Heavy Equipment Repair Plant, Varanasi• R&M Systems Group, Bhopal

$

ED / CFFP,Haridwar

*

*

*

*

*

CorporateOrganisationalStructureAson01.08.2013

A n n u A l R e p o R t2 0 1 2 - 1 3

7

CORPORATE FUNCTIONS BUSINESS SECTORS OPERATIONS

• Corporate R&D, Hyderabad• Ceramic Tech. Institute, Bangalore• ASSCP, Gurgaon

• Tech. Licensing & Joint Ventures• Mergers & Acquisitions

• Corp. Manufacturing Technology &Investment Planning

• Corp. Monitoring• Corp. Materials Management

• Centralized Stamping Unit, Jagdishpur• Fabrication Plant, Jagdishpur

• Corp. Engg. & Product Development• Advanced Research Projects

• Receivables Management• Exim Policy• Establishment

• Corp. Finance• Budgeting & Budgetary Control• Cost Management• Banking & Insurance• Treasury Management• Project Finance• Accounts & Audit• Indirect Taxation• Forex Management• Financial Planning & Policies• Financial Services• Direct Taxation

• Human Resource• Corporate Communication• Corp. Productivity Group• Medical Services• Legal

• Corp. Systems & Information Technology

• Human Resource Development Institute

• Corp Social Responsibility• Health Safety & Environment• Administration• Security

• Vigilance

• Strategic Planning• MoU with Government• Management Committee-Secretariat• Committee of Functional Directors- Secretariat• Parliament Matters• Investor Relations• Transformation Programme Office

• New Quality Initiatives• Total Quality Management• Quality Certification

• Secretarial Compliances & Investor ServicesCompanies Act & Listing Agreement•AGM, Board & Board Level committee Meetings•

• Power Sector – Marketing

• PS– Marketing, Hydro & Nuclear

• Project Engineering Management

• PS Eastern Region, Kolkata

• PS Northern Region, NOIDA

• PS Western Region, Nagpur

• PS Southern Region, Chennai

• Management Services• PS HQ- Quality, Safety & MM

• Captive Power Plant Business• Defence Business• Project Management Group

• Transmission Business Group

• Transportation Business• Transportation Systems Group• Industrial Products Business (Elect & Mech.)

• Regional Operations Division

• Component Fabrication Plant, Rudrapur

• Electro Porcelains Division, Bangalore

• Insulator Plant, Jagdishpur

• Project Engg. & Systems Division,Hyderabad

• Overseas Business

$ Matrix reporting to Director(IS&P) for Industry sector Business

Presently report to CMD*

• Heavy Electrical Plant, Bhopal• Centre for Electric Transportation, Bhopal

• EMRP, Mumbai

• Transformer Plant, Jhansi

• Heavy Electrical Equipment Plant,Haridwar

• Pollution Control Research Institute,Haridwar

• Central Foundry Forge Plant, Haridwar

• Heavy Power Equipment Plant,Hyderabad

• High Pressure Boiler Plant, Trichy• Seamless Steel Tube Plant, Trichy• Welding Research Institute, Trichy

• Industrial Valves Plant, Goindwal

• Piping Centre, Chennai

• Power Plant Piping Unit, Thirumayam

• Boiler Auxilliary Plant, Ranipet

• Electronics Division, Bangalore• Electronics Systems Division, Bangalore

• Industrial Systems Group, Bangalore

BOARD OF DIRECTORS

CHAIRMAN &

MANAGING DIRECTOR

COMMITTEE OF FUNCTIONAL

DIRECTORSMANAGEMENT COMMITTEE

ED / TL & JV, M&A

ED / Finance & CCG

ED / HR & CC

ED / CS & IT

ED / OSD

ED / CQ

Company Secretary

DirectorIndustrial Systems

& Products

ED / Hydro & Nuclear

ED / PS-ProjectManagement

ED / PS-SSBG

ED / PS-PEM

ED / PS-NR

ED / PS-WR

ED / PS-SR

ED / PS-Marketing

ED / PS-ER

ED / CPP, Defence,PMG

ED / TBG

ED / TBD, IPM & IPE

ED / CBU

ED / PE&SD

ED / Bhopal

ED / Jhansi

ED / HEEP,Haridwar

ED / HPEP,Hyderabad

ED / Trichy

ED / Thirumayam& PC

ED / BAP,Ranipet

ED / EDN,Bangalore

ED / ISG,Bangalore

ED / InternationalOperations

DirectorPower

DirectorEngineering, R&D

DirectorFinance

DirectorHuman Resource

Chief VigilanceOfficer

ED / Corp R&D

• Contract Closing Group

• Internal Audit

• Central Public Information Office

• Risk Management

• Project Management

• Technical Services

ED / MSX, SCT, IT

• PS-Human Resources

• Renewables & Water Business

ED / ROD & CFP

• Spares &Services Business Group• Heavy Equipment Repair Plant, Varanasi• R&M Systems Group, Bhopal

$

ED / CFFP,Haridwar

*

*

*

*

*

8

CorporateProfileEstablishedin1964,BHELisIndia’slargestengineeringandmanufacturing company of its kind engaged inthe design, engineering, manufacture, construction,testing, commissioning and servicing of a widerange of products and services for the core sectorsof the economy, viz. Power, Transmission, Industry,Transportation, Renewable Energy, Oil & Gas andDefence. The company has been earning profitscontinuously since 1971-72 and paying dividendssince 1976-77. In recognition of its consistenthigh performance, BHEL has been conferred with‘Maharatna' status by Government of India on 1st February, 2013. It is now one among the sevenMaharatnaPSEs.Hon’blePrimeMinisterofIndiahasdedicated the Power Plant Piping Unit, ThirumayamTamilNadu,16thManufacturingUnitofBHEL, to theNationon2ndAugust2013.Withwidespreadnetworkof 16 manufacturing units, two repair units, fourregionaloffices,eightservicecentres,eightoverseasoffices, 15 regional centres, seven joint venturesand infrastructure toexecutemore than150projectsitesacross India&abroadBHELprovides products,systems and services to customers efficiently andat competitive prices. The company has enhancedits capability to deliver 20,000 MW p.a. of powerequipment to address growing demand for powergenerationequipment.The foundationstone for thenewGreenfieldPowerEquipmentFabricationPlantofBHELatBhandara,MaharashtrawaslaidbytheHon’bleChief Minister of Maharashtra on 14th May, 2013.The company places strong emphasis on innovationand creative development of new technologies.Ourresearchanddevelopment(R&D)effortsenableustohaveastrongcustomerorientationrespondingtothechangesinthemarket.

Thehigh levelofquality&reliabilityofourproductsis due to adherence to international standards byacquiringandadaptingsomeofthebesttechnologiesfrom leading companies in the world includingGeneral Electric Company, Alstom SA, Siemens AGand Mitsubishi Heavy Industries Ltd., together withtechnologiesdevelopedinourownR&Dcentres.

Most of our manufacturing units and other entitieshave been accredited to Quality Management Systems(ISO9001:2008),EnvironmentalManagement

Systems(ISO14001:2004)andOccupationalHealth&Safety Management Systems (OHSAS 18001:2007).BHEL, where Quality has taken deep roots as perinternationally recognized quality systems, has onceagain made significant achievements by securing(a) Two ‘CII-ITC Sustainability Awards 2012’ forStrong Commitment towards sustainability and (b)‘CommendationforSignificantAchievementsinTQMbytwounitsofBHEL.

Continuing its tradition of winning prestigiousnational/ international awards, the organization andits employees won several awards during the yearwhichincluded‘SCOPEMeritoriousAwardforHumanResourceManagement’;IndianChamberofCommerce‘PSE Excellence Award’ in the R&D, Technology &Innovationcategory;‘3StarGoldAwards’forQualityCirclesby3BHELunits.Thesignificantawardsconferredin the Individual category to theCMD include 'NITIEDistinguished Alumnus Award 2012'; ‘BT-STAR BestPSUManoftheYearAward2012’;Enertia'PowerManoftheYearAward',tonameafew.BHELwasdeclaredtheBestPSU in theElectrical&Electronics categoryby Dun & Bradstreet. Customer satisfaction surveyhasalsobeenconductedforPowerSectorforthefirsttime,inthemonthofJanuary2013.

PowerGeneration

BHEListhelargestmanufacturerofPowergenerationequipmentinIndia,supplyingwiderangeofproducts&systemsforthermal,nuclear,gasandhydro-basedutilityandcaptivepowerplants.Thecompanyhasthecapability toexecutepowerprojectson turnkey/EPC

660 MW Turbine LP Rotor for Bara Project, under assembly at HEEP, Haridwar

A n n u A l R e p o R t2 0 1 2 - 1 3

9

basis fromconcept to commissioning.BHEL suppliessteam turbines, generators, boilers and matchingauxiliaries up to 800 MW ratings, including sets of660/700/800MWbasedonsupercritical technology.BHEL has facilities to manufacture up to 1000 MWunit size. Tomakeefficient useof high ash contentcoal available in India,BHELalso supplies circulatingfluidised bed combustion (CFBC) boilers for thermalplants. BHEL is the only Indian company capableof manufacturing large-size gas-based power plantequipment,comprisingofadvanced-classgasturbinesup to 289MW (ISO) rating for open and combined-cycle operations. BHEL engineers and manufacturescustom-builthydropowerequipments.ItsrangecoversturbinesofFrancis,PeltonandKaplanrunners,pumpturbines,bulb turbinesandmini-microhydroplants,withmatchinggenerators,fordifferenthead-dischargecombinations. BHEL is one of the few companiesworldwide,involvedinthedevelopmentofIntegratedGasificationCombinedCycle(IGCC)technologywhichwouldusherincleancoaltechnology.Asapartofnewgrowth areas, offerings for balance of plant control,control&instrumentationbeyondconventionalislandinnuclearsegmentandFlueGasDesulpurisation(FGD)SystemsinCoalbasedthermalpowerplanthavebeenidentified. With realization of enhanced capability,BHELiswellpoisedtomeetthegrowingdemandforpowerplantequipmentinthecountry.

With installed capacity of 1,15,500MW BHELmakeUtility sets, BHELmaintained its lion’s share of 57%in the country's total installed capacity comprisingThermal, Hydro and Nuclear Sets as of 31st March,2013. BHEL has achieved an all time high 10,340MW synchronization/commissioning of Power plant

equipment during the year including 10 nos. 500MWsetsand India’sfirst indigenouslymanufacturedsubcriticalsetof600MWratingatNorthChennai.Asatestimonytoitsprowessofmanufacturingsuperiorqualityequipments,BHEL’s500MWthermalsetshaveachievedconsistentavailabilityofmorethan90%forthelastsixyears.

Industries

BHEL is also a leading manufacturer of a variety ofIndustrial Systems & Products. Industry business ofthe company aims at meeting the growing demandforanumberofindustries,likemetallurgical,mining,cement,paper,fertilizers,refineries&petro-chemicalsetc.besidesCaptive/Industrialutilities.ProductsandsystemssuppliedbyBHELincludeCaptivePowerPlants,Centrifugal Compressors, Drive Turbines, Industrialboilers andauxiliaries,WasteHeatRecoveryBoilers,Gas Turbines, Pumps, Heat Exchangers, Electricalmachines, Valves, Heavy Castings and Forgings,ElectrostaticPrecipitators,ID/FDFans,SeamlessSteelTubesetc.

Over the years, BHEL has innovated in its offeringsof Industrial products & systems and emerged as amajorsupplierforthesunrisesectorsoftheIndustry.Controls and instrumentation systems, especiallydistributeddigital control systems for various powerplantsandindustries,hasbeenoneoftheareaswhereBHELhasestablisheditsfootprintasamajorsupplier.BHELhasalsoemergedsuccessfulinestablishingitselfasmotorsupplier in the IrrigationsectorwithpumpOEMs. The Industrybusiness sectorof the companyis fully geared to execute EPC contracts for captivepowerplantsfromconcepttocommissioning.

366 MW CCPP at IOCL's Paradeep Refinery

2x800 MW Krishnapatnam TPS

10

Transportation

BHELprovideselectricalpropulsionsystems,controlsand rolling stocks of various capacities to IndianRailways, India’s most important transportationinfrastructure with large share of passenger trafficand goods. The rangeof products offered in railwaytransportation include traction motors, tractiongenerators / alternators, transformers, substationequipment, vacuum circuit breakers, locomotivebogies, smoothening reactors, exciters, converters,inverters,choppersandassociatedcontrolequipment,viz. master controllers, chopper controllers, brakeand door equipment, electronic controls includingsoftwarebasedcontrolsextendingtorollingstockandothertransportapplications.Thesystemssuppliedareboth with the conventional DC and state-of–the-artACdrives. The company also suppliesDiesel Electriclocomotivestoprocessindustries,metrorailandcoalfields. Almost all the EMUs in service are equippedwith electrics manufactured and supplied by BHEL.India’s first underground metro at Kolkata runs ondrivesandcontrolssuppliedbyBHEL.

Aimed at maximizing business through mutuallybeneficial strategictie-up,BHELhas inkedMoUwithIndian Railways for setting up aGreenfieldMainlineElectric Multiple Unit (MEMU) coach factory inRajasthan to cater to the growingdemand formorelocal and suburban trains. Loco manufacturingcapacityatJhansiunitisunderaugmentationtomeetincreasedrequirementsof IndianRailways.BHELhasproved its capabilities and technological excellenceby successfully establishing itself as an indigenousmanufacturer of energy efficient IGBT basedpropulsion system for AC drives of locomotives, a

landmarkachievementintransportationsector.BHELhasalsodiversifiedintotheareaoftrackmaintenancemachinesandcoachbuildingforIndianRailwaysandundertakes retrofitting and overhauling of rollingstock.

RenewableEnergy

Globalwarming, climatic change, increasing costs offossil fuelaredrivingthedemandforrenewedfocuson Renewable Energy. With the government givingimpetusforacceleratedgrowthinthisarea,BHELhasbeen in the forefrontby supplying& commissioninglargesizestandaloneaswellasGridinteractiveSolarPowerplants.Thecompanyhascommissionednearly2MWSPVplantsatvariousIslandsofLakshadweep,

besidescommissioninga5MWSPVplantforKPCLatMandya,Karnataka.Currently, twoSolarPVprojectsof 10MW each are being executed for NTPC. As apart of commitment to sustainable developmentunder thegreen initiative,a5MWSPVplant isalsounder installationatBAP,BHELRanipet. Options forexpandingthecapacityofmanufacturingSPVmodulesare also being looked into. In order to provide EPCsolutions in the area of Concentrated Solar ThermalPower (CSP), an agreement with Abengoa, Spain,is already in place. The company is working jointlywith IIT-Rajasthan & IOCL for Research Design &Development(RD&D)activitiesofproducts&systemsinConcentratedSolarThermalarea.

OilandGas

BHEL possesses expertise to design, manufactureandservicevarious typesofonshore rigs to suit theElectric Locomotive (25 kV AC, Type WAG 7)

Grid-connected 5 MW Solar PV plant in Karnataka

A n n u A l R e p o R t2 0 1 2 - 1 3

11

Indian service conditions. BHEL supplies onshoredrilling rig equipment like draw-works, rotary-table,travellingblock,swivel,mastandsub-structure,mudsystemsandrigelectricstoleadingoilandnaturalgasexploration companies of India. BHEL now has thecapabilitytomanufactureconventionalonshoredeepdrillingrigsuptoadepthof9,000meters,Mobilerigsuptoadepthof3,000metersandWellservicingrigsuptoawell-depthof6,100meters.

Wellheads&X-MasTreeValvesupto10,000psiratingforonshoreaswell asoffshoreapplicationsarealsosuppliedbythecompanytoONGC,OilIndiaLtd.andPrivateDrillingCompanies.Customers likeONGC,OilIndia and other drilling companies have once againreposed faith inBHELbygiving recordordersduringtheyear2012-13forsupplyofWellHeadsandX-MassTreesaswellasrepeatordersforrefurbishingandupgradingofOil rigs tomeet the increaseddemandofcrude.

Transmission

BHEL has significant presence in the field of powertransmissioninIndiawithawiderangeoftransmissionsystems and products. The products manufacturedby BHEL include Power transformers, Instrumenttransformers,Dry type transformers, Shunt reactors,VacuumandSF6switchgear,Gasinsulatedswitchgears,Ceramic insulators,etc.Majorcriticalhardwaresuchas capacitor banks, circuit breakers, control andprotection equipment and thyristor valves are in itsmanufacturingrange.

BHELhasindigenouslydevelopedandcommercialized36 kV & 145 kV GIS and 765 kV transformers and

shunt reactors. The company has also developed &supplied1200 kVCVTand1200kV transformers forthefirst1200kVteststationinthecountry.BHELhasadditionallydeveloped&tested420kNdiscinsulatorsfor1200kVtransmissionlinesandnowhasarangeofdiscinsulatorsforEHVandUVAC/DCapplicationsupto1200kVACand+/-800kVDC,solidcoreinsulatorsupto400kVandhollowporcelaininsulatorsupto765kVAC.

BHELhasindigenouslydeveloped&executedschemesusing FACTS devices like Fixed Series Compensationfor 400 kV lines andControlled Shunt Reactor (CSR)for dynamic reactive power management of long 400kVtransmissionlines.Forcontrollingpowerflowin400kVsystems,BHELhasdevelopedPhaseShiftingTransformersindigenously.Withitsstrongengineeringbase, the company undertakes turnkey execution ofSubstation/Switchyards up to 765 kV project. BHELisexecutingthefirst±800kVHVDCNorthEast-Agramulti terminal project for efficient transmission ofbulkpoweroverlongdistance.

InternationalBusiness

BHEL has established its references in 75 countriesacross all inhabited continents of the world. Thesereferences encompass almost the entire range ofBHELproductsandservices,coveringThermal,Hydroand Gas-based turnkey power projects, Substationprojects, Rehabilitation projects, besides a widevariety of products like Transformers, Compressors,Valves,Oilfieldequipment,ElectrostaticPrecipitators,Photovoltaicequipment,Insulators,HeatExchangers,Switchgears,CastingsandForgingsetc.

400 kV Substation at Gas-based Power Plant, OTPC-Palatana 4x125 MW Kosti Thermal Power Plant, Sudan

12

The company has been successful in meeting therequirements of international markets in terms ofcomplexityofworkaswellastechnology,qualityandother requirements. Continued focus onAfter-Sales-Services led to orders for Spares & Services fromIndonesia, Bhutan, Oman, Malaysia, Bangladesh,Vietnam, Srilanka, Saudi Arabia and UAE during2012-13.BHELalsopossesses therequisiteflexibilityto interface and complement other internationalcompanies for large projects, and has exhibitedadaptability by manufacturing and supplyingintermediateproducts.Asapartofitsaimtoexpandofferings through strategic tie-up in Internationalarena, an MoU has been signed with the Ministryof Energy and Industry, Tajikistan for setting up oftwoHydro Power Projects (2x50MW)on ZeravshanRiver, Tajikistan. As a part of establishing long-termrelationshipswithkeycustomerswhocanbringlong-lasting value to the company, Enterprise FrameworkAgreement (EFA) has been signedwith Shell for thesupply of Gas Turbine Generator (GTG) packages toselect Shell locations in Asia-Pacific, Middle-East,CentralAsia,EasternEuropeandAfrica.Thecompanyis firmly perched to expand its vista by taking anumberofstrategicbusinessinitiativestofuelfurthergrowth in international business which includesexploration of opportunities in solar energy relatedprojects,equipmentsandprojects inTransmission&Distributionarena.

The prevailing environment of uncertainties in eurozone,lowerthanexpectedgrowthinotherdevelopedcountriesandpolitical instability inNorthAfrica,hasacontagioneffectonthetargetinternationalmarketof BHEL. Notwithstanding subdued internationalbusiness environment propelled by deferment ofcapitalinvestmentsinprojects,thecompanyhasbeenable to securepowerplantequipmentordersworth1760 MW during the year 2012-13. The year alsowitnessed the commissioning of five power plantsin overseas markets in Libya, Vietnam, Tajikistan,IndonesiaandEthiopia.

TechnologyUp-gradation,Research&Development

Innovation across every element of the businessvaluechainthroughasustainedprocessofResearch,Development & Deployment (RD&D) is a keyimperativeintoday’scompetitivecontext.BHELoveraperiodofalmosthalfcenturyhassuccessfullyevolved

into an innovation-friendly organization emphasizingon R&D/Technology development in its endeavor torealizeitsstrategicaspirationofbecomingengineeringconglomerate with inspirational growth culture.Accordingly BHEL pursued the strategy of in-houseproduct development by encouraging innovation inline with the “Decade of Innovations (2010-2020)”declaredbyGovt. of India. As amajor step towardsthis, the company has formulated its R&D policy.Significantly during 2012-13, BHEL invested ` 1252CroreonR&Defforts,4.4%higherthanthepreviousyear. BHEL’s efforts for encouraging innovation haveresulted in raising BHEL’s IPR capital tally to 2,170patentsandcopyrights. Theturnover fromin-housedevelopedproductsandserviceshasclocked` 9,643Crore, which is around 19% of the turnover of thecompany.

TheCorporateR&DDivisionatHyderabadleadsBHEL’sresearcheffortsusingemergingtechnologiestoofferstate-of-the-art total engineering solutions in linewiththefocusofthecountrytoremaincontemporaryin terms of technology vis-à-vis global benchmark.Research and product development centers at eachofthemanufacturingdivisionsplayacomplementaryrole. With the aim of facilitating advanced R&Dactivities in focused areas, BHEL has established 13Centers of Excellence across the company equippedwith know-how, know-why and state-of-the-artfacilities along with specialized manpower. ThesignificantR&DinitiativeoftheyearhasbeenDesignAutomationandKnowledgeBasedEngineering(KBE)for all major products across the company to offeroptimized benchmark solutions. Significantly, 146TechnologyPlansover1500R&Dprojectshavebeen

5-Axis Scoop Milling Technology for manufacture of Shrouded 3D Impellers of Centrifugal Compressors

A n n u A l R e p o R t2 0 1 2 - 1 3

13

identifiedforestablishingselfsufficiencyintheareasof UHV transmission, Transportation, Ultra SuperCriticalPlants,Renewableenergy,IGCC,Wateretc.

InadditiontoCorporateR&DDivision,BHELhasfourspecializedInstitutes,viz.,WeldingResearchInstituteatTrichy,CeramicTechnologicalInstituteatBangalore,Hydro Lab at Bhopal and PollutionControl ResearchInstituteatHaridwar.

HumanResourceDevelopmentInstitute

ConsistentwithHRDMissionstatement“Topromoteandinculcateavalue-basedcultureutilizingthefullestpotentialofHumanResourcesforachievingtheBHELMission”, the HRDI through a step by step strategiclong term training process and several short termneedbasedprograms,enables thehumanresourcesto unearth and hone their potential. BHEL’s humanresource management systems and processes aregeared towards creating a responsive, customer-centric and market-focused culture that enhancesorganizational capability and vitality equipped toleverageemergingmarketopportunities.

In line with changing market requirements, BHEL’sunflagging commitment to investing in up-gradationof knowledge and skills of its employees ensuresexcellence in performance. As a part of continuedthrust on Leadership Development, DevelopmentCenters were conducted for senior level executivesto assess their competency levels based on BHEL’sLeadership Competency framework. Around 352executiveswerecoveredinthisassessmentduringtheyear 2012-13 and given feedback on their strengthsandareasfordevelopment.

During 2012-13, developmental programs for 4.95mandays per employee were conducted and 2,202customer personnel were trained at various units.SomeoftheCoreprogramsconductedduringtheyear2012-13 for internal stakeholders include Strategicneed based modules; Competency based programsandFunctionalProgramslikeAdvancedManagementPrograms, GeneralManagement Programs, StrategicManagementPrograms,SeniorManagementProgramsandYoungManagersProgramsforbuddingmanagers.Technicaltrainingprogramswereconductedinvariousfunctional areas like Quality Management, ProjectManagement, Contract Management, MaterialManagement, Finance & Accounting to keep theemployeesupdatedwiththechangestakingplace intheenvironment.

In addition, the HRDI provides professional supporttoCorporateHRandHRDCsatUnits/Divisions.HRDIis also accepting consulting assignments from otherorganisationsinaselectivemanner.

Health,SafetyandEnvironmentManagement

Worldwide there is an increasing realizationthat societal challenges arising out of poverty,environmentaldegradationandclimatechangeposeanunprecedented threat to the future sustainabilityof businesses across the globe. BHEL, in conformitywith this concern, evinced its commitment towardsenvironmentinallitsactivities,productsandservicesbyprovidingsafeandhealthyworkingenvironmenttoallstakeholders.Recognizingthestressonenvironment,during 2012-13, BHEL continued with environmentimprovementprojects(EIP)includingtree-plantation,Water harvesting, installation of effluent treatmentplants, energy & resource conservation projects,utilizationofnon-conventionalenergysources,noiselevelreductionsystemstomentionafew.Further, inkeepingwiththecommitmenttowardsgreeninitiativesandcontributingtosustainabledevelopment,BHELisestablishinga5MWpgrid-interactiveSPVpowerplantatitsBoilerAuxiliaryPlantatRanipet.Energyauditwascompleted in twentyprojectsduring theyear.Theseprojects helped in enriching the environment andconservationofpreciousresourceslikeenergy,water,fuel oil, coolant, lubricant, mitigating environmentalpollution.

BHEL has been actively developing and acquiringcleantechnologies forpowergenerationenabling itscustomerstominimizetheimpactofpowergeneration

Real Time Digital Simulation Facility installed at COE-ATS at Corporate R&D

14

on the environment. Reinforcing its commitment tooptimum utilization of natural resources as well asitsconcernfortheenvironment,BHELhasdevelopeddynamic classifier system to improve combustionefficiency of boiler and reduction of NOx emission.Supplementing its efforts to reduce greenhouse gasemissions in a more focused and vigorous way, thecompanyhasgearedupforthemanufactureandsupplyofstate-of-the-artpollutioncontrolequipmentcalledFlueGasDesulphurisation (FGD) system for removalof Sulphur Dioxide (SO2) from the flue gas tomeetthe emerging requirement of thermal power plants.UndertheaegisoftheNationalMissiononCleanCoalTechnology, BHEL, in association with IGCAR, NTPCand other organizations, is developing AdvancedUltraSupercriticalTechnology.Thecompanywontheprestigious ‘Golden PeacockAward forOccupationalHealth&Safety2011’forsignificantachievementsinthefieldofOccupationalHealth&Safety.

CorporateSocialResponsibility

BHEL is a committed Corporate Citizen fully alive tothe need of building synergy between business andCorporate Social Responsibility (CSR) as an integralpartof itsbusinessstrategy.Asapartofthis, in linewithpreviousyears,BHELundertooksocio-economicand community development programs during theyear 2012-13 to promote education, improvementof living conditions, health and hygiene in villagesand communities located in the vicinity of itsmanufacturingplantsandprojectsitesspreadacrossthe country. BHEL financially supported 100 brilliantgirlchildren,whohavepassedclassX,topursuehighereducationuptoPost-graduationlevelunderprogramtiltled ‘Udayan Shalini’. The company has joinedhands with the Govt. of India’s ‘Project Udaan’ for

enhancingtheemployabilityoftheyouthofJ&Kandtointegratethemwiththemainstreamofthecountry.BHELhasalsoadoptedaCSRPolicyinlinewiththeCSRguidelinesissuedbyDepartmentofPublicEnterprises.

BHEL’s company-wide campaigntitled ‘Vision toAll-BHEL’s Call’ has been responded with more than51,000pledgesfromemployeesandtheirfamiliesfordonationoftheireyes.Thecompanyhasalsoventuredintoyetanothernoblecausefororgandonation.

During2012-13,aspartofsocialcommitment,6,139Apprenticesweretrainedinthecompany.Inaddition,8390 students/trainees from various professionalinstitutionsunderwentvocationaltraining.

ParticipationintheUN’sGlobalCompactProgramme:

As the world’s largest global corporate citizenshipinitiative, the Global Compact Program is the firstand the foremost concern which is exhibiting andbuildingthesociallegitimacyofbusinessandmarkets.BHELhas continued to play a prominent part in theUnitedNation’s Global Compact Programme on CSRbypromotingthecorevaluesonhumanrights,labourstandards, environment and anti-corruption andintends to advance these principles forming part ofits strategy& culturewithin its sphere of influence.BHELdemonstrated its commitment through regularpooling of communication of progress (COP) on theUNGC website. BHEL periodically submits annualCommunicationofProgressontherelevantprincipleofglobalcompactinrespectofEnvironmentissues.

Companypublicly advocateswith its employees andother stakeholders and regularly incorporates itscommitments towards Global compact programmethrough its Annual Report, press conferences andotherpublicdocuments.

Food delivery vans provided by BHEL to Akshay Patra Foundation for providing Mid-day meal to school children in Kamrup distt. of Assam

Medical treatment to victims of Uttarakhand tragedy at Rishikesh

A n n u A l R e p o R t2 0 1 2 - 1 3

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YearataGlance

FinancialCharts

(`inCrore)

2012-13 2011-12 Change(%)

Turnover 50156 49510 1.3

ProfitBeforeTax 9432 10302 -8.4

ProfitAfterTax 6615 7040 -6.0

RetainedEarnings 5071 5219 -2.8

TotalAssets 70128 66776 5.0

NetWorth 30444 25373 20.0

LongTermBorrowings 129 123 4.9

Debt:Equity 0.01 0.01 -

PerShare(in`):

-Networth 124.38 103.67 20.0

-Earnings 27.03 28.76 -6.0

Economicvalueadded 2657 4032 -34.1

Employee(Nos.) 48399 49390 -2.0

Turnover ( in Crore)`

2009-10 2010-11 2011-12 2012-132008-090

50000

28033

20000

30000

40000

34154

41299*

49510

10000

43337

50156

2009-10 2010-11 2011-12 2012-132008-09

PBT PAT

Profit Before Tax/Profit After Tax ( in Crore)`

2000

4000

6000

8000

12000

0

10000

4849

3138

6591

4311

8487*

9005

6011

5665*

10302

7040

9432

6615

*Excludingonetimeimpactofchangeinpolicyofwarrantyobligationforearlieryears

16

FinancialChartsOrders Received / Orders Outstanding ( in Crore)`

120000

100000

60000

2009-10 2010-11 2011-12 2012-132008-09

20000

40000

80000

180000

0

140000

117000

160000

59678 59037

144300

60507

164100

22096

135300

31650

115100

Orders Received Orders Outstanding

200

Dividend / Dividend Payout Ratios( in Crore)`

2009-102008-090

1600

600

800

1000

400

1200

1400

2010-11 2011-12 2012-13

832

1141

15671525

1323

31.0 30.9 29.5 25.9 23.3

Dividend Div. Payout Ratio

2009-102008-0940000

50000

44000

42000

46000

2010-11 2011-12 2012-13

45666

Manpower (in Nos.)

48000

4627446748

49390

48399

Net Worth Per Share (in )`

2009-102008-090.00

140.00

40.00

60.00

80.00

20.00

100.00

120.00

2010-11 2011-12 2012-13

52.86

65.03

103.67

82.34

124.38

2009-102008-090

40

20

10

30

2010-11 2011-12 2012-13

12.82

17.61

28.76

24.5627.03

Earnings Per Share (in )`

23.15*

2009-102008-090.10

1.10

0.30

0.20

0.40

2010-11 2011-12 2012-13

0.61

Turnover Per Employee ( in Crore)`

0.50

0.74

0.93

1.001.04

1.00

0.80

0.90

0.70

0.60

Note:Dividendpayoutratioincludesdividendtax. Figurespriorto2011-12arerestatedonpost-splitonnumberofsharesonliketolikebasis.*Excludingonetimeimpactofchangeinwarrantyobligationforearlieryears.

Figurespriorto2011-12arerestatedonpost-splitonnumberofsharesonliketolikebasis.

A n n u A l R e p o R t2 0 1 2 - 1 3

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FinancialChartsSegment-wise Revenue & Results ( in Crore)`

30000

25000

15000

2011-12 2012-13 2011-122012-13

5000

10000

20000

45000

0

35000

10604

4000039577

37863

11659

8559

2197

8184

3342

Segment Revenue Segment Results

Power Industry

Power Sector Industry Sector

Sector-wise Order Book Outstanding as at March 31, 2013

International Operations

10%9%

81%

2012-13 2011-12

5000

15000

25000

35000

55000

Profit Before TaxTurnover0

45000

50673 49898

9531 10367

Profit After Tax

6693 7087

Consolidated Financial Performance ( in Crore)`

Profit Before Tax0

10000

2000

1000

3000

9432

Consolidated Financial Statements - PBT/PAT ( in Crore)`

4000

34

9000

7000

8000

6000

5000

65

Profit After Tax

6615

34 44

BHEL Subsidiary Cos. Joint Ventures

Power Sector Industry Sector

Sector-wise Order Book 2012-13

International Operations

6%

13%

81%

18

Awards

CMD, BHEL receiving the CII-ITC Sustainability Award from the Hon'ble President of India

The Hon'ble President of India presenting the National Energy Conservation Award 2012 to CMD, BHEL

CMD, BHEL receiving the NDTV Profit Business Leadership Award 2012 in the Engineering category from Dy. Chairman, Planning Commission

Director (Finance), BHEL receiving CNBC TV18 Best CFO Award 2013 from Hon’ble Minister of State (Independent Charge) for Corporate Affairs

CMD, BHEL receiving the India Pride Award for Excellence in Heavy Industries 2012-13 from Hon’ble Union Minister of Petroleum & Natural Gas

CMD, BHEL receiving the AIMA Managing India Award for ‘Outstanding PSU of the year’ from the Hon'ble President of India

A n n u A l R e p o R t2 0 1 2 - 1 3

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Directors'ReportTotheMembers,

TheDirectorsaredelightedtopresentthe49thAnnualReportonthebusinessandoperationsoftheCompanyand the statement of accounts for the year endedMarch31,2013.

FinancialPerformance

FinancialYear

Figures(in`Croreexceptpersharedata)

2012-13 2011-12

(a) Turnover(Gross) 50156 49510

(b) Revenuefromoperations(Net)

47618 47228

(c) OtherOperationalIncome 807 751

(d) Operatingexpenses 39037 38092

(e) Operatingprofit 9388 9887

(f) Add:Otherincome 1122 1266

(g) Profitbeforedepreciation,financecost&taxexpense

10510 11153

(h) Less:Depreciation 953 800

(i) Less:Financecosts 125 51

(j) Profitbeforetax 9432 10302

(k) Less:Taxexpense 2817 3262

(l) ProfitafterTax 6615 7040

(m) Add:Balancebroughtforwardfromthepreviousyear

1031 812

(n) Profitavailableforappropriation

7646 7852

i) Dividend(includinginterimdividend)

1323 1567

ii) CorporateDividendtax(incl.oninterimdividend)

221 254

iii) AmounttransferredtoGeneralReserve

5000 5000

(o) BalanceinProfit&Loss 1102 1031

(p) EarningsperShare(`) 27.03 28.76

(q) NAVpershare(`) 124.38 103.67

(r) EconomicValueAdded(`Crore) 2657 4032

FinancialHighlights

During 2012-13, BHEL recorded its highest-everturnoverof` 50156Crore.Profitbeforetaxis` 9432CroreandProfitaftertaxisplacedat` 6615Crore.

Networthofthecompanyhasgoneupfrom` 25373Crore to ` 30444 Crore registering an increase of19.9%.Netassetvalue(NAV)persharehasbeenplacedat` 124.38in2012-13asagainst` 103.67in2011-12.

Dividend

The Board has recommended a Final Dividend of164.5% (` 3.29 per share), ` 804.11 Crore, for theyear2012-13.Aninterimdividendof106%(` 2.12pershare),` 518.89Crore,onsharecapitalof` 489.52Crore, has already been paid for the year 2012-13.Thusthetotaldividend(exclusiveofdividendtax)fortheyear2012-13is` 1323Crore(` 5.41pershare)asagainst` 1566.47Crore(` 6.40pershare)paidinthepreviousyear.

Provision of ` 136.66 Crore has been made forCorporateDividendTaxontheFinaldividendproposed.CorporateDividendTaxof` 84.18Crorehasalreadybeenpaidontheinterimdividend.

OrdersReceived

Ordersworth` 31650Crorewerereceivedduringtheyearasagainst` 22096Crorein2011-12.Sector-wise

CMD, BHEL presenting the Interim Dividend cheque for FY 2012-13 to Hon’ble Union Minister of Heavy Industries & Public Enterprises

20

ManagementDiscussionandAnalysis

A report onManagementDiscussion andAnalysis isplacedatAnnexure–I.

BoardofDirectors

Appointment

Smt.ChandraIyengarhasbeenappointedasPart-timeNon-officialDirectorw.e.f.01.04.2013.

Ms. Kusumjit Sidhu, IAS, Additional Secretary &

ordersbookedareasfollows:

(`inCrore)

2012-13 2011-12

PowerSector 25560 14012

IndustrySector* 4086 7850

InternationalOperations 2004 234

TotalOrdersBooked 31650 22096

OrderBookoutstandingattheendoftheyear 115100 135300

*excludesintersectoralorders

RatingofBHELvis-à-visMoUTargets

PerformanceofBHEL for theyear2011-12hasbeenratedas ‘Excellent’ in termsofMoUsignedwiththeGovernment of India. BHEL has been awarded theMoUCompositescoreof‘1.085’.

MaharatnaStatus

Consistent performance in a highly competitiveenvironment enabled BHEL attain the coveted‘Maharatna’ Status and be counted among sevenselectPSU’shavingthisstatus.

Financial Adviser, Department of Industrial Policy &Promotion, Ministry of Commerce & Industry hasbeen appointed as Part-time Official Director w.e.f.10.05.2013.

ShriW.V.K.KrishnaShankarhasbeenappointedasanAdditionalDirectorw.e.f.01.08.2013totakechargeoftheofficeofDirector(IS&P).

InaccordancewithSection260oftheCompaniesAct,1956andArticle67(iv)of theArticlesofAssociationof theCompany,Ms. Kusumjit Sidhuand ShriW.V.K.KrishnaShankarshallholdtheirdirectorshipsuptothe49thAnnualGeneralMeetingoftheCompanyandareeligibleforappointmentasDirectorsattheMeeting.

Cessation

Shri V.K. Jairath who was appointed as Part-timeNon-officialDirectorw.e.f.12.11.2009ceasedtobeaDirectoroftheCompanyoncompletionofhistenureon11.11.2012.

ShriVijayS.Madan, IAS,formerAdditionalSecretary&FinancialAdviser,MinistryofCommerce&Industry,consequent upon his appointment as Officer onSpecialDutyintheUniqueIdentificationAuthorityofIndiahasrelinquishedhispositionasPart-timeOfficialDirectorw.e.f.22.03.2013.

Smt.ChandraIyengar,Part-timeNon-officialDirector,consequentuponherappointmentasMemberontheMaharashtra Electricity Regulatory Commission, hasresignedfromtheBHELBoardon29.05.2013.

Shri O.P. Bhutani, who was appointed as Director(E,R&D)w.e.f.24.12.2009ceased tobeaDirectoroftheCompanyonattainingtheageofsuperannuationon31.05.2013.

ShriM.K.Dube,whowasappointedasDirector(IS&P)w.e.f. 25.06.2011 ceased to be a Director of theCompanyonattaining theageof superannuationon31.07.2013.

The Board of Directors place on record their deepappreciationofthevaluableservicesrenderedaswellasadviceandguidanceprovidedbyShriV.K. Jairath,Shri Vijay S.Madan, Smt. Chandra Iyengar, Shri O.P.BhutaniandShriM.K.Dubeduringtheirtenure.

Further pursuant to Sections 255 and 256 of theCompaniesAct,1956andArticle67(i)oftheArticlesofAssociationoftheCompany,S/ShriP.K.BajpaiandAtulSaraya will retire by rotation at the Annual GeneralMeeting and being eligible, offer themselves for re-appointment.

The Hon'ble President of India presenting the trophy for conferring Maharatna status for BHEL to CMD, BHEL

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21

In compliancewith Clause 49(IV)(G)(i) of the ListingAgreement,brief resumesof theDirectorsproposedforappointmentand re-appointmentalongwith thenature of their expertise in specific functional areasand names of companies in which the person alsoholdsthedirectorshipalongwiththemembershipoftheCommitteesoftheBoardaregivenatAnnexure-IIformingpartoftheDirectors’Report.

OfficialLanguageImplementation

1. CorporateOfficewasawardedfirstprizebyTownOfficial Language Implementation Committee(Undertaking),DelhiforexcellentimplementationofOfficialLanguage.

2. RCPuram,HyderabadwonfirstprizeforexcellentO.L.implementationfromTOLIC,Hyderabad.

3. PS-WR got third prize from TOLIC, Nagpurfor excellent editing of their Hindi Magazine‘Tarangini’.

4. PS-ER was awarded second prize for excellentediting of their Hindi Magazine ‘Poorvabha’ byTOLIC,Kolkata.

5. PS-WR got award of Active Member of TOLIC,NagpurfromTOLIC,Nagpur.

6. With a view to create favourable atmosphereforusageofHindi intheCompany,alltheUnits/Divisions of the company, including CorporateOffice, celebrated Hindi Divas and HindiWeek/Fortnight/Month during which variouscompetitions were held. 11 Hindi competitionswere held by Corporate Office. 230 participantsparticipated in thecompetitionsand85of themweregivencashawards.

7. In addition, wards of the employees of variousUnits/Divisions, who secured minimum 60% inclass XII exam and B2 grade in class X exam inHindisubjectweregivencashprize.

8. ‘Hindi Shabdakosh Jnan’ competition was heldby Corporate Office under auspices of TOLIC(Undertaking), Delhi. Various Hindi competitionsand programmes were also conducted by theUnits/Divisions under auspices of TOLIC existingattheircities.

9. 13 Hindi magazines were published by Unitsand Divisions of the company during the year.CorporateOfficealsobroughtout2 issuesof itshalf yearly Hindimagazine ‘Arunima’ during theyear.

10. 40 Translation Assistants (FTA) and 14 TypingAssistants (FTA)were recruited in variousUnits/Divisionsofthecompanyduringtheyear.6daysRajbhashaOrientationProgrammewasoraganizedforTranslationAssistants.

Participation in the Global Compact of the UnitedNations

BHEL is an environment friendly company in all itsactivities, products & services, besides providingsafe and healthy working environment to all itsstakeholders and it hasmadeUnitedNationsGlobalCompact(UNGC)programmeaspartoftheCompany’sstrategy,cultureandday-to-dayoperations.

BHELcontinuestobeamemberoftheUnitedNationsGlobal Compact (UNGC) Programme and standscommitedtothecorevaluesenshrinedinitsprinciplesonhumanrights,labourstandards,andenvironmentandanticorruption.BHELisnowaLifetimeCorporatememberofGlobalCompactNetwork,India.

Vigilance

TheVigilanceorganisationofBHELisheadedbyaChiefVigilanceOfficer(CVO)appointedbytheMinistry.Eachmanufacturing Unit / Power Sector Region of BHELhas a vigilance set up headed by a senior vigilanceexecutivereportingtotheCVO.

InadditiontopreventivevigilancewhichhasremainedthefocusareaofBHELVigilanceallthroughtheyears,additionalimpetuswasalsogivenforeffectivevigilanceadministration through leveraging technologyduring2012-13.ThishashelpedinproactiveandpredictiveVigilanceManagement.Hindi Diwas Samaroh being organised at BHEL on 14th September, 2012

22

Training programmes were conducted to updateemployees on Company’s policies, rules andprocedures. 119 such programmes were organizedduringtheyear2012-13invariousUnits,RegionsandofficesofBHEL. Interactive sessionswereheldwithlineexecutivesrepresentingdifferentfunctionalareas,inordertosensitizeemployeesandtoenhancetheirknowledge of the Company’s rules, procedures andpolicies.

To create awareness about the procedures ofprocurementinBHEL,todisseminatetheinstructionsissuedbyStatutoryAuthoritiesandtosharethecasestudies,theinauguralissueofquarterlye-Newsletter“DISHA”waspublishedon01.07.2013.

With a view to making systems more effective andtransparent,Vigilancehadcarriedoutsystemstudiesduringtheyear2012-13basedonwhichsuggestionstowards system improvement have been rendered.Some of the major areas where suggestions forimprovementweregivenare:

- PurchasePolicy

- Amendmentsto‘VendorRegistrationProcedures-SEARP,2010’.

- Systemicchangesin‘ReverseAuctionGuidelines’.

- Amendmentstocertainprovisions in ‘GuidelinesforSuspensionofBusinessDealingswithVendors’.

- Formulation of Common Loading Criteria inevaluationoftenders.

Withaviewtorestructurethemechanismforeffectiveand timely disposal of complaints a ‘ComplaintHandling Policy’ was issued on 24.06.2013 whereinthecomplaints receivedbyVigilancecanbedealt ina consistent manner, in accordance with the extantinstructionsissuedbytheCVC.

A workshop was organized at Corporate Office on29.05.2013whereinseniorexecutivesofmajorPSUs–SAIL,ONGC, IOCL, EIL,NLC, RINL, BPCL, participatedtosharethebestpracticesbeingfollowedbyvariousPSUs for Reverse Auction (RA). The inputs will behelpfulwhilerevisingtheRAguidelinesofBHEL.

As per the directions of the Central VigilanceCommission (CVC), the Company has taken manyinitiatives tomake available all relevant informationonthewebonrealtimebasis. Followinghavebeenensuredtomakeavailableallrelevantinformationontheweb:

• Status of Purchase Orders, Works Contractsconcluded every month, as per CVC format, isbeinguploadedbyallUnits.

• ProcedureandformsrelatedtoVendorregistrationarehostedontheCompanywebsite.

• Statusofvendorregistrationapplicationsishostedonthewebandcanbeviewedbyvendors.

• E-payment of vendor bills is being implementedthroughouttheorganizationandprincipleoffirstinfirstoutisbeingfollowedasaruleinpaymentofvendorbills.

• Status of bill payment can be viewed by thevendorson-line.

• Indents are being raised on-line in most of theUnits.

• Information relating to Rules/Procedures of theCompanyisavailableontheBHEL/Unitswebsites.

• This year the Company has initiated uploadingof project documentation on VIGEYE GPMS, aninitiativetakenupbytheCVC,withaviewtoraisealertsonprobable inconsistenciesduringprojectexecution.

Security

TheCompany’s Securitymechanism is sufficient andgeared up to provide security to each Plant/Unit.Whereas, the security of the most of the Plants oftheCompany isbeingmanagedbytheCISF, insomesmallerplants,theCompanyhasitsownSecurity.InotherPlants,CorporateOfficeandRegionalOffices,thesecurityisbeinglookedafterbytheprivateagenciessponsoredbyDirectorateGeneralResettlement,Govt.ofIndiaorEx-ServicemenCorporation.

Adequatemeasures havebeen taken for Security ofcomputers.DepartmentofElectronics,Govt.ofIndia(SRAC)hasalsocarriedoutinspectionofoursoftwaresecuritymechanismandtheirsuggestionshavebeenimplemented.

Security audit of major plants is being done by theIntelligence Bureau periodically and the additionalrequirements, wherever pointed out by them, areimmediately compliedwith by the concernedUnits.Reviewof Security is done internally also fromtimetotime.Monthlyreportontheft/pilferageandfireincidents is being compiled by Corporate SecurityDepartment alongwith quarterly reports on various

A n n u A l R e p o R t2 0 1 2 - 1 3

23

securityrelatedissuesasperthedecisionstakeninthemeetingsofHR&SecurityHeads.

CCTV’s are being installed and standard operatingprocedures(SOP)arebeingpreparedtodealwithanysecuritythreat.

TheManagement, security staff and the employeesof Company are sensitized to the security needs ofCompany.

Sustainability

The concept of Sustainability has been ingrained intheDNAof BHELwhich is evident from theMissionStatement–“ProvidingSustainableBusinesssolutionsin the fields of Energy, Industry & Infrastructure”.Sustainability is an integral part of the company’sstrategy.

BHEL is committed to be an Environment friendlycompany in all its areas of activities, products andserviceswhile providing a safe and healthyworkingenvironment. In line with the company’s strategy,EnvironmentImprovementProjects(EIP)/SustainableDevelopment (SD) Projects and CommunityDevelopment Programmes are being given specialthrust.

BHEL has defined its Sustainable Development(SD) policy keeping in view the scale & nature oforganization’s activities,products& services. TheSDprojects undertaken in 2012-13 were in the areasof Rain water harvesting, afforestation, captivepower generation based on solar energy, use ofrenewable energy, energy efficiency& conservation,and responsible waste disposal. A broad strategicmanagementframeworkhasalsobeendevelopedforensuringSustainableDevelopmentinBHELthroughitsproductandservicesaswellasin-houseactivities.

Through these initiatives, organization is directingits efforts to minimize the carbon footprint of theorganizational activities. Further it is also helpingthecustomertoreducethecarbonfootprint intheiroperations as well through development of cleanertechnologies.

In keeping with the commitment to promote theuseof renewablepower inmanufacturingunits, thecompany has installed 250 KWp Solar power plantatBhopalunitandRoofTopSolarpowerplantof20KWpatTrichyunitin2012-13.Companyalsoinstalledmore than1200Turbo ventilators across its units to

encourage energy conservation. As a part of EnergyEfficiencymorethan20energyefficiencyprojectswerecompletedattheunits.TotalexpenditureincurredonsuchactivitiestakenunderSustainableDevelopmentProjectsfortheyear2012-13was` 8.16Croreagainsttargetof` 7.44Crore.

AllmanufacturingUnits/Regionsofthecompanyareaccredited to international standards viz. ISO-14001certification for environmental management andOHSAS-18001 certification for occupational healthandsafetymanagementsystems.

BHELhasbeenawardedwiththeprestigious“GoldenPeacockAwardforSustainability”2012.

EPD Bangalorewas honoredwith the “Gold Award”during 2012 for its outstanding achievement in theSafetyManagementbyM/sGreentechFoundation.

BHEL, EPD-Bangalore & BHEL, Trichy units received“CII–ITCSustainabilityAward2012”forbeing India’s,‘oneofthemostSustainableorganization’.

Directors’ResponsibilityStatement

Pursuant toSection217(2AA)of theCompaniesAct,1956,itisherebyconfirmed:

(i) that in the preparation of the annual accountsfor the financial year ended 31st March, 2013the applicable Accounting Standards have beenfollowedalongwithproperexplanationrelatingtomaterialdepartures;

(ii) thattheDirectorshaveselectedsuchaccountingpoliciesandappliedthemconsistentlyandmadejudgments and estimates that were reasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsoftheCompanyasattheendofthefinancialyear2012-13andoftheprofitofthecompanyforthatperiod;

(iii) thattheDirectorshavetakenproperandsufficientcareforthemaintenanceofadequateaccountingrecords inaccordancewith theprovisionsof theCompaniesAct,1956forsafeguardingtheassetsoftheCompanyandforpreventinganddetectingfraudandotherirregularities;

(iv) that the Directors have prepared the annualaccountsforthefinancialyearended31stMarch,2013ona‘goingconcern’basis.

24

CorporateGovernance

As per the requirements of Clause 49 of the ListingAgreementadetailedreportonCorporateGovernancetogetherwiththefollowingisgivenatAnnexure–III:

(i) CEO/CFOCertificate[asperClause49(V)]and

(ii) Certificate from the Company’s Auditors [as perClause49(VII)].

OtherDisclosures

Information in accordance with the provisions ofSection 217(1)(e) of the Companies Act, 1956 readwith Companies (Disclosure of Particulars in theReportoftheBoardofDirectors)Rules,1988regardingconservation of energy, technology absorption andforeign exchange earnings and outgo is given atAnnexure-IV.

Noneoftheemployeeshavedrawnremuneration inexcessofthelimitsprescribedundersection217(2A)of the Companies Act, 1956 read with Companies(Particularsofemployees)Rules,1975duringtheyear2012-13.

StatementpursuanttoSection212oftheCompaniesAct,1956relatingtoSubsidiaryCompaniesisgivenatAnnexure-V.

EventsOccurringAfterTheBalanceSheetDate

Therewere no significant events occurring after theBalancesheetdate.

Auditors

TheAuditorsofyourCompanyareappointedbytheComptrollerandAuditorGeneralofIndia.Thenames

ofauditorsappointedfortheyear2012-13areprintedseparatelyintheAnnualReport.

The detail of cost auditors appointed for the year2012-13andCostAuditdetailsareprintedseparatelyintheAnnualReport.

The reply to the point referred to in the Auditors’ReportandCommentsoftheComptrollerandAuditorGeneralofIndiaaregivenatAnnexure–VI.

Acknowledgements

The Board places on record its sincere appreciationtowards the Company’s valued customers in Indiaand abroad for the support and confidence reposedbytheminthemanagementofthecompanyandlookforwardtothecontinuanceofthismutuallysupportiverelationshipinfuture.

The Board also gratefully acknowledges the supportandguidancereceivedfromvariousMinistriesoftheGovernment of India, particularly the Departmentof Heavy Industry, in Company’s operations anddevelopmental plans. The Directors express theirgrateful thanks also to the Comptroller and AuditorGeneral of India, Chairman and Members of AuditBoard, Statutory Auditors, Branch Auditors andCostAuditors.TheCompanyalsowishes toplaceonrecorditsappreciationforthecontinuedco-operationreceived from all the Technology Collaborators andSuppliers and support provided by the FinancialInstitutions and bankers. Last but not the least theBoardwishestoplaceonrecorditsdeepgratitudetoallBHELiteswhoseenthusiasm,teamefforts,devotionand sense of belongingness has made this greatcompanyproud.

ForandonbehalfoftheBoardofDirectorsofBHARATHEAVYELECTRICALSLTD.

Place:NewDelhiDated:August3,2013

(B.Prasada Rao)Chairman&ManagingDirector

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25

ManagementDiscussionandAnalysisAnnexure–ItotheDirectors’Report

A. FINANCIALPERFORMANCEOFTHECOMPANY

(i) StandaloneFinancialResults

BalanceSheet

1. ShareCapital

(`inCrore)

F.Y.2012-13 F.Y.2011-12

AuthorisedSharecapital 2000 2000

Issued,subscribed&PaidupShareCapital 490 490

Thereisnochangeinthesharecapitalduringtheyear2012-13.

2. Reserves&Surplus(`inCrore)

F.Y.2012-13 F.Y.2011-12

CapitalReserve 3 3

GeneralReserve 28850 23850

SurplusofProfit&Loss 1102 1031

29955 24884

TheReserve&Surplushasincreasedby` 5071Croreduring 2012-13 after addition of Retained earnings. Asumof 5000CrorehasbeentransferredtoGeneralReserveoutofprofitfortheyear2012-13.

3. Borrowings(`inCrore)

F.Y.2012-13 F.Y.2011-12

LongTerm

ShortTerm

Total LongTerm

ShortTerm

Total

UnsecuredLoans-Financialleaseobligation 129 0 129 123 0 123

SecuredLoan-Exportcredit 0 1286 1286 0 0 0

129 1286 1415 123 0 123

Borrowings have increased due to short termborrowingsbywayofexportcreditavailedtomanagecashflows.

4. OtherLongTerm/CurrentLiabilities

(`inCrore)

F.Y.2012-13 F.Y.2011-12

OtherLongTerm

Liabilities

CurrentLiabilities

Total OtherLongTerm

Liabilities

CurrentLiabilities

Total

Tradepayables(Incl.Acceptances) 756 9675 10431 617 10255 10872

Depositsfromcustomers&others 74 481 555 105 444 549

AdvancesReceivedfromcustomers&others 4960 11261 16221 6837 13144 19981

Otherpayables/liabilities - 2120 2120 - 2236 2236

5790 23537 29327 7559 26079 33638

Thereductioninotherlongtermliabilitiesandcurrentliabilitiesby 4311Crorein2012-13isduetodecreaseinnetbalanceofadvancesfromcustomers.

5. Provisions

(`inCrore)

F.Y.2012-13 F.Y.2011-12

LongTerm

ShortTerm

Total LongTerm

ShortTerm

Total

Provisionforemployeebenefits 2185 488 2673 2076 401 2477

Provisionforcontractualobligation 3603 1387 4990 2793 1057 3850

ProposedDividend(Incl.Div.tax) - 941 941 - 1047 1047

OtherProvisions 145 193 338 136 130 266

5933 3009 8942 5005 2635 7640

There is a net increase in total provision by` 1302Crorein2012-13owingtoadditionintheprovisionforcontractualobligation.

26

6. FixedAssets

(`inCrore)

F.Y.2012-13 F.Y.2011-12

GrossBlock 10783 9707

Less:Depreciation/amortisation 6328 5413

Less:LeaseAdjustmentAccount (3) (3)

NetBlock 4458 4297

CapitalWork-in-Progress 1134 1324

Intangibleassetsunderdevelopment 38 23

5630 5644

Gross Block increased by ` 1076 Crore and CapitalWork in progress including Intangible Assets underdevelopment decreased by ` 175 Crore during theyear. The net increase is due to capital expenditureincurredonaugmentationofmanufacturingcapacityandmodernisation of the facilities inmanufacturingunitsandatpowerprojectsites.

7. NonCurrentInvestments

(`inCrore)

F.Y.2012-13 F.Y.2011-12

LongTermTradeInvestments 429 462

Longtermtradeinvestmentshavedecreasedby` 33Crore due to sale of BHEL stake in Udangudi PowerCorporationLtd.

8. DeferredTaxAssets(Net)

(`inCrore)

F.Y.2012-13 F.Y.2011-12

DeferredTaxAssets(Net) 1551 1546

DeferredTaxassets(Net)hasmarginallyincreasedby ` 5 Crore mainly on account of increase in thesurchargeonincometax.

9. Loans&Advances

(`inCrore)

F.Y.2012-13 F.Y.2011-12

LongTerm

ShortTerm

Total LongTerm

ShortTerm

Total

Loans&Advances

905 2029 2934 900 2112 3012

Loans&advanceshavedecreasedby 78Croreowingtoadjustmentofadvancesmadetowardspurchases.

10. Inventories(`inCrore)

F.Y.2012-13 F.Y.2011-12

Inventories 11764 13549

Alleffortshavebeenmadetomaintaininventoryatalowerlevel.Inventoryasnumberofdaysofturnoveris86daysin2012-13asagainst100daysin2011-12.

11. Receivables(`inCrore)

F.Y.2012-13 F.Y.2011-12

LongTerm

TradeReceivable

Total LongTerm

TradeReceivable

Total

TradeReceivables(Net) 10654 29234 39888 9384 26357 35741

Receivablesincreasedby` 4147Crore.Innumberofdaystoturnoveritincreasedfrom264daysin2011-12to290daysin2012-13.

12. Cashandbankbalances(`inCrore)

F.Y.2012-13 F.Y.2011-12

Cash&bankbalances 7732 6672

The cash and bank balances at the end of 2012-13wouldbe` 6446Crorenetofshorttermborrowingsof` 1286Crore.

13. OtherCurrentAssets(`inCrore)

F.Y.2012-13 F.Y.2011-12

OtherCurrentAssets 200 151

Other current assets represent Interest accrued onbanksdepositsandinvestments.

Inventory Debtors

Inventory/Debtors in No. of Days of Turnover

50

100

150

200

250

350

2009-10 2010-11 2011-12 2012-132008-090

300

102

208

99

221

92

230

290

264

10086

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StatementofProfit&Loss

14. RevenuefromOperations(`inCrore)

F.Y.2012-13 F.Y.2011-12

GrossTurnover 50156 49510

Less:ExciseDuty 1904 1847

Less:ServiceTax 634 435

Revenuefromoperations(Net) 47618 47228

During 2012-13, BHEL recorded its highest everturnoverof 50156Crore.PowersegmentandIndustrysegment contributed 79% and 21% respectively forthetotalrevenueofthecompany.15. OtherOperationalIncome

(`inCrore)

F.Y.2012-13 F.Y.2011-12

ExportIncentive 24 12

ScrapSales 283 308

Others 500 431

807 751

Themarginal increaseinotheroperational incomeisowingtoincreaseinfreight&insuranceincome.

16. OtherIncome(`inCrore)

F.Y.2012-13 F.Y.2011-12

Exchangevariation(net) 143 99

InterestIncome 605 814

Otherincome 374 353

1122 1266

Otherincomedecreasedby`144Croreduringtheyearmainlyduetoreductionininterestincome.

17. Cost of Material consumption, Erection &EngineeringExpenses

(`inCrore)

F.Y.2012-13 F.Y.2011-12

Costofconsumptionofrawmaterial&components 23044 24549

Consumptionofstores&spares 584 564

Erection&EngineeringExpenses 4271 3795

27899 28908

There is reduction in material consumption aspercentage of net turnover after adjustment ofaccretion/decretion to WIP & FG from 60.49% in2011-12to59.13%in2012-13.

18.EmployeeBenefitsExpenses(`inCrore)

F.Y.2012-13 F.Y.2011-12

EmployeesBenefitsExpenses 5753 5465

Employeesremuneration&benefitsincreasedby5%(`288Crore)from`5465Crorein2011-12to`5753Crorein2012-13.

19.FinanceCosts(`inCrore)

F.Y.2012-13 F.Y.2011-12

Interestandotherborrowingcosts 125 51

The interest cost represents the interest componentof the leaserentalsonassetstakenonfinance leaseandinterestonshorttermborrowingsduringtheyear.20.Other Expenses of manufacturing, Admini-

stration,Selling&Distribution(`inCrore)

F.Y.2012-13 F.Y.2011-12

OtherexpensesofManufacturing,Administration,Selling&Distribution 3777 3223

The increase in other Expenses of manufacturing,Administration, Selling&Distribution is` 554Croreascomparedto2011-12duetovolumeofoperationsandalsoduetoliquidateddamageschargedoffduringtheyear.21. Provisions(Net)

(`inCrore)

F.Y.2012-13 F.Y.2011-12

Provisions(Net) 1566 1403

The increase in Provisions (Net) by ` 163 Crore ascomparedtopreviousyearismainlyonaccountofnetincreaseinprovisionforContractualObligations.22. Depreciation

(`inCrore)

F.Y.2012-13 F.Y.2011-12

Depreciation 953 800

The increase in depreciation by ` 153 Crore is onaccountofincreaseingrossblock.23. TaxExpense

(`inCrore)

F.Y.2012-13 F.Y.2011-12

IncomeTax-CurrentYear 3042 3277

-EarlierYears (220) (632)

Deferredtaxcharge/(credit) (4) 617

TaxExpenses(Net) 2818 3262

Thedecreaseintaxexpense(Net)isinlinewithchangeinprofitfortheyear.

28

24. ProfitafterTax(`inCrore)

F.Y.2012-13 F.Y.2011-12

ProfitafterTax 6615 7040

25.Dividend

The company has paid an interim dividend of 106% (` 2.12per share),` 518.89Crore,on share capitalof` 489.52Croreduringtheyear2012-13.TheBoardhas also recommended a Final dividend of 164.5% (` 3.29pershare)i.e.` 804.11Crore.

The total dividend (exclusive of dividend tax) fortheyear2012-13 is` 1323Crore (` 5.41pershare)as against` 1566.47Crore (` 6.40per share) in thepreviousyear.

Provision of ` 136.66 Crore has been made forcorporatedividendtaxonthefinaldividendproposed.Corporatedividend taxof` 84.18Crorehasalreadybeenpaidontheinterimdividend.

26. TransfertoGeneralReserve

` 5000CrorehasbeentransferredtoGeneralReservefortheyear2012-13.

(ii) FinancialReviewofSubsidiaryCompanies

a) BharatHeavyPlateandVesselsLtd.(BHPV)

Bharat Heavy Plate and Vessels Ltd. (BHPV) is 100%subsidiary co. of BHEL taken over on 10.05.2008. In2012-13BHPVrecordedaprofitof` 35.04Croreonaturnoverof` 240.27Crore.

ThefinancialhighlightsofBHPVareasunder:(`inCrore)

Particulars F.Y.2012-13 F.Y.2011-12

BHEL'sInvestmentinEquity at`1/- at`1/-

Advanceagainstissueofshares 34.00 34.00

Turnover 240.27 155.80

ProfitafterTax 35.04 10.44

b) BHELElectricalMachinesLtd.

A subsidiary Company has been incorporated on19thJanuary,2011as“BHELElectricalMachinesLtd”,withBHELholdingthemajoritystakeof51%withanequityinvestmentof` 5.36CroreandGovt.ofKeralaretaining49%.In2012-13,BHELEMLrecordedaloss

of` 0.55Croreonaturnoverof` 26.53Crore.(`inCrore)

Particulars F.Y.2012-13 F.Y.2011-12

BHEL'sInvestmentinEquity 5.36 5.36

Turnover 26.53 21.14

ProfitafterTax -0.55 -0.38

(iii)FinancialReviewofJointVenturesCompanies

a) BHEL-GEGasTurbineServicesPvt.Ltd.(BGGTS)

BGGTSisaJointVentureCompanyofBHEL&GEUSA,formedto takeuprepair&servicingofGEdesignedGasTurbines.TheFinancialhighlightsoftheCompanyareasunder:

(`inCrore)

Particulars F.Y.2012-13 F.Y.2011-12

BHEL’sInvestmentinEquity 2.38 2.38

Turnover 813.78 513.28

Profitaftertax 81.70 60.76

NetWorth 157.38 114.48

During the year BGGTShas paid interimdividend at500% and proposed final dividend at 200% on theEquitysharecapitalof`4.76Crore.

b) NTPC–BHELPowerProjectsPvt.Ltd.(NBPPPL)

AJointVenturebetweenBHEL&NTPCin-corporatedon28thApril,2008forcarryingoutEPCactivitiesinthePowerSector.TheFinancialhighlightsareasunder:

(`inCrore)

Particulars F.Y.2012-13* F.Y.2011-12

BHEL'sInvestmentinEquity 25.00 25.00

Turnover 116.25 145.55

Profitaftertax 5.66 13.06

*Basedonprovisionalfigures

c) UdangudiPowerCorporationLtd.(UPCL)

AJointVenturebetweenBHEL&TNEBwasincorporatedon26thDecember,2008,tobuild,ownandoperatea1600MW(2x800MW)SuperCriticalThermalPowerPlantatUdangudi.On26.03.2013,BHELhas sold itsentirestakeinUPCL.

(`inCrore)

Particulars F.Y.2012-13 F.Y.2011-12

BHEL'sInvestmentinEquity - 32.50

NetBlock - 29.09

CapitalWorkinProgress - 41.75

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d) RaichurPowerCorporationLtd.

BHEL has promoted a joint venture company withKarnatakaPowerCorporationLimited(KPCL)forsettingupSupercriticalThermalPowerPlantatKarnatakaonbuild,ownandoperatebasis.TheJointVenturewasincorporated on April 15, 2009 under the name of“RaichurPowerCorporationLtd”.

(`inCrore)

Particulars F.Y.2012-13* F.Y.2011-12

BHEL'sInvestmentinEquity 331.52 331.52

NetBlock 3.35 3.40

CapitalWorkinProgress(Includingadvancesforcapitalexpenditure) 3531.85 1469.07

*Basedonprovisionalfigures

e) DadaDhuniwaleKhandwaPowerLimited

BHEL has promoted a joint venture company withMadhya Pradesh Power Generating Company Ltd.(MPPGCL)forsettingupofa2x800MWSupercriticalThermalPowerPlantatKhandwa,MadhyaPradeshonbuild,ownandoperatebasis.TheJointVenturewasincorporatedonFebruary25,2010underthenameof“DadaDhuniwaleKhandwaPowerLtd”.

(`inCrore)

Particulars F.Y.2012-13* F.Y.2011-12

BHEL'sInvestmentinEquity 22.50 22.50

NetBlock 0.02 0.03

CapitalWorkinProgress 1.63 0.75

*Basedonprovisionalfigures

f) LaturPowerCompanyLtd.

BHEL has promoted a Joint venture company withMaharashtra State Power Generation Company Ltd.(MAHAGENCO) for setting up a 2x660MW ThermalPowerPlantor1500MWgasbasedCombinedCyclePower Plant (CCPP) in Latur,Maharashtra. The JointVentureCompanywas incorporatedonApril6,2011under the name of “Latur Power Company Ltd.”.The present paid up equity of the JVC is ` 5 Crore,subscribedtoequallybyboththepartners.

g) PowerPlantPerformanceImprovementLtd.

A Joint Venture between BHEL and Siemens and isunderliquidation.

(iv)ConsolidatedFinancialStatement(CFS)

ConsolidatedFinancialStatementshavebeenpreparedin accordance with Accounting Standard- 21 on“Consolidated Financial Statements” andAccountingStandard-27on“Financial Reportingof Interest inJointVentures.”

A brief summary of the results on FinancialperformanceinlinewiththeaboveASareasunder:

(`inCrore)

2012-13 2011-12 %ageincrease

over 2011-12

StatementofProfit&Loss

Turnover 50673 49898 1.55

ProfitBeforeTax 9531 10367 -8.06

ProfitAfterTax 6693 7087 -5.56

BalanceSheet

SourcesofFunds

Shareholdersfund 30533 25403 20.19

MinorityInterest 5 5 0.00

Noncurrentliabilities 13007 12880 0.99

Currentliabilities 28208 29142 -3.20

Total 71753 67430 6.41

ApplicationofFunds

NetBlock(incl.CWIP) 7036 6282 12.00

NonCurrentInvestments 6 6 0.00

DeferredTaxAssets 1556 1549 0.45

OtherNoncurrentassets 11744 10374 13.21

CurrentAssets 51411 49219 4.45

Total 71753 67430 6.41

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PowerSector

2x660 MW Barh Supercritical Power Project under execution by BHEL

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B. PERFORMANCEOFBUSINESSSEGMENTS

Power Sector

The Indian Power Sector is witnessing a slowdownsince the past few years. Issues of coal linkages,environmental clearances, land acquisition and fundconstraints have resulted in non-finalization of newprojects,especiallyintheprivatesectorandsomeoftheongoingprojectsareonaslowexecutionpath.

• In the Power Sector business segment, despitethesechallengesandintensecompetitivepressure,BHELhasmaintaineditsmarketleadershipinthedomesticmarketforutilitysets:

PowerSectorsecuredordersworth` 25,560Crore;82%upfromlastyear.

Securedorders for8nos.TurbineGenerator(TG) package and 9 nos. Boilers for Super-criticalsetsduringtheyear.

Continued Customer Confidence; Repeatorder of TG package for 2x700 MWe RAPP7&8.

Ordersfor7nos.ofstandaloneESPPackagesfor supercritical sets against stiff globalcompetition.

SignificantordersreceivedinthePowersectorinclude:

Thermal

Sub-CriticalOrders:

• 1x500 MW NTPC, Vindhyachal Stg-V: SteamGenerator(SG),TurbineGenerator&ESPPackage.

Super-Criticalratings:

• 2x660MWNTPC/Mauda:ESPPackages

• 2x660MWNTPC/Sholapur:ESPPackage

• 2x660MWDVC/Raghunathpur:TGPackage

• 3x660MWNPGCL/Nabinagar:SG,ESPPackage

• 2x800MWNTPC/Gadarwara:SG,TGPackage

• 2x660MWRRVUNL/Suratgarh:ErectionProcure-ment&Commissioning(EPC)Package

• 2x660 MW OPGCL/IB Valley: Boiler TurbineGenerator(BTG)Package

Hydro

• 3x57 MW NTPC/Lata Tapovan: Electrical &Mechanical(E&M)Package

Gas

• 160 MW RRVUNL/Ramgarh CCPP Stg IV: BTGpackage

Nuclear

• 2x700 MWe NPCIL/RAPP 7&8: TG, Control& Instrumentation (C&I) and Control CenterInstrumentationpackage

• 2x700MWeNPCIL/KAPP3&4:CCIpackage

Spares&ServicesBusinessGroup(SSBG)

Order inflow of ` 2,885 Crore in Spares & Servicesbusiness segment: 28% (Y-o-Y) increase over that of ` 2,250Crorein2011-12.

BHEL swept themarket in the area of ESP and C&Iretrofit business and secured orders to the tune of`499Croreagainststiffinternationalcompetition.

CommissioningHighlights

• All time high 10,340 MW of power plant equipment synchronised/commissionedincluding 9,328 MW utility, 703 MW captive/industrial sets in the country and 309 MW inoverseasmarkets.

Contract signing for 2x660 MW for OPGCL/IB TPS, Banharpalli 2x600 MW North Chennai TPS-commissioned India's first indigenously manufactured sub-critical set of 600 MW on EPC basis

32

• Highest ever 9,328 MW of utility projectCommissioned/Synchronized during a year:Consistentlymaintainingtheupwardtrendinlastfiveyears.

• All time high 9,298 MW utility capacity addedduringayear;14%upfromthepreviousyearand30 MW synchronized, awaiting clearance fromutilitiesforcapacityaddition.

• Atotalof29utilitysetscommissionedagainst21lastyear.

• The installed capacity of BHEL supplied Utilitysets went up to 1,15,500 MW maintaining itslion’sshareof57%inthecountry'stotalinstalledcapacitycomprisingThermal,HydroandNuclearsets.

• BHEL’s contribution to thecapacityadded in thecountryinthelastquarterwas56%.

• Commissioning of 4,621 MW in March’ 13 forutilitysets.

• Establishing a central monitoring system paiddividendsintermsofcompletionofPerformanceGuarantee Test for 58 nos.main plant packages(TG,Boiler,ESP,Mills).

FirstTimeAchievements

• Commissioning of India’s first indigenouslymanufacturedsub-criticalsetof600MWatNorthChennaionEPCBasis.

• Conducted ‘Performance Guarantee Test’ ofhighestcapacitysetof525MWatMaithonforTG&Boiler.

• Conducted1000MWgeneratorstatorwindingHVtest(Kudankulam1&2).

29 nos. Utility sets commissioned during the yearwere-

• KorbaWest(500MW)inChhatisgarh

• PragatiCCPPGT-3(250MW)inDelhi

• PipavavModule–IICCPP(351MW),UkaiU6(500MW)inGujarat.

• JhajjarU3(500MW)inHaryana

• ChutakHEPU1,2,3&4(4X11MW)inJammu&Kashmir

• AdhunikU1,2 (2X270MW),KodermaU2 (500MW)inJharkhand

• BinaU1&2(2X250MW),SatpuraU10(250MW),Vindhyachal U 11& 12 (2X500MW) inMadhyaPradesh

• Amravati U 1 (270 MW), Bela U 1 (270 MW),MaudaU1&2(2X500MW)inMaharashtra

• RamgarhGT(110MW)inRajasthan

Utility (Capacity addition) Total (Commissioned/Synchronised)

4000

2000

6000

8000

12000

0

10000

Commissioning (MW)

2009-10 2010-11 2011-12 2012-132008-09

1835

4182 4095

65836333

9442

8138

9270 9298

1034014%

2x270 MW Adhunik TPS-Unit 1 commissioned 2x363 MW Gas-based Power Plant, OTPC-Palatana

A n n u A l R e p o R t2 0 1 2 - 1 3

33

• NorthChennaiU2(600MW),VallurU2(500MW)inTamilnadu

• OTPCTripura(363.3MW)inTripura

• HarduaganjU9(250MW),ParichhaU5&6(2X250MW),RihandU5(500MW)inUttarPradesh

OverseassetscommissionedbyBHELduringtheyear includeWesternMountain Extension Libya,Unit-6(157MW),FinchaaSugarFactory,EthiopiaUnit1(12.5MW),PTMSWIndonesia-Boiler(30MW), Varjob - Hydro Power station Tajikistan-Unit I&II(2X4.75MW),NamchienHydroPowerProject,Vietnam-UnitI(100MW).

PerformanceofBhelUtilitySets

• BHEL supplied Thermal sets (Coal + Lignite)generated4,83,431MUsagainst4,59,706MUsoflastyearshowinganincreaseof5.16%andformingapprox.70.0%ofthecountry’stotalgenerationof6,91,340MUsfromthermalutilitysets.

• BHEL coal based sets registered PLF of 73.7%againstNationalAverageof69.95%.

• During the financial year, generation from BHELsupplied thermal sets of ratings 195 MW andabove–whichformthebackboneofthecountry’sthermalgeneratingcapacity,wentupto4,54,304MUswithPLFof77.3%andOAof89.3%.

• 13nos.stationsequippedwithBHELequipmentsrecordedaPLFofabove90%:

NR : Rihand Stage II (92.5), Singrauli (92.3),Unchahar(92.8)

ER : BudgeBudge(93.5)

WR: Bhilai(96.8),Dahanu(100.2),Korba(NTPC)(90.1),Vindhyachal(91.3),Raigarh(90.2)

SR : Kakatiya (90.9), North Madras (91.9),Ramagundam(90.7),Tuticorin(90.4)

• 187BHEL supplied coal based sets achievedPLFofover70%.Outofthese,57setsregisteredPLF of over 90% and 73 sets achieved PLF between80%-90%.

• BHELcoalsetsregisteredtheOperatingAvailability(O.A.)of86.3%.

• BHEL supplied500MWsetsachievedconsistentavailabilityofmorethan90%forthelastsixyears.

• 167 Thermal sets of BHEL make achieved O.A.higherthanorequalto90%.

• 182 BHEL supplied coal based sets clockeduninterrupted operation for more than 90 daysduringtheyearoutofwhich:

• 59setsrantwicecontinuouslyformorethan90days.

• 27 sets continuously ran formore than 200days.

• TrombayU5(500MW)andSingrauliU5(200MW)clocked uninterrupted operation throughout theyear–atestimonyofBHEL'sproductexcellence.

Services

BHELreinforceditscommitmentinprovidingpromptand efficient service to its customers aimed atfacilitating uninterrupted power supply and keepingpowerplantsingoodrunningcondition.

• Services sector has seen a phenomenal growthwith 30% increased order inflow (Y-o-Y) in FY 12-13:` 533.58Crore.

BHEL-built 200 MW (Unit 5) Singrauli STPS clocked uninterrupted operation throughout the year

BHEL supplied 500 MW (Unit 5) of Trombay TPS clocked uninterrupted operation throughout the year

34

• Duringtheyear,BHELoverhauled176nos.ofsetsincluding the non-BHEL ones-highest in last fiveyears

• Highestevercommissioningof485MW inR&MduringFY2012-13.Detailsofsets:

• JSEBPatratuTPS-10(110MW)

• PSPCL GNDTP Bathinda TPS-3 (110 MW)-upratedto120MW

• OHPCRengaliHEP-1(50MW)

• GSECLUkaiHEP-1(75MW)

• JSEBSubernrekhaHEP,Sikidiri(2x65MW)

• R&MofBoileratSatpura-7(210MW)enables itrunat‘fullload’evenafter30yearsofoperation

ServicesJobsinoverseasProject:

• ChukhaBhutanunit-284MW(R&MJob)

• Varjob-HydroPowerstationTajikistan-UnitI&II(R&Manduprating)

• Overhauling and ‘stator bar replacement’ ofGenerator–3(153MW)atLibya(SAS)

CustomerSatisfaction

Our valued customers have appreciated number ofeffortsbyBHELviz.improvementsinexistingsystems,completionofworksaheadofscheduleinchallengingconditions etc. in the form of appreciation letters,awardandaccolades.

Significantly appreciation letter received from MD,Jindal Power Ltd for adopting best practice for“successfullyplacingthepre-assembledcondenserinposition”atJPLRaigarh.

110 MW Unit uprated to 120 MW by BHEL at PSPCL GNDTP Bathinda TPS-3

Appreciationsreceivedfrommanyreputedcustomers(like Karnataka Power Corporation Limited, AndhraPradesh Power Generation Corporation Limited(APGENCO), Rajasthan Rajya Vidyut Utpadan NigamLimited,DamoderValleyCorporation(DVC),MSPGCL,NTPC, Tamilnadu Electricity Board (TNEB) etc. forexcellentsupportgivenbyBHEL.

3500 MW Capacity added in 2012-13 as against 1000 MW last year for NTPC. With this, BHEL'scontributiontoNTPC'scapacityof41,184MWstandsat70%.

AsperMoUwithGOI,‘CustomerSatisfactionSurvey’wasconductedfirsttimefor‘Power-Sectorasawhole’.Survey was conducted through external agency at 77customerlocationscovering271respondents.

#ExcludesNon-conventionalPowerGeneratingsets.MWuprating/deratingnotconsidered.

*ExcludesgenerationforBHELsetsof30MWratingand3Privateutilities(Torangallu,TATAJojobera,SuratLignite)

50000

100000

150000

250000

31.03.2010 31.03.2011 31.03.2012 31.03.201331.03.20090

200000

138165

87636

147750

91731

159911

98064

180413

106202

201036

115500

6362 61

5957

Installed Generating Capacity (MW)#(Coal+Gas+Hydro+Nuclear+Diesel)

All India BHEL % BHEL Vs All India

100000

300000

500000

200000

400000

600000

800000

2009-10 2010-11 2011-12 2012-132008-090

700000

511339

405793

539524

430760

561756

435216

612880

459706 483431

Generation Coal Sets (Utility) in Million Units*

691340

79 8077

75 70

All India BHEL BHEL Contribution %

A n n u A l R e p o R t2 0 1 2 - 1 3

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IndustrySector

BHEL’s first two-cylinder uprated 150MW (Reheat) rating turbine in the Industrial Segment commissioned for HINDALCO at Mahan

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IndustrySector

InIndustrySector,BHELsecuredordersworth`4500Crore in Captive Power, Rail Transportation, PowerTransmission, Oil & Gas, Renewable Energies andotherindustrialsegments.

Majorordersreceivedduringtheyear/otherbusinesshighlights–Industrysegment-wiseinclude:

CaptivePowerplants

• Order for 5th Back Pressure Turbine Generator(19.5 MW set) from M/s NALCO for theirDamanjodi plant against stiff competition fromChinese vendors. 4 no. 18.5MW BHEL turbineshaveearlierbeensuppliedforvariousexpansionphasesandareoperatingsuccessfully.

• Order for 23 MW STG set from M/s ParadeepPhosphates for their fertiliser plant at Paradeepagainstfiercecompetition.Presently,BHELmake2nos.16MWSTGsetsareoperatingsatisfactorilysince1986.

• Another 33MW steam turbine & generator setorder from Aditya Birla Chemical (India) Ltd.for their Palamau, Bihar caustic plant againststiff competition. BHELmake 30MW STG set isoperatingsatisfactorilysinceyear2000apartfrom12 no. x 150MW sets under various stages oferection/commissioning for Hindalco Industriesand4x20 -32MWSTGsets forGrasim(AdityaBirlagroupcompanies)

ProjectCommissioning

• BHEL'sfirsttwo-cylinderuprated150MW(Reheat)rating turbine in the industrial Segment wascommissionedforHINDALCOatMahan.

• BHELcommissioned703.3MWinCaptivePower/IndustrialSegment.

• For the first time in India, Gas Turbine was runwithRefineryFuelGasforHMEL’sGGSRrefinery.Customer’s appreciation has also been receivedforthesame.

RenewableBusiness

• Order received for 2 Solar Photo Voltaic (SPV)Powerplants forUnchahar& Talcher of 10MWeach from NTPC. This is the highest rated SPVPowerPlantorderreceivedbyBHELsofar.

• 5 MW grid connected SPV Plant for KPCL wascommissionedatMandya,Karnataka.

• SPV Plants commissioned at Andrott (320 kW)Kavaratti(760kW)&Kadmat(270kW)IslandsofLakshadweep.With thisBHELhascommissioneda totalof1900kWSPVPlantsat various Islandsof Lakshadweep. This is the largest Islandelectrification programme using Solar PhotoVoltaicmodules.

TransportationBusinessGroup

• Orders for 319 sets of Electrics for conventionalAC EMU/DEMU; 756 nos. of Traction Motors &252nos.TractionAlternatorreceivedfromIndianRailwaysagainst stiffcompetition from localandforeignsuppliers.

• Singlelargestorderfor47setsofPowerConverterwith control electronics for 6000 HP WAG-9locomotivesreceivedfromCLW,Chittaranjan.

• Securedordersfor12nos.DieselElectricshuntinglocomotive in the range of 350-1400 HP fromvariousnon-railwayscustomers.

Grid Interactive Solar Power Plant-commissioned a total of 1.9 MWp SPV plants at various islands of Lakshadweep for the Deptt. of Electricity

AC EMU being manufactured at BHEL’s Transformer Plant at Jhansi

A n n u A l R e p o R t2 0 1 2 - 1 3

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• In order to meet increasing demand of RailwayCoaches, BHEL has signed an MoU with IndianRailways for setting up a green field factory inRajasthan for manufacturing of MEMU coachesforRailways.

• Completed supplies of 15 sets of IGBT basedPropulsion system for electric loco againstRailway Board Order for 30 sets.Most of thesesetshavebeencommissionedonlocosandareincommercial service. Locomotive fitted with firstprototype set of IGBT based propulsion systemhas already covered more than 1 Lakh Km incommercialservice.

• Supplied 63 nos. 25 kV ACWAG-7 Electric loco-motivestoIndianRailwayswhichisthelargestno.oflocossuppliedinanysinglefinancialyear.

• TomakeoldDCEMUrakesofWesternandCentralRailwayssuitableforrunningonACsupply,BHELdeveloped up-rated AC EMU Transformers of1200kVAwithoutchangingtheouterdimensionsofexisting1000kVAACEMUTransformerssoasto fit them in limited space available in the oldcoaches.ThiswillhelprailwaystocontinuetorunsuburbanservicesinMumbaiwhereDCsupplyisbeingphasedout.

• Supplied thehighestno. of 237 setsofACEMUElectricstoIR.

• DeliveryofElectricsfor13rakesofKolkataMetroCoaches required for expansion of India's firstunderground Metro has been completed onschedule.Also suppliesofACEMUelectrics and

DEMUElectricstoRailwaysagainstICF/RCFordershavebeencompletedontime.

• To meet Railways growing demand for AClocomotives, manufacturing capacity at Jhansiplantisbeingfurtherenhancedfrom60locosp.a.to75locosp.a.

• BHELisfullygeareduptomanufactureandsupply6000HPWAG-9AClocomotiveswithIGBTbasedpropulsiontoIndianRailways.

IndustrialProducts-Electrical

• Secured order for 10 no. vertical synchronousmotors for Chintalapudi Lift Irrigation Schemein Andhra Pradesh, through M/s Xylem WaterSolutions India Pvt. Ltd. This will help inestablishingBHELasamotorsupplierwithpumpOEMsoperatingintheirrigationsector.

• Rate Contract (RC) was finalised with RelianceIndustriesLtd.forsupplyof160-470kWHTmotorsfor their projects at Hazira, Jamnagar and other sites.

• BHEL achieved yet another milestone bysuccessfullydeveloping

• 3600 kW10PoleVerticalmotor for PrimarySodium pumps application of 500 MWeProto Type Fast Breeder Reactor setup atKalapakkam. Integrated testing of motoron load was carried out along with Pump,Convertor and Ponymotor at pump vendorM/sKBLworksatKirloskarwadi.

• Successful development of largest 20 pole

Old DC EMU rakes upgraded to AC EMU by BHEL to enable Centre & Western Railways run suburban services in Mumbai

Signing of MoU with Indian Railways for Greenfield MEMU facility in Rajasthan

38

CACA vertical Induction Motor of 4370 kW,6.6 kV, for Sea Water pump application forNPCILBhavini(throughM/sKBL).

• The largest rating 5450 kW, 11 kV, 8 POLECACWH-ModuleMotorforIDFanapplicationof660MWPrayagrajSTPP.

• EML,KasargoddevelopedaslowcostsupplierforwindingofLTmotors.Statorcapsuleswithmushwinding sourced from them by HEP Bhopal andmotorstestedanddispatched.

IndustrialProducts-Mechanical

• ONGC reposed faith in BHEL by placing anotherorderforrefurbishment&upgradationofanotherfourrigsofONGC/Sibsagar.

• HighesteverorderbookinginayearforsupplyofWH&X-MasTreesachievedduring2012-13fromONGC,OIL,andotherdrillingcompanies.

• Successfully commissioned BHEL’s largest TurboBlowerhaving capacityof 4,18,000Nm3/hr at adischargepressureof5.75KSCAforRINL,Vizag.

• LargestcompressorsuppliedbyBHELforwetgasapplication toMRPL PFCCURefinery (2MCL1007compressor). The compressor is designed tohandle a large flow of 243733 kg/hr. BHEL hassuccessfully completed Mechanical run testandcompleteunit testof this compressoralongwith steam turbine EHNK 40/56-3 and also theperformancetestofthecompressor.

TransmissionSystem–Substation/Switchyard

• Order for 400/132 kV Switchyard at Nabinagarreceived against competitive bidding from M/sNPGCL.

• Order for 220 kV Pusauli New S/stn & Dehri (S/stnExtn)receivedagainstcompetitivebiddingfromM/sBSEB.

• For±800kV,6000MW,Multi-terminalHVDCNEAgraproject,thelargestHVDCprojectgloballyisunder construction, the design of DC Valve Hallhas been completed. Pre-fabricated building forDC Hall to house DC yard equipment indoorshavingclearspanof77mandheightof40mhasbeendesignedforthefirsttimeinIndia.

• Pole 2 of 2500 MW HVDC Ballia- Bhiwadi wascommissionedinJune,2012,allonshoresuppliesfromBHELincluding4nos.convertertransformersfromBhopalworks.Fullloadpowerflowof1250MWwasachievedinSeptember,2012.Withthistheprojectisloadedtofullcapacityof2500MW.

• BHELhasexpanded itsEPCpresence in thefieldofGISrightfrom33kVandcoveringGISratingsof66kV,132kV,220kVandupto400kVbackedbyin-houseengineering&integrationexpertise.

• 66kVGasInsulatedSwitchgear(GIS)waschargedbytheTransmissionBusinessGroupinOctober'12atParadipRefineryofM/sIndianOilCorporationLimitedasapartoftheturnkeycontract.

• 400 kV Gas Insulated Switchgear (GIS) for2x600 MW North Chennai TPS Stage-II, unit-2 commissioned by the Transmission BusinessGroup of BHEL in December'12. This is the firsttime 400 kV GIS in BHEL's EPC Thermal powerprojecthasbeencommissioned.

• The Phase-I of the National Experimentalsubstationof PGCIL at Binawas charged inMay

1200 kV Transformer at PGCIL Test Station at Bina 400 kV GIS commissioned for 2x600 MW North Chennai TPS Stg-II, Unit-2

A n n u A l R e p o R t2 0 1 2 - 1 3

39

2012 with BHEL’s 1200 kV UHVAC transformer,1200 kV CVT & Disc insulators. This project hasbeeninsuccessfuloperationsincethen.BHELwasthefirstmanufacturerinIndiatohavesuccessfullydesigned, manufactured and tested a 1200 kVtransformer.

• BHEL has successfully developed and tested thefirst400kV,315MVAPhaseShiftingTransformerwhich has been supplied to APGENCO forinstallationatKothagudemTPS.

• BHEL has set up state-of-the-art facility forThyristor Valve at EDN, Bangalore for assemblyandtestingofThyristorValveModules forHVDCandFACTSapplications.

• Capacitor shop at Bhopal has been upgradedconforming to cleanliness class 6 as per ISO-14644-1 for manufacturing capacitors for HVDCandFACTSprojects.

• AdditionalinvestmentshavebeenmadeatBhopalworks for manufacturing & testing convertertransformersfor±800kVHVDCproject.

TransmissionProducts

• Achievingyetanotherlandmark,BHELenters765kVtransformerbusiness-Securedtwosignificantorders:

• MeghaEngineering&InfrastructuresLtd.for765kVautotransformersandshuntreactorsalongwithothertransformersforWesternUPTransmissionSystemUpgradation.

• BIDCO for 765 kV generator transformers,auto transformers and shunt reactors forupcomingLalitpur3x660MWTPS.

The orders envisage design, manufacturing,testing and supply of total 53 nos., 12365MVA 765 kV transformers and reactors thatwould be manufactured at BHEL's state-of-the-arttransformerplantatBhopal.

498 MVA, 500 kV Converter Transformer for ± 500 kV, 2500 MW Balia-Bhiwadi HVDC project

BHEL's foray into765 kV range transformershas further strengthened BHEL's position inEHVsegment.

• Customer reposes faith in BHEL-severaltransformer/switchgear orders received onnegotiated basis from various customers viz.PSTCL(Punjab),NTPC(Tanda),Reliance(Dahanu),Chhattisgarh,DadraNagarHaveli,etc.

• Other significant orders received for powertransformers/switchgear/busducts:

• RRVPNL(Rajasthan)-9nos.160MVA,220kVautotransformers

• TANTRANSCO(TN)-6nos.100MVA,220kVautotransformers

• MP Transco & Discoms - 1378 nos. vacuumcircuitbreakers

• UPDiscoms-809nos.vacuumcircuitbreakers

• NTPC (Nabinagar,Mauda&Solapur) -7 setsbusductsfor7x660MWTPS

• Short circuit testing of 100 MVA, 220/66 kVsystempowertransformerwassuccessfullydonefor the first time in India. This transformer wasmanufacturedbyBHELJhansiforPSTCLandtestedatCPRI.

40

InternationalBusiness

Two nos. 135 MW Circulating Fluidised Bed Combustion (CFBC) Boilers under commissioning at New Caledonia

A n n u A l R e p o R t2 0 1 2 - 1 3

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InternationalBusiness

In International Business, the last few years havebeen afflicted with economic uncertainties andpolitical turmoil which has severely constrainedcapital investments worldwide. Especially in ourtargetmarketsnewprojectsarenotforthcomingandplannedprojectsarealsobeingputonholdoronslowexecution path. In spite of such challenging trends,BHELhasbeenabletosustainitsexportsmomentumwith a physical export order inflowof` 2004Crorefrom 20 countries in 2012-13 registering an eightfoldgrowthoverthepreviousyear.Theyearmarkedsignificantstepstowardsglobalizationwithsuccessfulforays innewmarketsandnewproductareas,apartfrom firmly establishing the company’s presence inexistingmarkets.

MajorAchievementsDuring2012-13

During the year BHEL secured following prestigiousorders:

• Major Orders from Bhutan – Acceleratingour success story in Bhutan, BHEL securedorders for Electro-mechanical package of 1020MWPunatsangchhu-IIHydroPowerProjectand Electro-mechanical package of 720 MWMangdechhu Hydro Power Project. With thisorder the total capacity contracted by BHEL inBhutan has reached 4,356MW (around 98% ofBhutan’stotalcapacity).AnotherkeyachievementwaswinningtheorderforTransformerPackageforthePunatsangchhu-IIHydroPowerProjectagainststiffinternationalcompetition.

• Entry into new markets – Consolidating itspresence in East Africa, BHEL has successfullymade itsmaiden entry intoBurundi by securingorderfor2x10MWKabuHydroProject.AlsoBHELfor thefirsttime securedanorder for supplyofOLTCfromM/sAbsoluteAfrica,SouthAfrica.

• RepeatOrders-Followingthesuccessfulexecutionof the previous orders of Wellheads, BHELreceivedrepeatordersforWellheadsfromJindalPetroleum Operating Company, Georgia andAmran Establishment LLC, Oman. M/s IER, UAEplaced an order for Rotor of Fr-6B Gas Turbinesubsequenttosuccessfuldeliveryof4nos.Frame6B Gas Turbines by BHEL. Also repeat order forBus ExtensionModulewas secured fromMetsoAutomation, USA (for the third time from thesamecustomer).Moreover,BHELsecuredarepeatorderforthesupplyof1900kWSlipRingInductionmotorfromMombasaCementLtd.,Kenya.

• Continued focus on After Sales Services led toorders for Spares & Services from Afghanistan,Bangladesh, Bhutan, Georgia, Indonesia, Iran,Jordan, Kenya, Libya, Malaysia, Malta, NewCaledonia,Nigeria,Oman,SriLanka,UAE,UnitedStates&Yemen.

ExecutionofMajorOverseasOrders

In the year 2012-13, BHEL has successfullycommissioned 309 MW of power plant capacity inoverseas markets. Major milestone of the year wasthecommissioningofpowerplantsinLibya,Tajikistan,Ethiopia,VietnamandIndonesia.

Contract signing for supply of electro-mechanical package of 720 MW Mangdechhu Hydro Power Project in Bhutan

Signing of Enterprise Framework Agreement with Shell for the supply of Gas Turbine Generator packages to select Shell locations across globe

42

• Libya–Unit-6(157MW)WesternMountainGTPPfor General Electricity Company of Libya wascommissioned during the year.With this BHEL’sinstalledcapacityinLibyahasreached1,182MW.

• Tajikistan–2x4.75MWModernisation&UpratingofVarzobPowerPlantcommissionedandprojecthandedovertoGovernmentofTajikistan.

• Ethiopia – First unit (12.5MW) of Fincha SugarFactoryefficaciouslycommissioned.

• Vietnam – First unit (100 MW) of Nam ChienHydroProjectsuccessfullycommissioned.

• Indonesia – First Unit (30 MW) of PT-MSWIndonesia CFBC Boiler project successfullysynchronized.

We are currently executing 30 nos. projects spreadover 23 countries across the world – Afghanistan,Belarus,Bhutan,DRCongo,Ethiopia,Indonesia,NewCaledonia,Oman,Rwanda,Sudan,SyriaandYementonameafew.

CustomerAppreciation

• Oman – 2 x Fr 5 GTG Mina Al Refinery –Appreciation received from Oman Oil Refineriesand Petroleum Industries Company SAOC forsuccessfulcompletionofallworksinrecordtimeinchallengingconditions.

• UAE – Certificate of appreciation awarded by Al Ghail Power LLC for successful completion of 2xFr6BGTGAlGhailPowerProject.

• Azerbaijan – Appreciation received from JSCAzereneji for the successful execution of theImishliandGalaPowerTransmissionProjectandafter-salessupport.

2x4.75 MW Modernisation & Uprating of Varzob Power Plant commissioned and project handed over to Govt. of Tajikistan

First Unit (30 MW) of PT-MSW Indonesia CFBC Boiler project successfully synchronized in Indonesia

Minister of Trade & Industry, the Czech Republic presenting the EEPC Star Performer Award for the Year 2011-12 in the 'Product

Group of Project Exports: Large Enterprise' to BHEL

A n n u A l R e p o R t2 0 1 2 - 1 3

43

CapitalInvestment

Hon’ble Union Minister for HI & PE inaugurating new Billet Charging Machine at BHEL, Tiruchirapalli

Thyristor Valve modules under Di-electric testing for ± 800 kV, 6000 MW NE-Agra HVDC Project

500/600 MW Rotor forging facility at CFFP, Haridwar New Automated Solar Photovoltaic Panel manufacturing facility at EDN, Bengaluru

44

C. CAPITALINVESTMENT

• BHELmade a capital investment of` 752Croreduring 2012-13 towards augmentation ofmanufacturingcapacityandmodernisationofthefacilities, in manufacturing units and at powerprojectsites.

• Focused attention was given on rebuilding andretrofittingofmanyexisting facilities toenhancetheir life, accuracy and productivity through anadditionalinvestmentof` 83Crore

• As part of major Capacity Augmentation formodernizationandupgradationoftheHotMillofourSeamlessSteelTubePlantatTrichy,envisagingmorethantwo-foldincreaseincapacityto86,500MTperannum,production trialsareunderway,with key facilities including the Rotary HearthFurnace, Walking Beam Furnace and StretchReducing Mill having been commissioned. Thiswillensuresecuredsupplychainforoneofthekeyinputsforboilermanufacture.Withintroductionofstate-of-the-arttechnology,yieldwillsubstantiallyimprove,enhancingcompetitiveness.

• Photovoltaic(PV)ModuleManufacturingCapacityhas been enhanced at our Electronics Division,Bengaluru with the installation of ultramodern 20MWSolarPVModulemanufacturingline.

• BHELisaugmentingitsmanufacturingandtestingfacilitiesfor±800kVHVDCTransmissionSystems;and for IGBT based propulsion systems for ACEMUs,DEMUs&6000HPACLocomotives.

• Towards preserving environment and to reduceemissionofgreenhousesgases,BHELhasinitiatedconversion of Diesel Oil operated furnaces toNaturalGasat itsCentralFoundryForgePlantatHaridwar.

• As part of its commitment towards green initiatives and contributing to sustainabledevelopment,BHELisestablishinga5MWpgrid-interactiveSPVpowerplantatitsBoilerAuxiliaryPlantatRanipet.

• BHEL in its endeavour to support, developand upgrade technology in the field of powertransmission area is establishing Centre ofExcellence for Advance Transmission System atCorporateR&D,Hyderabadandhascommissioned

RealTimeDigitalSimulator(RTDS),withcapabilityto simulate upto 1200 kV Transmission Voltagesfordevelopmentoftransmissionproducts.

D. JOINTVENTURES

I) BHEL-GEGasTurbineServicesLtd.(BGGTS)

TheJointVentureCompany,BHEL-GEGasTurbineServices Ltd. (BGGTS), has been promoted byBHEL with GE, USA for repair & servicing of GEdesignedGasTurbinesandhascompletedfifteenfullfinancialyearsofoperation.

BGGTSachievedasalesturnoverof 813.78Croreduringtheyear2012-13withaprofitaftertaxof` 81.70Crore.Ordersfor` 489.20Croreapproxwere booked by BGGTS during the year 2012-13. BGGTS successfully completed gas turbineservicing&supplyofsparestovariouscustomersin both Public and Private sectors. For the year2012-13,BGGTShasdeclaredatotaldividendof700%therebymaintainingitsconsistentrecordofimprovedperformance.

II) PowerplantPerformanceImprovementLimited(PPIL)

The Joint Venture Company, PowerplantPerformance Improvement Ltd. (PPIL), has beenpromoted by BHEL with Siemens, Germany forplantperformanceimprovementofoldfossilfuelpowerplants.

PPILisintheprocessofsettlementofoutstandingissues and collection of withheld payments forpending contracts. Since sufficient business toensure viability of the company has not beenforthcoming,thepromoterpartnershavemutuallyagreedtograduallywindupthecompany.

III) NTPC BHEL Power Projects Private Limited(NBPPL)

BHELalongwithNTPCLtd.haspromoteda jointventure company “NTPC BHEL Power ProjectsPrivate Limited” for carrying out EPC contractsforPowerPlantsandotherInfrastructureProjectsin India and abroad. The JVC has acquired landin Mannavaram, AP and is in the process ofimplementing Phase-I of the investment forcarryingoutEPCandmanufactureofBalanceofPlant equipment for power plants. NBPPL hasenteredintoatechnicalcollaborationagreementwithM/SDMW,USAformanufactureandsupply

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of Coal Handling Plants. The JVC is presentlyexecutingorders forBalanceofPlantequipmentassignedtoit.

Thepaidup capital of the JVC is presently` 50Crore,withBHELandNTPCeachhavingsubscribed` 25 Crore. Further equity contribution of` 25Crore each has beenmade inMay 2013 by thetwopromoters toenable JVC tomeet its capitalexpensesrequirement for implementingphase-I.Forthefinancialyear2012-13,theJVCachievedaturnoverof 116.25CroreandPATof 5.66Croreapprox.(unaudited).

IV) UdangudiPowerCorporationLimited(UPCL)

BHELhadpromotedajointventurecompanywithTamilnadu Electricity Board for setting up of a2x800MWSupercritical Thermal PowerPlant atUdangudi, Tuticorin, Tamil Nadu on build, ownandoperatebasis. The JVCwas incorporatedonDecember26,2008underthenameof“UdangudiPowerCorporationLtd”.ThepaidupequitycapitalofJVCwas` 65Crore,withBHELandTNEBeachhavingsubscribed` 32.5Crore.TheJVChasbeenawaitinggrantofcoallinkageandMOEFclearancebefore proceeding with finalizing main plantequipmentorderonBHEL. InMarch2012,Govt.of Tamil Nadu indicated that theywould like topursuethisprojectasastateprojectratherthanasa JVprojectand requestedBHEL toagree forterminationofJVAonmutualconsentbasis.Afterexploring all possible options, BHEL has agreedfor sale of BHEL’s equity in UPCL to TANGEDCOforatotalconsiderationof` 64Crore.Pursuantto receipt of sale consideration and transferof BHEL’s share in UPCL to TANGEDCO, BHELnomineedirectorshaveresignedfromtheBoardofUPCLwitheffectfromMarch26,2013andtheJVAstandsterminated.

V) RaichurPowerCorporationLimited(RPCL)

BHELhaspromotedajointventurecompanywithKarnataka Power Corporation Limited (KPCL) forsettingupof a 2x800MWSupercritical ThermalPowerPlantatYeramarus,Raichur,Karnatakaand1x800MWSupercritical Thermal PowerPlant atEdlapur, Raichur, Karnataka on build, own andoperatebasis.TheJointVentureAgreementwithKPCLwassignedonJanuary12,2009andtheJVCwas incorporated on April 15, 2009 under the

name of “Raichur Power Corporation Limited”.The initial authorized and paid up equity of theJVC was ` 10 Crore subscribed to equally byKPCL and BHEL. Pursuant to financial closure inNovember2011andinductionofIFCIasthethirdequity partner, a change in equity structure hasbeen agreed and final equity holding would beKPCL50%,BHEL26%andIFCI24%.Attheendof2012-13, the total paid up equity capital of JVCisapprox.` 775.9Crore,withBHELcontributing ` 331.5Crore,KPCLcontributing 344.4CroreandIFCIcontributing` 100Crore.JVChasalsotieduptherequireddebtwithM/sPFCandaconsortiumofcommercialbanks.

The JVC has received MOEF clearance for the 2x800MWYeramarusPowerProjectandtheorderforsupplyandE&Cofmainplantequipmentforthe2x800MWYermarusprojecthasbeenplacedonBHELforavalueofapprox.` 6,300Crore.TheworkofCoalHandling SystemandAshHandlingSystemforYTPShasalsobeenawardedtoBHELat a negotiated contract value of ` 966 Crore(inclusiveoftaxes).TheLOAfor1x800MWEdlapurprojectvaluing 3,100CrorehasalsobeensettledandNoticetoProceedwouldbeissuedafterMOEFclearance.

VI) DadaDhuniwaleKhandwaPowerLimited(DDKPL)

BHELhaspromotedajointventurecompanywithMadhya Pradesh Power Generating CompanyLtd. (MPPGCL) for setting up of a 2x800 MWSupercritical Thermal Power Plant at Khandwa,MadhyaPradeshonbuild,ownandoperatebasis.The JointVentureAgreementwithMPPGCLwassigned on January 28, 2010 and the JVC wasincorporated on February 25, 2010 under thenameof“DadaDhuniwaleKhandwaPowerLtd.”.TheinitialauthorizedandpaidupequityoftheJVCwas` 5CroresubscribedtoequallybyMPPGCLandBHEL.Atpresentthepaidupequitycapitalis` 45Crore,withBHELandMPPGCLeachhavingsubscribedto` 22.5Crore,toenableJVCtomeetlandacquisitionexpenses.Theacquisitionoflandisinprogresswithsection9notificationissuedforlandforapproachroad&waterpipelinecorridorandsection6notificationforlandformainplant.ApplicationforgrantofcoallinkagewasfiledwithMinistryofCoalonJanuary27th,2010andallthe

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requirementsunderToRasspecifiedbyMinistryofEnvironmentandForests(MOEF)includingEIAstudyandpublichearinghasbeencompleted.TheJVC has been awaiting grant of coal linkage andMOEFclearancebeforeproceedingwithfinalizingmain plant equipment order on BHEL. The JVChasinJan’13appliedforallotmentofcoalblocksunderthenewpolicyforcoalblockallotmenttoGovt.companiesannouncedbyGovt.of India.AchangeinequitystructurehasbeenapprovedbytheBoard,withBHELholding26%,MPPGCL10%,PSUs/PSU-FIs/PSUbank16%andbalance48%byastrategicpartner.

VII)LaturPowerCompanyLimited(LPCL)

BHELhaspromotedaJointventurecompanywithMaharashtra State Power Generation CompanyLtd. (MAHAGENCO) for setting up a 2x660MWThermal power plant or 1500 MW gas basedCombined Cycle Power Plant (CCPP) in Latur,Maharashtra. The JointVentureAgreementwithMAHAGENCOwassignedonNovember11,2010and the JVC was incorporated on April 6, 2011under thenameof “LaturPowerCompany Ltd”.ThepresentpaidupequityoftheJVCis` 5Crore,subscribedtoequallybyboththepartners.

The JVC has reviewed the viability of variousfueloptions tosetupacoalbasedorgasbasedproject.Duetononavailabilityofcoallinkageanddomesticgasalsonotbeingavailabletill2015,theJVpartnersareconsideringtheoptionofsettingupaSolarPVplant.

E. R&DANDTECHNOLOGICALACHIEVEMENTS

BHEL places strong emphasis on innovationand creative development. The research anddevelopmental efforts of the company are thusaimed not only at improving the performanceand efficiency of the existing products, but alsodeveloping new products using state-of-the-arttechnologiesandprocesses,relevanttotheneedsofthecountrytoremaincurrentbothintermsoftechnology&featuresvis-à-visglobalbenchmarks.

Accordingly, BHEL pursued two prongedstrategynamely; aggressive in-houseefforts andencouraging innovationwhich is in linewith the“Decade of Innovations (2010-2020)” declaredbyGovt.of India.Asa result,R&Dspendof thecompany has registered 4.4% growth over last

financial year (from ` 1,199 Crore to ` 1,252Crore (actual)) and associated turnover from In-house developed products and services clockingturnoverof` 9643Crore,whichisapprox19%ofthetotalturnoverofthecompany.BHEL’seffortsforencouraginginnovationhaveresultedinraisingBHEL’s IPR capital tally to 2170 as on datewithhighesteverIPRs(385nos.)filedthisyear.

Some significant developments carried outduringtheyearareasfollows:

• A cost-effective high-pressure feed waterheater for 600 MW Power Plants, meetinginternationalstandards,hasbeensuccessfullydeveloped.Ithasbeeninstalledat2x600MWNorthChennai.

• To meet stringent safety requirements of500MWFastBreederReactorbasedNuclearPower Plant of BHAVINI, a state-of-the-art unified C&I platform involving majorequipment like Steam Generator, Turbine,Auxiliary Boiler and Station C&I has beendesignedandimplemented.

• To improve the stability and reliability ofpower systems, BHEL has developed andmanufactured a 3 Phase, 315MVA, 400 kVclass,PhaseShiftingTransformerwith state-of-the-art features. It will be installed atAPGENCOKothagudem.

• In the area of renewable energy, a cost-effective 250 kW grid-connected PowerConditioningUnit(PCU)hasbeendeveloped,commissioned and synchronized with thegrid.

3-Phase, 315 MVA, 400 kV class Phase Shifting Transformer with state-of-the-art features developed and manufactured by BHEL

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• To enhance overall solar energy absorptionduring the day by PV arrays, BHEL hasdeveloped a modular solar thermal suntracker which operates on a novel liquidbalancing system. It enables generation of25%additionalenergyduringtheday.

• BHEL has developed a mathematical modelfor predicting the dynamic behavior of 182MW IntegratedGasificationCombinedCycle(IGCC)plants.Thishasbeenusedtocarryoutdynamicsimulationsforpossibledisturbancesintheplantandtodevelopcontrolsystems.

• BHELhasdevelopedanewvariant‘300MWSteamTurbine'with3.9%improvedheatratebyoptimizingtheflowpathsofHP,IPandLPturbines, while keeping the existing turbinemodulecombinationof270MW.Theturbinehas been offered for 1x300 MW AbhijeetInfra,Visakhapatnam.

• In the transportation sector, catering toRDSO'srequirementforconversionofexistingDC EMUs to 25 kV AC EMUs, BHEL hassuccessfullytypetesteda1200kVAACEMUtransformerwhichmatchesthedimensionsoftheconventionalACEMUtransformerwitha20%enhancedoutput.

• To improve the reliability of Oil rigs, BHELhasdevelopedanimproveddesignofCasingLine Spooler Unit with electrically operatedbrakingsystemtoeliminatethefailureofropeduringreevinginoroutoperation.

• In its endeavour to develop environmentfriendly technologies, BHEL has developed

Copper Indium Gallium di-Selenide (CIGS)nano-material for the absorber layer of thinfilmsolarcells.CIGShasbetterperformanceunder diffused light. 16-20% efficiency hasbeenachievedatlablevel.

• AsareliablepartnerinISRO’sspaceprogram,BHELachievedalandmarkwiththesuccessfuldeployment of its Space Grade Solar Panelsand Satellite Batteries on the GSAT-10 andRISAT satellites. BHEL has supplied 278 sq.mtrs. of Space Grade Solar Panels and 42Satellite Batteries, which are deployed onvarioussatellites,nowinorbit.

• Astate-of-the-artTestFacility forboiler feedboosterpumps forpowerplantsup to1000MW has been established at Hyderabad.It is used for testing the pump for full loadperformanceandNPSH(NetPositiveSuctionHead)testwithvacuumcontrol.Theboosterpump for 660 MW NTPC Barh-II unit wastestedatthisfacility.

• A Drop Tube Furnace facility has beenestablished at the Coal Research Centre,Tiruchy, for testing the combustioncharacteristics of Indian, imported as wellasblendedcoals. Itwillbeusedforaccuratepredictionofboilerperformanceandefficientfurnacedesign.

F. QUALITYPERFORMANCEHIGHLIGHTS

1. Continuing its tradition of achieving excellence,two Units of BHEL (Hyderabad & EDN) havebeen awarded “Commendation for SignificantAchievement” in 2012-13 under CII EXIM BankAwardSchemeforBusinessExcellenceasperthegloballyrecognizedmodelofEuropeanFoundationforQualityManagement(EFQM).

2. Customer Satisfaction Survey conducted in2012-13 for Power Sector of BHELbyM/s IMRBInternational,Gurgaon.CSSwascarriedoutforallfour PS-regions and PEM. The overall CustomerSatisfaction Index (CSI) of BHEL as per surveyreportis65outof100.

3. InternationalConventiononQualityControlCircles(ICQCC- 2012) held at Kuala Lumpur, Malaysiaduring14-17thOct’12where4units(Trichy,HEEPHaridwar,EDN&EPD)ofBHELparticipated.BHEL

Indigenously developed Solar Thermal Sun Tracker based on Liquid Balancing System

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Trichy, EDN&EPDbagged “3 STARGold” awardwhereasHEEPHaridwarbagged“2STARSilver”award.

G. HUMANRESOURCEMANAGEMENT

1) IndustrialRelations

1. TheIndustrialRelationsscenariointhevariousManufacturingUnitsandtheBusinessSector/OfficesoftheCompanyremainedharmoniousand peaceful during the year 2012-13. Themandayslostwasalmostnegligibleduringtheyear.

2. The thrust on participative culture andcommunication continued during the year.Theapex levelbipartite forum,namely "TheJointCommitteeforBHEL"mettwice.Therewere 64 meetings of the Plant Councilsand 365 meetings of the Shop Councils. Inaddition, meetings were also held with therepresentativesofExecutivesandSupervisorsofthevariousManufacturingUnits includingtheBusinessSector/Offices.

3. A Joint Appeal on behalf of “The JointCommitteeforBHEL”,wasalsoissuedapprisingall the employees about the prevailingbusiness environment, the order bookposition,thevariousfinancialparametersandtheintensecompetitionwhichtheCompanyisfacing.TheAppealurgedtheemployeesnotonlytoriseonthisoccasionbuttoovercomethesechallengeswithalltheirmight.

2) AwardswonbyBHEL,Units&employees

Continuing its tradition of winning prestigiousnational/international awards, the organizationanditsemployeeswonseveralawardsduringtheyear2012-13.Notableamongtheseincluded:

• The ‘India Pride Award for Excellence inHeavy Industries 2012-13’ was received byCMD,BHELfromDr.M.VeerapaMoily,UnionMinisterofPetroleum&NaturalGas.

• The Indian Chamber of Commerce ‘PSEExcellenceAward’ in theR&D,Technology&Innovation category was received from Mr.O.P. Rawat, Secretary, Department of PublicEnterprises,Govt.ofIndia.

• ‘National Energy Conservation Award 2012’waswonbyBHELCentralFoundryForgePlant(CFFP), Haridwar for excellence in energyconservationandmanagementin‘Foundries’sub-sector in ‘Industries’ sector.TheHon'blePresident of India, Shri Pranab Mukherjee,presented the award to CMD, BHEL, onNationalEnergyConservationDay.

• ‘AIMAManaging India Award’ for being theOutstandingPSUof theYearbytheAll IndiaManagementAssociation(AIMA).Theawardwas presented by the Hon'ble President ofIndia,ShriPranabMukherjeetoCMD,BHEL

• The ‘NDTVProfitBusinessLeadershipAward2012’ in the Engineering category from ShriMontek Singh Ahluwalia, Dy. Chairman,Planning Commission. BHEL has won thisprestigious award for the third year insuccession.

• ‘DSIJAwardfortheFastestGrowingMaharatnaPSU’.TheawardwaspresentedtoCMD,BHELbyMr. Ajit Singh,Hon'bleUnionMinister ofCivilAviation.

• BHEL was declared the Best PSU in theElectrical & Electronics category by Dun &Bradstreet.

• BHEL has won ‘Golden Peacock NationalTrainingAward2012’afteragapofmorethana decade. The Award highlights the TrainingExcellenceoftheorganization.

Winners of ‘Vishwakarma Rashtriya Puraskar 2010 & National Safety Awards 2010’ with Dir. (HR) & the then Dir. (IS&P) after

receiving the awards from the Hon'ble Union Minister of Labour

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• The 37th ELCINA-EFY Award, Instituted bythe Electronic Industries Association ofIndia (ELCINA) and Electric for You (EFY) inrecognitionofthe‘SpiritofExcellence’intheelectronicsindustry.

• ‘Enertia Award 2011’ under the categoryTechnology & Innovation for ConventionalEnergy(Thermal,Nuclear,etc.).

• Engineering Export Promotion Council(EEPC)’s Top Export Award-recognision fortwentythirdsuccessiveyear.

• 'SKOCH Digital Inclusion 2012' Gold awardTrophy in the PSU category for developingand implementing 'Drawing and DocumentManagementSystem'.

• ‘BT-Star Award 2013 for Excellence inInnovation (Tech/RnD)’ in the Maharatna/Navratna category was received by CMD,BHEL from Shri Shekhar Dutt, Hon'bleGovernorofChhattisgarh,inthepresenceofShri Bhupinder Singh Hooda, Hon'ble ChiefMinisterofHaryana.

• The ‘GoldAwardunder theNationalAwardsfore-Governance2012-13’wasconferredonBHEL for Innovative use of ICT by PSUs forCustomer’sBenefits.Theawardwaspresentedto BHEL by the Hon'ble Chief Minister ofRajasthan, Shri Ashok Gehlot, at the 16thNationalConferenceone-Governance.

• 7 employees won ‘Prime Minister’s ShramAwards’including1ShramBhushan;5ShramDevi;and1ShramShreeand3VishwakarmaRashtriya Puraskars have been shared by13 employees from BHEL’s Trichy unit,for innovative suggestions leading to costreduction, higher productivity, safety andqualityofproducts.

• 5 'National Safety Awards 2010' to BHEL'sTrichyunitandEPD,Bangaloreforoutstandingachievementsintermsofthelongestaccidentfree period and lowest accident frequencyrateattheirworks.

• 'DainikBhaskarIndiaPrideGoldAward2012'for excellence in Central and State Public

Sector Enterprises in the category of HeavyIndustries.

Thefollowingawardswereconferredinindividualcategory:

• Shri B.P. Rao, CMD, BHEL, received the 'BT-Star Best PSUManof the Year 2012'AwardfromShriOscarFernandes,inthepresenceof ShriT.K.A.Nair,AdvisortothePrimeMinisterofIndia.

• Mr.FarooqAbdullah,Hon'bleUnionMinisterofNew&RenewableEnergypresentedEnertia'PowerManoftheYearAward'forindividualcontribution to thepower sector toMr. B.P.Rao,CMD,BHEL.

• ‘NITIEDistinguishedAlumnusAward2012’toCMD,BHEL.

• Top Rankers ‘Entrepreneurial Path BreakerAward 2013’ from Mr. Ajay Shankar,Member Secretary, National ManufacturingCompetitivenessCounciltoCMD,BHEL.

• ‘CNBC TV18 Best CFO Award 2013’ wasreceived by Director (Finance) from theHon'bleUnionMinisterofState(IndependentCharge)forCorporateAffairs,Mr.SachinPilot.

• ‘BTYesBankCFOofPSU (Large)award’wasreceived by Director (Finance) fromHon’bleUnion Minister for Commerce & Industry, ShriAnandSharma.

• Director (Finance), BHEL, was conferred theIPE ‘Finance Leadership Award’ for valuablecontribution made by his practices towardscorporate governance. The awards arepresentedbyInstituteofPublicEnterprise(IPE)& endorsed by World CSR Congress, WorldCSRDay,CMOAsia&AsianConfederationofBusiness.

• ‘CFO 100 Roll of Honour 2013 in CorporateGovernance/Financial Control’ to Director(Finance),BHEL.

• HRLeadershipAwardtoDirector(HR),BHEL.

• Director (Power), BHEL, received the BT-Star Award 2013 for Excellence as Director(Projects) in the Maharatna/Navratna

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category, from Shri Shekhar Dutt, Hon’bleGovernorofChhattisgarh,inthepresenceofShri Bhupinder Singh Hooda, Hon’ble ChiefMinisterofHaryana.

• ‘BureaucracyTodayPSUDirectorof theYearAward’toDirector(Power),BHEL.

3) HumanResourceDevelopment

• Training

• During the year 2012-13, total number oftrainingmandays(TMD)peremployeeis4.95againstMoUtargetof3TMDperemployee.

• 152Multi-skilling/SkillupgradationProgrammeshavebeenconductedduring2012-13coveringapproximately3000artisans.

• CustomerTraininghasbeenaregularactivityat BHEL. During the year, 2202 customersweretrainedgiving9921mandays.

• 8390 Vocational Trainees from differentprofessional institutions were also trainedgiving386586mandays.

• 6139ActApprenticesweretrainedindifferentunitsgiving1103205mandays.

• Our esteemed customers like NTPC, PGCIL,NHPC, ONGC and IOCL appreciated us forconducting effective customer trainingprogrammesatHRDCBhopal.

• DVC appreciated the training programme atHRDCJhansias“ValuableandKnowledgefull,Italsohelpedinoperation&maintenanceatsite”.

• People Development Workshops – Basedon the findings of the BHEL EmployeeEngagement Survey and Focused GroupDiscussions measuring the rational andemotionalcommitmentsofthenewentrantsintheorganization,HRDIandCorporateHR/NIC conducted threeworkshops for TrainingofTrainers forPeopleDevelopmentatHRDI,Noida. Participants who were trained herein turnwentback to theirunits/regionsandconducted a total of 82workshops covering2110executives(E4-E7).

• KnowledgeTransferWorkshops–KnowledgeTransferWorkshops have been devised as amechanism to capture existing knowledgefromtheseniorswhohavesuperannuatedorareduetosuperannuate&todocumenttheirknowledgeforthebenefitoffutureengineersofBHEL.

• ‘BHEL: Need of the hour’ for Artisans – Toincrease the efficacy of artisans and theircommitment to work for BHEL’s growth,six workshops were conducted at Bhopal,Haridwar, Hyderabad, Trichy and Rudrapur.315artisansparticipatedintheworkshops.

• ‘Life EducationWorkshop’ for Supervisors– Inordertoincreasetheproductivity,positiveorientation and commitment at work placefor Supervisors; HRDI had conducted TwoLife Education Workshops at Haridwar. 111Supervisors of Haridwar unit attended thisprogramme.

• TrainingforBoardMembers-Inkeepingwithour policy of training from all levels ,threeof our BoardMembers were nominated forattending two days “Directors’ Conclave:Towards Value Adding Board” organized byInternational Management Institute(IMI),NewDelhionSept.28-29,2012.

• In collaborationwith NTPC, a topmanage-ment programme - “Strategic ManagementInitiativeforLeadershipEffectiveness(SMILE)TowardsGlobalStrategicLeadership”washeldfor11daysatGreaterNoida,Berlin,MilanandParisbyInternationalManagementInstitute,NewDelhi.ProgrammewasattendedbynineEDs,oneGM(I) and twoSr.GMs+oneDHIrepresentative.

• Mentoring Workshop - During the year2012-13, 23 workshops were conducted atVaranasi,Haridwar,Bhopal,Trichy,Bangalore,Delhi,Hyderabad,Jhansi,RanipetandPowerSector(EasternRegion)totrain742mentorsandmentees.

• Competency Development - As a part of‘Competency Development’ initiatives, thethird phase of Behavioural Competency

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assessment was conducted for Senior levelexecutives with the help of a Consultantusing the Development Centre approach.352executiveswerecoveredduringtheyeartherebycompletingtheassessmentsacrossallunits.Thestrengthsandareasofimprovementin relation to the BHEL’s CompetencyFrameworkweresharedwitheachparticipantandaDevelopmentPlan suggested for eachduringthefeedbacksession.

4) Manpowerstrength

The manpower strength of the Company as on31.03.2013was48,399.

5) StatusonPresidentialDirectives

Directives on reservation policy for reservedcategorypersons

Presidential Directives on reservation policyissuedbyCentralGovt.fromtimetotimepertainstoprovisionofcertainpercentagesofreservationin direct recruitment as well as promotion inspecifiedpostsandforspecifiedreservedcategoryof candidates, i.e SCs, STs, OBCs and PhysicallyChallenged. Besides, the Directives also containprovisionofcertainconcessionsandrelaxationsindirect recruitments, promotions and reservationforhousing for specifiedcategoryofemployees.The Presidential Directives on the subject fromtimetotimearebeingstrictlycompliedwithandreservation percentages are ensured throughmaintenance of Post Based Roster system asprescribed by Govt. However, there is no directimpactoftheseguidelinesonthefinancialpositionofthecompany.

I. RepresentationofSC/STemployees:

The overall representation of SC/ST/OBCemployees in total manpower was 19.81%,5.76% and 25.02% for SCs, STs and OBCrespectively as on 31/12/2012. However,thepercentages indirect recruitmentduringthe year are 19.06% for SCs, 5.83% for STsand 33.66% forOBCs. This does not includeoffers issued, but those who joined after01/01/2013till31/03/2013,whichtakescareof the requiredpercentageof reservationason31/03/2013.

The Annual Statement in the prescribedformat showing the representation of SCs,STsandOBCsason31/12/2012andnumberofappointmentsmadeduringtheprecedingcalendaryear,asfurnishedtotheGovernment,isgivenatAnnexure-A.

II. ManpowerstrengthofPhysicallyChallengedemployeesason31.12.2012

As on 31/12/2012, we have a total of 930PhysicallyChallengedemployeesinBHEL.Thegroupwisemanpower strengthof PhysicallyChallengedemployeesintheCompanyason31/12/2012isgivenatAnnexure-B.

H. CORPORATESOCIALRESPONSIBILITYHIGHLIGHTS

It has been BHEL’s endeavour always to act as a responsible corporate citizen committed toworkingforwelfareofthesocietythroughinclusivegrowth aimed at capability building, empower-ment of communities, environment protection,developmentofbackwardregionsandupliftmentofthemarginalizedandunder-privilegedsectionsofthesociety. In linewiththiscommitment,thecompanysupportsvarioussocialinitiativesacrossthecountrybyundertakingprojectsindiversifiedareas like Education, Community Development,Health, Environment Enrichment, VocationalTraining, Skill Development, Disaster/CalamityManagement and Infrastructure Development.Duringtheyear2012-13, theCompanyachieveda fundoutflowof` 63Croreon its variousCSRinitiativesandactivities.

Education

The Company is promoting various ScholarshipProgrammesforstudentsfrombelow-the-poverty-line(BPL)/weakersectionsofthesocietytoenablethem pursue higher education. Under theseprogrammes,financialassistanceisalsoprovidedto children of widows in adopted schools andvillagesofBHELunits.Thecompanyissupportingneed-based construction of hostels, classrooms,toiletsetc.inseveraleducationalinstitutesofthebackwardregions/districtsofthecountry.

BHEL supported a project titled “Katha ReadingLeague in 10 MCD schools” of Delhi which has

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been implemented by an NGO named “Katha”.The project has successfully achieved the objectiveofrehabilitatingslumchildren,includingschool drop-outs, developing in them aninclinationtowardsreading/learningthroughthemethodofstory-telling.

Another project titled “Lifting every voice ofchildren” has been undertaken by the companytoprovidequalityeducationtochildrenbelongingto under-privileged/weaker economic sectionsof the society. The project targeted socially& economically deprived children living in re-settlement colonies of Delhi. Under the project,300childrenhavebeencoveredtopromotequalityeducationthrough10integratedlearningcentreswheretheywerealsoprovidedwithmid-daymealsforbetternutrition/health.Tomaketheclassroomenvironmentuser-friendly&supportive, learningmateriallikecopy,pencils,slate,eraseretc.aswellastoysandotheritemsfordecorationofBalwadiwerealsoprovidedtothesechildren.Apartfromtheabove,severalactivitieslikegameshavealsobeen conducted for motor development of thechildren.

Carryingforwarditsendeavourforinclusivegrowthof the society, BHEL joined hands with an NGOnamed‘UdayanCare’tosupporthighereducationofgirlchildrencomingfrombelow-the-povertyline(BPL)families.ThisCSRproject,alignedtoBHEL’sHaridwarunit,isyetanotherstepbytheCompanytowards empowering girl children coming fromextremely poor family background, so that theyareabletojointhemainstreamofdevelopment.Under this programme titled ‘Udayan Shalini’,100brilliantgirl children,whohavepassedclassXth,shallbefinanciallysupportedtopursuetheireducation up to Post-graduation level alongsidedeveloping/enhancing their personality andemployability.

CommunityDevelopment

Tosupplementourhealthandhygieneprograms,BHELhasinitiatedaprogramcalled“AnhadGram”in25villagesofthebackwarddistrictofMungerin Bihar. Through the program, following fourobjectiveswillbeachieved-i)Dairydevelopment,

ii)Biomassfuel,iii)WomenHealth&Hygieneandiv) Food Processing & Preservation Unit, with aviewtoholisticallyimprovethelivingconditionsofpeopleinthesevillages.Theseprojectsarenamedas:Swadhaar(Milkchillingunits),SuIndhan(Bio-mass fuel), SuKanya (Low cost sanitary napkinsunit)andSuAahar(FoodProcessing&PreservationUnit).

1. Swadhaar: The program involves setting upof a milk chilling centre for the profitablemanagement of animal husbandry in thevillage. The cooperatives have been formedfrom the rural population of the village forprofitable and commercial usage of milk.Onegroupof farmershasalsobeen formedfor organic certification of their farmlandand farm produce. Under this programme,the farmers have been trained for propermanagement of their livestock to ensurebetter quality and quantity of milk. Theprogramhas been envisaged to bring aboutsustainabledevelopmentof the region in itssocial,economicandenvironmentalarena.

2. SuIndhan:Asthewomenofthevillageshavetospendalargepartofthedayincollectionoffirewoodandalsohavetobearthedrudgeryandsmokewhilecookingbytheirtraditionalfuelandmethods,thisprogramforbriquette-making from the agricultural bio-wasteshas been undertaken. Under the program,briquetteshavebeenproducedwithaburningefficiency of about 55 minutes, resulting inlesser pollution and better fuel efficiencywhilecooking.

3. SuKanya:Underthisprogram,BHELissettingup a production unit for low cost sanitarynapkins in the villages. The unit will be runand managed by the women SHGs of thevillage.Thisprogramhasbeenenvisagedfortheempowermentofwomen.Withaviewtomakethewomenofthevillageself-reliantandactasprotagonistsintheregionforprovidinga lowcost sanitarynapkinalternative to thewomen/girls of the region for their betterhealth&hygiene.

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4. SuAahar: Under the program, a centre forfood processing to provide value additionto the crops grown and with consequentincrease in income of the farmers has beenset up in the villages. Promotion of Organicfarmingintheselectedbeneficiaryvillageshasalsobeendonesoastopromotesustainabledevelopment of agriculture in the region.It is through the practice of organic farmingthatinputcostofagriculturewillgetreducedandthefarmerswillgetagoodpricefortheirproducethatwillincludeasignificantvarietyofcropsandfruits.Around100farmershavingat least 40 hectares of agricultural landwillworkinthisprojectfororganiccertificationoftheirland.

HealthManagement

Committed to providing quality health careservices for theneedy anddeprivedpeople andinparticular,fortheagedpeoplelivinginremote/backward regions, BHEL joined hands withHelp Age India, a renowned NGO, by providingthemwith 04MobileMedicalUnits (MMUs) foroperationinthevicinityofremoteprojectsitesofitsPowerSectorRegions-PSNR,PSSR,PSERandPSWR.

TheMMUsarefullyequippedwithbasicdiagnosticequipments such as Stethoscope, BP Apparatus,Glucometer for measuring blood-sugar levels,weighing machine etc. including medicines forcommonailmentssuchasHypertension,Diabetes,Arthritis, etc. The Help Age team consisting ofSocial Protection Officer, Medical Consultant,Physiotherapist and Pharmacist along withspecialistdriverswilloperatetheMMUsatNimooBazgoh in Leh, Angul (Odisha), Durgapur (WestBengal) and Nagpur (Maharashtra), to providefreemedicinesandhealthcaretothepoorpeopleresidingintheseareaswhootherwiseareunabletoaffordmedicaltreatmentontheirown.

BHELhasextendedsupporttoTriumphFoundation,acharitabletrustundertheRotaryClubofThaneHills for settingupaDayCareCentreandBloodBank for patients afflicted with Thalassemia, adiseasecausedbyweakeninganddestructionof

RedBloodCellsresultinginbonedeformitiesandcardio-vascularillnesses.

BHELhasfundedthestate-of-the-artequipmentsforthisBloodBankwithmodernfacilitiessuchas,provisionofNucleicAcidtestedbloodandbloodcomponents at a very nominal cost,MobileVanfacility for conducting voluntary blood donationcamps, facility to store 1000 units of blood, barcoding of all the samples and blood units andcomponentstoensuredonorandpatientidentity.

DisasterManagement

As an expression of its solidarity and supportto thousands of people devastated by therecent floods in the Ganges & its tributaries inUttarakhandregion,BHELswiftlygotintotheacttoprovide reliefandsuccour to thembywayoffood,water,medicinesaswellasmobilemedicareservices(MMU).

Reaching out to the victims of flood-ravagedUttarakhand region, BHEL made a humblecontribution of ` 2 Crore under the company’sCSR initiativestotheChiefMinister’sRelief fundof Uttarakhand to alleviate the suffering of thedistraughtpeople.

In addition to the amount given to CM’s Relieffund, BHEL employees also came forward toexpresstheirsolidarityandsupportforthepeopledevastated by nature’s havoc in Uttarakhand bycontributing their one day’s salary amounting ` 6.38CroretoPM’sRelieffund.Thisnoblegestureof BHEL employees yet again symbolises theinherentstrengthoftheCompanyinintegratingitsorganisationalvalueswiththedeterminationandpassionofitsemployeestoreachouttothemostneedyanddowntroddensectionsofthesociety.

Earlier,BHELhadalsocompassionatelyrespondedto the beck and call of the victims devastatedby the earthquake in Sikkim by undertakingrefurbishmentoffourgovernmentschoolswhichweredamagedbytheearthquake.

EnvironmentProtection

Fullyalivetowardsitsresponsibilityforprotectionof the environment, BHEL had undertaken aprojectthatentailedafforestationofabarrenland

54

atRamadurgainKoppaldistrictofKarnataka.Theproject involvesplantingof fruit-bearing trees inapatchofcompletelybarrenlandandpreservingthese trees for birds and animals, thereby alsopromotingprotectionofspecies

VocationalTraining

With a view to provide self-employmentopportunities towomen and to enable them toenhance their social and economic status, twoprogrammes viz. “Cutting and tailoring” and“beauty culture” for women of economicallyweaker sections of Simrawari (Khailar) &GopalpuravillagesofJhansiwereconducted.

UDAANProject

The Govt. of India has evolved a scheme called‘Special Industry Initiative’ (SII) to train theeducated youth of Jammu & Kashmir (J&K),whohavethepotentialtocontributetonationalgrowth/development, so as to enhance theiremployability. The initiative titled ‘Udaan’envisages training of 40,000 youths holdingprofessional graduate/post-graduate degrees.BHELhasjoinedthisinitiativetoprovidetrainingto500J&Kyouthsoveraperiodoffiveyears.

The training programme for the first batch of100 youths by BHEL was formally launched on14.02.2013atafunctionheldinSCOPEcomplex,NewDelhiwhichwaspresidedoverbyShriM.F.Farooqui, Secretary (HI), Ministry of HI&PE. Shri B.P. Rao, CMD (BHEL), Shri Ambuj Sharma,Joint Secretary (HI), our Directors – S/Shri AtulSaraya, Director (Power), O.P. Bhutani, Director(E,R&D),M.K. Dube, Director (IS&P), P.K. Bajpai,Director (Finance), R. Krishnan, Director (HR);andahostofotherdignitariesincludingShriR.K.Srivastava, Jt. Secretary (MHA– Kashmir Affairs)andShriDilipChenoy,CEO&MDofNationalSkillDevelopment Corporation (NSDC) were presentontheoccasion.

CSRTraining&Development

Believing firmly in the need for training andsensitizingemployeesandstafftowardsCSR,BHELhadtrained45officialsengaged inCSRactivitiesinvariousunits/regions/divisionsoftheCompany

for better understanding and implementation ofCSRguidelinesissuedbytheDepartmentofPublicEnterprises(DPE).

I. RIGHTTOINFORMATIONACT,2005

BHELisafront-runnerinimplementingtheRighttoInformation(RTI)Act,2005andhasembracedtheActintrueletterandspirit.

ACentralPublicInformationOfficer(CPIO)andaCentralAssistantPublicOfficer(CAPIO)aidedbyaSeniorExecutive(Law)atthecompany leveland15CPIOsateachofthemajoradministrativeunitsalongwith1CAPIOatBhopalUnitarefunctioningaspartoftheRighttoInformationGroup.

To assist and facilitate the citizen in obtaininginformation,detailedguidelineshavebeenplacedonBHEL’swebsite,spellingouttheprocedureforsecuring access to information and filing of firstappealsundertheAct.

Instructions have been issued to administrativeunits to ensure compliance to the mandatoryrequirementsoftheAct.

ProactivedisclosureshavebeenmadeonBHEL’swebsite in linewith Section4 (1) (b)of theAct,disseminatingvariouscategoriesofinformationsothatcitizenshaveminimumneedtoresorttotheActforthepurposeofobtaininginformation.

BHELisanactivememberofSteeringCommitteeonRTIconstitutedbyStandingConferenceofPublicEnterprise(SCOPE).CMD,BHELshowcasedBHEL’sjourneyinadoptingRTIasatooloftransparencyin improvingefficiency in systemsandprocessesin the special issue of ‘Kaleidoscope’ a SCOPEpublication.

The CPIOs and the other stakeholders involvedare sensitised regularly about their obligationsunder the Act through various trainings andworkshops. BHEL participated in Symposiumon “Right to Information Act, 2005 for CentralPublic Sector Enterprises”heldon29th&30th ofNovember2012atMumbai.AnnualworkshoponRightto InformationAct,2005forthebenefitofnew & existing CPIOs/CAPIOs of BHEL was held

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on5.10.2012whereinalongwithotherspeakersMs. Sushma Singh, Honourable InformationCommissioner from the Central InformationCommissionaddressedtheparticipants.

BHEL received 1425 RTI applications and 287appeals during the year 2012-2013 which weredealtwithaspertheprovisionsoftheAct.

J. INTERNALCONTROLSYSTEM

• The company has Internal Audit Cells locatedat major manufacturing units, regional officesand at Corporate office of the company whichcarryoutauditsasperAnnualAuditProgrammeapproved by Board Level Audit Committee. TheInternal Audit department checks the adequacyand effectiveness of internal control systemthrough regular audits, system reviews andmonitors compliance of various policies andprocedures. The Company has in-house InternalAudit Department commensurate with its sizeof operations. Functioning of Internal Audit andadequacyofinternalcontrolsystemisreviewedbyBoardLevelAuditCommitteewhichissupportedbyUnitLevelAuditCommittees.

• Thecompanyhaswellplacedproperandadequatesystems of internal control and documentedprocedures covering all financial and operatingfunctions. Adequate internal control measuresare in the form of various codes, manuals andprocedures issued by themanagement coveringall critical and important activities viz. Purchase,Material, Stores,Works, Finance, and Personneletc. These codes, manuals and procedures areupdatedfromtimetotimeandaresubjecttostrictcompliancewhichismonitoredbyInternalAudit.TheCompanycontinues itsefforts toalignall itsprocessesandcontrolswithglobalbestpractices.

K. MERGERS&ACQUISITIONS

BHEL, in its strategic endeavor to diversify themarketandproductportfolio,isactivelypursuingacquisition opportunities in Europe & USA inthe areas of core technologies in energy sectorincluding renewables and other potential areaslike transportation& transmission to achieve itsobjectives like access to technology, access to

global markets, securing global supply sources,diversifying into related & new business areasetc.tofacilitateinachievingtoplineandbottomlinegrowthtargetsasenvisagedinStrategicPlan2017.

Inthispursuit,BHELisconsistentlyevaluatingitstechnologyprofile,productmixandexploringnewpotentialmarketsforsuitabletargetopportunitiesin close co-ordinationwith its empanelledM&AAdvisors.

To realize the full benefits to BHEL from BharatHeavy Plate & Vessels (BHPV), a wholly ownedsubsidiary, a proposal for merger of BHPV withBHEL under the provisions of Sick IndustrialCompanies(SpecialProvisions)Act,1985(“SICA”)was approved by BHEL Board onMay 23, 2012.Consequently, with the approval of mergerproposalbyUnionCabinetonFebruary21,2013,a Modified Draft Rehabilitation Scheme (MDRS)undertheprovisionsofSICAhasbeenfiledwithHon’bleBIFR.

TheExtraordinaryGeneralMeetingsofBHPVandBHEL shareholders were held on June 20, 2013andJune27,2013respectivelywhereinproposalformerger of BHPVwith BHELwas passed by aspecialresolution.

It is envisaged that with the merger of BHPVwith BHEL, the consolidated entity shall providestrategicandcompetitiveadvantagebyintegratingandrationalizingcapacitiesfortheproductionofindustrialboilersandprocessplantequipment.

L. OPPORTUNITIESANDTHREATS

World

Theglobaleconomyfacesanumberofsignificantand interrelated challenges hampering recoveryfrom a half a decade long economic crisis. Theglobaleconomyisstillunderthegripofcrisiswitheuro-zone recession continued in the first threemonthsof2013despite some signsof revival inGermany coupled with increased monetary andfiscalcutsinUS.

Across the advancedeconomies, the IMF report2013predictsshrinkageofgrowthby0.2percentin2013againstearlier forecastof3percentdue

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to fall inUSgrowth from2.2percent in2012 to1.6 percent in 2013 on the back of continuedausterity, unabated recessions in eurozoneand some medium-term risks emerging from“unconventional monetary measures” in otherdeveloped economies. In Asia (and particularlytheASEANeconomies),wheredomesticdemandgrowth has been fairly strong with scope forstimulusinselectedareas,theoutlookduringtheyear2013-14appearspositive. EnduringworriesabouttheEurozonedebtcrisiswill tendtofavorthedollarovertheeuroandotherriskycurrencies.Theoveralloutlookindicatesabalancedriskwithprospects of slow recovery in global economyduringthecurrent&nextfiscal.

Globally energy scenario has witnessed majorshiftsandrealignmentswithShaleGasdiscoveriesproving to be a game-changer. Fukushimadisaster has put the nuclear program on theback burner while major technological andcost breakthroughs have accelerated prospectsof renewables. Growing population, stringentenvironmental regulationsandnewtechnologiesare transforming the energy landscape makinginroadsforalternativeenergyintheglobalenergymix for long term sustainability of economicgrowth. With the increasing need to developalternative energy, notable steps have beentakenbyinternationalpoliticalfraternityinpolicymaking with important agreements on climatechange, reformof inefficient fossil-fuel subsidiesanddevelopmentanddeploymentoflow-carbontechnologies having potential to transform theglobal energy systems. As a part of alternativesources of energy, renewables are growing at amuch faster pace than fossil fuel with share ofelectricity generation from solar surpassing thegenerationfromwindenergysources.

In the global context, growth in demand forenergy isexpectedtobearoundonepercentonanannualaverageduring theperiod2011-2035.The fastest growingmajor source of energywillbenaturalgaswhilecoalwouldremaindominantfuel till 2025 before paving the way for lesscarbonintensiveenergiesledbyOECDandChina.Globalinvestmentinenergysupplyinfrastructureis expected to be around $38 Trillion over

2011-2035.By2035,Chinawouldaccountfor22%ofworlddemand,upfrom17%intheyear2012followedbyIndiawith18%shareintherise.

On the face of the challenges of availability,accessibility,andaccountability in thecontextofenergy,policyandtechnologyinnovationsaretheimperativesforharnessingnaturalresourcesmoreefficientlyformaintainingasustainableeconomicgrowth.

India

Overall economyof Indiahas takenahit due tothe cascading effect of uncertainty surroundingglobal economy coupled with low domesticconsumption demand spurred by inflation andpoormanufacturing&capitalgoodsperformancemirroring weak investment sentiment. The GDPgrowth number for the year 2012-13 has been5% against 5.3-5.5% predicted earlier by mostfinancialinstitutions.ThecountryhastostruggleevenhardertoachieveaGDPgrowthnumberofaround6%inFY14duetochallengingdomestic&external environments and lower-than-expectedexpansionduringthefiscal2012-13.

Sectoral indicators of IIP during the year 2012-13were alsodisappointing as Electricity&Manufacturing posted a subdued growth whileMining contracted. Indian Rupee breached alltimelowof56-levelagainstDollarduetonumberof macro-economic factors like large currentaccount deficit, high fiscal deficit and delay ineasing of monetary policy. Industrial growth, asperIIPdatareleasedbyCSO,registeredagrowthof 2.5% duringMarch’2013 after bottoming outin February’2013 at 0.6%. The Capital Goodssectorhasregisteredsubduedperformancewithintermittentcontractionsallthroughtheyear2012-13pummeledbybleakinvestmentclimateduetohigh interest rate and uncertainty in finalizationofprojects.CMIEestimateforaverageIIPgrowthovertheyear2013-14isaround3.5%,apositivesignal for increasing industrial growth prospectdrivenmainlybyenhancedfocusoninfrastructuredevelopment. Intervention of monetary policyregulator is a necessary requirement for

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sustainable growth in industrial production. Theresilience of Indian economy would continueto get tested on the anvil of challenges thrownupbya strugglingworldeconomyanddomesticpressuresofinflation,currentaccountdeficit,lackof investment sentiment, subdued capital inflowandconsumptiondemand.

Power Sector

TheIndianPowerSectorisoneofthelargestandmost important industries in India as it fulfillsthe energy requirements of all industries acrossvarious sectors. The sector has been growingquiteremarkablyoverthelasttwoplanperiods.Incurrentplanperiod (12thPlan),capacityadditionof20,623MWwasachievedtillMarch’13againsta capacity addition target of 17,601 MW. Totalinstalled capacity in India reached2,23,344MWas on March 31, 2013. Still, country’s powersector is characterized, with some pockets asnotable exceptions, by a sharp demand-supplyimbalance, frequentpowercutsetc.Respondingto burgeoning demand of electricity, 12th Planenvisages an investment of around ` 16 LakhCrore in Power Infrastructure. During 12th and13th Plan periods, Government of India intendstoaddaround88.5GWand100GWrespectivelyalong with the matching capacity additions inT&Dsegments. Inordertobuildanefficientandrapidlygrowingelectricitysectorwithlarge-scaleprivateandforeigninvestmentswithstate-of-the-art technology, Government of India has shownits strong commitments by constituting CabinetCommittee on Investments to clear projectsexpeditiously.Thereforeopportunitiesforgrowthexist for all stakeholders. Foreign suppliers,especially from China and other developednations havemade substantial inroads in PowerGeneration and transmission equipment space.Off late, Japan is also on the lookout to enterinto Indian Power Sector taking advantage ofdepreciatingYen.

In spite of various policy initiatives to diversifythe fuelmix, it is becoming increasingly evidentthat coal will continue to occupy centre-stageof India's energy scenario due to the limited

reserve potentiality of petroleum& natural gas, eco-conservationrestrictiononhydelprojectandgeo-politicalperceptionofnuclearpower.Basedonestimates,theconsumptionofcoalisprojectedto rise by nearly 40 percent over the next fiveyearsandalmosttodoubleby2020.Introductionofenergyefficient, climate-friendlyand less fuelconsuming technologies like thermal sets withSupercritical parameters, UHV Transmissionsystems, FACTS, Smart Grid etc, augur well forrespondingtothechallengesassociatedwiththesector.InitiativesareunderwayindevelopmentofIGCCandAdvancedUltraSupercriticaltechnologyseekingtoreducecarbonfootprintinGenerationofPower.Renewablepowerislikelytocontributesignificantly towards incremental capacityaddition with cumulative target of 20 GW fromSolarEnergyand54GWfromWind,SmallHydroPlants(SHP)&Biomassbytheyear2022.

The survival of the domestic electrical andpower equipment sector is closely linked totimely finalization of infrastructure projectsand addressing the issues of non-level playingfield vis-à-vis imports. India’s investment cycleis inextricably linked to thepower cycle, as30%of country’s capital formation is determined bythe power sector. The key problems hinderingthe growth of the power sector are land, fuel,environment&forestclearancesandinvestmentsbesides security issues. Other challenges likeskill deficit, constrained availability of criticalrawmaterials and infrastructure constraints arecriticaltogiveaboosttodomesticproductionofPower & Heavy Electrical equipment. Capacityimbalancesparticularly inBalanceofPlantareashave emerged as one of themain impedimentsfor realizing the capacity addition targets of thesector. The Cabinet decision to impose duty onimport of power equipment has addressed thedisadvantagesofaround5%only,whileagapofabout9%stillremains.

A welcome step in promoting growth has beenthe clearance accorded by Cabinet Committeeon Investments, a high level panel constitutedby Union Cabinet, to 13 infrastructure projectsinvolvinginvestmentsworth` 33,000Crore.The

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financialre-structuringofStateDiscomsinitiatedbyUnionGovernment isanother importantsteptoalleviatethewoesofdebtstarveddistributioncompanies owned by State Governments.Another significant step is the decision of CERCaddressing the unprecedented increase in theprice of imported coal through compensationpackages to the power project developers oncasetocasebasis.Inanutshellactionslikepolicyinterventions, debt restructuring initiative, tariffhikestakenbytheGovernmentareindicationsofrecoveryafterhavinggonethroughatoughtimeoverthelastcoupleofyears.

Industry Sector

Depressing growth of world economy and itscontagion effect has taken sheen out of IndianIndustry leading to a semblance of stagnationin industrial production. The industrial sectorexhibited signs of slowdown during 2012-13mainly on account of sharp deceleration incapital and intermediate goods, mining andmanufacturing. Significantly Transmission andDistributionmarketshrankby9-10%,firsttimeinthelastdecade.Araftofissuesplaguingthegrowthof all sectors of Industry be it Transportation,Electrical Equipment, Defence Products includelow R&D Investment, Commoditization of theproducts, lack of operational efficiency coupledwith incursion of Low Cost Substitute fromForeignSuppliers.Thisopensupopportunitiestoenhance cost competitiveness, increase supplychain agility, explore technology tie-up and lookoutward for sustainable growth. As substantialmanufacturing capacity in the industry beingunderutilisedduetodelayedconversionoforderstriggered by subdued consumption demand,capital investments in expansion of facilities inindustriesarenottakingplace.Thisfurtherleadstoreductioninemployment,lessconsumptionofraw materials & commodities and intermediarygoodsaswellassubduedgrowthofServiceSector.

Increased capex in Metro, Rolling Stock andDedicatedFreightCorridorislikelytodrivestrongdemand. Another demand driver is Ultra Highvoltage segment where 12th Plan has accordedmore thrust and given that there are very few

players,opportunityisdefinitelygoingtoimproveformanufacturersofHeavyElectricalequipment.With recent initiatives of Government to boostinfrastructureprojects,thereisasenseofrecoveryinpublicspendinginsegmentslikeHydrocarbon,Energy, Roads, Railways etc, albeit slow, duringmedium to long term. With renewed focus on non-conventional energy, offerings in renewablewould gainmomentum.Acute drought situationcoupled with regulatory interventions hascompelledmunicipalauthoritiestomovetowaterrecycling and water treatment driving demandgrowth.

M. POSITIONINGFORTHEFUTURE

• Power sector will continue to remain majorcontributor in our top line with transportationand transmission emerging as next big businessverticals. Strategies are in place to strengthenour presence in Nuclear, Renewable and Watersegments.

• CompanyhasadopteditsStrategicPlan2012-17.Theplanattemptstosteerthecompanytowardsbecoming a global engineering enterprise. Keydriversofoursuccessare-expandingourofferingsinPowerSectorbybuildingEPCcapability, focuson industry businesses, expansion of spares &servicesandadoptionofcollaborativeapproach.

• The company is continuously sharpening itsfocus on ‘6-Point’ priority areas for action viz.Capability Enhancement, Accelerated ProjectExecution, Product Cost Competitiveness &Quality,Diversification,Engineering&TechnologyandPeopleDevelopmentalignedwithitsStrategicPlaninitiativestosustainitsleadershippositioninitsareasofoperations.

• Efforts are being made to make supply chainagileandaccelerateprojectexecution,sustainedfocus on Vendor Base Expansion, Scaling upprocurement through technology initiatives,AdvancedManufacturingAction,GlobalSourcingetc.

• Developing lower rating sets with supercriticalparametersprovidingalternatives to theUtilitiestotakeadvantageofthiseco-friendlytechnologyeveninlowerratingsets.

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• Inordertomeetburgeoiningdemandforenergy,IEP has identified Nuclear Energy based powergenerationasaviableoption.Increasedscopebyoffering products beyond conventional island inNuclearbusinessisunderway.

• BHEL’s collaborative initiatives to addressthe growing demand potential in RailwayTransportation including Metro & SuburbanRailwaysincludeinitiativewithIndianRailwaysforsettingupagreenfieldMainlineElectricalMultipleUnit(MEMU)CoachfactoryinRajasthan.

• Considering theNationalActionPlanonClimateChange targeting 15% of electricity generationfromrenewablesby2020,BHELislookingtowardsexpanding its capacity to manufacture photovoltaicmodules&cells.

• AsapartofstructuredrivenstrategicinitiativestoexpandofferingsinRenovationandModernisationofPowerPlants,R&Msystemsgroup(RMSG)hasbeenconstituted.

• Inabidtoaddresstheaspirationsofthecompanyto become a preeminent supplier of IndustrialBoiler, Nuclear Steam Generator & supplier ofequipmentforprocessIndustries,mergerofBHPV,asa100%subsidiaryofBHEL, isunderway. Inabid tomake headway in new product areas likeAlternatorsforTractionApplicationsetc.,facilitiesofBHEL-EML,aJointventureofBHELandKeralaGovt.,arebeingleveraged.

• ‘Engineering and Technology’ is our strength. Toupholdour reputation forexcellence inourcorecapability, we will continue to upgrade existingproductstocontemporarylevelsanddevelopnewproducts through continuous in-house efforts aswellasthroughacquisitionofnewtechnologies.

N. RISKSANDCONCERNS

The recovery from global economic recession isstillshroudedwithuncertaintyasthereisnoletupinthesovereigndebtcrisisineurozoneresultingin general loss of confidence. The environmentin euro area further deteriorated due to theeffectsofbankdeleveragingontherealeconomy.BecauseoftheproblemsinEuropecompounded by Fiscal Cliff in US (in terms tax increase &

spending cuts), the business activities remaineddisappointingsince2011.TheWorldGDPgrowthis projected to contract by 0.2% in Fiscal 2013againstearlierforecastofaround3%(IMFreportApril2013),despitethecorrectivemeasurestakenbyEuropeanbanks,easingoffiscaltightening inUS and continued fiscal stimulus maintained byGovernment of Japan to boost demand. Theslowdownintheemergingmarketanddevelopingeconomies continues since 2012 due to sharpdeceleration in demand from key advancedeconomies coupled with domestic policytightening, slowpaceof resolutionof regulatoryissues,andsubdued investmentsentiments. Inanutshell,Macroeconomic scenario is entrenchedin the risks of Eurozone crisis,US sequestration,slowingdemandinemergingmarketsandloweringappetiteforcapitalinvestmentworldwideleadingtocontinuationofstagnatedgrowth intheshorttomediumterm.

The Indian Power Sector has over the yearscaught attention of the world because of highpower capacity additions program planned inthe country. This has resulted in a number ofreputed internationalplayers/suppliersofpowerequipmentproactivelymakingforayintoIndiaastargetmarket. Suppliers from the countries likeChinahavealreadymadesubstantial foothold inPower Equipment supplies taking advantage ofreduced import duty and funding through ECBroute besides the concessions provided by theirGovernmenttoboostexports.12thPlancoalandgas based power capacity addition plans havebeenscaleddownduetovagariesassociatedwithfuel linkages. Apart from fuel unavailability, theother constraints for the project developmentsareclearance issuesandhighcostof investmentleading to under-utilisation of already rampedup manufacturing capacities rendering a verychallengingsituationforBHEL’sgrowthprospects.Thesituationisfurtheraggravatedbypoorlogisticsassociatedwithtransportationaffectingdelivery.

Acombinationofglobalcompetitionandlacklusterdemand in international market coupled withsubdued consumption demand in the domesticmarketaregoingtoweighheavilyonthedomestic

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ForandonbehalfoftheBoardofDirectorsofBHARATHEAVYELECTRICALSLTD.

Place:NewDelhiDated:August3,2013

(B.Prasada Rao)Chairman&ManagingDirector

industry escalating the competitive intensity.Unforeseenriseinrawmaterialprices,especiallysteel and copper, due to depreciating currencycould also impact margins. Further, prevailing non-tariffrestrictionsimposedbysomecountrieslead to competitive disadvantage in export ofCapitalGoods.

Energy security and climate change are thetwin causes of mounting worries surroundingenvironmental sustainability world over. Indiahas an overall strategic imperative to balancethe goals of sustainable energy use, enhancedcompetitivenessandmaintenanceofthesecurityof the energy supply. With assimilation of eco-friendlytechnologiesandbuildingoncapabilities

to harness alternative sources of energy, theIndianmarketismovingsteadilytowardsensuringthat the equipment match the requirements ofenergy security. The domestic power sector hasotherconcernslikelimitednumberandcapacity/capability of balance of plant vendors in thecountry,lackofcompetent/qualifiedconstructioncontractorsfortakinguplargesizepowerprojects,shortage of skilled manpower and contractualissues between project authorities/developers,contractorsandtheirsub-contractorsetc.

In most of the business areas in which BHELoperates,thegrowthprospectsaredependentonpolicydecisionsatthenationalandinternationallevelsasalsoontheprevailingbusinesstrends.

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Annexure–A

Annexure–B

AnnualStatementShowingtheRepresentationofSCs,STsandOBCsason01/01/2013andNo.ofappointmentsmadeduringtheprecedingcalendaryear

RepresentationofSCs/STs/OBCs(Ason01/01/2013)

No.ofappointmentsmadeduringthecalendaryear

ByDirectRecruitment ByPromotion* ByDeputation/Absorption

Groups TotalNo.ofEmployees

SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

GroupA 14572 2336 945 2723 1112 163 83 334

GroupB 9926 1655 284 939 1 1 0 0

GroupC 23525 5383 1566 8327 2925 601 156 989

GroupD(Excl.SW)

702 174 20 238 97 23 2 69

GroupD(SW)

151 133 2 1 0 0 0 0

Total 48876 9681 2817 12228 4135 788 241 1392 0 0 0 0 0 0

*InBHEL,noappointmentsaremadeatinductionlevelbypromotion

Representationofthepersonswithdisabilitiesason01/01/2013

Group NumberofEmployees(Representation)

DirectRecruitment(Duringthecalendaryear2012)

Promotion*

(Ason01/01/2013) No.ofVacanciesReserved

No.ofVacanciesMade(appointed)

No.ofVacanciesReserved

No.ofVacanciesMade(appointed)

Total VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

GroupA 14572 3 15 176 4 12 18 1112 34

GroupB 9926 10 14 147 1

GroupC 23525 31 37 485 13 31 52 2925 1 4 85

GroupD 853 1 3 8 1 2 97

Total 48876 45 69 816 17 44 72 4135 1 4 119

Note: (i) VHstandsforVisuallyHandicapped(personssufferingfromblindnessorlowvision)

(ii) HHstandsforHearingHandicapped(personssufferingfromhearingimpairment)

(iii) OH stands for Orthopaedically Handicapped (persons suffering from locomotor disability or cerebralpalsy)

*ThereisnoreservationinPromotionfromGroupBtoAandwithinGroupA.InBHELwithinGroupC&D,careerbasedpromotionpolicyisfollowed,whereinallemployeesoncompletionofprescribedeligibilityperiodinaGradeandsubjecttoattainingsatisfactorylevelsinconductandperformancearepromotedtothenexthighergrade.

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Annexure–IItotheDirectors'Report

BriefResumeofDirectorsProposedforAppointmentandRe-appointmentasperListingAgreement[Clause49IV(G)(I)]

Part–timeOfficialDirectors

Ms.KusumjitSidhu

Ms.KusumjitSidhu, aged57years,was inductedasPart-timeOfficialDirectorontheBoardofBHELw.e.f.10th May, 2013. Ms. Sidhu, an IAS Officer of 1979batch,ispresentlypostedastheAdditionalSecretary& Financial Adviser, in the Department of IndustrialPolicy and Promotion, Ministry of Commerce andIndustry, Government of India. She is also holdingthe chargeof Financial AdviserofMinistryofHeavyIndustries & Public Enterprises, Ministry of Micro,Small&MediumEnterprises.

Ms.SidhuispostgraduateinHistoryandhasrichanddiversifiedexperienceofworking inseniorpositions,both at Central and State levels. During her careerspanningover30years,shehasservedinresponsiblepositions in various Government departments likeIrrigation, Water Resources, Power, Tourism, HigherEducation&Languages,Planning,Personneletc.PriortojoiningasAdditionalSecretary&FinancialAdviser,Department of Industrial Policy and Promotion, sheheldthechargeofChiefElectoralOfficerandPrincipalSecretary of Elections Department, Government ofPunjab.

Presently, she is also serving as Part-time OfficialDirector of HMT Limited, Bangalore and HeavyEngineeringCorporationLimited,Ranchi.

Ms.SidhudoesnotholdanyshareofBHEL.

FunctionalDirectors

ShriAtulSaraya

Shri Atul Saraya, aged 59 years, has been inductedas Director (Power) w.e.f. 1st October, 2009. He isa Graduate in Electrical Engineering from HarcourtButlerTechnological Institute,Kanpurandalsoholdsa PG Diploma in BusinessManagement. Shri Sarayajoined BHEL Haridwar as an Engineer Trainee in1976andhasmore than37 yearsof diversifiedandversatileprofessionalexperienceofmanufacturingatBHEL’s Heavy Electricals Equipment Plant, Haridwar,Business Development at Power Sector MarketingDivision at New Delhi and Project Implementationand Construction at Power Sector Eastern Region,ConstructionDivision,Kolkata.AsExecutiveDirector,he held the charge of both Power SectorMarketing

andPowerSectorEasternRegionconcurrently.

Apart from being the full time Director (Power) inBHEL,heisalsoPart-timeChairmanofRaichurPowerCorporation Ltd. [a Joint Venture Company (JVC) ofBHEL & Karnataka Power Corp. Ltd.] and Part-timeDirectorontheBoardofNTPC–BHELPowerProjectsPrivateLimited(NBPPL),aBHEL-NTPCJVC.

AsDirector(Power),heisresponsibleforspearheadingthe Power Sector of BHEL, which handles about76% of the organisation’s business. New domesticand increasing foreign competition in the country isthe biggest challenge being faced within the sectorby the organisation today. Shri Saraya is addressingthese issues by successfully formulating strategiesfor securingnotonlybusiness for thegrowthof theorganisation but also ensuring timely completion ofthe Projects in hand leading to enhanced customersatisfaction.

ShriSarayahasalsoinitiatedvariousactivitiestowardsCorporate Social Responsibility helping children andotherbackwardcommunitiesintheirdifficulttimes.

ShriSarayaisholding1000equitysharesofBHEL.

Shri P.K. Bajpai

Shri P.K. Bajpai,aged58yearshasbeen inductedasDirector (Finance)w.e.f.1st July,2011.He isaB.Tech(Mech.) from IIT, Kanpur, MBA from the Universityof Leeds (UK) and ACMA from the Institute of CostAccountantsofIndia.

ShriBajpaijoinedBHELintheyear1977andhasmorethan36yearsofversatileexperience.Hehasplayeda critical role as Head of Finance of Profit CentrescomprisingentirevaluechainoftheOrganizationviz.Engineering (Project Engineering andManagement),Manufacturing and Erection Commissioning andServices. Shri Bajpaiwas posted asHead of Financeof BHEL’s Manufacturing Unit at Bhopal when theUnit showed loss in 2000-2001 after showing profitcontinuouslysince1972-73.Atthiscriticaljuncture,hewasabletomakeanimmediateturnaround,withUnitshowingprofitin2001-2002.DuringhistenureasHeadofFinanceofErectionandCommissioningUnit,PowerSector—NorthernRegionfrom1996-2001,therewasan all round improvement in Turnover, ValueAddedandPBToftheRegion.AsHeadofFinanceofProjectEngineering and Management division, he played

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criticalroleininitiatingthedevelopmentofintegratedsoftware called PULSE, sizing and specifications ofpackages for procurement and rationalization andsimplificationofprocesses.

As General Manager (Finance) Internal Audit/ManagementImprovementCell,ShriBajpaiintroducedSystemsAudit.HedevelopedasystemonEffectivenessofInternalAuditandImprovementsforhighermaturitylevel, effective coordinationwith CAG office for ‘NIL’commentsonAnnualAccounts.

Besides heading critical SBUs, Shri Bajpai has alsoworked in Corporate Financial Services Divisionlooking after TreasuryManagement, Forex ExposureManagement, Receivables Management, OperationSurplus/DeficitManagement,Bankingfacility—Cash/NonCashlimits.HewasalsoHeadofFinanceofPowerSector HQs and also dealt with HR, ManagementServices,IT&HRDDfunctions.

Shri Bajpai is currently a Part-timeChairman on theBoardofLaturPowerCompanyLimited.

ShriBajpaidoesnotholdanysharesofBHEL.

ShriW.V.K.KrishnaShankar

ShriW.V.K.KrishnaShankar,aged58years,hasbeeninducted asDirector (Industrial Systems&Products)by thePresidentof Indiaw.e.f1stAug,2013.He isaMechanical Engineer from University VisveswarayyaCollegeofEngineering,BangaloreUniversityandhasaDiplomainManagement.Hehasundergonetrainingin Corporate Planning at IMI (now IMD), Geneva,Switzerland.During a career spanning 36 yearswithBharatHeavyElectricalsLimited,hehandledavarietyofassignmentsinstrategicaswellasoperationalareasinvariouscapacitiesandfunctions.HewaselevatedtothepositionofExecutiveDirectorinJuly2010.

Having started his career in BHEL at Tiruchirappalliin1977,heactivelyparticipated inprojectplanning,scheduling and monitoring activities related to thesetting up of Seamless Steel Tube Plant of BHEL atTiruchirappalli. After commissioning of the plant,he was moved to Corporate Office of BHEL wherehe designed and implemented project monitoringsystems at corporate level for two large investmentschemesofBHEL,viz.Phase-IIIexpansionoftheBoilerPlant(4000MW)atTiruchirappalliandestablishmentof a Boiler Auxiliaries Plant at a green field site inRanipet.HewasalsocloselyassociatedatCorporateLevelintheevolution&designof‘ProductManager’based organization structures for implementationacrossvariousunitsofBHEL.

During 1998 to 2004, as part of Industry BusinessSector,heplayedakeyroleinmarketingofPulverizedfuelbasedCaptivePowerPlants,DGPowerPlantsandDefenceProducts&Systems.

HehasalsoworkedwiththeNationalManufacturingCompetitiveness Council (NMCC) formed by theGovernmentofIndiaasaforumatthehighestlevelforpolicy dialogue to energize& sustainmanufacturingin India. Hewas associatedwith the drafting of the‘NationalStrategy forManufacturing’ inMarch2006aswellastherecommendationsformingapartofthe‘Report of PrimeMinister’s Group on Measures forensuringsustainedgrowthoftheIndianManufacturingSector’inSep2008.

He has been involved in drawing up five CorporatePlans for the company starting with the ‘CorporatePlan for the 80s’. As Executive Director (CorporatePlanning & Development), Shri Krishna Shankar ledthe exercise in creating a new vision, mission andvaluesforthecompany in2010-11bycarryingoutaunique experiment of capturing the imagination ofyounger generation. The company’s new ‘StrategicPlan2012-17’pilotedbyhim toenableBHEL realizearevenuetargetof` 1,00,000Croreby2016-17,laysemphasisonbuildingeightbusinessverticalsofBHEL,viz. Utility Power Plant Business; Spares & ServicesBusiness;CaptivePowerPlantBusiness;TransmissionBusiness;TransportationBusiness;IndustrialProducts& Defence; Renewable Energy Business; and WaterBusiness.

He has successfully handled the Investor Relationsportfolio for five years. He has represented BHEL atseveralinteractiveforumsinCanada,France,Germany,Italy,Singapore,Switzerland,UKandUSA.AsSecretaryof theManagement Committeeof BHEL – topmostpolicy making body in the company as well as theSecretary of the Committee of Functional Directors,Mr. Krishna Shankarwas closely associatedwith theshort term and long terms aspects of the companyoperations.HeisaninvitedmemberontheCII-CapitalGoodscommitteeandFICCI-CapitalGoodscommitteeandisalsotheBHELNomineeDirectorontheBoardofDadaDhuniwaleKhandwaPowerLimited(2x800MWJointVentureofBHEL&MPPGCL).

Having been appointed as the Chief Risk Officer ofthe company in January 2013, he spearheaded theimplementation of Enterprise Risk Managementacrosstheentireorganization.

Shri Krishna Shankar is holding 100equity shares ofBHEL.

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Annexure–IIItotheDirectors’Report

CorporateGovernance

1. OurPhilosophyonCorporateGovernance

BHEL has established a sound frameworkof Corporate Governance which underlinescommitment to quality of governance,transparencydisclosures,consistentstakeholders’value enhancement and corporate socialresponsibility. BHEL endeavours to transcendmuchbeyondtheregulatoryframeworkandbasicrequirements of Corporate Governance focusingconsistently towards building confidence of itsvarious stakeholders including shareholders,customers,employees, suppliersand the societyatlarge.TheCompanyhasdevelopedaframeworkforensuringtransparency,disclosureandfairnesstoall,especiallyminorityshareholders.

The Vision of BHEL envisages “being a globalengineering enterprise providing solutions for abetter tomorrow” and its Mission is "Providingsustainable business solutions in the fields ofEnergy,Industry&Infrastructure”.

The Corporate Governance Policy of BHELrests upon the four pillars of Transparency,Full Disclosure, Independent Monitoring andFairness to all. To strengthen this, BHEL hassignedaMoUwithTransparencyInternationaltoadopt ‘Integrity Pact’. Our corporate structure,businessproceduresanddisclosurepracticeshaveattainedasoundequilibriumwithourCorporateGovernance Policy resulting in achievementof goals aswell as high level of business ethics.BHEL’s CorporateGovernancepolicy is basedonthefollowingprinciples:

i) IndependenceandversatilityoftheBoard

ii) Integrityandethicalbehaviourofallpersonnel

iii) Recognition of obligations towards allstakeholders – shareholders, customers,employees,suppliersandthesociety

iv) High degree of disclosure and transparencylevels

v) Total compliance with laws in all areas inwhichthecompanyoperates

vi) Achievementofabovegoalswithcompassionforpeopleandenvironment

The Company believes that conducting businessin a manner that complies with the CorporateGovernance procedures and Code of Conduct,exemplifieseachofourcorevaluesandpositionsustodeliverlong-termreturnstoourshareholders,favourableoutcomestoourcustomers,attractiveopportunities to our employees andmaking thesuppliersourpartnersinprogress&enrichingthesociety.

2. BoardofDirectors

i. Composition&CategoryofDirectors

Pursuant to Section 617 of the Companies Act,1956,BHELisa‘GovernmentCompany’as67.72%ofthetotalpaid-upsharecapitaloftheCompanyisheldbythePresidentofIndia.

TheBoardofDirectorsofBHELhasanappropriatemix of Executive Directors represented byFunctional Directors including CMD and Non-Executive Directors represented by GovernmentNominees& IndependentDirectors, tomaintainthe independence of the Board and to separatetheBoardfunctionsofmanagementandcontrol.As the Chairman is an Executive Director,Independent Directors comprise half of thestrengthoftheBoard.

The composition of the Board of Directors is asfollows:

Particulars Board Structure

ActualStrengthason31.03.2013

Chairman&ManagingDirector 1 1

Whole-timeExecutive(Functional)Directors

5 5

Part-timeOfficialDirectors(GovernmentNominees)representingtheMinistryofHeavyIndustries&PublicEnterprises,GovernmentofIndia

2 1

Part-timeNon-official(Independent)Directors

8 2

Total 16 9

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Ason31stMarch, 2013, thereexisted six vacanciesof Part-timeNon-official (Independent)Directors andonevacancyofPart-timeOfficialDirector(GovernmentNominee)ontheBoardofBHEL.Further,Ms.KusumjitSidhu,AS&FA,DIPP,MinistryofCommerce&Industry,hasbeenappointedasPart-timeOfficialDirector(GovernmentNominee)ontheBoardofBHELw.e.f.10.05.2013.ThematteroffillingupofothervacanciesisunderconsiderationofDepartmentofHeavyIndustry,MinistryofHeavyIndustries&PublicEnterprises,GovernmentofIndia.

ii. AttendanceofeachDirectorattheBoardMeetingsheldduring2012-13andthelastAGM

Director'sNameS/Shri

No.ofBoardMeetings LastAGM(heldon19.09.2012)Held Attended

EXECUTIVEDIRECTORSB. Prasada Rao Chairman&ManagingDirector 8 8 YesAtulSarayaDirector(Power) 8 8 YesO.P.BhutaniDirector(E,R&D) 8 8 YesM.K.DubeDirector(IS&P) 8 8 YesP.K. BajpaiDirector(Finance) 8 8 YesR.KrishnanDirector(HR) 8 8 YesPART-TIMEOFFICIALDIRECTORS–GOVT.NOMINEESAmbujSharmaJointSecretary,DepartmentofHeavyIndustry 8 8 YesV.S.MadanAdditionalSecretary&FinancialAdviser,DepartmentofIndustrialPolicyandPromotion,MinistryofCommerce&Industry(w.e.f.19.07.2012)(upto22.03.2013) 5 3 YesSaurabhChandra*AdditionalSecretary&FinancialAdviser,DepartmentofIndustrialPolicyandPromotion,MinistryofCommerce&Industry(upto17.04.2012) 1 - -PART-TIMENON-OFFICIAL(INDEPENDENT)DIRECTORSAshokKumarBasu*(upto21.06.2012) 2 2 -M.A.Pathan*(upto21.06.2012) 2 2 -Smt.RevaNayyar*(upto21.06.2012) 2 1 -V.K.Jairath(upto11.11.2012) 4 3 YesS. Ravi 8 8 YesTrimbakdasS.Zanwar 8 8 Yes

*denotestherespectivepersonwasnotaDirectorofBHELasonlastAGMdate.

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iii. NumberofotherBoardsorBoardCommittees*inwhichDirectorofBHELisamemberorChairmanason31stMarch,2013

Director’snameS/Shri

DetailsofDirectorshipsinotherCompanies

DetailsofCommitteeMembershipsandCommitteeChairmanship

B. Prasada RaoChairman&ManagingDirector

BharatHeavyPlate&VesselsLtd. -NIL-

AtulSarayaDirector(Power)

1.NTPC-BHELPowerProjectsPvt.Ltd.2.RaichurPowerCorporationLtd.

-NIL-

O.P.BhutaniDirector(E,R&D)

LaturPowerCompanyLtd. -NIL-

M.K.DubeDirector(IS&P)

DadaDhuniwaleKhandwaPowerLtd. -NIL-

P.K. BajpaiDirector(Finance)

LaturPowerCompanyLtd. AuditCommittee:LaturPowerCompanyLtd.(Chairman)

R.KrishnanDirector(HR)

LaturPowerCompanyLtd. -NIL-

AmbujSharmaPart-timeOfficialDirector

HindustanPaperCorporationLtd. -NIL-

TrimbakdasS.ZanwarPart-timeNon-officialDirector

ShreeSaibabaSugarsLtd. -NIL-

S. RaviPart-timeNon-officialDirector

1.MahindraUgineSteelCo.Ltd.2.IDBICapitalMarketsServicesLtd.3.UTITrusteeCompanyPvt.Ltd.4.LICHousingFinanceLtd.5.SRaviFinancialManagement ServicesPvt.Ltd.6.ReligareHousingDevelopment FinanceCorporationLtd.7.GMRChennaiOuterRingRoad Pvt.Ltd.8.CanbankVentureCapitalFundLtd.9.SMERatingAgencyofIndiaLtd.10.SBI–SGGlobalSecuritiesServices Pvt.Ltd.11.IDBIBankLtd.

AuditCommittee:1.MahindraUgineSteelCo.Ltd. (Member)2.IDBICapitalMarketsServicesLtd. (Chairman)3.LICHousingFinanceLtd. (Chairman)4.ReligareHousingDevelopment FinanceCorporationLtd. (Member)5.SMERatingAgencyofIndiaLtd. (Member)6.IDBIBankLtd.(Member) Shareholders’/Investors’GrievanceCommittee:1.MahindraUgineSteelCo.Ltd. (Member)2.LICHousingFinanceLtd. (Member)3.IDBIBankLtd.(Chairman)

*OnlyChairmanship/MembershipoftheAuditCommitteeandShareholders'/Investors'GrievanceCommitteehasbeenconsidered.

NoDirectoroftheCompanyholdsofficeatthesametimeasDirectorinmorethanfifteen(15)companies.NoDirectorofthecompanyisamemberinmorethanten(10)CommitteesorisaChairmanofmorethanfive(5)CommitteesacrossallcompaniesinwhichheisaDirector.

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iv. No.ofBoardMeetingsheld,datesonwhichheld

Themeetingsof theBoard arenormally held atthe Company’s Registered Office in New Delhiandarescheduledwellinadvance.TheCompanySecretary,inconsultationwiththeChairmanandManagingDirector,sendsawrittennoticeofeachBoardmeetingtoeachDirector.TheBoardagendaiscirculatedtotheDirectorsinadvance.

The members of the Board have access to allinformation of the Company and are free torecommendinclusionofanymatterinagendafordiscussion.Incaseofneed,theseniormanagementisinvitedtoattendtheBoardMeetingstoprovideadditional inputs relating to the items beingdiscussed and/or to give presentation to theBoard.TheBoardmeetsatleastonceinaquartertoreviewthequarterlyresultsandotheritemsontheagenda.Additionalmeetingsareheld,whennecessary.

Duringtheyearunderreview,theBoardmeteighttimesonthefollowingdates:

(i)April3,2012 (ii)May23,2012

(iii)July26,2012 (iv)October29,2012

(v)November12,2012 (vi)December6,2012

(vii)February1,2013 (viii)March22,2013

v. Board’sResponsibilities

TheBoard’smandateistooverseetheCompany’sstrategicdirection,reviewandmonitorcorporateperformance, ensure regulatory compliance andsafeguardtheinterestsoftheshareholders.

vi. RoleofIndependentDirectors

The Independent Directors play an importantroleindeliberationsattheBoardandCommitteemeetingsandbringtotheCompanytheirexpertiseinthefieldsofengineering,finance,management,lawandpublicpolicy.

The Board has established various Committeessuch as the Audit Committee, Shareholders’/Investors' Grievance Committee, RemunerationCommittee, Project Review Committee,Committee on Mergers & Acquisitions,RemunerationCommitteeonPRP,HRCommittee,

CSR&SDCommitteeandNominationCommitteehaving adequate representation of IndependentDirectors.

In terms of Clause 49 of the Listing Agreement,the Audit Committee, Shareholders'/Investors'Grievance Committee and the RemunerationCommittee are chaired by an IndependentDirector and the said Committees’ functionsare within the defined terms of reference.Further, in line with the requirements of DPEGuidelines on Corporate Governance for CPSEs,the company has constituted a RemunerationCommittee on Performance Related Pay headedby an Independent Director. Consequentupon the adoption of the DPE Guidelines onCorporate Social Responsibility and SustainableDevelopment for CPSEs, the Board constitutedthe“BoardLevelCommitteeforCorporateSocialResponsibility (CSR) & Sustainable Development(SD)” forproper andperiodicmonitoringofCSRactivities and oversee Sustainable Developmentactivities. In linewithDPEOMdated28.12.2012onModelRole&ResponsibilitiesofNon-OfficialDirectors for CPSEs, a meeting of IndependentDirectors also took place on 31.01.2013 with Shri S. Ravi as Chairman & Lead IndependentDirector. The minutes of all the Committeemeetings are circulated and discussed in theBoardmeetings.

vii. InformationplacedbeforetheBoardofDirectors

The information under the following heads areusually presented to the Board of Directors ofBHELeitheraspartof theagendapapersoraretabled/presentedduringthecourseoftheBoardmeeting:

• Annualoperatingplansandbudgetsandanyupdates.

• Capitalbudgetsandanyupdates.

• Quarterly results for the company and itsoperatingdivisionsorbusinesssegments.

• MinutesofmeetingsofAuditCommitteeandotherCommitteesoftheBoard.

• Minutes of Board Meetings of unlistedsubsidiarycompanies.

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• Statement of all significant transactionsand arrangements entered into by unlistedsubsidiarycompanies.

• The information on recruitment andremunerationofseniorofficersjustbelowtheBoardlevel.

• DetailsofanyJointVentureorR&Dprojectortechnical collaboration agreement requiringapprovalofBoardofDirectors.

• Significant labour problems and theirproposed solutions. Any significant develop-mentinHumanResources/IndustrialRelationsfront like signing of wage agreement,implementation of Voluntary RetirementSchemeetc.

• Sale of material, nature of investments,subsidiaries, assets, which is not in normalcourseofbusiness.

• ActionTakenReportonmattersdesiredbytheBoard.

• Disclosure of Interest by Directors aboutdirectorships and Committee positionsoccupiedbytheminothercompanies.

• Quarterly report on Compliance of variouslaws.

• Informationrelatingtomajorlegaldisputes.

• StatusofArbitrationcases.

• ShorttermInvestmentofsurplusfunds.

• Any contract(s) in which Director(s) aredeemedtobeinterested.

• Status of shareholders' grievances onquarterlybasis.

• Information/status in respect of Power &IndustrySectorsandInternationalOperationsDivisiononquarterlybasis.

• SignificantCapitalInvestmentproposals.

• Changesinsignificantaccountingpoliciesandpracticesandreasonsforthesame.

• Detailed presentation on performance ofvariousunits/functions.

• Any other information required to bepresentedtotheBoardeitherforinformationorapproval.

viii.SelectionofNewDirectors

As per Articles of Association of BHEL, thePresidentof India throughDepartmentofHeavyIndustry, Ministry of Heavy Industries & PublicEnterprises, appoints the Chairman&ManagingDirector, Functional Directors and Part-timeOfficial Directors on the Board of BHEL andalso nominates Part-time Non-official Directors(IndependentDirectors)ontheBoardofBHEL.

The Independent Directors are selected by theDepartment of Heavy Industry in consultationwith the Search Committee of the DepartmentofPublicEnterpriseswhichmaintainsapanelofeminentpersonalitieshavingwideexperience inthe field of Management, Finance, Engineering,AdministrationandIndustry.

ix. Membershipterm&Retirementpolicy

The appointment of Chairman & ManagingDirectorandFunctionalDirectorsshallbeonsuchterms and conditions, remuneration and tenureas thePresidentof Indiamay fromtimetotimedetermine.

Two Part-time Official Directors viz. AdditionalSecretary/Joint Secretary, Department of HeavyIndustry, Ministry of Heavy Industries & PublicEnterprises and Additional Secretary& FinancialAdviser,Ministry of Commerce and Industry arenominated by the Government of India on theBoardofBHEL.TheycontinuetobeontheBoardof BHEL at the discretion of theGovernment ofIndia.

ThetenureofPart-timeNon-official(Independent)DirectorsisdecidedbytheDepartmentofHeavyIndustry. Normally, an Independent Director isappointed for a period of three years and suchappointeesareliabletoretirebyrotationintermsoftheprovisionsoftheArticlesofAssociationofBHEL.

x. CodeofConduct

As part of BHEL’s persisting endeavour to set a

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high standard of conduct for its employees, a‘Codeof Business Conduct and Ethics’ has beenlaid down for all Board Members and SeniorManagement personnel. In line with MOU 2011-12signedwithDHI,thesaidCodewasrevisedinlinewithchangesintheregulatoryframework&changingbusinessdynamicsandtoincorporateotherrelevantprovisionstostrengthentheCode.

TheCodeencompasses:

• GeneralMoralImperatives;

• SpecificProfessionalResponsibilities;and

• Additional Duties/Imperatives for BoardMembersandSeniorManagementPersonnel.

AcopyofthesaidrevisedCodehasbeenplacedon the Company’s website ‘www.bhel.com’. Additionalsuggestions/ideasto improvethesaidCodearegladlyinvited.

xi. CharteroftheBoardofDirectors

For the purpose of clearly defining the rolesand responsibilities of the Board and individualDirectors,theBoardhaslaiddownaCharteroftheBoardofDirectors.TheCharteralsoarticulatesourcorporategovernanceobjectivesandapproach.

xii. CEO/CFOcertification

CEO/CFOcertificationpursuanttoClause49(V)oftheListingAgreementisenclosed.

3. AuditCommittee

i. Termsofreference(31.03.2013)

The terms of reference of the Audit CommitteespecifiedbytheBoardareinconformitywiththerequirementsof Section292Aof theCompaniesAct, 1956 as well as Clause 49 of the ListingAgreementandareasfollows:

1. Oversightofthecompany’sfinancialreportingprocess and the disclosure of its financialinformation to ensure that the financialstatementsarecorrect,sufficientandcredible.

2. Recommending to the Board, the appoint-ment, re-appointment and, if required, thereplacement or removal of the StatutoryAuditorandthefixationofauditfees.

3. ApprovalofpaymenttoStatutoryAuditorsforanyotherservicesrenderedbythestatutoryauditors.

4. Reviewing,withthemanagement,theannualfinancialstatementsbeforesubmissiontotheBoardforapproval,withparticularreferenceto:

a. Matters required to be included in theDirectors’ResponsibilityStatementtobeincluded in the Board’s report in termsof clause (2AA) of section 217 of theCompaniesAct,1956.

b. Changes,ifany,inaccountingpoliciesandpracticesandreasonsforthesame.

c. Major accounting entries involvingestimates based on the exercise ofjudgmentbymanagement.

d. Significant adjustments made in thefinancial statements arising out of auditfindings.

e. Compliance with listing and otherlegal requirements relating to financialstatements.

f. Disclosure of any related partytransactions.

g. Qualificationsinthedraftauditreport.

5. Reviewing, with the management, thequarterly financial statements beforesubmissiontotheBoardforapproval.

6. (i) Reviewing, with the management,performance of statutory and internalauditors,adequacyoftheinternalcontrolsystems.

(ii) Toensurecomplianceof internalcontrolsystems.

7. Reviewing the adequacy of internal auditfunction, if any, including the structureof the internal audit department, staffingand seniority of the official heading thedepartment, reporting structure coverageandfrequencyofinternalaudit.

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8. Discussion with internal auditors anysignificantfindingsandfollowupthereon.

9. Reviewing the findings of any internalinvestigations by the internal auditors intomatters where there is suspected fraud orirregularity or a failure of internal controlsystems of a material nature and reportingthemattertotheBoard.

10. (i) Discussion with Statutory Auditors/Internal Auditors periodically aboutinternalcontrolsystems.

(ii) DiscussionwithStatutoryAuditorsbeforethe audit commences, about the natureand scopeof audit aswell as post-auditdiscussion to ascertain any area ofconcern including observations of theAuditors.

11. Tolookintothereasonsforsubstantialdefaultsinthepaymenttothedepositors,debentureholders,shareholders(incaseofnonpaymentofdeclareddividends)andcreditors.

12. To review the functioning of the WhistleBlower Mechanism, in case the same isexisting.

13. To review the Audit paras referred to BLAC by the Internal Audit/Board and/orGovt. ofIndiaandtoprovideitssuggestions/guidance/commentsontheissuesreferredtoit.

14. Carrying out any other function as ismentioned in the terms of reference of theAuditCommittee.

ii. CompositionofCommittee,nameofmembers&ChairpersonandAttendance:

The Audit Committee comprises of a majorityof Independent Directors as mandated by theListing Agreement. Further, the Committee ischairedbyanIndependentDirector.Thememberdirectorscompriseofprofessionalsofreputeandstandingwithbackground incommerce,finance,administrationandgovernance,bothnationalandinternational.

The Audit Committee was last reconstituted on16th July,2012.TheCommitteecomprisesof thefollowingdirectors:

NameoftheDirectorS/Shri

Position No.ofMeetings

held duringtheirtenure

No.ofMeetingsAttended

S. Ravi(Part-timeNon-officialDirector)

Chairman 8 8

AmbujSharma(Part-timeOfficialDirector)

Member 8 8

TrimbakdasS.Zanwar(Part-timeNon-officialDirector)

Member(w.e.f.

16.07.2012)

5 5

M.A.Pathan(Part-timeNon-officialDirector)(upto21.06.2012)

Member 3 3

Smt.RevaNayyar(Part-timeNon-officialDirector)(upto21.06.2012)

Member 3 2

Company Secretary acts as the Secretary to theCommittee.Director(Finance),HeadofInternalAuditandarepresentativeofStatutoryAuditorsattendthemeetingsasinvitees.

iii. MeetingsofAuditCommitteeduring2012-13

TheAuditCommitteemeteighttimeson3rdApril,2012, 23rd May, 2012, 15th & 16th June, 2012, 26th July, 2012, 8th October, 2012, 29th October,2012, 1st February, 2013 and 1st & 2nd March,2013duringtheyear2012-13.Thedetailsoftheattendanceofeachmemberisgivenintheabovetable.

4. RemunerationCommittee

i. RemunerationPolicy

BHEL being a Public Sector Undertaking, theappointment and remuneration of CMD/FunctionalDirectorsaredecidedby theGovt.ofIndia. The part-time non-executive directors arenotpaidanyremunerationexceptsittingfeesforattending meetings of the Board or Committeethereof.Moreover, the termsof appointmentofCMD/Directors, as approvedby thePresident of

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India, provide for fixation of certain perks andbenefits like leased accommodation, paymentof HRA, furnished accommodation, productivitylinked incentive etc., as per rules of BHEL. Assuch,theBoardhadconstitutedaRemunerationCommittee in itsmeetingheldon7thDecember,2005withthefollowingtermsofreferenceinlinewithClause49oftheListingAgreement.

ii. Termsofreference

a. Oversightofthecompany’spolicyonspecificremuneration packages, perquisites forWhole-timeDirectorsincludingpensionrightsand any compensation payment, which arenotfixedbythePresidentofIndia.

b. Approve certain perquisites for Whole-time Directors which are within the powersof Board. Review of the elements ofremunerationpackageof individualdirectorssummarized under major groups, such asincentives/benefits, bonus, stock options,pensionetc.

c. Finalizationofpoliciesonperksandbenefitsand other related matters which are notfixedbythePresidentofIndiabutwithinthepowersofBoard.

d. Approvaloffixedcomponentandperformancelinked incentives based on the performancecriteria.

e. FinalizationofthecriteriaofmakingpaymentstoNon-ExecutiveDirectors.

f. Recommendation of fees/compensation/stock options, if any, to be paid/granted, tonon-executive directors, including indepen-dent directors, to the Board of Directors/Shareholders.

g. Carrying out any other function related tothe termsof referenceof theRemunerationCommittee.

iii. Composition,namesofmembers&Chairperson

The Remuneration Committeewas last reconsti-tuted on 6th December, 2012. The Committeecomprisesofthefollowingdirectors:

NameoftheDirectorS/Shri

Position

TrimbakdasS.Zanwar(Part-timeNon-officialDirector)

Chairman(w.e.f.06.12.2012)

Member(w.e.f.16.07.2012)

V.K.Jairath(Part-timeNon-officialDirector)(upto11.11.2012)

Chairman(w.e.f.16.07.2012)

AshokKumarBasu(Part-timeNon-officialDirector)(upto21.06.2012)

Chairman

AmbujSharma(Part-timeOfficialDirector)

Member(w.e.f.06.12.2012)

S. Ravi(Part-timeNon-officialDirector)

Member

Smt.RevaNayyar(Part-timeNon-officialDirector)(upto21.06.2012)

Member

Director(Finance) Member

Director(HR) Member

Company Secretary of the Company acts as theSecretarytotheCommittee.

iv. MeetingsandAttendance

NomeetingoftheRemunerationCommitteetookplaceduringtheyear.

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v. DetailsofremunerationofFunctionalDirectorsduringtheyear2012-13aregivenbelow:-(in`)

Sl. No.

NameoftheDirectorS/Shri

Salary Benefits PerformanceLinked

Incentives

Total ServiceContract/NoticePeriodSeveranceFee

1. B. Prasada Rao 2427534 1043071 2056560 5527165 --

2. AtulSaraya 2175558 878718 1411380 4465656 Liabletoretirebyrotation

3. O.P.Bhutani 2166761 688550 1401839 4257151 Liabletoretirebyrotation

4. M.K.Dube 2120128 615021 1258409 3993558 Liabletoretirebyrotation

5. P.K. Bajpai 2403944 373046 1203474 3980464 Liabletoretirebyrotation

6. R.Krishnan 1954065 720020 613843 3287928 Liabletoretirebyrotation

vi. DetailsofpaymentsmadetoIndependentDirectorsduringtheyear2012-13aregivenbelow:-(in`)

NameoftheIndependentDirectorsS/Shri

SittingFees Total

BoardMeeting CommitteeMeeting

AshokKumarBasu(upto21.06.2012)

40,000/- 15,000/- 55,000/-

M.A.Pathan(upto21.06.2012)

40,000/- 60,000/- 1,00,000/-

Smt.RevaNayyar(upto21.06.2012)

20,000/- 60,000/- 80,000/-

V.K.Jairath(upto11.11.2012)

60,000/- 1,50,000/- 2,10,000/-

S. Ravi 1,60,000/- 2,85,000/- 4,45,000/-

TrimbakdasS.Zanwar 1,60,000/- 1,95,000/- 3,55,000/-

IndependentDirectorswereentitledforsittingfee@ 20,000/-perBoardMeetingand 15,000/-perBoardLevelCommitteeMeetingattendedbythem.

vii. EquitySharesheldbyDirectors

Exceptasstatedhereunder,noneoftheDirectors,holdanyEquitySharesinBHEL(ason31stMarch,2013):

NameoftheDirectorS/Shri

No.ofsharesheld

B. Prasada Rao 2000

AtulSaraya 1000

M.K.Dube 100

TheCompanyhasnotissuedanystockoptionsduringtheyear2012-13.

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5. Shareholders’Committees

5.1 ShareTransferCommittee

TheBoard constituted a Share Transfer Committeeon25thMarch, 1992,which comprises of Chairman&ManagingDirector,Director(Power)andDirector(Finance)oftheCompany.

The Share Transfer Committee considers and approves all share-related issues, transfer/transmission ofshares,issueofduplicatesharecertificateetc.,inphysicalmodebesidestakingnoteofbeneficiarypositionunderdematmode.

Meetingsduring2012-13

TheShareTransferCommitteemet40timesduringtheyear.TheminutesoftheShareTransferCommitteemeetingsareperiodicallyplacedbeforetheBoardofDirectors.

5.2 Shareholders’/Investors’GrievanceCommittee(SIGC)

i. TermsofReference

The Shareholders’/Investors’ Grievance Committeewas set up on 26th July, 2001 specifically to look intomattersrelatedtoredressalofshareholdersandinvestorscomplaintsliketransferofshares,non-receiptofBalanceSheet,dividendandanyotherrelevantgrievancethattheshareholdermayhave.

ii. CompositionofCommittee,nameofmembers&Chairperson

The Shareholders’/Investors’ Grievance Committee was last reconstituted on 6th December, 2012. TheCommitteecomprisesofthefollowingdirectors:

NameoftheDirectorS/Shri

Position No.ofMeetingsheldduringtheirtenure

No.ofMeetingsAttended

S. Ravi (Part-timeNon-officialDirector)

Chairman(w.e.f.06.12.2012)(upto23.03.2013)

1 1

V.K.Jairath(Part-timeNon-officialDirector)(upto11.11.2012)

Chairman(w.e.f.16.07.2012)

2 2

Smt.RevaNayyar(Part-timeNon-officialDirector)(upto21.06.2012)

Chairperson 1 1

Director(Finance) Member 4 4

Director(HR) Member 4 4

CompanySecretaryshallactasitsSecretary.

Company Secretary is the ComplianceOfficer in terms of Clause 47 of the Listing Agreementwith the StockExchanges.

iii. MeetingsandAttendance

TheCommitteemetfourtimeson22ndMay,2012,25thJuly,2012,30thOctober,2012and31stJanuary,2013duringtheyearunderreview.Thedetailsoftheattendanceofeachmemberisgivenintheabovetable.

Detailofshareholders’complaints

AsreportedbyKarvyComputersharePrivateLimited(RTA)toSEBI,1048complaintswerereceivedfromtheshareholdersduring theyearunder reviewandall complaintswere redressedup to31stMarch,2013.Nocomplaintwaspendingattheendoftheperiodunderreport.

74

6. HRCommittee

i. TermsofReference

TheBoardconstitutedtheHRCommitteeon31stMay,2006specificallytolookintothefollowingmatters:

a. Reviewofpresentpolicieswithrespecttopromotionandreward/incentivetotheExecutives.

b. SuggestbothshorttermandlongtermchangesinthepoliciestoprepareBHELforthechanged/emergingbusinessenvironment.

ii. CompositionofCommittee,nameofmembers&Chairperson

The HR Committeewas last reconstituted on 16th July, 2012. The Committee comprises of the followingdirectors:

NameoftheDirectorS/Shri

Position

TrimbakdasS.Zanwar(Part-timeNon-officialDirector)

Chairman(w.e.f.16.07.2012)

Smt.RevaNayyar(Part-timeNon-officialDirector)(upto21.06.2012)

Chairperson

AmbujSharma(Part-timeOfficialDirector)

Member

S. Ravi(Part-timeNon-officialDirector)

Member(w.e.f.16.07.2012)

M.A.Pathan(Part-timeNon-officialDirector)(upto21.06.2012)

Member

Director(Finance) Member

Director(HR) Member

CompanySecretaryshallactasitsSecretary.

iii. MeetingsandAttendance

NomeetingoftheHRCommitteetookplaceduringtheyear.

7. CommitteeonMergers&Acquisitions

i. TermsofReference

TheBoardconstitutedtheCommitteeonMergers&Acquisitionson25thJanuary,2007specificallytolookintothefollowingmatters:

a. Toexaminethefeasibilityoftheproposalsrelatingtomergers,acquisitionsandtakeoverofentities intermsofpowersgrantedbyGovernmentofIndiatoNavratnaPSUsandmakenecessaryrecommendationstotheBoard.

b. To examine the synergy and strategic fit between BHEL and the M&A opportunity and decide onrecommendationsatvariousstagesofDueDiligence.

c. To takea viewon the valuationof the target,bidding strategies, term sheets,modeoffinancingandfinalise recommendations on crucial issues pertaining to definitive documents like Shareholders' andSharePurchaseAgreementsetc.

d. ToprovideguidanceonpostM&Aissuesofmanagementrestructuring,relationshipwithparentcompanyandotherrelatedissues.

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ii. CompositionofCommittee,nameofmembers&Chairperson

TheM&ACommitteewaslastreconstitutedon26thMarch,2011.TheCommitteecomprisesofthefollowingdirectors:

NameoftheDirectorS/Shri

Position No.ofMeetingsheldduringtheirtenure

No.ofMeetingsattended

AmbujSharma(Part-timeOfficialDirector)

Chairman 1 1

S. Ravi(Part-timeNon-officialDirector)

Member 1 1

V.K.Jairath(Part-timeNon-officialDirector)(upto11.11.2012)

Member 1 1

Director(Power) Member 1 1

Director(E,R&D) Member 1 1

Director(IS&P) Member 1 1

Director(Finance) Member 1 1

HeadofM&ADept.shallbethepermanentinviteeandtheCompanySecretaryshallprovidesecretarialsupporttotheCommittee.

iii. MeetingsandAttendance

TheCommitteemetonceon22ndMay,2012duringtheyearunderreview.Thedetailsoftheattendanceofeachmemberisgivenintheabovetable.

8. ProjectReviewCommittee

i. TermsofReference

The Board constituted the Project Review Committee on 25th January, 2007 with the following terms ofreference:

a. TheProjectReviewCommitteeshallhaveatleastfourmeetingsinayear.

b. Thequorumforthemeetingsshallbethreemembers.

c. TheProjectReviewCommitteeshallreviewthestatusofprojectscosting` 100Croreandabove,orderswon/ lost and major customer complaints in respect of Power & Industry Sectors and InternationalOperationsDivision,onquarterlybasis.

d. TheProjectReviewCommitteemayinvitesuchoftheexecutives,asitconsidersappropriatetobepresentatthemeetingsoftheCommittee.

e. TheProjectReviewCommitteeshallmakenecessaryrecommendations,whereverrequired,totheBoardrelatingtoprojectsinrespectofPowerSector,IndustrySectorandInternationalOperationsandalsoonrelatedissues.

ii. CompositionofCommittee,nameofmembers&Chairperson

TheCommitteewas last reconstitutedon6thDecember, 2012. TheCommittee comprisesof the followingdirectors:

76

NameoftheDirectorS/Shri

Position No.ofMeetingsheldduringtheirtenure

No.ofMeetingsattended

S. Ravi(Part-timeNon-officialDirector)

Chairman(w.e.f.06.12.2012)Member(w.e.f.16.07.2012)

12

12

V.K.Jairath(Part-timeNon-officialDirector)(upto11.11.2012)

Chairman(w.e.f.16.07.2012)

Member

2

1

2

1

M.A.Pathan(Part-timeNon-officialDirector)(upto21.06.2012)

Chairman 1 1

AmbujSharma(Part-timeOfficialDirector)

Member(w.e.f.06.12.2012)

1 1

AshokKumarBasu(Part-timeNon-officialDirector)(upto21.06.2012)

Member 1 1

Director(Power) Member 4 4

Director(IS&P) Member 4 4

Head of International Operations of BHEL shall be invited as and when required. Company Secretary of theCompanyshallactasSecretarytotheCommittee.

iii. MeetingsandAttendance

TheCommitteemetfourtimeson23rdMay,2012,19thSeptember,2012,29thOctober,2012and31stJanuary,2013duringtheyearunderreview.Thedetailsoftheattendanceofeachmemberisgivenintheabovetable.

9. RemunerationCommitteeonPerformanceRelatedPay

i. TermsofReference

InlinewiththeDPEguidelinesissuedvideOfficeMemorandumno.2(70)/08-DPE(WC)dated26.11.2008,BoardconstitutedtheRemunerationCommitteeonPerformanceRelatedPayon23rdApril,2009todecidethebonus/variablepaypoolandpolicyforitsdistributionacrosstheexecutivesandnon-unionisedsupervisors.

ii. CompositionofCommittee,nameofmembers&Chairperson

TheCommitteewas last reconstitutedon6thDecember, 2012. TheCommittee comprisesof the followingdirectors:

NameoftheDirectorS/Shri

Position No.ofMeetingsheldduringtheirtenure

No.ofMeetingsattended

S. Ravi(Part-timeNon-officialDirector)

Chairman(w.e.f.16.07.2012)Member

1-

--

Smt.RevaNayyar(Part-timeNon-officialDirector)(upto21.06.2012)

Chairperson - -

AmbujSharma(Part-timeOfficialDirector)

Member(w.e.f.06.12.2012)

- -

TrimbakdasS.Zanwar(Part-timeNon-officialDirector)

Member(w.e.f.16.07.2012)

1 1

V.K.Jairath(Part-timeNon-officialDirector)(upto11.11.2012)

Member* 1 1

*ShriV.K.JairathwaselectedChairmanofthemeeting.

Director(HR)willbethepermanentinvitee.

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iii. MeetingsandAttendance

TheCommitteemetonceduringtheyearon30thOctober,2012.Thedetailsoftheattendanceofeachmemberisgivenintheabovetable.

10.BoardLevelCommitteeforCorporateSocialResponsibility&SustainableDevelopment

i. TermsofReference

InlinewithDPEGuidelinesonCorporateSocialResponsibilityforCPSEs,theBoardconstitutedtheBoardLevelApexCommitteeforCSRon25thNovember,2010forproper&periodicmonitoringofCSRactivities.Further,intermsofDPEGuidelinesonSustainableDevelopment,theBoardofDirectorsmandatedthattheCommitteewillalsooverseeSustainableDevelopmentactivities.Accordingly,thesaidCommitteewasre-designatedas“BoardLevelCommitteeforCorporateSocialResponsibility(CSR)&SustainableDevelopment(SD)”.

ii. CompositionofCommittee,nameofmembers&Chairperson

The Committee was last reconstituted on 1st February, 2013. The Committee comprises of the followingdirectors:

NameoftheDirectorS/Shri

Position No.ofMeetingsheldduringtheirtenure

No.ofMeetingsattended

TrimbakdasS.Zanwar(Part-timeNon-officialDirector)

Chairman(w.e.f.16.07.2012)

Member

6

1

6

1

Smt.RevaNayyar(Part-timeNon-officialDirector)(upto21.06.2012)

Chairperson 1 1

AmbujSharma(Part-timeOfficialDirector)

Member(w.e.f.01.02.2013)

1 1

S. Ravi(Part-timeNon-officialDirector)

Member(w.e.f.16.07.2012)

6 6

V.K.Jairath(Part-timeNon-officialDirector)(upto11.11.2012)

Member 4 3

Director(Finance) Member 7 7

Director(HR) Member 7 7

ED/GMI/c(HSE&CSR)shallbethepermanentinvitee.CompanySecretaryoftheCompanyshallactasSecretarytotheCommittee.

iii. MeetingsandAttendance

TheCommitteemetseventimesduringtheyearon22ndMay,2012,25thJuly,2012,18thSeptember,2012, 29thOctober,2012,2ndJanuary,2013,31stJanuary,2013and22ndMarch,2013.Thedetailsoftheattendanceofeachmemberisgivenintheabovetable.

11. BoardLevelNominationCommittee

i. TermsofReference

TheBoardconstitutedtheNominationCommitteeon22ndMarch,2013torecommendtotheBoardnominationofBHELofficialsintheBoardsofitssubsidiariesandothergovernmentorganizationswhicharerequiredtobeapprovedbytheBoardofBHELbeforefurthersubmissiontoDHI.

ii. CompositionofCommittee,nameofMembers&Chairperson

TheCommitteecomprisesofthefollowingDirectors:

78

NameoftheDirectorS/Shri

Position

S. Ravi(Part-timeNon-officialDirector)

Chairman

Director(E,R&D) Member

Director(Finance) Member

Director(HR) Member

Head/HR shall be the permanent invitee. Company Secretary of the Company shall act as Secretary to theCommittee.

iii. MeetingsandAttendance

NomeetingoftheNominationCommitteetookplaceduringtheyear.

12. GeneralMeetings

i. LocationandtimeoflastthreeAGMs:

Year Location Date Time

FY2009-10(46thAGM)

FICCIAuditorium,BarakhambaRoad(TansenMarg),NewDelhi-110001

17thSeptember,2010 10.00a.m.

FY2010-11(47thAGM)

TalkatoraIndoorStadium,TalkatoraGarden,NewDelhi-110001

20thSeptember,2011 10.00a.m.

FY2011-12(48thAGM)

FICCIAuditorium,BarakhambaRoad(TansenMarg),NewDelhi-110001

19thSeptember,2012 10.00a.m.

ii. DetailsofSpecialResolutionspassedinpreviousthreeAGMs

ASpecialResolutioninrespectofAmendmentintheArticlesofAssociation(forsub-divisionofequitysharesof` 10/-eachinto5equitysharesof` 2/-each)waspassedinthe47thAnnualGeneralMeetingheldon20.09.2011.

iii. PostalBallot

Nospecialresolutionswerepassedthroughpostalballotinthepreviousyear.Nosuchresolutionsareproposedthroughpostalballotduringtheyear.

13. Disclosures

i. DisclosuresonmateriallysignificantrelatedpartytransactionsthatmayhavepotentialconflictwiththeinterestsofCompanyatlarge

TheCompanyhasnotenteredintoanymateriallysignificantrelatedpartytransactionsthatmayhavepotentialconflictwiththeinterestsofthecompanyatlarge.Nonetheless,transactionswithrelatedpartieshavebeendisclosedinPointNo.18ofNote31-OtherNotesonFinancialStatementintheAnnualReport.

ii. Non-compliances/penalties&stricturesimposedonthecompanywithrespecttocapitalmarketsinthelastthreeyears

Nosuchnon–compliancehasoccurrednoranypenaltyorstricturebeenimposedonthecompanyinthelastthreeyears.Thecompanyhassetthehigheststandardswithrespecttoobservanceandconformitywithlawsandallcompliancesaremadebeforethedeadlinesstipulatedbystatute.

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iii. WhistleBlowerpolicy

BHELhasnotyetestablishedaWhistleBlowerPolicyfortheemployees.Nonetheless,nopersonnelhasbeendeniedaccesstotheauditcommittee.

iv. DetailsofcompliancewiththerequirementsofDPEGuidelinesonCorporateGovernanceandcompliancewithmandatoryrequirementsandadoptionofthenon-mandatoryrequirementsofClause49

TherequirementsoftheDPEGuidelinesonCorporateGovernanceforCPSEshavebeendulycompliedwithbythecompany.Further,allmandatoryrequirementsasindicatedinClause49oftheListingAgreementhavealsobeendulycompliedwithbythecompany.Detailsofthesamehavebeengivenatappropriateplacesinthisreport.

In addition to compliancewithmandatory requirements, BHELhas alsobeen following someof thenon-mandatoryrequirementsasgiveninClause49.TheCompanyhasalreadysetupaRemunerationCommitteetoapprovespecificaspectsoftheremunerationofdirectors.Thecompanyisalreadyintheregimeofunqualifiedfinancialstatements.

InlinewiththeDPEguidelines,listingagreementandwiththeobjectiveofprovidingtheDirectorsa)insightintoguidelinesandproceduresforsuccessfuldischargeoftheirstatutoryduties,b)betterunderstandingofthebusinessenvironmenttoenvisionthefutureanddevelopstrategiesandc)needbasedtrainingtomeetthespecificrequirementsoftheboardmembers,BHELBoardhasapprovedapolicyforTrainingofDirectors.Itcoversbothgeneralandspecifictrainingsmoretunedtowardscompanyspecificareas.

Othernon-mandatoryrequirementswouldbegraduallycompliedwithonneedbasisbythecompany.

No expenditure has been debited in books of accountswhich is not for the purpose of business and noexpensesincurredandaccountedwhicharepersonalinnatureandincurredfortheBoardofDirectorsandTopManagement.

v. PresidentialDirectives

NoPresidentialDirectivewasreceivedduringthelastthreeyearsi.e.2010-11,2011-12&2012-13.

vi. RiskManagement

InpursuanceofClause49(IV)(C)oftheListingAgreementandClause7.3oftheDPEGuidelinesonCorporateGovernanceforCPSEs,BHELhasinplaceaBoardapprovedRiskManagementCharter&Policy(RMCP),layingdownprocedurestoinformBoardmembersabouttheriskassessmentandminimization.TheRMCPprovidestheoverall framework forRiskManagement (RM)processof the company. TheRMprocess includesRiskidentification,Riskassessment,Riskevaluation,categorisation,Riskstreatmentplanformitigationofrisksandescalation/reportingofriskstoBoardasperdefinedprocessandperiodicityandRMgovernancestructure.RMCPalsoincludesmechanismforreviewofrisksanditsperiodicity.

vii. Auditor’scertificateonCorporateGovernance

Auditor’scertificateonCorporateGovernanceisenclosed.

14. CommunicationofFinancialandOtherInformation

Asrequiredunderclause41,companyissuesanoticeofatleast7daysinadvancetothestockexchangesoftheBoardMeetingsinwhichtheunaudited/auditedfinancialresultsaredueforconsideration.Further,thesaidresultsareintimatedimmediatelyaftertheyaretakenonrecord/approvedtotheStockExchanges.Thesefinancialresultsarenormallypublishedwithin48hoursofconclusionoftheBoardorCommitteemeetingatwhichthefinancialresultswereapprovedinatleastoneEnglishdailynewspapercirculatinginthewholeorsubstantiallythewholeofIndiaandinonedailynewspaperpublishedinthelanguageoftheregion,where

80

theregisteredofficeofthecompanyissituatedandalsouploadedonthecompany’swebsitewww.bhel.com. TheCompany isalsofiling/submitting informationrequiredunderListingAgreementon thenewsystemsvizNSEElectronicApplicationProcessingSystemorNEAPSandBSEListingCenterdevelopedbyNSEandBSErespectively.

Officialnewsreleasesincludingimportanteventslikereceiptofmajorordersaswellaspresentationsmadetotheinvestorsandfinancialanalystsatperiodicinvestors'meetsarealsodisplayedontheCompany'swebsite.

In compliance with Clause 54 of the Listing Agreement, the company’s website also contains additionalupdatedinformationlikeshareholdingpattern,compliancewithcorporategovernance,contactinformationofthedesignatedofficialsofthecompanyresponsibleforassistingandhandlinginvestorgrievancesetc.

InlinewithMinistryofCorporateAffairs(MCA)Guidelines,BHELhasalsouploadedonitswebsiteinformationregardingunpaid/unclaimeddividendason thedateof lastAGMcontainingdetailsofpersonsentitled toreceivethedividend,amountdue&duedatefortransferintoInvestorEducationProtectionFund(IEPF).Theprocedureforclaimingunpaid/unclaimeddividendbyshareholders(incasethesamehasnotbeentransferredtoIEPF)hasalsobeenuploaded.

15.GeneralShareholderInformation

i. AGM(Date,TimeandVenue)

Date Time Venue 20thSeptember,2013 10.00AM FICCIAUDITORIUM, BarakhambaRoad,(TansenMarg),NewDelhi-110001

ii. Financialyear - 1stApril,2012to31stMarch,2013

iii. DatesofBookClosure - 11thSeptember,2013to20thSeptember,2013 (Bothdaysinclusive)

iv. Dividendpaymentdate - Onorbefore19thOctober,2013

v. DividendHistory:

BHEL has been following “Stability cumGrowth” policywith regard to dividend payment. The details ofdividendpaidbyBHELduringthelasttenyearsandtheamountofunclaimeddividendason31.03.2013aresummarizedasunder:

Year RateofDividend

No.ofshares

(inCrore)

TotalAmountofDividend

Paid (`inCrore)

DateonwhichDividendwas

declared

UnclaimedDividendason31.03.2013

(`)

2003-2004(Interim) 30% 24.476 73.43 01.03.2004* AlreadytransferredtoInvestorEducation&ProtectionFund

2003-2004(Final) 30% 24.476 73.43 28.09.2004 AlreadytransferredtoInvestorEducation&ProtectionFund

2004-2005(Interim) 35% 24.476 85.67 10.12.2004* AlreadytransferredtoInvestorEducation&ProtectionFund

2004-2005(Final) 45% 24.476 110.14 29.09.2005 AlreadytransferredtoInvestorEducation&ProtectionFund

2005-2006(Interim) 40% 24.476 97.90 07.12.2005* AlreadytransferredtoInvestorEducation&ProtectionFund

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81

2005-2006(Spl.Interim)

85% 24.476 208.05 07.03.2006* 549363(ason31.3.2013)Subsequentlytransferredto

InvestorEducation&ProtectionFund

2005-2006(Final) 20% 24.476 48.95 15.09.2006 165716#

2006-2007(Interim) 125% 24.476 305.95 25.01.2007* 935355$

2006-2007(Final) 60% 48.952 293.71 17.09.2007 1157808

2007-2008(Interim) 90% 48.952 440.57 25.01.2008* 1912752

2007-2008(Final) 62.50% 48.952 305.95 17.09.2008 1822884

2008-2009(Interim) 90% 48.952 440.57 29.01.2009* 2675466

2008-2009(Final) 80% 48.952 391.62 17.09.2009 1761688

2009-2010(Interim) 110% 48.952 538.47 21.01.2010* 2953566

2009-2010(Final) 123% 48.952 602.11 17.09.2010 2766823

2010-2011(Interim) 132.50% 48.952 648.62 15.03.2011* 2498727

2010-2011(Final) 179% 48.952 876.24 20.09.2011 3325748

2011-2012(Interim) 136% 244.76@ 665.75 02.03.2012* 3006197

2011-2012(Final) 184% 244.76@ 900.72 19.09.2012 5123067

2012-2013(Interim) 106% 244.76@ 518.89 01.02.2013* 4551633

*DateofmeetingofBoardofDirectorsinwhichinterimdividendwasdeclared

#proposedtobetransferredtoInvestorEducationandProtectionFund(IEPF)on21.10.2013

$proposedtobetransferredtoInvestorEducationandProtectionFund(IEPF)on01.03.2014

@Post-splitnumberofsharesoffacevalueof` 2/-

IncaseashareholderhasnotbeenabletoreceivedividendforanyofthelastsevenyearsandwhichhasnotyetbeentransferredtotheInvestorEducation&ProtectionFund(IEPF),he/shecanclaimthisunpaiddividendbyfollowingtheprocedureuploadedonthecompany’swebsite(www.bhel.com).

vi. (a) ListingonStockExchangesandStockCode

BHEL'ssharesarelistedonthefollowingStockExchangesforwhichlistingfeesfor2012-13hasbeenpaid:

NameoftheStockExchange StockCode

1.BombayStockExchangeLimitedPhirozeJeejeebhoyTowers,DalalStreet,Mumbai-400001

500103

2.NationalStockExchangeofIndiaLimitedExchangePlaza,PlotNo.C/1,Block-G,BandraKurlaComplex,Bandra(East),Mumbai-400051

BHEL

(b) PaymentofAnnualCustodianFeetoDepositories

TheAnnualCustodianfeehasbeenpaidtoNSDLandCDSLforthefinancialyear2012-13.

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vii. DelistingofEquityShares

BHELfilednecessaryapplicationwithCalcuttaStockExchangeAssociationLimited(CSE) fordelisting.FinalapprovalfromCSEisstillawaited,however,“BHEL”ScriphasnotbeenappearinginthelistofsecuritieslistedontheCSE.

viii.MarketPriceData&performanceincomparisontobroad-basedindicessuchasS&PBSESensex,S&PBSEPSUIndexandCNXNiftyareasunder:-

BHELVs.S&PBSESensex

High,LowandClosingmarketpriceofBHELsharesontheBombayStockExchangeLtd.(BSE)vis-à-visS&PBSESensex,No.ofsharestradedandTurnoverduringeachmonthinlastfinancialyearendedMarch31,2013aresummarizedasunder:

MonthBHELsharepricesatBSE(`) S&PBSESensex No.of

shares traded

Turnover(`inLakh)High Low Close High Low Close

Apr-12 274.45 222.00 224.90 17,664.10 17,010.16 17,318.81 16,427,608 41,201.31

May-12 228.90 197.80 211.95 17,432.33 15,809.71 16,218.53 20,292,020 43,483.89

Jun-12 232.90 203.15 232.10 17,448.48 15,748.98 17,429.98 12,972,096 28,388.75

Jul-12 240.00 207.10 215.70 17,631.19 16,598.48 17,236.18 10,431,694 23,566.91

Aug-12 235.50 211.50 214.35 17,972.54 17,026.97 17,429.56 7,045,005 15,947.65

Sep-12 255.80 195.05 246.85 18,869.94 17,250.80 18,762.74 19,812,997 44,143.49

Oct-12 272.45 222.35 225.10 19,137.29 18,393.42 18,505.38 14,775,373 36,523.56

Nov-12 239.50 219.30 233.35 19,372.70 18,255.69 19,339.90 6,713,444 15,350.80

Dec-12 247.50 220.40 228.40 19,612.18 19,149.03 19,426.71 8,164,532 19,008.61

Jan-13 245.40 221.05 227.70 20,203.66 19,508.93 19,894.98 9,392,723 21,777.86

Feb-13 229.95 200.00 201.20 19,966.69 18,793.97 18,861.54 10,283,832 21,760.05

Mar-13 208.70 174.50 176.95 19,754.66 18,568.43 18,835.77 8,729,498 16,807.35

Source:www.bseindia.com

Performance of BHEL closing share price at BSE ( ) vs. S&P BSE Sensex (Close) During 2012-13`

BH

EL

Clo

sin

g S

hare

Pri

ce a

t B

SE

()`

S&

PB

SE

Sen

sex

Month

BHEL Closing Share price at BSE ( )` S&P BSE Sensex

100

120

140

160

180

200

220

240

260

224.90

211.95

232.10

215.70

214.35

246.85 225.10

233.35

228.40 227.70

201.20

176.95

23000.00

21000.00

19000.00

17000.00

15000.00

Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13

17318.81

16218.53

17429.98

17236.18

17429.56 18762.74

18505.3819339.90

19426.71

19894.98

18861.54 18835.77

A n n u A l R e p o R t2 0 1 2 - 1 3

83

BHELVs.S&PBSEPSUIndex

High,LowandClosingmarketpriceofBHELsharesontheBombayStockExchangeLimited(BSE)vis-à-visS&PBSEPSUIndex,duringeachmonthinlastfinancialyearendedMarch31,2013aresummarizedasunder:

MonthBHELsharepricesatBSE(`) S&PBSEPSUIndex

High Low Close High Low Close

Apr-12 274.45 222.00 224.90 7,534.35 7,070.71 7,248.96

May-12 228.90 197.80 211.95 7,283.79 6,517.30 6,760.10

Jun-12 232.90 203.15 232.10 7,265.80 6,574.35 7,258.21

Jul-12 240.00 207.10 215.70 7,422.80 6,911.98 7,104.99

Aug-12 235.50 211.50 214.35 7,263.09 6,892.19 6,939.38

Sep-12 255.80 195.05 246.85 7,544.38 6,885.34 7,415.81

Oct-12 272.45 222.35 225.10 7,598.65 7,053.66 7,104.67

Nov-12 239.50 219.30 233.35 7,321.62 6,957.62 7,177.65

Dec-12 247.50 220.40 228.40 7,354.91 7,079.20 7,334.71

Jan-13 245.40 221.05 227.70 7,945.26 7,359.54 7,661.77

Feb-13 229.95 200.00 201.20 7,699.10 6,835.71 6,862.42

Mar-13 208.70 174.50 176.95 7,043.80 6,338.18 6,481.16

Source:www.bseindia.com

Performance of BHEL closing share price at BSE ( ) vs. S&P BSE PSU Index (Close) During 2012-13`

BH

EL

Clo

sin

g S

ha

re P

ric

e a

t B

SE

()`

S&

PB

SE

PS

U I

nd

ex

Month

BHEL Closing Share price at BSE ( )` S&P BSE PSU Index

Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13

160

180

200

220

240

260 8000

7000

6000

5000

4000

3000

2000

1000

7248.96

6760.107258.21

7104.99

6939.38

7415.817104.67

7177.65

7334.71

7661.77 6862.42

6481.16

224.90

211.95

232.10

215.70 214.35

246.85

225.10

233.35228.40 227.70

201.20

176.95

84

BHELVs.CNXNifty

High,LowandClosingmarketpriceofBHELsharesontheNationalStockExchangeofIndiaLimited(NSE)vis-à-visCNXNifty,No.ofsharestradedandTurnover,duringeachmonthinlastfinancialyearendedMarch31,2013aresummarizedasunder:

MonthBHELsharepricesatNSE(`) CNXNifty No.ofshares

tradedTurnover

(`inLakh)High Low Close High Low Close

Apr-12 274.50 222.30 224.75 5,378.75 5,154.30 5,248.15 113,791,646 2,85,893.44

May-12 228.70 197.35 212.10 5,279.60 4,788.95 4,924.25 135,145,181 2,89,794.24

Jun-12 233.00 203.10 232.45 5,286.25 4,770.35 5,278.90 96,882,442 2,11,938.62

Jul-12 239.90 206.60 215.65 5,348.55 5,032.40 5,229.00 71,965,840 1,62,990.52

Aug-12 235.55 211.60 213.25 5,448.60 5,164.65 5,258.50 60,055,496 1,35,637.71

Sep-12 256.00 195.10 246.95 5,735.15 5,215.70 5,703.30 138,087,502 3,11,222.89

Oct-12 272.35 222.20 224.80 5,815.35 4,888.20 5,619.70 104,980,719 2,59,572.69

Nov-12 239.60 219.40 234.35 5,885.25 5,548.35 5,879.85 54,665,182 1,24,956.75

Dec-12 247.75 220.35 228.25 5,965.15 5,823.15 5,905.10 68,621,067 1,59,677.93

Jan-13 245.70 220.50 227.80 6,111.80 5,935.20 6,034.75 78,243,298 1,80,962.65

Feb-13 230.15 199.70 201.15 6,052.95 5,671.90 5,693.05 72,821,312 1,54,269.57

Mar-13 208.45 174.25 177.00 5,971.20 5,604.85 5,682.55 56,260,728 1,08,409.98

Source:www.nseindia.com

A n n u A l R e p o R t2 0 1 2 - 1 3

85

ix. PolicyonInsiderTrading

BHELendeavors topreserve the confidentialityofunpublishedprice sensitive informationand topreventmisuse of such information. For this purpose and in line with the SEBI (Prohibition of Insider Trading)Regulations, 1992, the Company had adopted “Code of Conduct for Prevention of Insider Trading” on 26thAugust,2002.

PursuanttoSEBI(ProhibitionofInsiderTrading)(Amendment)Regulations,2008issuedinNovember,2008,BHELhadrevisedits“CodeofConductforPreventionofInsiderTrading”.TherevisedBHEL“CodeofConductforPreventionofInsiderTrading,2009”cameintoforceon29thJanuary,2009.TheobjectiveoftheCodeistopreventdealinginsecuritiesoftheCompanybyanInsider(DirectorsandotherDesignatedEmployees)eitheronhisownbehalforonbehalfofanyotherperson,onthebasisofunpublishedpricesensitiveinformation.TheBoardhasappointedDirector(Finance)astheComplianceOfficerundertheCode.

x. Registrar&ShareTransferAgent(RTA)

M/sKarvyComputersharePrivateLtd.

Delhi Address HyderabadAddress

UNIT:BHEL105-108,ArunachalBuilding,19,BarakhambaRoad,NewDelhi–110001Tel.:011-2332440143681700/01/02/21Fax:011-23730743Email:ksbldelhi@karvy.com

UNIT:BHEL17-24,VittalRaoNagar,Madhapur,Hyderabad–500081Tel.:040-44655000Fax:040-44655024Email:madhusudhan.ms@karvy.com einward.ris@karvy.comWebsite:www.karvycomputershare.com

RTA’s performance in servicing shareholders has been satisfactory. All the investor grievances have beenpromptlyattendedto.

xi. ShareTransferSystem

Theshare transfer systemwith respect tophysical sharesconsistsofactivities like receiptof sharesalongwithtransferdeedfromtransferees,itsverification,preparationofMemorandumofTransfers,itsapprovalbytheShareTransferCommitteeanddispatchofdulyendorsedsharecertificatestotherespectivetransfereeswithintheprescribedtimeaspertheListingAgreement.InlinewithSEBICirculardatedJuly5,2012,sharecertificatesarebeingissuedwithin15daysofdateoflodgmentfortransfer,sub-divisionandconsolidation.ShareTransfer activitiesunderphysical segment like receipt/dispatchofdocuments, their verificationandpreparationofMemorandumofTransfersarebeingcarriedoutbyM/s.KarvyComputersharePrivateLimited.

xii. DistributionofShareholding

(i) Distributionofsharesaccordingtosizeofholdingason31stMarch,2013

No.ofequityshare(s) held

No.ofShareholders %ofShareholders No.ofShares %ofShareholding

1-500 411831 93.19% 39,818,188 1.63%

501-1000 17349 3.92% 13,672,949 0.56%

1001-2000 7300 1.65% 11,051,344 0.45%

2001-3000 2072 0.47% 5,239,203 0.21%

3001-4000 775 0.18% 2,758,986 0.11%

4001-5000 637 0.14% 3,029,969 0.12%

5001-10000 870 0.20% 6,313,776 0.26%

10001&Above 1085 0.25% 2,365,715,585 96.66%

Total 441919 100% 2,447,600,000 100%

86

(ii) ShareholdingPatternason31stMarch,2013

Category 2013 2012

Votingstrength(%)

No.ofsharesheld

Votingstrength(%)

No.ofsharesheld

PromotersHolding

IndianPromoters-

PresidentofIndia(POI) 67.72 1,657,552,000 67.72 1,657,552,000

TotalPromoterholding 67.72 1,657,552,000 67.72 1,657,552,000

Non-promotersHolding

MutualFundsandUTI 1.00 24,471,627 1.44 35,324,113

Banks,FinancialInstitutions,InsuranceCompanies

11.41 279,351,514 11.40 278,981,481

ForeignInstitutionalInvestors(includingQualifiedForeignInvestor)

14.76 361,122,791 13.49 330,058,708

Others

Directors&Relatives 0.00 3100 0.00 3100

BodiesCorporate 1.50 36,667,462 2.83 69,234,164

Individuals 3.23 79,088,900 2.69 65,769,748

ForeignNationals 0.00 1090 0.00 790

NRIs 0.24 5,742,426 0.19 4,738,757

Trust 0.03 856,552 0.05 1,262,523

ClearingMembers 0.11 2,742,538 0.19 4,674,616

TotalNon-promoterholding 32.28 790,048,000 32.28 790,048,000

GrandTotal 100.00 2,447,600,000 100.00 2,447,600,000

A n n u A l R e p o R t2 0 1 2 - 1 3

87

(iii)Listofshareholderswhoareholdingmorethan1%ofthesharesoftheCompanyason31stMarch,2013

Category&Shareholder'sName 2013

Votingstrength(%) No.ofsharesheld

Promoters

1.PresidentofIndia(POI) 67.72 1,657,552,000

Non-promoters

1.LifeInsuranceCorporationofIndia 5.78 141,433,662

2.ComgestSAA/cMagellan 1.44 35,350,000

3.LazardAssetManagementLLCA/cLazardEmergingMarkets Portfolio

1.27 31,186,042

4.LICofIndiaMarketplus1GrowthFund 1.02 24,939,880

5.ComgestGrowthPLCA/cComgestGrowthEmergingMarkets 1.01 24,807,000

xiii.Dematerialisationofsharesandliquidity

InaccordancewiththedirectionsoftheSecurities&ExchangeBoardofIndia(SEBI),tradinginBHELsharesbyallcategoriesofinvestorsindematformhasbeenmadecompulsoryw.e.f.5thApril,1999.BHELhasexecutedagreementwithboththedepositoriesofthecountryi.e.NationalSecuritiesDepositoryLimited(NSDL)andCentralDepositoryServices(India)Limited(CDSL)foradmissionofitssecuritiesunderdematmode.Ason 31stMarch, 2013, 99.94% of the total equity share capital of BHEL is being held in dematmode by theshareholders.ShareholdingofHon’blePresidentofIndia(beingthePromoterofthecompanyholding67.72%ofthepaid-upsharecapitalofthecompany)isalsoheldindematerializedform.TheInternationalSecuritiesIdentificationNumber(ISIN)allottedtoCompanyisINE257A01026.

88

xiv. OutstandingGDRs/ADRs/Warrantsoranyconvertibleinstruments,conversiondateandlikelyimpactonequity: Nil

xv. PlantlocationsBHELManufacturingUnits Bangalore 1.ElectronicsDivision

2.ElectronicsSystemsDivision3.ElectroPorcelainDivision

Bhopal 4.HeavyElectricalPlantGoindwal 5.IndustrialValvesPlantHaridwar 6.HeavyElectricalEquipmentPlant

7.CentralFoundryForgePlantHyderabad 8.HeavyPowerEquipmentPlantJagdishpur 9.InsulatorPlant

10.CentralisedStampingUnitJhansi 11.TransformerPlantRudrapur 12.ComponentFabricationPlantRanipet 13.BoilerAuxiliariesPlantTiruchirappalli 14.HighPressureBoilerPlant

15.SeamlessSteelTubePlantThirumayam 16.PowerPlantPipingUnit

BHELRepairUnits Mumbai 1.ElectricalMachineRepairPlantVaranasi 2.HeavyEquipmentRepairPlant

BHELSubsidiaries Visakhapatnam 1.BharatHeavyPlateandVesselsLtd.Kasaragod 2.BHELElectricalMachinesLtd.

xvi.Addressforcorrespondence Shareholderscansend theirqueries regardingTransferof shares,Non-receiptofdividend,Revalidationof

DividendWarrantsandanyothercorrespondencerelatingtothesharesoftheCompanyeitherto:

ShriI.P.Singh Phone :011-26001046 CompanySecretary Fax :011-66337533 BHEL Email :shareholderquery@bhel.in Regd.Office:BHELHouse,SiriFort,NewDelhi–110049 OR

KARVYCOMPUTERSHAREPVT.LTD. UNIT:BHEL Delhi : 105-108,ArunachalBuilding Phone :011-23324401,43681700/01/02/21 19,BarakhambaRoad Fax:011-23730743 NewDelhi–110001 Email:ksbldelhi@karvy.com

Hyderabad : 17-24,VittalRaoNagar, Phone:040-44655000 Madhapur, Fax :040-44655024 Hyderabad–500081 Email :madhusudhan.ms@karvy.com einward.ris@karvy.com Note:Shareholdersholdingsharesinelectronicmodeshouldaddressallcorrespondencetotheirrespective

depositoryparticipants.

Declaration:PursuanttoClause49(I-D)oftheListingAgreementwithStockExchanges,itisherebydeclaredthatallBoardmembersandSeniorManagementpersonnelhaveaffirmedcompliancewithBHEL’s“CodeofBusinessConductandEthics”forthefinancialyear2012-13.

ForandonbehalfoftheBoardofDirectorsofBHARATHEAVYELECTRICALSLTD.

Place:NewDelhiDated:August3,2013

(B.Prasada Rao)Chairman&ManagingDirector

A n n u A l R e p o R t2 0 1 2 - 1 3

89

CEOandCFOCertification

To,

TheBoardofDirectors

BharatHeavyElectricalsLtd.,

NewDelhi.

(a) WehavereviewedfinancialstatementsandthecashflowstatementofBharatHeavyElectricalsLimitedforthe

yearended31stMarch,2013andthattothebestofourknowledgeandbelief:

(i) Thesestatementsdonotcontainanymateriallyuntruestatementoromitanymaterialfactorcontain

statementsthatmightbemisleading;

(ii)Thesestatementstogetherpresentatrueandfairviewofthecompany’saffairsandareincompliancewith

existingaccountingstandards,applicablelawsandregulations.

(b) Thereare,tothebestofourknowledgeandbelief,notransactionsenteredintobytheCompanyduringthe

year2012-13whicharefraudulent,illegalorviolativeoftheCompany’sCodeofConduct.

(c) Weaccept responsibility forestablishingandmaintaining internal controls forfinancial reportingand that

wehaveevaluatedtheeffectivenessoftheinternalcontrolsystemsofthecompanypertainingtofinancial

reporting andwe have disclosed to the auditors and the Audit Committee, deficiencies in the design or

operationofsuchinternalcontrols,ifany,ofwhichweareawareandthestepswehavetakenorproposeto

taketorectifythesedeficiencies.

(d) WehaveindicatedtotheauditorsandtheAuditCommittee.

(i) significantchangesininternalcontroloverfinancialreportingduringtheyear2012-13;

(ii) significantchangesinaccountingpoliciesduringtheyear2012-13andthatthesamehavebeendisclosed

inthenotestothefinancialstatements;and

(iii) instancesofsignificantfraudofwhichwehavebecomeawareandtheinvolvementtherein, ifany,of

themanagementoranemployeehavingasignificantroleintheCompany’sinternalcontrolsystemover

financialreporting.

(P. K. Bajpai)Director(Finance)

(B.Prasada Rao)Chairman&ManagingDirector

Place:NewDelhiDated:May23,2013

90

Auditors’CertificateonCorporateGovernance

TheMembersBharatHeavyElectricalsLtd.

WehaveexaminedthecomplianceofconditionsofCorporateGovernancebyBharatHeavyElectricalsLtd. fortheyearendedon31.03.2013asstipulatedinClause49oftheListingAgreementofthesaidcompanywiththeStock Exchanges and theDPEGuidelines onCorporateGovernance for Central Public Sector Enterprises (DPEGuidelines).

ThecomplianceofconditionsofCorporateGovernanceistheresponsibilityofthemanagement.Ourexaminationwaslimitedtoproceduresandimplementationthereof,adoptedbythecompanyforensuringthecomplianceoftheconditionsoftheCorporateGovernance.Itisneitheranauditnoranexpressionoftheopiniononthefinancialstatementsofthecompany.

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,wecertifythatason31.03.2013,thecompanyhascompliedwithalltheconditionsofCorporateGovernanceasstipulatedintheabovementionedListingAgreementandDPEGuidelinesexcept Clause 49(1)(A) of Listing Agreement (Clause 3.1.4 of the DPE Guidelines) relating to condition of not less than fifty percent of board of directors being independent.

Wefurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityofthecompanynortheefficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsofthecompany.

ForandonbehalfofGandhiMinocha&Company

CharteredAccountantsFRN000458N

(ManojBhardwaj)Partner

M.No.98606Place:NewDelhiDated:August3,2013

A n n u A l R e p o R t2 0 1 2 - 1 3

91

ConservationofEnergy

TechnologyAbsorptionandResearch&Development

Annexure–IVtotheDirectorsReport

EnergyConservation(ENCON)isanimportantthrustareainBHEL.Followingmainactivitieswereperformedduringthefinancialyear:

• NationalEnergyConservationDaywascelebratedacrossthecompanyon14thDecember.VariousactivitiesrelatedtoENCONwereorganizedforawarenessgenerationofemployees.

• Morethan1200TurboVentilatorswereinstalledatmanufacturingunits.

• EnergyAuditrecommendationswereimplementedattheunitsfromlastEnergyAuditreports.

• EnergyAuditwasconductedatHEP-Bhopal&CFP-Rudrapurunits.

Research&Development

1. SpecificareasinwhichR&DcarriedoutbytheCompany GivenintheDirectors’Report2. BenefitsderivedasaresultoftheaboveR&D under"R&DandTechnology"3. Futureplanofaction:

ThefollowingarethemajorthrustareasforR&Dandtechnology:

- Moreefficientconventionalthermalpowerplantsusingsupercriticalparameters

- Moreefficientconventionalthermalpowerplantsusingultra-supercritical&AdvancedUltrasupercriticalparameters

- Advancedcontrolandinstrumentationplatformforthermalpowerplantandindustrialapplication

- CoalresearchforrefinementofunderstandingIndiancoalcharacteristics

- IntegratedGasificationCombinedCycle(IGCC)powerplants

- GreentechnologiesforReductionofemissionssuchasUndergroundCoalGasification,cleandevelopmentmechanism(CDM)projectsetc.

- AtmosphericandCirculatingFluidizedBedCombustion(CFBC)boilers

- Largesizehydropowerplantswithhigherefficiencyandlongerlife

- Advancedtransmissionsystemslike±800kVHVDC,765kV,1200kVTransmissionsystems/products

- FlexibleACTransmissionsystems,includingdevicessuchasThyristorControlledSeriesCompensation,phaseshiftingtransformer,staticsynchronizedcompensator(STATCOM),controlledshuntreactor,etc.

- Gasinsulatedswitchgear

- Efficient,reliableandcosteffectivetransportationsolutionsincludingIGBT–basedapplications,three-phaseACdrivesystemfordieselelectriclocos,MEMU.

- HigherratingIndustrialsteamturbines

- Enhancingefficiencyoftheexistingproducts

- GridconnectedrenewableenergysystemssuchassolarPV,solarthermal,windetc.

- Simulators

- AdvancedFabricationTechnologies

- Surfacecoatingsincludingceramicapplications

92

ExpenditureonR&D

TechnologyAbsorptionandAdoption

ForeignExchangeEarningsandOutgoings

Total .... ` 1251.92Crore

a) Recurring .... ` 1233.19Crore

b) Capital ` 18.73Crore

Expenditureasapercentageoftotalturnover .... 2.5%

Detailsoftechnologyimportedduringthelast5years:

Technology Yearofimport Absorptionstatus

Largesizeforgings 2010 Technologyabsorptioninprogress.

CentrifugalCompressors 2010 Technologyabsorptioninprogress.

WatertreatmentSystems 2011 Technologyabsorptioninprogress.

(`inCrore)

2012-13 2011-12(i)ForeignExchangeUsed 6982 9815(ii)ForeignExchangeEarned 12357 14419

- Residuallifeassessmentstudies

- DeploymentofnewtechnologiesincludingdeploymentIntelligentmachines&robotics,forreducingcycletimeandcost

- Specializedengineeringsoftwareapplications

- KnowledgeManagement

- TotalEngineeringsolutionsincludingEPCwithfocusondesignautomation/KBE/PLM

- Vibrationandnoisereduction

- ApplicationsbasedonhightemperatureSuperconductors

- DesalinationandWaterTreatmentPlants

- FlueGasDesulphurization(FGD)systems

- Nano-technologyapplications

- Hydrogenenergyandfuelcells

ForandonbehalfoftheBoardofDirectorsofBHARATHEAVYELECTRICALSLTD.

Place:NewDelhiDated:August3,2013

(B.Prasada Rao)Chairman&ManagingDirector

A n n u A l R e p o R t2 0 1 2 - 1 3

93

StatementPursuanttoSection212oftheCompaniesAct,1956relatingtoSubsidiaryCompany

Annexure–VtotheDirectorsReport

NameoftheSubsidiaryCompany BharatHeavyPlate&VesselsLtd.

BHELElectricalMachinesLtd.

1 FinancialyearoftheSubsidiaryendedon 31stMarch,2013 31stMarch,2013

2 Datefromwhichtheybecamesubsidiary 10thMay2008 19thJanuary2011

3 ShareoftheSubsidiaryheldbytheCompanyason31stMarch2013

a) Number&FaceValue 337978EquitySharesof`1000/-eachfullypaidup

5355000EquitySharesof`10/-eachfullypaidup

b) Extentofholding 100% 51%

4 TheNetaggregateamountofthesubsidiaryCompanyProfit/(Loss)sofarasitconcernsthememberoftheholdingCompany

(`inCrore) (`inCrore)

a) NotdealtwithintheholdingCompany’sAccounts

i)FortheFinancialYearendedMarch31, 2013

35.04 (-)0.28

ii)Uptothepreviousfinancialyearsofthe SubsidiaryCompany

(-)33.38 (-)0.19

b) DealtwithintheholdingCompany’saccounts

i)FortheFinancialYearEndedMarch31, 2013

Nil Nil

ii)ForthePreviousfinancialyearoftheSubsidiaryCompanysincetheybecame theholdingCompany'sSubsidiary

Nil Nil

ForandonbehalfoftheBoardofDirectorsofBHARATHEAVYELECTRICALSLTD.

Place:NewDelhiDated:August3,2013

(B.Prasada Rao)Chairman&ManagingDirector

94

INDEPENDENTAUDITORS'REPORTTothemembersofBharatHeavyElectricalsLimited

Annexure-VItotheDirectors'Report

ReportontheFinancialStatements

WehaveauditedtheaccompanyingfinancialstatementsofBharatHeavyElectricalsLimited(“theCompany”),whichcomprisetheBalanceSheetasatMarch31,2013,andtheStatementofProfitandLossandCashFlowStatement for the year then ended, and a summary of significant accounting policies and other explanatoryinformation.

Management’sResponsibilityfortheFinancialStatements

Management is responsible for thepreparationof thesefinancial statements thatgivea trueand fairviewofthefinancialposition,financialperformanceandcashflowsoftheCompanyinaccordancewiththeAccountingStandardsreferredtoinsub-section(3C)ofsection211oftheCompaniesAct,1956(“theAct”).Thisresponsibilityincludes the design, implementation and maintenance of internal control relevant to the preparation andpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’sResponsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewith theStandardsonAuditing issuedby the InstituteofCharteredAccountantsof India.ThoseStandards require thatwecomplywithethical requirementsandplanandperform theaudit toobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements.Theproceduresselecteddependontheauditor’s judgment, including theassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheCompany’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinionandtothebestofour informationandaccordingtotheexplanationsgiventous,thefinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

(a) InthecaseoftheBalanceSheet,ofthestateofaffairsoftheCompanyasatMarch31,2013;

(b) InthecaseoftheStatementofProfitandLoss,oftheprofitfortheyearendedonthatdate;and

(c) InthecaseoftheCashFlowStatement,ofthecashflowsfortheyearendedonthatdate.

A n n u A l R e p o R t2 0 1 2 - 1 3

95

ReportonOtherLegalandRegulatoryRequirements

1. AsrequiredbytheCompanies(Auditor’sReport)Order,2003(“theOrder”)issuedbytheCentralGovernmentofIndiaintermsofsub-section(4A)ofsection227oftheAct,wegiveintheAnnexureastatementonthemattersspecifiedinparagraphs4and5oftheOrder.

2. Asrequiredbysection227(3)oftheAct,wereportthat:

a. wehaveobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposeofouraudit;

b. inouropinionproperbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasappearsfromourexaminationofthosebooksandproperreturnsadequateforthepurposesofouraudithavebeenreceivedfrombranchesnotvisitedbyus.

c. TheBranchAuditorsReportshavebeenfurnishedtousandhavebeenappropriatelydealtwithwhilepreparingourreport.

d. theBalanceSheet,StatementofProfitandLoss,andCashFlowStatementdealtwithbythisReportareinagreementwiththebooksofaccountandwiththereturnsreceivedfrombranchesnotvisitedbyus.

e. inouropinion,theBalanceSheet,StatementofProfitandLoss,andCashFlowStatementcomplywiththeAccountingStandardsreferredtoinsubsection(3C)ofsection211oftheCompaniesAct,1956;

f. In terms ofNotificationNo.GSR 829(E) dated 21.10.2003 issued by theDepartment of CompanyAffairs,GovernmentofIndia,theprovisionsofSection274(1)(g)oftheCompaniesAct,1956arenotapplicabletotheCompany.

g. SincetheCentralGovernmenthasnotissuedanynotificationastotherateatwhichthecessistobepaidundersection441AoftheCompaniesAct,1956norhasitissuedanyRulesunderthesaidsection,prescribingthemannerinwhichsuchcessistobepaid,nocessisdueandpayablebytheCompany.

ForGandhiMinocha&coCharteredAccountants

FRN000458N

ForS.N.Dhawan&Co.CharteredAccountants

FRN000050N

Date:May23,2013Place:NewDelhi

(BhupinderSingh)M.No092867

(SureshSeth)M.No010577

96

AnnexuretoIndependentAuditors’Report(ReferredtoinParagraph1undertheheading“ReportonOtherLegalandRegulatoryRequirements”ofour reportofevendateon theaccountsofBharatHeavyElectricals Limited for theyearendedMarch31,2013)

i) (a) TheCompanyhasmaintainedproperrecordsshowingfullparticularsincludingquantitativedetailsandsituationofitsfixedassets.

(b) Accordingtotheinformationandexplanationsgiventous,physicalverificationoffixedassets isbeingconductedinaphasedmannerbythemanagementunderaprogrammedesignedtocoverallthefixedassetsoveraperiodofthreeyears,which,inouropinion,isreasonablehavingregardtothesizeoftheCompanyandnatureofitsbusinessandnomaterialdiscrepancieswerenoticedonsuchverificationtotheextentverificationwasmadeduringtheyear.Inrespectof65locomotivesgiventoIndianRailwaysonleaseinsteadofphysicalverificationacertificateconfirmingphysicalpossessionoftheselocomotiveshasbeenobtainedfromIndianRailwaysaspertheleaseagreement.

(c) According to the information and explanations given to us, the Company has not disposed off anysubstantialpartofitsfixedassetsduringtheyear.

ii) (a) As explained to us physical verification of inventory has been conducted by themanagement underPerpetualInventoryProgrammeatregularintervalsduringtheyearexceptforstockofworkinprogressandfinishedgoodsinfewunitswheretheseareverifiedattheyearendwithreferencetotheinspectionreportsandproductionreportsoftheProductionPlanningDepartmentofsuchunits.Inregardtostockslyingwithcontractors/fabricatorsandotherparties,confirmationswerereceivedinafewcasesonly.Inouropinionthefrequencyofverificationisreasonable.

(b) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theproceduresofphysicalverificationofinventoriesfollowedbythemanagementarereasonableandadequateinrelationtothesizeoftheCompanyandthenatureofitsbusiness.

(c) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theCompanyhasmaintainedproperrecordsofitsinventoriesanddiscrepanciesnoticedonphysicalverificationofinventorieswerenotmaterialwithregardtothesizeandnatureofoperationsoftheCompanyandhavebeenproperlydealtwithinthebooksofaccount.

iii) (a) Accordingtotheinformationgiventous,theCompanyhasnotgrantedanyloans,securedorunsecuredto companies, firms and other parties covered in the register maintained under section 301 of theCompaniesAct,1956.Thereforeclauses(iii)(b)to(iii)(d)ofParagraph4oftheOrderarenotapplicabletotheCompany.

(b) Accordingtotheinformationgiventous,theCompanyhasnottakenanyloans,securedorunsecured,from companies, firms or other parties covered in the registermaintained under Section 301 of theCompaniesAct,1956.Thereforeclauses(iii)(f)and(iii)(g)ofParagraph4OrderarenotapplicabletotheCompany.

iv) Inouropinionandaccordingtotheinformationandexplanationsgiventous,thereisanadequateinternalcontrolsystemcommensuratewiththesizeof theCompanyandthenatureof itsbusinesswithregardtopurchaseof inventoryandfixedassetsandforthesaleofgoodsandservices.FurtheronthebasisofourexaminationofthebooksandrecordsoftheCompany,andaccordingtotheinformationandexplanationsgiventous,wehaveneithercomeacrossnorhavebeeninformedofanycontinuingfailuretocorrectmajorweaknessesintheinternalcontrolsystems.

v) Accordingtotheinformationandexplanationsgiventous,weareoftheopinionthatduringtheyeartherearenocontractsandarrangementsthatneedtobeenteredintheregistermaintainedunderSection301oftheCompaniesAct,1956.Thereforeclause(v)(b)ofParagraph4oftheOrderisnotapplicabletotheCompany.

vi) Accordingtotheinformationandexplanationsgiventous,theCompanyhasnotacceptedanydepositsfrom

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publicduringtheyearwithinthemeaningofsections58Aand58AAoranyotherrelevantprovisionsoftheCompaniesAct,1956andtheCompanies(AcceptanceofDeposits)Rules1975.

vii) Accordingtotheinformationandexplanationsgiventous,theCompanyhasaninternalauditdepartmentresponsible for carryingout internal audit of various sections at headoffice, regional offices andunits atperiodicalintervalsaspertheapprovedauditplan.Inouropinion,theinternalauditsystemoftheCompanyisgenerallycommensuratewithsizeandnatureofitsbusiness.

viii)WehavebroadlyreviewedthebooksofaccountandrecordsmaintainedbytheCompanypursuanttotheCompanies(CostAccountingRecords)Rules2011prescribedbytheCentralGovernmentundersection209(1)(d)oftheCompaniesAct,1956andareoftheopinionthatprimafacietheprescribedaccountsandrecordshavebeenmadeandmaintained.Wehave,however,notmadeadetailedexaminationofthecostrecordswithaviewtodeterminewhethertheyareaccurate&complete.

ix) (a) According to the information and explanations given to us, in our opinion, the Company is generallyregular indepositingwithappropriateauthoritiesundisputedstatutoryduesincludingProvidentFund,InvestorEducationandProtectionFund,EmployeesStateInsurance,IncomeTax,SalesTax,WealthTax,ServiceTax,ExciseDuty,CustomsDuty,Cessandanyothermaterialstatutoryduesasapplicabletoit.

(b) Accordingtotheinformationandexplanationsgiventous,noundisputedamountspayableinrespectofProvidentFund,InvestorEducationandProtectionFund,EmployeesStateInsurance,IncomeTax,SalesTax,WealthTax,ServiceTax,ExciseDuty,CustomsDuty,CessandotherstatutoryduesoutstandingasatMarch31,2013foraperiodofmorethansixmonthsfromthedatetheybecomepayableexcept in the case of Libya project, where as per the agreement, the income tax liability has to be discharged by the customer directly to the Libyan Government. The amount outstanding for more than six months is ` 32.88 Crore pertaining to financial year 2008-09 & 2009-10.

(c) Accordingtotheinformationandexplanationsgiventous,theparticularsofSalesTax,IncomeTax,ExciseDuty,ServiceTax,CustomDutyandCesswhichhavenotbeendepositedonaccountofdisputeareasunder:

Sl. No.

NameoftheStatute NatureoftheDues PendingAmount

(`inCrore)

Amountpaidunderprotest

(`inCrore)

Forumwheredisputeispending

1 CentralSalesTaxAct,WorkContractTaxAct,LeaseTax,EntryTaxActandSalesTaxActofvariousStates

SalesTax,EntryTax&WorkContractTax

35.78 10.38 AssessingOfficer249.20 21.44 Dy.Commissioner/

Jt.Commissioner/CommissionerAppeals

344.94 49.72 AppellateTribunal125.82 28.25 HighCourt

3.43 3.38 SupremeCourt

117.30 8.69 VariousAppellateAuthorities

2 IncomeTaxAct,1961 IncomeTax 3.4 - HighCourt26.50 - AppellateTribunal4.15 - Commissioner(Appeals)

3 CentralExciseAct,1944 ExciseDuty 30.26 0.06 AssessingOfficer1.15 0.48 Commissioner(Appeals)

259.13 3.61 AppellateTribunal43.02 4.37 HighCourt

- - VariousAppellateAuthorities4 ServiceTaxunderthe

FinanceAct,1994ServiceTax 54.38 0.01 Commissioner(Appeals)

105.33 - AppellateTribunal- - AssessingOfficer

5.70 - HighCourt

98

x) TheCompanyhasnoaccumulatedlossesasatMarch31,2013andhasnotincurredanycashlossesduringthefinancialyearcoveredbyourauditandtheimmediatelyprecedingfinancialyear.

xi) AccordingtotherecordsoftheCompanyexaminedbyusandtheinformationandexplanationsgiventous,theCompanyhasnotdefaultedinrepaymentofduestofinancialinstitutions,banksordebentureholders.

xii) According to the informationandexplanationsgiven tous, theCompanyhasnotgrantedany loansandadvancesonthebasisofsecuritybywayofpledgeofshares,debenturesandothersecurities.

xiii) Inouropinion,theCompanyisnotachitfundoraNidhi/mutualbenefitfund/society.Therefore,provisionsofclause(xiii)ofParagraph4oftheOrderarenotapplicabletotheCompany.

xiv) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theCompanyisnotdealingortradinginshares,securities,debenturesandotherinvestments.Accordingly,theprovisionsofclause(xiv)oftheParagraph4oftheOrderarenotapplicabletotheCompany.

xv) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theCompanyhasnotgivenguaranteesforloanstakenbyothersfrombanksorfinancialinstitutions.

xvi) Asperinformationandexplanationsgiventous,theCompanyhasnotobtainedanytermloanduringtheyear.

xvii) Accordingtothe informationandexplanationsgiventousandonanoverallexaminationoftheBalanceSheetoftheCompany,wereportthatnofundsraisedonshort-termbasishavebeenusedforlong-terminvestment.

xviii) According to the informationandexplanationsgiven tous, theCompanyhasnotmadeanypreferentialallotmentofsharestopartiesandcompaniescoveredintheregistermaintainedundersection301oftheCompaniesAct,1956.

xix) Inouropinion,theCompanyhasnotissuedanydebenturesduringtheyear.Therefore,provisionsofclause(xix)ofParagraph4oftheOrderarenotapplicabletotheCompany.

xx) TheCompanyhasnot raisedanymoneybywayofpublic issueduring theyear.Therefore,provisionsofclause(xx)ofParagraph4oftheOrderarenotapplicabletotheCompany.

xxi) DuringthecourseofourexaminationofthebooksandrecordsoftheCompany,carriedoutinaccordancewiththegenerallyacceptedauditingpracticesinIndia,andaccordingtotheinformationandexplanationsgiventous,nofraudonorbytheCompanyhasbeennoticedorreportedduringtheyear.

ForGandhiMinocha&coCharteredAccountants

FRN000458N

ForS.N.Dhawan&Co.CharteredAccountants

FRN000050N

Date:May23,2013Place:NewDelhi

(BhupinderSingh)M.No092867

(SureshSeth)M.No010577

Management Reply to Point No. (ix)(b) : In respect of ECCO Libya, as per the contract, the income tax liability has to be discharged by the customer (ECCO). ECCO has confirmed that they will honor their commitment and directly approach the Libyan tax authorities

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100

COMMENTSOFTHECOMPTROLLERANDAUDITORGENERALOFINDIAUNDERSECTION619(4)OFTHECOMPANIESACT,1956ONTHEACCOUNTSOFBHARATHEAVYELECTRICALSLIMITED,NEWDELHIFORTHEYEARENDED31MARCH2013

The preparation of financial statements of Bharat Heavy Electricals Limited, New Delhi for the year ended 31March2013inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,1956istheresponsibilityoftheManagementoftheCompany.TheStatutoryAuditorsappointedbytheComptrollerandAuditorGeneralof IndiaunderSection619(2)of theCompaniesAct,1956are responsible forexpressingopiniononthesefinancialstatementsunderSection227oftheCompaniesAct,1956basedonindependentauditinaccordancewiththeauditingandassurancestandardsprescribedbytheirprofessionalbody,theInstituteofCharteredAccountantsofIndia.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated23May2013.

I,onbehalfoftheComptrollerandAuditorGeneralofIndia,haveconductedasupplementaryauditunderSection619(3)(b)oftheCompaniesAct,1956ofthefinancialstatementsofBharatHeavyElectricalsLimited,NewDelhifortheyearended31March2013.ThissupplementaryaudithasbeencarriedoutindependentlywithoutaccesstotheworkingpapersoftheStatutoryAuditorsandislimitedprimarilytoinquiriesoftheStatutoryAuditorsandcompanypersonnelanda selectiveexaminationof someof theaccounting records.On thebasisofmyauditnothingsignificanthascometomyknowledgewhichwouldgiverisetoanycommentuponorsupplementtoStatutoryAuditors'reportunderSection619(4)oftheCompaniesAct,1956.

ForandonthebehalfoftheComptroller&AuditorGeneralofIndia

Place:NewDelhiDate:17June,2013

(BrijMohan)PrincipalDirectorofCommercialAudit&Ex-officioMember,AuditBoard-III,

New Delhi

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BalanceSheetAsatMarch31,2013 (`inCrore)

Particulars NoteNo. Figuresasat31.03.2013 Figuresasat31.03.2012

I. EQUITYANDLIABILITIES

(1) Shareholders'Funds(a) Sharecapital 1 489.52 489.52(b) Reserves&surplus 2 29954.58 30444.10 24883.69 25373.21

(2) Non-currentliabilities(a) Long-termborrowings 3 129.20 123.43(b) otherlongtermliabilities 4 5789.68 7558.59(c) Longtermprovisions 5 5932.91 11851.79 5005.68 12687.70

(3) Currentliabilities(a) Short-termborrowings 6 1286.00 0.00(b) Tradepayables 7 9675.24 10254.82(c) Othercurrentliabilities 8 13862.10 15824.60(d) Short-termprovisions 9 3009.22 27832.56 2635.69 28715.11TOTAL 70128.45 66776.02

II. ASSETS

(1) Noncurrentassets(a) Fixedassets 10

(i) Tangibleassets 4314.67 4160.72(ii) Intangibleassets 143.82 136.09(iii) Capitalwork-in-progress 1133.51 1324.63(iv) Intangibleassetsunderdevelopment 38.08 5630.08 22.98 5644.42

(b) Non-currentinvestments 11 429.17 461.67(c) Deferredtaxassets(net) 12 1550.69 1546.24(d) Long-termloansandadvances 13 905.33 900.10(e) Othernon-currentassets 14 10653.72 13538.91 9383.62 12291.63

(2) Currentassets(a) Inventories 15 11763.82 13548.73(b) Tradereceivables 16 29234.49 26356.93(c) CashandBankBalances 17 7732.05 6671.98(d) Shorttermloansandadvances 18 2029.12 2111.72(e) Othercurrentassets 19 199.98 50959.46 150.61 48839.97

TOTAL 70128.45 66776.02

SignificantAccountingPoliciesOthernotestofinancialstatements 31TheAccompanyingNotes1to31&Significantaccountingpoliciesformanintegralpartofthefinancialstatements.

ForandonbehalfofBoardofDirectors

(I.P.Singh)CompanySecretary

(P.K. Bajpai)Director(Finance)

(B. Prasada Rao)ChairmanandManagingDirector

AsperourreportofevendateattachedForS.N.Dhawan&Co.CharteredAccountants

FRN-000050N

ForGandhiMinocha&Co.CharteredAccountants

FRN-000458N

Place:NewDelhiDate:May23,2013

(SureshSeth)Partner

M.No.10577

(BhupinderSingh)Partner

M.No.092867

104

ForandonbehalfofBoardofDirectors

(I.P.Singh)CompanySecretary

(P.K. Bajpai)Director(Finance)

(B. Prasada Rao)ChairmanandManagingDirector

AsperourreportofevendateattachedForS.N.Dhawan&Co.CharteredAccountants

FRN-000050N

ForGandhiMinocha&Co.CharteredAccountants

FRN-000458N

Place:NewDelhiDate:May23,2013

(SureshSeth)Partner

M.No.10577

(BhupinderSingh)Partner

M.No.092867

StatementofProfit&LossfortheyearendedMarch31,2013 (`inCrore)

Particulars NoteNo. Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

I. Revenuefromoperations(Gross) 20 50156.48 49509.78Less:Exciseduty 1904.01 1846.56Less:Servicetax 634.80 435.36Revenuefromoperations(Net) 47617.67 47227.86

II. Otheroperationalincome 21 806.98 751.03III. Otherincome 22 1121.71 1265.55

Totalrevenue(ItoIII) 49546.36 49244.44IV. Expenses

Costofmaterialconsumption,erectionandengineeringexpenses 23 27899.37 28907.73(Increase)/DecreaseinWorkinprogress&FinishedGoods

24 116.21 -823.20

Employeebenefitsexpense 25 5752.78 5465.43Financecosts 26 125.27 51.28Depreciation&Amortisationexpense 10.1 953.39 800.00Otherexpensesofmanufacture,administration,sellinganddistribution 27 3776.56 3223.22Provisions(net) 28 1565.77 1402.58Less:Costofjobsdoneforinternaluse 75.87 104.11Totalexpenses 40113.48 38922.93

V. Profitbeforepriorperiodadjustmentsandtax 9432.88 10321.51VI. Add/less:Priorperiodadjustments(net) 29 -0.44 -19.25VII. Profitbeforetaxfortheyear 9432.44 10302.26VIII. Less:Taxexpense 30

a) Currenttax 2822.15 2645.00b) Deferredtax -4.44 2817.71 617.30 3262.30

IX. Profitfortheyear 6614.73 7039.96Earningspershare(Basic&Diluted)(Referpt.no.20ofNote31)in` 27.03 28.76FaceValuepershare(in`)(Referpointno.20ofNote31) 2.00 2.00SignificantAccountingPoliciesOtherNotestofinancialstatements 31

TheaccompanyingNotes1to31&significantaccountingpoliciesformanintegralpartofthefinancialstatements.

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ForandonbehalfofBoardofDirectors

(I.P.Singh)CompanySecretary

(P.K. Bajpai)Director(Finance)

(B. Prasada Rao)ChairmanandManagingDirector

AsperourreportofevendateattachedForS.N.Dhawan&Co.CharteredAccountants

FRN-000050N

ForGandhiMinocha&Co.CharteredAccountants

FRN-000458N

Place:NewDelhiDate:May23,2013

(SureshSeth)Partner

M.No.10577

(BhupinderSingh)Partner

M.No.092867

CashFlowStatementfortheyearendedMarch31,2013 (`inCrore)

2012-13 2011-12A. CASHFLOWFROMOPERATINGACTIVITIESNetProfitBeforeTaxasperStatementofProfitandLoss 9432.44 10302.26Adjustmentfor

Depreciation/Amortisation 954.16 802.67LeaseEqualisation 0.29 -3.82Provisions(Net) 423.95 539.77BadDebts&LD&investmentwrittenoff 377.26 97.29ProfitonsaleofFixedassets -3.31 -4.01ProfitonsaleofLongTermInvestments -31.50 0.00Financecost 125.27 51.28Interest/DividendIncome -623.95 -830.63

OperatingProfitbeforeWorkingCapitalchanges 10654.61 10954.81Adjustmentfor

Trade&OtherReceivables -4441.00 -8793.32Inventories 1788.30 -2576.01TradePayable&Advances -2971.92 2784.13

Cashgeneratedfromoperations 5029.99 2369.61DirectTaxesPaid(Netofrefund) -3165.21 -3183.18NETCASHINFLOW/(OUTFLOW)FROMOPERATINGACTIVITIES 1864.78 -813.57

B. CASHFROMINVESTINGACTIVITIESPurchaseofFixedAssets -988.52 -1307.21SaleandDisposalofFixedAssets 12.72 9.27SaleandDisposalofLongtermInvestments 31.50 0.00InvestmentinSubsidiary&JointVentures 32.50 -22.50Interest&Dividendincome 573.75 990.73NETCASHUSEDININVESTINGACTIVITIES 338.05 329.70

C. CASHFLOWFROMFINANCINGACTIVITIESProceedsfromShortterm&LongtermBorrowing(Net) 1304.43 28.60DividendPaid(includingtaxondividend) -1648.57 -1793.70Financecost -122.52 -49.80NETCASHUSEDINFINANCINGACTIVITIES 466.66 1814.90

D. NETINCREASE/(DECREASE)INCASHANDCASHEQUIVALENTS 1060.07 -2958.17OpeningBalanceofCashandCashEquivalents 6671.98 9630.15ClosingBalanceofCashandCashEquivalents(ReferNoteno.17) 7732.05 6671.98

Note1 : Cash&CashEquivalentsconsistsofcashandbankbalance&depositswithbanks. 2 : Previousyear'sfigureshavebeenregrouped/rearrangedwherevernecessary. 3 : Cash&CashEquivalentsincludes`3.52Crore(`2.18Crore)unclaimeddividendlyingindesignatedbankaccounts

106

1-ShareCapital(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Authorised

1000,00,00,000 equity shares of `2 each (previousyear1000,00,00,000equitysharesof`2each) 2000.00 2000.00

Issued,Subscribed&PaidupCapital 489.52 489.52

244,76,00,000 fully paid equity Sharesof` 2 each(previousyear244,76,00,000equitysharesof` 2each)

a) Outofwhich122,38,00,000equitysharesof`2each(previousyear122,38,00,000equitysharesof`2each)allottedasbonusshares

b) Thereconciliationofthenumberofequitysharesoutstandingissetoutbelow:

Number Amount Number Amount

Sharesoutstandingatthebeginningoftheyear 2447600000 489.52 489520000 489.52

Sharesissuedduringlastyeartowardssplitofsharesfrom`10to`2pershare 1958080000

Sharesboughtbackduringtheyear - - - -

Sharesoutstandingattheendoftheyear 2447600000 489.52 2447600000 489.52

c) Details of shares held by shareholders holdingmorethan5%sharesattheyearend

No.ofshares %ageofholding

No.ofshares %ageofholding

PresidentofIndia(POI)alongwithnominees 1657552000 67.72% 1657552000 67.72%

LifeInsuranceCorporationofIndia 141433662 5.78% 141433662 5.78%

FaceValuepershare(`) 2.00 2.00

d) Terms/rightsattachedtotheequityshares:

Thecompanyhasonlyoneclassofequityshareshavingaparvalueof`2pershare(previousyear`2pershare).Eachholderoftheequitysharesisentitledtoonevotepershare.

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2-Reserves&surplus

3-Long-termborrowings

4-Otherlong-termliabilities

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012CapitalreserveOpeningBalance 2.74 2.74Add:Additions - -Less:Deductions - 2.74 - 2.74GeneralreserveOpeningbalance 23849.72 18849.72Add:transferfromsurplusofprofit&loss 5000.00 5000.00Less:Deductions - 28849.72 - 23849.72Surplusfromstatementofprofit&lossOpeningBalance 1031.23 811.86Add:profitfortheyear 6614.73 7039.96Profitavailableforappropriation 7645.96 7851.82Less:Appropriation--Generalreserve 5000.00 5000.00-Dividend(includinginterimdividendof`518.89 Crore,previousyear` 665.75Crore) 1323.00 1566.47-Corporatedividendtax(includingtaxoninterim dividend`84.18Crore,previousyear`108Crore) 220.84 1102.12 254.12 1031.23

29954.58 24883.69Proposeddividendonequitypershare(`) 3.29 3.68

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012SecuredDebentures/Bonds - -TermLoansfromStateGovernment - -TermLoansfromFinancialInstitutions - -

- -UnsecuredLongtermmaturitiesoffinanceleaseobligations 129.20 123.43

129.20 123.43129.20 123.43

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012Tradepayables 756.10 616.84Advancesreceivedfromcustomers&others 4959.23 6836.86Depositsfromcontractors&others 74.35 104.89

5789.68 7558.59

108

5-Long-termprovisions (`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012Provisionforemployeebenefits 2185.47 2076.18ContractualObligation 3602.85 2793.48Otherlong-termprovisions 144.59 136.02

5932.91 5005.68

6-Short-termborrowings (`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012SecuredLoansfrombanksPackingcredit(securedby first charge byway of hypothecationof rawmaterials,components,work-in-progress,finishedgoods,stores, Trade Receivables and other current assets bothpresentandfuture)

1,286.00 -

1,286.00 -Repayablewithinaperiodof6to9monthsatinterestraterangingfrom7.25%to7.50%

7-TradePayables (`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012TradePayables 9600.11 10143.89Acceptances 75.13 110.93

9675.24 10254.82(refertopointno.10Note31forMicroandsmallenterprisesdisclosure)

8-Othercurrentliabilities (`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012Currentmaturitiesoffinanceleaseobligation 75.09 62.43Advancesreceivedfromcustomers&others 11261.12 13144.42DepositsfromContractors&others 481.00 444.27Unclaimeddividend* 3.52 2.18Otherpayables/liabilities** 2030.82 2163.50Interestaccruedbutnotdue 1.15 0.65Interestaccruedanddueon:StateGovernmentLoans 2.33 2.33Financelease 7.07 4.82

13862.10 15824.60Advancesreceivedfromcustomers&othersincludevaluationadjustment-`5759.02Crore(previousyear`7150.34.Crore)*There isnoamountdue&outstandingasatbalancesheetdatetobetransferredto InvestorEducation&ProtectionFund.**IncludesEmployeesduesandStatutorydues.

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9-Short-termprovisions

10-Fixedassets

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Provisionforemployeebenefits 488.33 401.38ProposedDividend 804.11 900.72Corporatedividendtax 136.66 146.12Contractualobligation 1387.13 1057.43Othershort-termprovisions 178.66 87.61CorporateSocialResponsibility 14.33 42.43

3009.22 2635.69

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

(i)Tangibleassets

Grossblock 10441.74 9406.70

Less:Accumulateddepreciation 6130.42 5249.62

Less:Leaseadjustmentaccount -3.35 -3.64

NetBlock 4314.67 4160.72

(ii)Intangibleassets

Grossblock 341.52 299.94

Less:Accumulateddepreciation 197.70 163.85

Netblock 143.82 136.09

(iii)Capitalworkinprogress

Constructionwork-in-progress-Civil 214.65 338.31

Constructionstores(includingintransit) 11.27 9.99

Plant&machineryandotherequipments

-UnderErection/Fabrication/awaitingerection 630.17 702.25

-Intransit 277.30 273.80

Leasedassetsundererection 0.12 0.28

1133.51 1324.63

(iv)Intangibleassetsunderdevelopment 38.08 22.98

38.08 22.98

Total 5630.08 5644.42

RefertodetailsinNoteno.10.1

110

Note10.1FixedAssets (`inCrore)

GrossBlock Depreciation NetBlockCostAsat

31.03.2012

Additions/adjustmentsduringthe

year

Deductions/adjustmentsduringthe

year

CostAsat

31.03.2013

Leaseadjustment

Account

Depreciation/Amortisation

upto31.03.2013

Asat31.03.2013

Asat31.03.2012

Depreciation/Amortisationfortheyear

Factory/OfficeComplex(i)TangibleassetsFreeholdland(incl.developmentexp.) 16.87 0.94 17.81 17.81 16.87Leaseholdland(incl.developmentexp.) 6.05 0.15 6.20 0.41 5.79 5.66 0.01Roads,bridgesandculverts 20.53 4.50 0.01 25.02 5.13 19.89 16.82 1.45Buildings 1333.60 258.38 0.48 1591.50 594.13 997.37 862.20 123.34Leasholdbuildings 3.12 3.12 1.39 1.73 1.79 0.05Drainage,sewerageandwatersupply 21.37 3.39 0.02 24.74 11.65 13.09 10.24 0.55Railwaysiding 14.87 1.56 16.43 9.07 7.36 6.39 0.60Locomotivesandwagons 30.97 13.35 44.32 20.86 23.46 11.78 1.67Plant&Machinery 5965.60 560.90 18.10 6508.40 3991.92 2516.48 2601.42 642.71Electronicdataprocessingequipments 135.86 8.28 1.59 142.55 135.94 6.61 5.81 2.15Electricalinstallations 276.75 23.26 0.11 299.90 119.25 180.65 175.58 18.11ConstructionEquipment 212.17 36.37 0.62 247.92 163.04 84.88 78.33 29.64Vehicles 18.96 0.07 0.48 18.55 16.13 2.42 2.88 0.50Furniture&fixtures 43.08 8.93 0.55 51.46 14.86 36.60 31.54 3.45Office&otherequipments 146.70 23.69 1.13 169.26 81.44 87.82 74.12 9.57Fixedassetscostingupto`10,000/- 97.58 9.70 1.44 105.84 105.84 9.83Capitalexpenditure 0.44 0.44 0.44AssetsGivenonLease 497.15 497.15 3.35 493.79 6.71 3.79 0.15EDPEquipmenttakenonlease 340.14 81.06 20.89 400.31 232.94 167.37 155.75 68.09Office&otherequipmenttakenonlease 4.67 0.83 3.84 0.74 3.10 4.22 0.29Otherassetstakenonlease 1.34 0.83 2.17 2.17 0.36TotalTangibleAssets-Factory 9187.82 1035.36 46.25 10176.93 3.35 6001.14 4179.14 4065.19 912.52(ii)IntangibleAssets-InternallydevelopedSoftwarePatents&TradeMarksTechnicalKnowHowOthers 29.96 10.19 0.05 40.10 23.45 16.65 15.76 9.29-OthersSoftware 119.83 20.93 0.07 140.69 120.30 20.39 9.83 10.40Patents&TradeMarksTechnicalKnow-how 141.30 10.58 151.88 45.10 106.78 110.45 14.24Others 8.85 8.85 8.85 0.05 0.05TotalintangibleAssets-Factory 299.94 41.70 0.12 341.52 197.70 143.82 136.09 33.98TotalofFactoryAssets 9487.76 1077.06 46.37 10518.45 3.35 6198.84 4322.96 4201.28 946.50Township/ResidentialTangibleassetsFreeholdland(incl.developmentexp.) 2.09 2.09 2.09 2.09Leaseholdland(incl.developmentexp.) 1.99 0.05 2.04 0.62 1.42 1.41 0.02Roads,bridgesandculverts 5.09 0.59 5.68 3.01 2.67 2.17 0.09Buildings 130.93 43.55 2.98 171.50 64.40 107.10 68.75 3.17Leaseholdbuildings 0.27 0.27 0.21 0.06 0.07 0.01Drainage,sewerageandwatersupply 17.19 0.17 17.36 14.53 2.83 3.04 0.38PlantandMachinery 17.55 2.27 0.01 19.81 12.56 7.25 6.36 1.37ElectronicDataProcessingEquipmentElectricalinstallations 17.73 0.89 0.09 18.53 14.98 3.55 3.21 0.48Vehicles 1.08 0.01 1.07 1.02 0.05 0.07 0.01Furniture&fixtures 0.85 0.12 0.03 0.94 0.36 0.58 0.56 0.07Office&otherequipments 21.67 1.34 0.10 22.91 14.98 7.93 7.80 1.11Fixedassetscostingupto`10,000/- 2.44 0.18 0.01 2.61 2.61 0.18TotalTangibleAssets-Township 218.88 49.16 3.23 264.81 129.28 135.53 95.53 6.89TotalofTownshipAssets 218.88 49.16 3.23 264.81 129.28 135.53 95.53 6.89TotalofTangibleAssets 9406.70 1084.52 49.48 10441.74 3.35 6130.42 4314.67 4160.72 919.41TotalofIntangibleAssets 299.94 41.70 0.12 341.52 197.70 143.82 136.09 33.98TotalofFactory&Township 9706.64 1126.22 49.60 10783.26 3.35 6328.12 4458.49 4296.81 953.39Previousyear 8049.74 1700.00 43.10 9706.64 3.64 5413.47 4296.81 3400.92 800.00ThedetailsofR&DcapitalitemsincludedinabovePlant&Machinery&otherEquipments 359.12 76.02 435.14 266.49 168.65 124.45 31.62Building 31.62 5.40 37.02 17.67 19.35 14.98 1.03GrossBlockasat31.03.2013includesassetscondemnedandretiredfromactiveuse ` 61.57Crore(Previousyear`59.20Crore)NetBlockasat31.03.2013includesassetscondemnedandretiredfromactiveuse` 0.14Crore(Previousyear`0.18Crore)GrossBlockexcludescostofassetspurchasedoutofgrantreceivedfromGovtofIndiaforresearchasexecutingagencysincethepropertydoesnotvestwiththeCompany.

2012-13 2011-1230.81 30.81

Thereisnoimpairmentlossinfixedassetsduringtheyear.

A n n u A l R e p o R t2 0 1 2 - 1 3

111

11-Non-currentinvestments(`inCrore)

Figuresasat1.03.2013 Figuresasat1.03.2012LongTermInvestments(atcost)UnquotedShares(Fullypaidup):TRADE:

1402(previousyear1402)EquitySharesof 10/-each(Previousyear`10each)ofEngineeringProjects(India)Ltd. * *

728960(previousyear728960)EquitySharesof`10/-eachofAPGasPowerCorporationLtd. 0.91 0.91

5000000 (Previous year 5000000) Equity Shares of `10/-eachofNeelachalIspatNigamLtd. 5.00 5.91 5.00 5.91

SubsidiaryCompanies-

337978 (previous year 337978) Equity Shares of ` 1000/-each of Bharat Heavy Plate & Vessels Ltd. acquired at anominalvalueof`1/- * *

5355000 (previous year 5355000) Equity Shares of ` 10/-eachofBHELElectricalMachinesLtd. 5.36 5.36 5.36 5.36

JointVentureCompanies

1999999 (previous year 1999999) Equity Shares of ` 10/-eachofPowerplantPerformanceImprovementLtd. 2.00 2.00

Less:Provisionfordimunitioninvalue 2.00 2.00

-25000000(previousyear25000000)EquitySharesof`10/-eachofNTPC-BHELPowerProjectsPvt.Ltd. 25.00 25.00

-Nil(previousyear32500000)EquitySharesof`10/-eachofUdangudiPowerCorporationLtd. - 32.50

- 331523312 (previous year 331523312) Equity Shares of `10/-eachofRaichurPowerCorporationLtd. 331.52 331.52

-22500000(previousyear22500000)EquitySharesof`10/-eachofDadaDhuniwaleKhandwaPowerLtd. 22.50 22.50

-2500000(previousyear2500000)EquitySharesof`10/-eachofLaturPowercompanyLtd. 2.50 2.50

-2379999(previousyear2379999)EquitySharesof`10/-eachofBHEL-GEGasTurbineServicesPvt.Ltd. 2.38 383.90 2.38 416.40

AdvancesdeposittowardsissueofSharesToBharatHeavyPlate&VesselsLtd.(SubsidiaryCompany) 34.00 34.00

OTHERTHANTRADE:

3 (Previous year 3) shares of` 100/- eachof BHELHouseBuildingCooperativeSocietyLtd.,Hyderabad * *

*Valueoflessthan`1lakh/-429.17 461.67

AggregatevalueofUnquotedInvestments 429.17 461.67

AggregateprovisionindiminutioninvalueofInvestments 2.00 2.00

112

12-Deferredtaxassets(Net)

13-Long-termloansandadvances

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012Provisions 1088.81 1018.58Statutarydues 484.03 555.64ModvatAdjustment 60.79 75.57Others 31.94 36.47

1665.57 1686.26DeferredTaxLiabilitiesDepreciation 114.88 140.02Deferredtaxassets(net) 1550.69 1546.24

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012LoansLoanstoSubsidiaryCompanies 234.98 218.87Capitaladvance 60.76 21.77Deposits 51.22 42.65Loanstoemployees 0.01 0.01LoanstoPublicSectorUndertakings 12.00 16.00LoanstoOthers 0.00 0.01Interestaccruedandordueonloans 0.56 359.53 0.78 300.09Advances(Recoverableincashorinkindorforvaluetobereceived)Forpurchases 113.21 416.66ToOthers 70.06 183.27 118.02 534.68DepositsBalancewithcustoms,PortTrustandotherGovtAuthorities 42.48 38.50AdvanceTax/TDS(NetofProvisionforTaxation ` 9268.23crore(Previousyear`8293.49Crore) 343.06 72.31

928.34 945.59Less:Provisions 23.01 45.49

905.33 900.10Subclassification:-Secured,consideredgood 12.15 16.27Unsecured,consideredgood 893.18 883.83Doubtful 23.01 45.49

928.34 945.59Includes:DuefromOfficers 0.03 -

A n n u A l R e p o R t2 0 1 2 - 1 3

113

14-Othernon-currentassets

15-Inventories

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Longtermtradereceivables 13036.39 11494.90

Less:Provisionforbad&doubtfuldebts 1804.84 1749.90

Less:Automaticpricereductionadjustment 577.83 10653.72 361.39 9383.62

10653.72 9383.62

Subclassification:Longtermtradereceivables

Secured,consideredgood - -

Unsecured,consideredgood 10653.72 9383.62

Doubtful 2382.67 2111.29

13036.39 11494.90

Longtermtradereceivablesincludedeferreddebts-

-` 9859.62Crore(previousyear`8194.77Crore)

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Rawmaterial&components 4489.12 4937.63

Material-in-transit 664.73 5153.85 1846.42 6784.05

Work-in-progress 4188.19 4820.87

(includingitemswithsub-contractors)

Finishedgoods 1358.14 951.41

Interdivisiontransfersintransit 297.06 1655.20 199.60 1151.01

Stores&spareparts

Production 238.85 209.83

Fuelstores 23.94 15.03

Miscellaneous 45.20 307.99 35.87 260.73

Materialswithfabricators/contractors 234.94 316.70

Loosetools 44.36 46.16

Scrap(atestimatedrealisablevalue) 63.42 64.98

Nonmovinginventory 170.64 162.39

Less:Provisionfornon-movinginventory 54.77 115.87 58.16 104.23

11763.82 13548.73

RefertoSignificantAccountingPolicyNo.9regardingmodeofvaluation

114

16-Tradereceivables

17-Cash&BankBalances

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Debtsoutstandingforaperiodexceedingsixmonths 11631.09 10279.39

Otherdebts 18604.19 16811.30

30235.28 27090.69

Less:Provisionforbad&doubtfuldebts&automaticpricereductionadjustment 1000.79 733.76

29234.49 26356.93

Tradereceivablesincludedeferreddebts-

-` 7220.91Crore(previousyear`6057.02Crore)

Tradereceivablesincludegoodsdespatchedpendingbilling

-` 1705.16Crore(previousyear`1717.07Crore)

Tradereceivablesincludevaluationadjustment-

-`1274.42Crore(previousyear`1475.07Crore)

Particularsoftradereceivables:

Secured,consideredgood - -

Unsecured,consideredgood 29234.49 26356.93

Doubtful 1000.79 733.76

30235.28 27090.69

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Cash&cashequivalents

BalanceswithBanks* 2562.47 1661.62

FixedDepositshavingmaturitylessthan3months 1300.00 1250.00

Cheques,DemandDraftsonhand 418.47 359.11

Cash&Stampsinonhand 1.11 1.25

OtherBankBalances

FixedDeposithavingmaturitymorethan3months&lessthan12months 3450.00 3400.00

7732.05 6671.98

*Includes

Earmarkedagainstunclaimeddividend 3.52 2.18

Non-repatriableaccount 13.16 19.28

A n n u A l R e p o R t2 0 1 2 - 1 3

115

18-Short-termloansandadvances

19-Othercurrentassets

(`inCrore)

Figuresasat31.03.2013

Figuresasat31.03.2012

Loans

LoanstoSubsidiaryCompanies 0.00 1.70

LoanstoEmployees 0.02 0.02

MaterialsIssuedonloan 9.74 9.74

Loanstoothers 0.01 0.01

LoanstoPublicSectorUndertakings 4.00 4.00

Interestaccruedandordueonloans 2.64 16.41 1.59 17.06

Advances(Recoverableincashorinkindorforvaluetobereceived)

Tosubsidiaries 0.55 1.86

Toemployees 31.07 30.97

Forpurchases 695.56 945.26

ToOthers 940.91 1668.09 844.57 1822.66

Deposits

Balancewithcustoms,PortTrustandotherGovtAuthorities 336.71 285.34

Others 60.24 44.50

2081.45 2169.56

Less:Provisionfordoubtfulloans&advances 52.33 57.83

2029.12 2111.72

ParticularsofLoansandadvances:-

Secured,consideredgood 6.19 4.25

Unsecured,consideredgood 2022.93 2107.47

Doubtful 52.33 57.83

2081.45 2169.56

Includes:

DuefromDirectors - -

DuefromOfficers 0.11 0.13

(`inCrore)

Figuresasat31.03.2013

Figuresasat31.03.2012

InterestAccruedonBanksDepositsandinvestments 199.98 150.61

199.98 150.61

116

20-Revenuefromoperations

21-Otheroperationalincome

22-Otherincome

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Saleslessreturns(gross) 43424.62 44147.75Incomefromexternalerection&otherservices&revenuefromworkscontract 6731.86 5362.03

50156.48 49509.78Referpointno.28Aofnoteno.31

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

ExportIncentives 24.26 11.95Rentalincomeonleasedassets 0.93 0.93Leaseequalisationaccount -0.29 0.64 3.82 4.75Scrapsale 283.35 307.59Receiptfromsale/transferofsurplusstock 0.07 0.17Others 498.66 426.57

806.98 751.03

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

A.Otherincome

ProfitonsaleofLongtermInvestments 31.50 -

Profitfromsaleoffixedassets&capitalstores(net) 3.31 4.01Dividend 19.00 16.98Exchangevariation(net) 143.38 99.32Others (including grants of ` 0.33 Crore(previousyear` 0.33Crore)fromGovtofIndiaforR&DProjects)

319.57 331.37

Total(A) 516.76 451.68B.InterestIncome*Fromcustomers 0.03 2.56Frombanks 534.41 786.78Others 70.51 24.53*TDS` 56.08Crore(previousyear` 83.22Crore)

Total(B) 604.95 813.87

TotalOtherIncome Total(A+B) 1121.71 1265.55

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117

24-Increase/(Decrease)inworkinprogress&finishedgoods

25-Employeebenefitsexpense

23-Costofmaterialconsumption,erectionandengineeringexpenses

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Work-in-progress

ClosingBalance 4188.13 4821.13

OpeningBalance 4821.13 -633.00 4126.60 694.53

FinishedGoods

ClosingBalance 1359.89 952.42

OpeningBalance 952.42 407.47 858.65 93.77

Inter-divisiontransferintransit 109.32 34.90

NOTE: -116.21 823.20

ElementofExcisedutyinFinishedGoods

ClosingBalance 126.49 99.97

OpeningBalance 99.97 81.96

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Salaries,wages,bonus,allowances&otherbenefits 4856.50 4594.68

Contributiontogratuityfund 142.09 150.66

Contributiontoprovidentandotherfunds 297.60 275.77

Groupinsurance 11.77 12.12

Staffwelfareexpenses 444.82 432.20

5752.78 5465.43

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Consumptionofrawmaterial&components* 23043.84 24549.35

Consumptionofstores&spares 583.89 563.77

ErectionandEngineeringexp.-paymenttosubcontractors 4271.64 3794.61

27899.37 28907.73

*Referpointno.28fofnoteno.31

118

26-Financecosts

27-Otherexpensesofmanufacture,administration,selling&distribution

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Interestexpense 42.39 47.34

OtherBorrowingCosts 82.88 3.94

125.27 51.28

Less:BorrowingCostcapitalised - -

125.27 51.28

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Royalty,technical,Residentconsultant'scharges&otherconsultancycharges 124.10 79.84

Rent 84.79 94.92

Exciseduty 307.14 248.30

Power&Fuel 555.78 510.25

Rates&taxes 71.42 46.26

Servicetax 13.22 15.15

Insurance 125.79 133.46

Repairs:

Buildings 95.59 79.64

Plant&machinery 37.83 35.60

Others 152.36 138.61

Otherexpensesinconnectionwithexports 28.28 26.79

Losseswrittenoff 1.06 0.09

Baddebtswrittenoff 28.12 22.64

Carriageoutward 573.44 623.06

Travelling&conveyance 197.45 183.02

Miscellaneousexpenses 994.12 874.39

Liquidateddamageschargedoff 348.08 74.56

Donations 0.03 0.17

Corporatesocialresponsibility&sustainabilitydevelopmentexpenses 37.96 36.46

3776.56 3223.22

A n n u A l R e p o R t2 0 1 2 - 1 3

119

28-Provisions(net) (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Doubtfuldebts,LiquidatedDamagesandLoans&advancesCreatedduringtheyear 1195.88 973.61Lesswrittenbackduringtheyear 819.55 376.33 345.30 628.31ContracutalObligationsCreatedduringtheyear 1786.05 1193.73Lesswrittenbackduringtheyear 644.23 1141.82 330.92 862.81OthersCreatedduringtheyear 86.87 52.56Lesswrittenbackduringtheyear 39.25 47.62 141.10 -88.54

1565.77 1402.58

29-Priorperiodadjustment(net) (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

INCOMESaleslessreturns 1.97 -19.32Otheroperationalincome 0.00 0.30Otherincome 0.12 0.17Interestincome 0.00 2.09 -0.21 -19.06

EXPENDITUREPaymenttoSubcontractor 0.06 -ConsumptionofRawmaterial&components 0.47 1.64Depreciation 0.77 2.67Misc.Expenses 1.23 2.53 -4.11 0.19

-0.44 -19.25

30-Taxexpense (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

a)CurrenttaxForcurrentyear 3042.00 3277.00Excessprovisioncreatedinearlieryearswrittenback -219.85 2822.15 -632.00 2645.00b)Deferredtaxcharge/(credit)Forcurrentyear -163.26 7.13Forearlieryears 158.82 -4.44 610.17 617.30

2817.71 3262.30

120

SignificantAccountingPolicies1 BasisofpreparationofFinancialStatements

Thefinancialstatementshavebeenpreparedasofagoingconcernonhistoricalcostconventionandon accrual method of accounting in accordancewiththegenerallyacceptedaccountingprinciplesandtheprovisionsoftheCompaniesAct,1956asadoptedconsistentlybytheCompany.

2 UseofEstimates

The preparation of financial statements inconformity with generally accepted accountingprinciples requires the Management to makeestimatesandassumptionsthataffecttheincomeandexpenditureduringthereportingperiodandthe assets and liabilities including contingentliabilitiesatthedateoffinancialstatements.Thedifferencesbetweenactualresultsandestimatesarerecognizedintheperiodinwhichresultsareknown.

3 FixedAssets

Fixedassets (other than landacquiredfree fromState Government) are carried at the cost ofacquisition or construction or book value lessaccumulateddepreciationandimpairment,ifany.

Cost includes value of internal transfers forcapitalworks,takenatactual/estimatedfactorycost or market price, whichever is lower. Effectof extraordinary events such as devaluation/revaluationinrespectoflongtermliabilities/loansutilisedforacquisitionoffixedassetsisaddedto/reducedfromthecost.

Land acquired free of cost from the StateGovernment is valued at ` 1/- except for thatacquired after 16th July 1969, in which case thesameisvaluedattheacquisitionpriceoftheStateGovernment concerned,by corresponding credittocapitalreserve.

4 Leases

FinanceLease

A) (i) AssetsGivenonLeasePriorto1stApril2001

Assetsmanufacturedandgivenonfinancelease are capitalised at the normal sale

price/fair value/contracted price andtreatedassales.

Depreciation on the same is chargedat the rate applicable to similar type offixed assets as per Accounting Policy on‘Depreciation’. Against lease rentals,matching charge ismade through LeaseEqualisationAccount.

Finance income is recognised over theleaseperiod.

(ii) Assets Given on Lease on or after 1stApril,2001

Assetsmanufacturedandgivenonfinancelease are recognised as sales at normalsaleprice/fairvalue/NPV.

Finance income is recognised over theleaseperiod.

Initial direct costs are expensed at thecommencementoflease.

B) Assets Takenon Leaseonor after 1st April 2001

Assets taken on lease are capitalised at fairvalue/NPV/contractedprice.

Depreciation on the same is charged at therateapplicabletosimilartypeoffixedassetsas per Accounting Policy on ‘Depreciation’.If the lease assets are returnable to thelessoronexpiryof leaseperiod, thesame isdepreciatedoveritsusefullifeorleaseperiod,whicheverisshorter.

Lease payments made are apportionedbetween finance charges and reduction ofoutstandingliabilityinrelationtoassetstakenonlease.

OperatingLease

A) AssetsGivenonLease:

Assetsmanufacturedandgivenonoperatinglease are capitalised. Lease income arisingtherefrom is recognised as income over theleaseperiod.

A n n u A l R e p o R t2 0 1 2 - 1 3

121

B) AssetsTakenonLease:

Lease payments made for assets taken onoperating lease are recognised as expenseovertheleaseperiod.

5 IntangibleAssets

A) Intangibleassetsarecapitalisedatcostif

a. it is probable that the future economicbenefitsthatareattributabletotheassetwillflowtothecompany,and

b. the company will have control over theassets,and

c. thecostoftheseassetscanbemeasuredreliably and is more than ` 10,000/.Intangible assets are amortised overtheirestimatedusefullivesnotexceedingthree years in case of software and notexceedingtenyearsincaseofothersonastraightlinepro-ratamonthlybasis.

B) a. Expenditure on research including theexpenditure during the research phaseof Research & Development Projects ischargedtoStatementofprofitandlossintheyearofincurrence.

b. Expenditure incurred on Developmentincluding the expenditure during thedevelopment phase of Research &DevelopmentProjectmeetingthecriteriaasperAccountingStandardonIntangibleAssets,istreatedasintangibleasset.

c. Fixed assets acquired for purposes ofresearchanddevelopmentarecapitalised.

6 BorrowingCosts

Borrowing costs that are attributable to themanufacture, acquisition or construction ofqualifyingassets,areincludedaspartofthecostofsuchassets.

A qualifying asset is one that necessarily takesmore than twelve months to get ready forintendeduseorsale.

Otherborrowingcostsarerecognisedasexpenseintheperiodinwhichtheyareincurred.

7 Depreciation

(i) Depreciationonfixedassets(otherthanthoseusedabroadundercontract)ischargeduptothe total cost of the assets on straight-linemethodaspertheratesprescribedinScheduleXIVoftheCompaniesAct,1956,exceptwheredepreciation is charged at rates determinedon the basis of the technically assessedestimatedusefullivesshownhereunder:-

SingleShift

DoubleShift

Triple Shift

GeneralPlant&Machinery 8%

12% 16%

Automatic/Semi-AutomaticMachines 10% 15% 20%

ErectionEquipment,CapitalTools&Tackles 20%

TownshipBuildings

–SecondClass 2.5%

–ThirdClass 3.5%

RailwaySidings 8%

Locomotives&Wagons

8%

ElectricalInstallations 8%

Office&OtherEquipments 8%

Drainage,Sewerage&Watersupply 3.34%

ElectronicDataProcessingEquipment 20%

In respect of additions to/deductions fromthe fixed assets, depreciation is charged onpro-ratamonthlybasis.

(ii) Fixed assets used outside India pursuant tolongtermcontractsaredepreciatedoverthedurationoftheinitialcontract.

(iii) Fixed assets costing ` 10,000/- or less andthose whose written down value as at thebeginning of the year is ` 10,000/- or less,are depreciated fully. In so far as townshipbuildingsareconcerned,thecostpertenementisthebasisforthelimitof` 10,000/-.

122

(iv) At erection/project sites: The cost of roads,bridgesandculvertsisfullyamortizedoverthetenure of the contract, while sheds, railwaysidings, electrical installations and othersimilar enabling works (other than purelytemporaryerections,woodenstructures)aresodepreciatedafterretaining10%asresidualvalue.

(v) Purely Temporary Erection such as woodenstructuresarefullydepreciatedintheyearofconstruction.

(vi) Leasehold Land and Buildings are amortisedovertheperiodoflease.Buildingsconstructedon land takenon leasearedepreciatedovertheirusefullifeortheleaseperiod,whicheverisearlier.

8 Investments

(i) Long–term investments are carried at cost.Decline,otherthantemporary,inthevalueofsuchinvestments,isrecognisedandprovidedfor.

(ii) Current investments are carried at costor quoted/fair value whichever is lower.Unquotedcurrentinvestmentsarecarriedatcost.

(iii) The cost of investment includes acquisitionchargessuchasbrokerage,feesandduties.

Any reduction in thecarryingamount&anyreversals of such reductions are charged orcreditedtotheStatementofprofitandloss.

9 InventoryValuation

(i) Inventory is valued at actual/estimated costornetrealisablevalue,whicheverislower.

(ii) FinishedgoodsinPlantandworkinprogressinvolvingHydroandThermalsetsincludinggasbasedpowerplants,boilers,boilerauxiliaries,compressors and industrial turbo sets arevaluedatactual/estimatedfactorycostorat97.5% of the realisable value, whichever islower.

(iii) In respect of valuation of finished goodsin plant and work-in-progress, cost means

factory cost; actual/estimated factory costincludesexcisedutypayableonmanufacturedgoods.

(iv) Inrespectofrawmaterial,components,loosetools,storesandsparescostmeansweightedaveragecost.

(v) (a)ForConstructioncontractsenteredintoonorafter01.04.2003:

Where current estimates of cost andsellingpriceofacontractindicatesloss,theanticipatedlossinrespectofsuchcontractis recognised immediately irrespective ofwhetherornotworkhascommenced.

b) Forallothercontracts:

Where current estimates of cost andselling price of an individually identifiedprojectformingpartofacontractindicatesloss, the anticipated loss in respect ofsuch project on which the work hadcommenced,isrecognised.

c) In arriving at the anticipated loss, totalincome including incentives on exports/deemedexportsistakenintoconsideration.

(vi) The components and other materialspurchased/manufacturedagainstproductionorders but declared surplus are charged offtorevenueretainingresidualvaluebasedontechnicalestimates.

10 RevenueRecognition

Salesarerecordedbasedonsignificantrisksandrewardsofownershipbeingtransferredinfavourofthecustomer.Salesincludegoodsdispatchedtocustomersbypartialshipment.

A. Forconstructioncontractsenteredintoonorafter1.4.2003

Revenue is recognized on percentagecompletionmethodbasedonthepercentageofactualcostincurreduptothereportingdatetothetotalestimatedcostofthecontract.

B. Forallothercontracts

(i) Recognition of sales revenue in respectof long production cycle items (Hydro

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and Thermal sets including gas-basedpower plants, boilers, boiler auxiliaries,compressorsandindustrialturbosets) ismade on technical estimates.When theaggregatevalueofshipmentsrepresents30%ormoreoftherealizablevalue,theyareconsideredat97.5%oftherealizablevalue or in its absence, quoted price.Otherwise,theyareconsideredatactual/estimated factory cost or 97.5% of therealizable value,whichever is lower. Thebalance 2.5% is recognized as revenueon completion of supplies under thecontract.

(ii) Income from erection and projectmanage-ment services is recognizedon work done based on: Percentage ofcompletion;or

The intrinsic value, reckoned at 97.5%of contract value, the balance 2.5% isrecognizedas incomewhenthecontractiscompleted.

(iii) Income from engineering servicesrenderedisrecognizedatrealizablevaluebasedonpercentageofworkcompleted.

(iv) Income from supply/ erection of non-BHELequipment/systemsandcivilworksis recognized based on dispatches tocustomer/workdoneatprojectsite.

11 AccountingforForeignCurrencyTransactions

Transactionsinforeigncurrenciesarerecordedattheexchangeratesprevailingon thedateof thetransaction. Foreign currency monetary assetsandliabilitiesaretranslatedatyearendexchangerates. Exchangedifferencearisingonsettlementoftransactionsandtranslationofmonetaryitemsarerecognizedasincomeorexpenseintheyearinwhichtheyarise.

12 Translation of Financial Statements of IntegralForeignOperations

(i) Items of income and expenditure aretranslatedataveragerateexceptdepreciation,which is converted at the rates adopted forthecorrespondingfixedassets.

(ii) Monetary itemsaretranslatedattheclosingrate;non-monetaryitemscarriedathistoricalcost are translated at the rates in force onthe date of the transaction; non-monetaryitems carried at fair value are translated atexchange rates that existed when the valueweredetermined.

(iii) All translation variances are taken toStatementofprofitandloss.

13 EmployeeBenefits

Provident Fund and Employees’ Family PensionScheme contributions are accounted for onaccrualbasis.Liability forEarnedLeave,HalfPayLeave, Gratuity, Travel claims on retirement andPost RetirementMedical Benefits are accountedfor in accordance with actuarial valuation.Compensation under Voluntary RetirementSchemeischargedoffintheyearofincurrenceonapro-ratamonthlybasis.

14 Claimsby/againsttheCompany

(i) Claims for liquidated damages against theCompany are recognised in accounts basedonmanagement’sassessmentoftheprobableoutcome with reference to the availableinformation supplemented by experience ofsimilartransactions.

(ii) Claimsforexportincentives/dutydrawbacks/duty refunds and insurance claims etc. aretakenintoaccountonaccrual.

(iii) Amounts due in respect of price escalationclaims and/or variations in contract workare recognised as revenue only when thereare conditions in the contracts for suchclaims or variations and/or evidence of theacceptability of the same from customers.However, escalation is restricted to intrinsicvalue.

15 ProvisionforWarranties

(i) Forconstructioncontractsenteredintoonorafter01.04.2003:

Thecompanyprovideswarrantycostat2.5%of the revenueprogressively as andwhen itrecognises the revenue and maintain thesamethroughthewarrantyperiod.

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(ii) Forallothercontracts:

Provisionforcontractualobligationsinrespectofcontractsunderwarrantyattheyearendismaintainedat2.5%ofthevalueofcontract.Inthecaseofcontractsforsupplyofmorethana single product 2.5% of the value of eachcompletedproductisprovided.

(iii)Warranty claims / expenses on rectificationwork are accounted for against naturalheadsasandwhen incurredandcharged toprovisionsintheyearend.

16 GovernmentGrants

GovernmentGrantsareaccountedwhenthereisreasonablecertaintyoftheirrealisation.

Grants related to fixed depreciable assets areadjusted against the gross cost of the relevantassets while those related to non-depreciableassets are credited to capital reserve. Grants related to revenue, unless received as compen-sation for expenses/losses, are recognised asrevenueovertheperiodtowhichthesearerelatedontheprincipleofmatchingcoststorevenue.

Grants in the form of non-monetary assets areaccountedforattheacquisitioncost,oratnominalvalueifreceivedfree.

17 TaxesonIncome

Currenttaxisdeterminedonthebasisoftaxableincome in accordance with the provisions ofthe IncomeTaxAct, 1961.Deferred tax liability/asset resulting from timing difference between

accounting income and taxable income isrecognisedconsideringthetaxrateandlawsthathave been enacted or substantively enacted ason the balance sheet date. Deferred tax assetis accounted for and carried forward only tothe extent that there is reasonable certaintythat sufficient future taxable income will beavailable againstwhich such deferred tax assetscan be realised. Deferred tax assets in respectof unabsorbed depreciation and carry forwardof losses are recognised only if there is virtualcertainty that there will be sufficient futuretaxableincomeavailabletorealisesuchassets.

18 Impairment

The carrying amount of cash generating units isreviewedateachbalancesheetdatewherethereis any indication of impairment. An impairmentlossisrecognisedinthestatementofprofitandloss where the carrying amount exceeds therecoverableamountofthecashgeneratingunits.Animpairmentlossisreversedifthereischangeintherecoverableamountandsuchlosseithernolongerexistsorhasdecreased.

19 SegmentReporting

Segment reporting is in linewith theaccountingpolicies of the company. Revenue and expensesare identified to segments on the basis of theirrelationship to the operating activities of thesegment.Revenue,expenses,assetsandliabilitieswhich are not allocable to segments on areasonablebasis,areincludedunder"Unallocatedrevenue/expenses/assets/liabilities.

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S. No.

Description 2012-2013 2011-2012

1 Estimated amount of contracts, net of advances, remaining to beexecutedoncapitalaccountandnotprovidedfor `inCrore 323.89 625.12Theaboveincludesforacquisitionofintangibleassets `inCrore 1.65 13.84Inviewofthenatureofbusiness,beinglongtermconstructioncontractstheremaybeothercommitmentsforpurchaseofmaterialetc.,whichhasbeenconsideredasnormalbusinessprocess,hencenotbeendisclosed.

2 Landandbuildingsincludesa) (i) Acresoflandforwhichformaltransfer/leasedeedhavenot

beenexecuted Acres 8662.27 8662.27(ii) Numberofflats forwhich formal transfer/ leasedeedhave

notbeenexecuted(NetBlock`0.12cr(previousyear`0.13cr))

Nos. 12 12

(iii) Number of buildings forwhich formal transfer/ lease deedhavenotbeenexecuted(NetBlock`5.21cr(previousyear`5.35cr))

Nos. 1 1

(iv) Acresoflandforwhichthecostpaidisprovisional;registrationcharges and stampduty (netof provision alreadymade), ifany,wouldbeaccountedforonpayment. Acres 51.52 91.52

b) Acres of land leased to Ministry of Defence, Govt. of IndiaDepartments&others Acres 31.27 31.27

c) Acres of land being used byMinistry of Defence and for whichfurther approval of the competent authority for continuance oflicencingofthislandisawaited. Acres 180.00 180.00

d) Acresoflandisunderadversepossession.(Costoflandmentionedabovein(a)(i),(a)(iv),(b),(c)and(d)isnotmaterial)

Acres 377.93 122.94

3 Theimpactontheprofitofproviding100percentdepreciationonfixedassetsupto`10,000/-each,withoutconsideringsuchimpactofearlieryears,isasunder:100%depreciationonassetsupto 10,000/-chargedoffintheaccountingyear. `inCrore 11.40 22.98Normaldepreciationonabove. `inCrore 3.33 5.79Excessamountcharged. `inCrore 8.07 17.19

4 Saleslessreturnsa) includesbasedonprovisionalprices; `inCrore 261.87 242.89b) includes for escalation claims raised in accordance with sales

contracts, inclusive of escalation claims on accrual basis, to theextentlatestindiceswereavailable; `inCrore 2136.62 2156.26

c) includesdespatchesofequipmentheldonbehalfofcustomersattheirrequestforwhichpaymenthasbeenreceivedbyCompany;and `inCrore 151.55 30.88

d) excludesforpricereduction(netofrefund)duetodelayindeliveryasperthetermsofthecontract. `inCrore 201.19 263.79

31-OtherNotesonFinancialStatements

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5 Contingentliabilities:

Claimsagainstthecompanynotacknowledgedasdebt:

i) a) IncomeTaxPendingAppeals `inCrore 34.05 45.20

b) Againstwhich paid under protest included under the head"depositsothers" `inCrore 0.00 0.00

ii) a) SalesTaxDemand `inCrore 876.47 732.70

b) Againstwhich paid under protest included under the head"AdvancesRecoverable" `inCrore 121.85 98.39

iii) a) ExciseDutydemands `inCrore 333.56 320.08

b) Againstwhich paid under protest included under the head"AdvancesRecoverable" `inCrore 8.52 7.84

iv) a) CustomDutydemands `inCrore 0.21 0.21

b) Againstwhich paid under protest included under the head"AdvancesRecoverable" `inCrore 0.06 0.06

v) Court&Arbitrationcases `inCrore 726.38 559.23

vi) a) LiquidatedDamages `inCrore 3376.67 2283.63

b) AmountdeductedbycustomerstowardsLDincludedinvi)a) `inCrore 2004.98 1579.19

vii) CounterClaimbycontractors `inCrore 0.61 0.61

viii) a) ServiceTaxDemand `inCrore 165.41 131.75

b) Againstwhichpaidunderprotest `inCrore 0.01 0.00

ix) Others `inCrore 56.54 106.34

x) CorporateGuaranteegivenonbehalfofsubsidiarycompany(BHPV) `inCrore 6.56 9.57

(Inviewofthevariouscourtcasesandlitigationsandclaimsdisputedbythecompanyfinancialimpactastooutflowofresourcesisnotascertainableatthisstage).

6 Cash credit limit from banks aggregating to ` 5000 Crore (previous year ` 3000 Crore) and Company’scounterguarantee/indemnityobligationsinregardtobankguarantee/lettersofcreditlimitaggregatingto `50000Crore(previousyear`52000Crore)sanctionedbytheconsortiumbanksaresecuredbyfirstchargebywayofhypothecationofrawmaterials,components,workinprogress,finishedgoods,stores,tradereceivablesand other current assets both present and future. The outstanding bank guarantees as at 31.03.2013 is `41786Crore(previousyear`38200Crore)andCorporateGuaranteeason31.03.2013 is`4717.71Crore(Previousyear`4448.14Crore).

7 Otherpayable/liabilitiesincludeasumof`100.51Crore(previousyear`100.51Crore)towardsguaranteefeedemandedbytheGovernmentofIndiainrespectofforeigncurrencyloanstakenbytheCompanyattheinstanceoftheGovernmentupto1990-91.ThematterforitswaiverhasbeentakenupwiththeGovernmentsincetherewasnostipulationforpaymentofsuchguaranteefeeatthetimetheloans(guaranteedbyGovernment)weretaken.VideBHELletterdated19.09.2012,DepartmentofHeavyIndustries(DHI)hasbeenagainrequestedforwaiveroftheguaranteefee.ThematterisunderdiscussionswithDHI.

8 Amorphous Silicon Solar Cell Plant (ASSCP), Gurgaon was taken on April 1, 1999 from Ministry of Non-conventionalEnergySourcesonleaseforaperiodof30years.TheformalleaseagreementwiththeMinistryofNon-ConventionalEnergySourcesisyettobefinalised.

9 BalancesshownunderTradereceivables,Tradepayables,contractor’sadvances,depositsandstock/materialslyingwithsub-contractors/fabricatorsaresubjecttoconfirmation,reconciliation&consequentialadjustment,ifany.ThereconciliationiscarriedoutonongoingbasisastheCompanyisinthebusinessoflongtermconstructioncontracts&provisionswhereverconsiderednecessaryhavebeenmadeinlinewiththeguidelines.

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10 ThedisclosurerelatingtoMicroandSmallEnterprises 2012-13 2011-12

TotalOutstandingattheendoftheaccountingyear `inCrore 503.30 554.33

i) Theprincipalamountremainingunpaidtosupplierasattheendoftheaccountingyear `inCrore 492.83 542.82

ii) Theinterestduethereonremainingunpaid,tosupplierasattheendofaccountingyear. `inCrore 10.47 11.51

iii) The amount of interest paid, along with the amounts of thepaymentmadetothesupplierbeyondappointeddayduringtheyear. `inCrore 0.00 0.00

iv) The amount of interest paid in terms of section 18, along withthe amounts of the payment made to the supplier beyond theappointeddayduringtheyear. `inCrore 0.00 0.00

v) Theamountofinterestdueandpayablefortheperiodofdelayinmakingpayment(whichhavebeenpaidbutbeyondtheappointeddayduringtheyear)butwithoutadding interestspecifiedunderthisAct. `inCrore 5.67 1.76

vi) The amount of interest accrued during the year and remainingunpaidattheendofyear. `inCrore 8.07 4.05

vii) Theamountof further interest remainingdueandpayableeveninthesucceedingyears,untilsuchdatewhentheinterestduesasaboveareactuallypaidtothesmallenterprises,forthepurposeofdisallowanceasadeductibleexpenditure. `inCrore 10.14 5.22

11 a) ThedisclosuresrelatingtoConstructionContractsenteredonorafter01.04.2003aspertherequirementofAccountingStandard-7(Revised)areasfollows:

(`inCrore)

2012-13 2011-12

Contractrevenuerecognisedfortheyear 41925.55 41996.73

InrespectofContractinprogressattheendofyear:

Costincurredandrecognisedprofits(lessrecognisedlosses) 206956.54 166413.56

Amountofadvancereceived 7899.17 10232.27

Amountofretentions(deferreddebts) 16845.57 13466.79

Inrespectofduesfromcustomersafterappropriatenettingoff

Grossamountduefromcustomerforthecontractworkasanasset 2678.10 2658.54

Grossamountduetocustomerforthecontractworkasaliability 2648.75 4021.75

Contingencies - -

b) Theestimatesoftotalcostsandtotal revenue inrespectofconstructioncontractsenteredonorafter1stApril,2003inaccordancewithAccountingStandard(AS)-7(R)ConstructionContractsarereviewedandupdatedperiodicallytoascertainthepercentagecompletionforrevenuerecognition.However,itisimpracticabletoquantifytheimpactofchangeinestimates.

12 a) The operations of the Libyan project site have been consolidated based on the unaudited accountsmaintainedattheregionalheadquarteratNoida,inviewoftheturnmoilinLibya.

b) TheoperationsoftheTishreenSyrianprojectsitehavebeenconsolidatedbasedontheunauditedaccountsmaintainedattheregionalheadquarteratNoida,asforcemajeureconditionwasinvokedinSyriainthesecondweekofJune2012andthesameconditionprevailsason31stMarch2013.

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13 ThedetailsofResearch&DevelopmentExpenditureincurredduringtheyearwhichisdeductibleundersection35(2AB)oftheIncomeTaxAct.1961.

A. CapitalExpenditureonR&D 2012-13 2011-12

Land `inCrore 0.00 0.04

Building `inCrore 0.53 5.82

Plant&Machinery&OtherEquipments `inCrore 66.89 55.51

TotalCapitalExpenditure `inCrore 67.42 61.37

B. RevenueExpenditureonR&D

Salaries&Wages `inCrore 187.56 158.86

MaterialConsumables/spares `inCrore 24.74 27.13

Manufacturing&OtherExpenses(NetofIncome) `inCrore 65.64 63.97

TotalRevenueExpenditure(NetofIncome) `inCrore 277.94 249.96

Note:Expenditureonlandandbuildinghasnotbeenconsideredasdeductibleundersection35(2AB)oftheIncomeTaxAct,1961.

14 Thedisclosurerelatingtoderivativeinstruments:

a) Thederivativeinstrumentsthatarehedgedandoutstandingason31.03.2013isNil(previousyearNil).

b) Theforeigncurrencyexposuresthatarenothedgedbyaderivativeinstrumentorotherwiseareasunder:

a)Assets/Receivables(i.e.Debtors)

Inforeigncurrency 2012-13 2011-12

inUS$ inCrore 62.53 55.61

inEURO inCrore 60.61 46.69

inLYD inCrore 0.88 0.87

inRO inCrore 0.03 0.03

InIndiancurrency

inUS$ `inCrore 3372.99 2774.30

inEURO `inCrore 4160.17 3123.98

inLYD `inCrore 37.17 35.60

inRO `inCrore 4.78 4.48

inOthers `inCrore 35.19 43.59

b)Liabilities(i.e.Advancesfromcustomers/creditors)

Inforeigncurrency

inUS$ inCrore 36.21 35.37

inEURO inCrore 32.62 34.17

inLYD inCrore 1.42 1.49

InIndiancurrency

inUS$ `inCrore 1987.81 1777.45

inEURO `inCrore 2297.00 2347.33

inLYD `inCrore 61.00 62.18

inOthers `inCrore 151.22 230.31

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(`inCrore)

15 Remunerationpaid/payabletoDirectors(includingChairman&ManagingDirector)* 2012-13 2011-12

Salaries&Allowances 2.12 2.15

ContributiontoPF 0.12 0.10

ContributiontoGratuityFund 0.09 0.08

Others 0.23 0.21*Theaboveamountincludesleaveencashmentonpaymentbasis&excludesgroupinsurancepremium.

TheCMDandfunctionaldirectorshavebeenallowedtheuseofstaffcarforbothdutyandnon-dutyjourneys.Theceilingofnon-duty journey is1000kmsp.m.againstrecoveryofprescribedamount inaccordancewithtermsandconditionofappointment.Themonetaryvalueoftheperquisitefortheuseofcar,ifcalculatedinaccordancewiththeprovisionsofI.T.Rules1962wouldamountto`0.02Crore(PreviousYear`0.02Crore)

(`inCrore)

16 a) Expenditureondepartmentalrepair&maintenancewhichareasunder: 2012-13 2011-12

Plant&Machinery 192.06 178.30

Buildings 58.97 54.93

Others 31.30 36.75

b) AgencyCommissiononexportsincludedinexpensesinconnectionwithexports 18.55 17.48

c) Expenditureonresearch&development 337.18 320.26

d) RentResidential 59.12 73.55

e) PaymenttoAuditors

AsAuditors 0.55 0.50

includespaidabroad 0.01 0.04

Reimbursementofexpenses 0.16 0.16

Taxationmatters(includingcertification) 0.12 0.14

includespaidabroad 0.00 0.02

Otherservices 0.34 0.33

f) PaymenttoCostAuditors 0.13 0.01

g) Expenditureonentertainment 8.27 8.00

h) Expenditureonforeigntravel

No.oftours 891 921

ExpenditureinRupees 19.46 16.76

i) ExpenditureonPublicityandPublicRelations

Salariesallowances&otherbenefits 11.47 10.40

Otherexpenses 15.00 15.11

j) Director'sFees 0.12 0.23

17 ThedisclosurerelatingtoAS-15(R)–EmployeeBenefits

a) GratuityPlan

Thegratuityliabilityarisesonaccountoffuturepayments,whicharerequiredtobemadeintheeventofretirement,deathinserviceorwithdrawal.Theliabilityhasbeenassessedusingprojectedunitcreditactuarialmethod.

Reconciliationofopeningandclosingbalancesofthepresentvalueofthedefinedbenefitobligationasattheyearendedareasfollows:

130

(`inCrore)

1 Changeinpresentvalueofobligation 2012-13 2011-12

a) Presentvalueofobligationasatthebeginning 1828.21 1770.22

b) Acquisitionadjustment - -

c) InterestCost 146.26 150.47

d) Pastservicecost - -

e) Currentservicecost 86.86 78.85

f) Curtailmentcost/(Credit) - -

g) Settlementcost/(Credit) - -

h) Benefitspaid -246.85 -239.80

i) Actuarial(gain)/loss 58.45 68.47

j) Presentvalueofobligationattheendoftheperiod 1872.92 1828.21

2 Changeinthefairvalueofplanassets

a) Fairvalueofplanassetsatthebeginning 1828.21 1770.26

b) AcquisitionAdjustments - -

c) Expectedreturnonplanassets 155.40 150.47

d) Contributions - -

e) Benefitspaid -246.85 -239.80

f) Actuarialgain/(loss)onplanassets -5.92 -3.53

g) Fairvalueofplanassetsasattheendoftheyear 1730.83 1677.40

3 Fairvalueofplanassets

a) Fairvalueofplanassetsatthebeginning 1828.21 1770.26

b) AcquisitionAdjustments - -

c) Actualreturnonplanassets 149.48 146.94

d) Contributions - -

e) Benefitspaid -246.85 -239.80

f) Fairvalueofplanassetsattheyearend 1730.83 1677.40

g) Fundedstatus -142.09 -150.81

h) Excessofactualoverestimatedreturnofplanassets -5.92 -3.53

4 Actuarialgain/lossrecognized

a) Actuarialgain/(loss)fortheperiod–obligation -58.45 -68.47

b) Actuarial(gain)/lossfortheperiod–planassets 5.92 3.53

c) Total(gain)/lossfortheperiod 64.37 72.00

d) Actuarial(gain)/lossrecognizedintheperiod 64.37 72.00

e) Unrecognizedactuarial(gains)/lossesattheendoftheperiod - -

5 Theamountrecognizedinbalancesheetandstatementofprofitandloss

a) Presentvalueofobligationasatendoftheperiod 1872.92 1828.21

b) Fairvalueofplanassetsasattheendofperiod 1730.83 1677.40

c) Fundedstatus -142.08 -150.81

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d) Excessofactualoverestimated -5.92 -3.53

e) Unrecognisedactuarial(gains)/losses - -

f) Netasset/(liability)recognizedinbalancesheet -142.09 -150.81

6 Expenserecognizedinthestatementofprofitandloss

a) Currentservicecost 86.86 78.85

b) Pastservicecost - -

c) Interestcost 146.26 150.47

d) Expectedreturnonplanassets -155.40 -150.47

e) Curtailmentcost/(credit) - -

f) Settlementcost/(credit) - -

g) Netactuarial(gain)/lossrecognizedintheperiod 64.37 72.00

h) Expensesrecognizedinthestatementofprofit&loss 142.09 150.85

Assumptions-Discountingrate8.00%(prev.year8.50%),Futuresalaryincrease6.00%(prev.year6.00%),Expectedrateofreturnonplanassets8.50%(prev.year8.50%).

b) PostRetirementMedicalBenefitsPlan `inCrore

1 Changeinpresentvalueofobligation 2012-13 2011-12

a) Presentvalueofobligationasatthebeginning 1069.10 951.35

b) Acquisitionadjustment 0.00 0.00

c) Interestcost 85.53 80.86

d) Pastservicecost 0.00 0.00

e) Currentservicecost 21.32 18.54

f) Curtailmentcost/(Credit) 0.00 0.00

g) Settlementcost/(Credit) 0.00 0.00

h) Benefitspaid -63.66 -56.54

i) Actuarial(gain)/loss 109.91 74.90

j) Presentvalueofobligationasattheendofyear 1222.20 1069.10

2 Changeinthefairvalueofplanassets - -

3 Fairvalueofplanassets - -

FundedStatus -1222.20 -1069.10

4 Actuarialgain/lossrecognized

a) Actuarialgain/(loss)fortheperiod-obligation 109.91 74.90

b) Actuarial(gain)/lossfortheperiod–planassets - -

c) Total(gain)/lossfortheyear 109.91 74.90

d) Actuarial(gain)/lossrecognizedintheperiod 109.91 74.90

e) Unrecognizedactuarial(gains)/lossesattheendoftheperiod - -

5 Theamountrecognizedinbalancesheetandstatementofprofitandloss

a) Presentvalueofobligationasattheendoftheyear 1222.20 1069.10

b) Fairvalueofplanassetsasattheendoftheyear - -

c) Fundedstatus -1222.20 -1069.10

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d) Netassets/(liability)recognizedinbalancesheet -1222.20 -1069.10

6 Expensesrecognizedinthestatementofprofitandloss

a) Currentservicecost 21.32 18.54

b) Interestcost 85.53 80.86

c) Netactuarial(gain)/lossrecognizedintheyear 109.91 74.90

d) Expensesrecognizedinthestatementofprofit&loss 216.75 174.30

c) LongTermLeaveLiability(EL/NEL/HPL)

The companyprovides for earned leavebenefit andhalf pay leave to theemployeesof the companywhichaccruehalfyearlyat15days(maximum)and10daysrespectively.73.33%oftheearnedleaveisencashablewhileinserviceanduptoamaximumof300daysonretirement.Halfpayleaveisencashableonseparationbeyondtheageof50yearssubjecttotheoverallceilingof480days.Theleaveliabilityhasbeen treated as other long termbenefits andhas been assessedusingprojectedunit credit actuarialmethod.

(`inCrore)

1 Changeinpresentvalueofobligation 2012-13 2011-12

a) Presentvalueofobligationasatthebeginning 1199.22 1192.95

b) Acquisitionadjustment - -

c) InterestCost 95.94 101.40

d) Pastservicecost - -

e) Currentservicecost 40.58 42.84

f) Curtailmentcost/(Credit) - -

g) Settlementcost/(Credit) - -

h) Benefitspaid -335.00 -259.62

i) Actuarial(gain)/loss 173.57 121.65

j) Presentvalueofobligationattheendoftheperiod 1174.31 1199.22

2 Changeinthefairvalueofplanassets

a) Fairvalueofplanassetsatthebeginning - -

b) AcquisitionAdjustments - -

c) Expectedreturnonplanassets - -

d) Contributions - -

e) Benefitspaid - -

f) Actuarialgain/(loss)onplanassets - -

g) Fairvalueofplanassetsasattheendoftheyear - -

3 Fairvalueofplanassets

a) Fairvalueofplanassetsatthebeginning - -

b) AcquisitionAdjustments - -

c) Actualreturnonplanassets - -

d) Contributions - -

e) Benefitspaid - -

f) Fairvalueofplanassetsattheyearend - -

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g) Fundedstatus -1174.31 -1199.22

h) Excessofactualoverestimatedreturnofplanassets - -

4 Actuarialgain/lossrecognized

a) Actuarialgain/(loss)fortheperiod-obligation -173.57 -121.65

b) Actuarial(gain)/lossfortheperiod–planassets - -

c) Total(gain)/lossfortheperiod 173.57 121.65

d) Actuarial(gain)/lossrecognizedintheperiod 173.57 121.65

e) Unrecognizedactuarial(gains)/lossesattheendoftheperiod - -

5 Theamountrecognizedinbalancesheetandstatementofprofitandloss

a) Presentvalueofobligationasatendoftheperiod 1174.31 1199.22

b) Fairvalueofplanassetsasattheendofperiod - -

c) Fundedstatus -1174.31 -1199.22

d) Excessofactualoverestimated - -

e) Unrecognisedactuarial(gains)/losses - -

f) Netasset/(liability)recognizedinbalancesheet -1174.31 -1199.22

6 Expenserecognizedinthestatementofprofitandloss

a) Currentservicecost 40.58 42.84

b) Pastservicecost - -

c) Interestcost 95.94 101.40

d) Expectedreturnonplanassets - -

e) Curtailmentcost/(Credit) - -

f) Settlementcost/(credit) - -

g) Netactuarial(gain)/lossrecognizedintheperiod 173.57 121.65

h) Expensesrecognizedinthestatementofprofit&loss 310.09 265.89

d) InlinewiththeguidancenoteonAS-15(R),thecompanyhasgottheactuarialvaluationofprovidentfunddoneinrespectofPFtrustsoftheunits/regions.Aspertheactuarialvaluationcertificateliabilityforlikelyinterestshortfall,tobecompensatedbythecompanytothePFtrust,hasbeenprovidedintheaccounts.

Provision made (withdrawal) for shortfall in PF interest liabilitybasedonactuarialvaluationfortheyear

`inCrore -2.95 4.96

AccumulatedprovisionforshortfallinPFinterestliabilitybasedonactuarialvaluation

`inCrore 29.19 32.14

18 RelatedPartyTransactions:

i) RelatedPartieswherecontrolexists(JointVentures):

PowerplantPerformanceImprovementLtd.

BHEL-GEGasTurbineServicesPvt.Ltd.

NTPC-BHELPowerProjectsPvt.Ltd.

UdangudiPowerCorporationLtd.(Upto26.03.2013)

RaichurPowerCorporationLtd.

DadaDhuniwaleKhandwaPowerLtd.

LaturPowerCompanyLtd.

134

ii) Otherrelatedparties(KeyManagementPersonnel-FunctionalDirectors:existing&retired):

S/ShriB.P.Rao,AtulSaraya,O.P.Bhutani,M.K.Dube,P.K.BajpaiandRKrishnan(w.e.f.01.04.2012)

iii) DetailsofTransactions

JointVentures 2012-13 2011-12

PurchaseofGoodsandServices `inCrore 86.70 98.14

SalesofGoodsandservices `inCrore 2757.14 654.23

ReceivingofServices `inCrore 0.00 97.52

RenderingofServices `inCrore 303.63 46.98

Dividendincome `inCrore 16.66 16.96

Royaltyincome `inCrore 0.90 0.63

Purchaseofshares `inCrore 0.00 22.50

SaleofShares `inCrore 64.00 0.00

AmountsduetoBHELattheendoftheyear `inCrore 978.18 595.06

AmountsduefromBHEL(incl.advances)attheendoftheyear `inCrore 588.65 1022.24

ProvisionforDoubtfuldebts `inCrore 4.39 0.76

Advancesgiven `inCrore 2.20 8.36

Note:MajorityoftransactionsarewithBGGTS,NBPPLandRaichurPowerCorporationLtd.

KeyManagementPersonnel(KMP)

PaymentofSalaries `inCrore 2.53 2.54

RelativesofKMP

AmountsduetoBHELattheendoftheyear `inCrore 0.01 0.00

PaymentofSalaries `inCrore 0.25 0.20

19 Lease

Detailsofassetstakenonleaseonorafter1stApril2001areasunder:

i) FinanceLease

a. OutstandingbalanceofMinimumLeasepayments 2012-13 2011-12

notlaterthanoneyear `inCrore 90.12 81.80

laterthanoneyearandnotlaterthanfiveyears `inCrore 150.43 143.89

laterthanfiveyears `inCrore 0.00 0.00

Totalminimumleasepaymentsatthebalancesheetdate `inCrore 240.55 225.69

b. PresentValueof(a)above

notlaterthanoneyear `inCrore 75.09 62.43

laterthanoneyearandnotlaterthanfiveyears `inCrore 129.20 123.43

laterthanfiveyears `inCrore 0.00 0.00

TotalofPresentValueatthebalancesheetdate `inCrore 204.29 185.86

c.1 Financecharges `inCrore 36.26 39.83

c.2 PresentvalueofResidualvalue,ifany `inCrore 0.00 0.01

A n n u A l R e p o R t2 0 1 2 - 1 3

135

ii) Thecompanyisinthepracticeoftakinghousesforemployees,officebuildingsandEDPequipmentsetc.onoperatingleasebothascancellableandnon-cancellable.

iii) OperatingLease 2012-13 2011-12

Thefutureminimumleasepaymentsundernon-cancellableoperatingleaseareasunder

notlaterthanoneyear `inCrore 1.94 3.97

laterthanoneyearandnotlaterthanfiveyears `inCrore 2.43 3.29

laterthanfiveyears `inCrore 4.40 0.79

iv) Detailsregardingrentalsinrespectofassetstakenonleasepriorto1.4.2001areasgivenbelow:

CostofAssets

Land&Buildings `inCrore 0.01 0.01

Computers&peripherals `inCrore 0.00 0.00

Rentalspayableoverunexpiredperiodoflease

Land&buildings `inCrore 0.02 0.02

Computers&peripherals `inCrore 0.00 0.00

20 EarningsperShare:

Weighted average number of Equity Shares outstanding during the year(A)

Nos.inCrore

244.760 244.760

NominalValueofEquityShare (`) 2.00 2.00

NetProfitfortheyear(B) `inCrore 6614.73 7039.96

BasicandDilutedEarningsPerShare(B)/(A) (`) 27.03 28.76

21 JointVentures

PursuanttocomplianceofAccountingStandard-27issuedbytheInstituteofCharteredAccountantsofIndia,relevantdisclosuresrelatingtoJointventuresareasfollows:

a) NamesofJointVentures CountryofIncorpo-ration

ProportionofOwnership

2012-13 2011-12

PowerPlantPerformanceImprovementLtd India Onesharelessthan

50%

Onesharelessthan

50%BHEL-GEGasTurbineServicesPvtLtd India

NTPC-BHELPowerProjectsPvt.Ltd. India 50% 50%

UdangudiPowerCorporationLtd.(Upto26.03.2013) India NIL 50%

LaturPowercompanyLtd. India 50% 50%

RaichurPowerCorporationLtd. India 43% 46%

DadaDhuniwaleKhandwaPowerLtd. India 50% 50%

b) Theprovisionfordiminutioninvalueof investmentinPowerPlantPerformanceImprovementLtd.hasbeenmadesincethecompanyisunderliquidationandtheamountpaidasequityisnotrecoverable.

c) BHELhassolditsstakeinUdangudiPowerCorporationLimitedon26.03.2013.

136

d) Aggregateamountofcompany'sinterestinJointVenturesasperaccountsisasunder:

BHEL-GEGasTurbineServicesPvt.Ltd. (`inCrore)

2012-13 2011-12

FixedAssets 4.47 4.40

NetCurrentAssets 72.42 57.00

Loanfunds 0.26 0.22

Misc.Exp.notwrittenoff 0.00 0.00

DeferredTaxAssets(net) 2.73 2.11

ShareholdersFunds 78.69 57.24

Income 413.55 260.56

Expenses 353.10 215.35

ContingentLiabilities 2.53 2.69

CapitalCommitments 2.97 0.18

NTPC-BHELPowerProjectsPvt.Ltd. (`inCrore)

2012-13 2011-12

FixedAssets 24.42 12.90

NetCurrentAssets 3.36 21.11

Loanfunds 0.03 0.05

Misc.Exp.notwrittenoff 0.00 0.00

DeferredTaxAssets(net) 1.63 1.13

ShareholdersFunds 35.99 33.15

Income 57.33 73.46

Expenses 53.62 64.74

ContingentLiabilities 0.00 4.81

CapitalCommitments 28.85 15.26

UdangudiPowerCorporationLtd. (`inCrore)

2012-13 2011-12

FixedAssets - 35.42

NetCurrentAssets - -2.64

Loanfunds - 0.00

Misc.Exp.notwrittenoff - 0.00

DeferredTaxAssets(net) - 0.00

ShareholdersFunds - 32.78

Income - 0.08

Expenses - 0.00

ContingentLiabilities - 0.00

CapitalCommitments - 0.00

BHEL'sentireequitystakewassoldon26.03.2013

A n n u A l R e p o R t2 0 1 2 - 1 3

137

RaichurPowerCorporationLtd. (`inCrore)

2012-13 2011-12

FixedAssets 1273.94 458.31

NetCurrentAssets -60.18 -167.04

Loanfunds 1110.58 159.52

Misc.Exp.notwrittenoff 0.00 0.00

DeferredTaxAssets(net) 0.00 0.00

ShareholdersFunds 333.64 333.91

Income 0.00 0.05

Expenses 76.63 19.32

Figuresof2012-13arebasedonprovisionalunauditedfinancialresults

DadaDhuniwalaKhandwaPowerLtd. (`inCrore)

2012-13 2011-12

FixedAssets 0.83 0.39

NetCurrentAssets 3.01 3.28

Loanfunds 0.00 0.00

Misc.Exp.notwrittenoff 0.00 0.00

DeferredTaxAssets(net) 0.00 0.00

ShareholdersFunds 22.89 22.63

Income 0.38 0.40

Expenses 0.00 0.00

ContingentLiabilities 1.93 0.00

Figuresof2012-13arebasedonunauditedfinancialresults

LaturPowerCompanyLtd. (`inCrore)

2012-13 2011-12

FixedAssets 0.00 0.00

NetCurrentAssets 2.44 2.32

Loanfunds 0.00 0.00

Misc.Exp.notwrittenoff 0.30 0.28

DeferredTaxAssets(net) 0.00 0.00

ShareholdersFunds 2.74 2.60

Income 0.21 0.15

Expenses 0.01 0.00

ContingentLiabilities 0.00 0.00

CapitalCommitments 0.00 15.00

Figuresof2012-13arebasedonunauditedfinancialresults

138

22 AsperthelistingagreementwiththeStockExchanges,therequisitedetailsofloansandadvancesinthenatureofloans,givenbytheCompanyaregivenbelow:

i) InrespectofSubsidiaryCompany: (`inCrore)

2012-13 2011-12

BharatHeavyPlates&VesselsLtd.(interestfree)

Loansandadvancesinthenatureofloansoutstanding 234.98 218.87

Maximumamountof loansandadvances inthenatureof loansoutstandingduringtheyear

234.98 218.87

BHELElectricalMachinesLtd.

Loansandadvancesinthenatureofloansoutstanding 0.00 1.70

Maximumamountof loansandadvances inthenatureof loansoutstandingduringtheyear

1.70 1.70

ii) Noloanshavebeengiven(otherthanloanstoemployees),whereinthereisnorepaymentscheduleorrepaymentisbeyondsevenyears;and

iii) There are no loans and advances in the nature of loans, to firms/companies, in which directors areinterested.

23 ThedisclosurerelatingtoAccountingStandard-29 (`inCrore)

2012-13 2011-12

a) LiquidatedDamages

Opening 1137.44 697.96

Additions 649.42 555.86

Usage/Writeoff/payment -433.04 -74.56

Withdrawal/adjustments -33.36 -41.82

ClosingBalance 1320.46 1137.44

ContractualObligation

Opening 3850.91 2982.16

Additions 1786.05 1193.73

Usage/Writeoff/payment -154.31 -133.48

Withdrawal/adjustments -492.68 -191.50

ClosingBalance 4989.97 3850.91

b) LiquidateddamagesareprovidedinlinewiththeAccountingPolicyofthecompanyandthesameisdealtsuitablyintheaccountsonsettlementorotherwise.ContingentliabilityrelatingtoliquidateddamagesisshowninitemNo.5ofNoteno.31.

c) Theprovisionforcontractualobligationismadeattherateof2.5%ofthecontractrevenueinlinewithsignificantAccountingPolicyNo.15tomeetthewarrantyobligationsasperthetermsandconditionsofthecontract.Thesame is retainedtill thecompletionof thewarrantyobligationsof thecontract.Theactualexpensesonwarrantyobligationmayvaryfromcontracttocontractandonyeartoyeardependinguponthetermsandconditionsoftherespectivecontract.

24 During the year theCompanyhas includedpoliciesonUseof estimates, Taxeson income, impairmentandSegmentreporting.TheimpactduetothisisNILasthesewerealreadyinpractice.

25 Assets and Liabilites are classified between Current and Non-current considering 12 months period as operatingcycle.

26 Itemofexpenseandincomelessthan`oneLakharenotconsideredforbookingunderPriorPeriodItems.

A n n u A l R e p o R t2 0 1 2 - 1 3

139

(`inCrore)

Fortheyearended31.3.2013 Fortheyearended31.3.2012

A. PRIMARYSEGMENT-BUSINESSSEGMENTS

Power Industry Total Power Industry Total

I. SEGMENTREVENUE

a. SegmentRevenue 39576.74 10604.00 50180.74 37862.87 11658.86 49521.73

b. OperatingRevenue-External 39576.74 10604.00 50180.74 37862.87 11658.86 49521.73

II. SEGMENTRESULTS

a. SegmentResults 8559.48 2196.57 10756.05 8183.81 3342.42 11526.23

b. Unallocatedexpenses(Netofincome) 1198.34 1172.69

c. Profitbeforefinancecost&IncomeTax(a)-(b) 9557.71 10353.54

d. Financecost 125.27 51.28

e. NetProfitbeforeIncomeTax(c)-(d) 9432.44 10302.26

f. IncomeTax 2817.71 3262.30

g. NetProfitafterIncomeTax 6614.73 7039.96

III ASSETS&LIABILITIES

a. SegmentAssets 46465.35 13038.33 59503.68 44134.64 13430.20 57564.84

b. UnallocatedAssets 10624.77 9211.18

c. TotalAssets 70128.45 66776.02

d. SegmentLiabilities 29809.47 7182.77 36992.24 31973.02 8074.50 40047.52

e. UnallocatedLiabilities 2692.11 1355.29

f. TotalLiabilities 39684.35 41402.81

IV OTHERINFORMATION

a. Costincurredduringtheperiodtoacquirefixedassets(Incl.CWIP)

694.74 203.27 792.95 434.94

b. Depreciation 709.65 191.91 598.46 150.75

c. NonCashExpenses(otherthandepreciation) 1361.49 354.30 1397.25 120.37

B. SECONDARYSEGMENT-GEOGRAPHICALSEGMENTS

WithinIndia

OutsideIndia

Total WithinIndia

OutsideIndia

Total

1 NetSales/IncomefromOperations 49261.01 919.73 50180.74 48059.05 1462.68 49521.73

2 TotalAssets 69634.52 493.93 70128.45 66297.33 478.69 66776.02

3 CostincurredduringtheperiodtoacquireFixedAssets

939.52 0.07 939.59 1263.95 0.15 1264.10

Theprimarysegmentshavebeenidentifiedas'Power'and'Industry'basedontheordersbookedbytherespectivebusinesssectors.TheorderbookedbyInternationaloperationgroupistakentoPowerorIndustryasthecasemaybe.

27.SegmentInformation

140

(`inCrore)

Product Unit Salesduringtheyear2012-2013

Op.StockofFin.Goods01.04.2012

Cl.StockofFin.Goods31.3.2013

Qty. Value Qty. Value Qty. ValueHEP,BhopalSWITCHGEAR, CONTROLGEAR, RECTIFIER, CAPACITORSSwitchgear-11kvto220kvhigh Nos. 4119 287.08 16 0.67 0 11.44speedairblastcircuitbreakers Nos. (3972) (306.87) (29) (1.64) (16) (0.67)ControlPanels Nos. 191 40.92 0 0.08 0 2.41

Nos. (250) (69.79) 0 (0.02) 0 (0.08)Industrialcontrolgear Nos. 0 9.12 0 0.00 0 0.00

Nos. 0 (15.13) 0 0.00 0 0.00TractioncontrolgearforAC,DC Set 251 163.49 0 0.92 0 0.11&dieselsystem Set (247) (164.56) (8) (1.07) 0 (0.92)RectifierswithElectronics Nos. 135 96.93 0 0.00 0 0.28

Nos. (357) (107.29) 0 0.00 0 0.00Capacitors MVAR 1046 10.91 27 0.28 0 0

MVAR (1590) (12.39) (23) (0.45) (27) (0.28)Bushings 0 19.22 0 0.20 0 0.41

0 (20.73) 0 (0.18) 0 (0.20)TRANSFORMERSPowertransformersupto400kv MVA 21919 789.82 311 22.73 683 26.25

MVA (23389) (851.44) (540) (13.25) (311) (22.73)Instrument,welding,transformers MVA 0 14.04 0 0.19 0 0.06andreactors Nos. 490 24 1

MVA 0 (16.32) 0 (0.03) 0 (0.19)Nos. (354) (25) 0.00 (24)

INDUSTRIAL AND TRACTION MACHINESTractionMotorsforAC,DC&diesel Nos. 2121 558.83 0 10.79 17 2.42system,main/auxiliarygenerators Nos. (2009) (493.35) (30) (4.50) 0 (10.79)Industrialmachines,ACmotors Nos. 1071 259.32 108 12.18 131 14.46upto1000HP,DCmotors& Nos. (1392) (383.25) (37) (5.94) (108) (12.18)generatorsofalltypesHEAVY ROTATING PLANT & TURBINESLargeelectricalmachines Nos. 386 451.59 30 17.42 17 14.17above1000HP Nos. (389) (432.08) (10) (11.46) (30) (17.42)Waterwheelalternators Nos. 7 575.49 0 50.94 0 14.47&waterturbines&Mini MW 880 0.00microturbines&generators Nos. 7 325.53 0 39.16 0 10.68

MW 1310Nos. (22) (467.82) (12) (52.98) 0 (50.94)MW (854) 0.00Nos. (9) (275.18) 0 (32.35) 0 (39.16)MW (380)

TurboAlternators& Set 2 476.24 0 4.05 0 44.04Steamturbines Set (2) (465.12) 0 (1.43) 0 (4.05)HeatExchangers Nos. 52 259.09 0 0.00 0 5.93

Nos. (46) (264.24) 0 0.00 0 0.00Others 164.73 0.35 0.39

(222.27) (0.63) (0.35)TOTAL 4502.35 159.96 147.52

28.OtherInformationA.Sales,OpeningStocks&closingStocks

A n n u A l R e p o R t2 0 1 2 - 1 3

141

(`inCrore)

Product Unit Salesduringtheyear2012-2013

Op.StockofFin.Goods01.04.2012

Cl.StockofFin.Goods31.3.2013

Qty. Value Qty. Value Qty. Value

TP,Jhansi

Powertransformersand Nos. 131 471.07 0 0 0 0

specialtransformers Nos. (157) (548.18) (4) (14.03) 0 0

ESPTransformer Nos. 1705 174.06 4 0.19 0 0

Nos. (1280) (142.83) (4) (0.15) (4) (0.19)

ACEMUTransformer Nos. 97 18.81 0 0.00 0 0.00

Nos. (17) (3.12) 0 0.00 0 0.00

FreightLocotransformers Nos. 90 71.71 8 6.49 3 1.60

Nos. (67) (51.25) 0 0.00 (8) (6.49)

Instrumenttransformers Nos. 395 14.07 0 0.00 0 0.00

Nos. (335) (7.36) 0 0.00 0 0.00

BusDuct Nos./Set 0 0.25 0 0.00 0 0.00

Nos./Set 0 (0.67) 0 0.00 0 0.00

DryTypeTransformer Nos. 75 26.99 0 0.00 0 0.00

Nos. (88) (38.02) (2) (0.07) 0 0.00

DieselShunters Nos. 7 27.38 0 0.00 0 0.00

Nos. (10) (32.02) 0 (0.00) 0 0.00

ACLOCO Nos. 62 492.35 0 0.00 0 0.00

Nos. (53) (367.96) (1) (5.62) 0 0.00

Others/Misc. Nos. 18.86 0.31 0.02

Nos. 0 (22.68) 0 (1.47) 0 (0.31)

TOTAL 1315.55 6.99 1.62

HEEP,Haridwar

ElectricalMachines MW/Nos. 0 0 1/2 0.22 1/2 0.22

MW/Nos. 0 0 (1/2) (0.22) (1/2) (0.22)

Industrialcontrolspanels Nos. 0 0 3 0.19 3 0.19

Nos. 0 0 (3) (0.18) (3) (0.19)

TurboSets

TurbineModules MW/Nos. 8924/121 99/3 758/19

MW/Nos. (8356/131) 5940.28 0 69.07 (99/3) 365.05

Turbogeneratormodules MW/Nos. 4511/31.5 (4816.67) 0 (12.89) 446/4 (69.07)

MW/Nos. (3498/28) 0 0

Hydrosets MW/Nos. 0 0.68 0 0.00 0 0.00

MW/Nos. 0 (4.07) 0 (0.05) 0 0.00

SuperRapidGunMount Nos. 2 77.50 0 0.00 0 0.00

Nos. (3) (111.83) 0 0.00 0 0.00

GasTurbine MW/Nos. 0 0.02 0 0.00 0 0.00

MW/Nos. 0 (4.06) 0 0.00 0 0.00

Others 0 506.02 0 22.70 0 28.72

0 (475.72) 0 (12.29) 0 (22.70)

TOTAL 6524.50 92.18 394.18

142

(`inCrore)

Product Unit Salesduringtheyear2012-2013

Op.StockofFin.Goods01.04.2012

Cl.StockofFin.Goods31.03.2013

Qty. Value Qty. Value Qty. Value

HPBP,Trichy

Boilers MT 515127 13851.39 16047 285.09 25498 358.83

MT (692272) (13953.26) (21717) (328.53) (16047) (285.09)

Valves Nos. 160367 870.34 2341 45.55 18964 42.13

Nos. (155976) (552.14) (6541) (12.07) (2341) (45.55)

Incomefromtesting&otherservices 0 4.75 0 0.00 0 0.00

0 (6.10) 0 0.00 0 0.00

Seamlesssteeltubes MT 286 4.09 0 0.00 97 1.73

MT (41) (0.72) 0 0.00 0 0.00

TOTAL 14730.57 330.64 402.69

BAP,Ranipet

Boilerauxiliaries MT 227150 3704.91 37701 256.25 40734 296.98

MT (304303) (4201.22) (23279) (173.15) (37701) (256.25)

Incomefromtesting&otherservices 1.97

0 (5.25) 0 0.00 0 0.00

Incomefromexternalerection&otherservices 3.67

0 (0.24) 0 0.00 0 0.00

TOTAL 3710.55 256.25 296.98

HPEP,Hyderabad

UtilitySets Nos. P 818.68 1P 12.11 P 24.41

Nos. (P) (1065.66) (7P) (8.63) (1P) (12.11)

Small&MediumSets Nos. 4P 408.32 1P 11.11 2P 11.70

Nos. (12P) (276.56) (7P) (6.47) (1P) (11.11)

Pumpsandheaters Nos. P 1560.63 7P 2.49 P 2.09

Nos. (8P) (1138.43) (2P) (3.46) (7P) (2.49)

Compressors Nos. P 642.46 P 17.78 1P 3.45

Nos. (7P) (655.20) (3P) (4.61) (P) (17.78)

GasTurbine Nos. 27P 1448.13 P 6.97 0 0.00

Nos. (10P) (2475.10) (3P) (102.30) (P) (6.97)

BowlMills Nos. 1P 1374.67 0 0.00 0 0.00

Nos. (19P) (1260.15) 0 0.00 0 0.00

HeatExchangers Nos. P 21.13 0 0.00 0 0.00

Nos. (P) (1.65) 0 0.00 0 0.00

ErectionIncome 18.34 0 0.00 0 0.00

(40.90) 0 0.00 0 0.00

Castings 0.48 0.00 0 0.00

(3.29) 0 0.00 0 0.00

Breakers Nos. 6 16.27

Nos. (16) (9.09) 0 0.00 0 0.00

OilRigs Nos. P 167.31

Nos. (P) (74.56) 0 0.00 0 0.00

TOTAL 6476.42 50.46 41.65

A n n u A l R e p o R t2 0 1 2 - 1 3

143

(`inCrore)

Product Unit Salesduringtheyear2012-2013

Op.StockofFin.Goods01.04.2012

Cl.StockofFin.Goods31.3.2013

Qty. Value Qty. Value Qty. Value

ISG,Bangalore

OtherServices 1164.11 0 0.00 0 0.00

(999.29) 0 0.00 0 0.00

TOTAL 1164.11 0.00 0.00

EDN,Bangalore

Powerdevices Nos. 6968 1.93 129 0.06 82 0.08

Nos. (7461) (1.89) (72) (0.29) (129) (0.06)

Photovoltaics KWs 2348 21.18 1 0.01 48 0.21

KWs (17521) (267.55) (1) (0.01) (1) (0.01)

ControlEquipments Cubicles 4605 1610.09 176 26.49 266 17.45

Cubicles (5650) (1950.59) (19) (11.79) (176) (26.49)

TOTAL 1633.20 26.56 17.74

EPD,Bangalore

Insulators&bushings MT 5678 91.13 513 5.25 888 10.02

MT (7970) (123.22) (595) (9.13) (513) (5.25)

Ceralin MT 4190 101.26 28 0.35 188 2.35

MT (4020) (97.25) (388) (3.55) (28) (0.35)

ControlPanel Nos. 76 4.11

Incomefromtesting&otherservices 0 4.31 0 0.00

0 (0.03) 0 0.00 0 0.00

TOTAL 200.81 5.60 12.37

PowerGroup

Incomefromerection&Otherservices&spares 8392.84 1.55 0.19

(8118.83) (-5.79) (1.55)

TOTAL 8392.84 1.55 0.19

IP,Jagdishpur

Insulators CMT 6385 84.67 699 8.84 1048 13.27

CMT (6967) (74.66) (460) (5.46) (699) (8.84)

Ceralin MT 4501 77.15 36 1.11 83 1.55

MT (4391) (71.28) (135) (2.66) (36) (1.11)

TOTAL 161.82 9.95 14.82

IVPGoindwal

IndustrialValves Nos. 0 0.00 364 1.07 1050 5.38

Nos. 0 0.00 (307) (1.21) (364) (1.07)

FuelPipeCouping Nos. 16 0.01 0 0

Nos. (16) (0.01)

TOTAL 0.00 1.08 5.38

CFP,Rudrapur

BusductProject Sets 39 207.00 21 6.76 22 9.05

Sets (35) (134.85) (14) (8.98) (21) (6.76)

TOTAL 207.00 6.76 9.05

144

(`inCrore)

Product Unit Salesduringtheyear2012-2013

Op.StockofFin.Goods01.04.2012

Cl.StockofFin.Goods31.3.2013

Qty. Value Qty. Value Qty. Value

HERP,Varanasi

Spares&RepairsforBoiler/Turbine&Auxiliaries 192.01 0.22 0.12

(209.20) 0 (0.28) 0 (0.22)

TOTAL 192.01 0.22 0.12

TransmissionBusinessGroup

Spares(IncludingServices) 631.41 4.22 16.66

(380.65) (8.37) (4.22)

TOTAL 631.41 4.22 16.66

EMRP,Mumbai

Repair&Projectwork 46.96 0.00 0.00

(38.82) 0.00 0.00

TOTAL 46.96 0.00 0.00

InternationalOperations

IncomefromSales(RevenueRecognitionAdjustment) -12.46 0.00 0.00

(20.54) 0.00 0.00

TOTAL -12.46 0.00 0.00

IndustrySector

IncomefromSales(RevenueRecognitionAdjustment) 26.58 0.00 -0.14

(71.64) 0.00 0.00

TOTAL 26.58 0.00 -0.14

PE&SD

Industrialsets 190.84

(42.94)

GasTurbine 81.50

(14.52)

TOTAL 272.34

CFFP,Haridwar

NFCastings MT 0 0.22

MT 0 0

TOTAL 0.22

Adjustment -20.30 0 -0.94

(-21.79) 0 0

GRANDTOTAL 50156.48 952.42 1359.89

(49509.78) (858.65) (952.42)

A n n u A l R e p o R t2 0 1 2 - 1 3

145

(`inCrore)

Fortheyearended31.03.2013

Fortheyearended31.03.2012

b. Valueofimports

CIFbasis

Rawmaterials 3042.51 4884.27

Componentsandspareparts 3245.41 4049.33

Capitalgoods 319.86 401.25

c. Expenditureinforeigncurrency

Royalty 112.86 68.59

Know-how 12.72 4.28

Professional&Consultancyfees 0.88 1.93

Interestandothers(incl.onforeignsites) 248.25 405.16

Dividend:@

a)numberofnon-residentshareholders 9334 6698

b)numberofsharesheld 338319525 63851148

c)grossamountofdividend 124.50 114.29

d)yeartowhichdividendrelates 2011-12 2010-11

(FinalDividend) (FinalDividend)

InterimDividend:@

a)numberofnon-residentshareholders 8908 8292

b)numberofsharesheld 367614071 339026338

c)grossamountofdividend 77.93 92.22

d)yeartowhichdividendrelates 2012-13 2011-12

(InterimDividend) (InterimDividend)

@Thecompanyhasnotmadeanyremittanceofdividendinforeigncurrency.ThepaymentshavebeenmadeinIndianRupeestotheBankers/PowerofAttroneyholdersofnon-residentshareholders.

d. Value of consumption of raw materials, components,stores&spareparts.

#Imported(includingcustomduty) 7752.76 8048.81

Indigenous 15874.97 17064.31

Percentageoftotalconsumption

Imported 33 32

Indigenous 67 68

e. Earningsinforeignexchange

Exportofgoods(FOBbasis) 438.68 1006.53

Interest 0 0.03

Erection&otherservices 143.12 477.01

FEinDeemedExports(incl.domesticcontracts) 11774.79 12935.58#Includescanaliseditemswhereverascertained.

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(`inCrore)

Fortheyearended31.03.2013

Fortheyearended31.03.2012

f. Statement for raw materials and componentsconsumedGroupofmaterials Units Quantity Value Quantity Value

FerrousmaterialsMT 359639 647585

Meters 12455008 16084481Nos. 4484045 5839126Sq.M 16181 50035Kg. 65601635 64246360

Others 461 1434517.67 5774.15

Non-ferrousmaterialsMT 10757 6101

Meters 2628311 3050477Nos. 338013 211852

Sq.M. 4285 96Kg. 7896378 6967175RL 23838 26960

Others 34565 444597.11 554.30

InsulatingmaterialsMeters 55491713 79130216

MT 23715 33058Nos. 898553 469400

Sq.M. 2749575 2024396Kg 711885 1242793LT 5410250 5268930RL 235629 135391M2 190245 171330KL 3493 7460ST 237 509

Others 112034 31596305.72 280.41

InsulatedcablesandMagnetwiresMeters 2777834 3762371

Nos. 459681 153753Kg 12504 6149

45.62 60.09Components 12635.20 10739.08Others 4942.52 7141.32

23043.84 24549.35

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Directors'Report

BharatHeavyPlateandVesselsLimited

To, TheShareholders, BharatHeavyPlateandVesselsLimited, Visakhapatnam.

TheDirectorsarepresentingthe47thAnnualReportonthebusinessandoperationsof theCompanyfor theyearended31stMarch,2013.

Sales

TheCompanyachievedaTurnoverof` 240.27Croreasagainst` 155.80Croreinthepreviousyear(i.e.,agrowthof54%overpreviousyear).

FinancialPerformance

The salient features of Financial Performanceof theCompanyfortheyearareasfollows:

(`inCrore)

2012-13 2011-12

1. Turnover 240.27 155.80

2. GrossMargin 32.79 12.71

3. Interest 0.96 1.40

4. Depreciation 0.93 1.02

5. ProfitBeforeTax&Exceptionalitems 30.89 10.28

6. ExtraordinaryIncome 4.14 0.16

7. Profitbeforetax 35.04 10.44

8. Profitaftertax 35.04 10.44

The Gross Margin for the Year 2012-13 is ` 32.79Crore as against` 12.71Crore in the previous year.TheProfitbeforetaxfortheyear2012-13is` 35.04Croreasagainst` 10.44Croreduring2011-12.YourCompany could achieve theaboveperformancedueto the wholehearted involvement & hard work oftheBHPVemployees&thesupportextendedbytheHoldingCompany(BHEL)bywayoforders,deputingofofficials,interestfreeloan/advancesetc.

ContributiontoExchequer

Your Company contributed to the Public Exchequerrevenueof` 31.46Croreduringtheyear2012-13asagainst 16.16Croreduring2011-12asperthedetailsgivenbelow:

(`inCrore)

2012-13 2011-12

1. ExciseDuty/ServiceTax 24.33 14.25

2. CustomDuty 0.92 0.05

3. SalesTax 6.21 1.86

31.46 16.16

Order Book

TheCompanyhas facedmanyproblemswith regardtoorderinflowbecauseoftheincreasedcompetitionin terms of price & delivery and stringent pre-qualification criteria made the order book positionoftheCompanycriticalduringtheyearunderreview.YourCompanycouldobtainordersmainlyfromBHEL-Trichy,SAIL–Bhilai,NRL-Numaligarh,SAIL-Rourkela&ADA-Bangalore. The Company has booked orders of` 135.49Croreasagainst the targetof` 432Crore(MoUGoodlevel)andtheValueoftheordersonhandforexecutionason31.03.2013wereworth` 106.34Crore. Your Company has been submitting offers tovariousprojectsandmakingalloutefforts tosecurefurtherorders.

ManagementDiscussionandAnalysis

A report onManagementDiscussion andAnalysis isplacedatAnnexure-1

BoardofDirectors

Appointment

• Shri P.V. Sridharan, Director (HR), BHPV wasentrusted the Additional Charge of the post ofDirector(Operations)foraperiodof3monthswitheffectfrom01.05.2012oruntilfurtherorders.

• ShriDebasisJana,Director,DHIwasappointedasparttimeofficialDirectorontheBoardofBHPVwitheffectfrom21.03.2013.

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• Shri C.P. Chengappa, General Manager, BHEL(OSD-ED, BHPV) was appointed as ManagingDirectorontheBoardofBHPV witheffect from12.04.2013.

• ShriG.UdayKumar,AGM,BHEL (OSD-HR), BHPVwas appointed asDirector (HR) on theBoardofBHPVwitheffectfrom30.05.2013(AN).

• Shri D. Asokan, AGM, BHEL (OSD-Operations,BHPV)wasappointedasDirector(Operations)onthe Board of BHPVwith effect from 03.06.2013(FN).

Cessation

• Shri A.S. Nagaraja, Director (Operations) &Additional charge of the post of MD ceased tobe Director of the Company with effect from30.04.2012inviewofhissuperannuationinBHPV.

• Shri P.V.Sridharan, Director (HR) & AdditionalchargeofthepostofDirector(Operations)ceasedto beDirector of the Companywith effect from31.07.2012inviewofhissuperannuationinBHPV.

• ShriR.P.Goyal,Director,DHIceasedtobeparttimeofficialDirectoroftheCompanywitheffectfrom21.03.2013.

OfficialLanguageImplementation

As a Public Sector Undertaking, BHPV is committedto implement the Official Language Policy ofGovernment of India. During the year 2012-13, thecompany continued its thrust on official languageimplementation in line with Government of India'spolicy on Official Languages Act, 1963 and OfficialLanguagesRules,1976.

45employeesweretrainedinHindiPrabodh,PraveenandPragyaclassesduringtheyear.OneincrementforoneyearwasgiventotheemployeesonpassingHindiPragyaexamination.

Hindi Day was celebrated on 14th September, 2012.VariousHindicompetitionswereconductedforHindiand Non-Hindi speaking employees separately. CashAwards and Merit Certificates were given to thoseemployeeswhopassedHindiexaminationsandprizesweregiventothewinnersofHindicompetitions.ThreeHindimagazines are being procured and distributedregularly to employees along with Hindi books ondifferentsubjectswrittenbyeminentWriters.

BIFRStatus

The company was referred to BIFR in August-2004due to total erosion of its networth after incurringsignificant losses in the year 2002-03 and 2003-04 and the BIFR declared the company as sick.The Department of Heavy Industry vide theircommunication dated 07.05.2008 conveyed theapprovalofUnionCabinetfortakingoverofBHPVasasubsidiaryofBHEL.Accordingly,BHPVwastakenoverbyBHELaswhollyownedsubsidiaryonMay10,2008.SBIwas appointed by BIFR as theOperatingAgencytoprepareaRehabilitationSchemeforthecompanywhichwassanctionedbyBIFRonOctober21,2010.

AlthoughtheHoldingcompany(BHEL)hasbeentakingallpossiblestepsforrevivaloftheBHPV,duetocertainsignificantdifficultiesthedesiredresultscouldnotbeachieved formaking thenetworthpositivewithinareasonabletime. Inordertoovercometheabove,aproposal for merger of BHPV with BHEL along withDraftAmalgamationschemewasapprovedbyBHEL&BHPVBoards.

TheMinistryofHeavyIndustries&PublicEnterprises,Department of Heavy Industry vide its letter Dt.06.03.2013 intimated that the proposal for Mergerof BHPV with BHEL (Holding company) has beenapproved by the Cabinet in its meeting held on21.02.2013. Consequent to the approval of MergerbytheCabinet,anapplicationwasfiledwithHon’bleBIFRforsanctioningthescheme. Inthehearingheldon 14.05.2013, the Bench directed the Company toconvenetheGeneralmeetingandobtaintheapprovaloftheshareholdersandsubmitthesametotheBoard.

Vigilance

Your Company continues to take all possible stepsto build systems and procedures, which are simple,transparent and easy to comply with by every oneconcernedso thata transparentandcorruption freeenvironmentprevails.AllthedirectivesissuedbytheCentralVigilanceCommissionfromtimetotimehavebeencompliedwith.

Vigilance Awareness Week was observed from29.10.2012 to 03.11.2012 to bring about greaterawareness and accountability amongst employees.TheVigilancepledgewasadministeredtoallemployeesby their Departmental Heads on 29.10.2012. Duringthe period, guest lectures and various competitions

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were arranged for the employees in addition tothedisplayofbanners at prime locations inside andoutsidethefactorypremises.OnefulldayProgrammeon“PurchasePolicyandCVCGuidelines”byGM(Vig),BHEL Trichy was organized for Senior Executives.Two Training Programmes were also conducted forExecutivesandSupervisorsinordertospreadvigilanceawareness and improvement in the Organizationalculture.

Security

ThecompanyhasitsownSecurityDepartment,whichis entrusted the responsibility of Security and Firesafety of the company and supported by AP ARMDSecurityServices,Hyderabad,asponsoredagencyofDirectorateGeneralofResettlement,NewDelhi.

The Security personnel are adequately gearedup toprovide security and Fire Safety of the organizationas per the requirement. The audit of Securityarrangements of the company are being doneperiodically by the Intelligence Bureau, Ministry ofHome Affairs, New Delhi and the recommendationsare being implemented from time to time and it isreviewedinternallyalso.

The quarterly report on theft, pilferage and Fireincidents are submitted by the Security Departmentto top Management. National Fire Service Week,securitymockdrilltosensitizeemployeeswithregardto internal/ external security threats etc, are beingcontinuouslyconductedbySecurityDepartmentapartfromparticipatingintheRepublicDay/IndependenceDayCeremonialParades.

Quality

BHPV’s products are known for their high andconsistent quality. BHPV strives to maintain thisposition through adoption of ISO 9001:2008,international Quality Management standard.During the month of March-2012, BHPV’s QualityManagement system was thoroughly audited byBureau Veritas Certification India (Private) Limitedwho recommended for re-certification of BHPV toISO 9001:2008 for a further period of three years.However, intervening surveillance Audits are alsoplannedatspecifiedintervalsandthefirstsurveillanceaudithasbeenconductedinMay2013.

LloydsRegisterextendedtherecognitiontoBHPVasmanufacturerof‘FusionWeldedPressureVesselsClass

1’till25thAugust,2013.TheCompanyalsohasvalidcertificateofauthorizationfromtheprestigiousASMEforcodestampofU,U2&SandRStampauthorizationfromNationalBoardandBoilersandPressureVesselsInspectors.

Ancillaries/Sub-vendorsandShops

The total output by the ancillaries / sub-vendorsfor the year under review is` 108 Crore as against` 80Crore in the previous year.NewVendorswereregistered in 2012-2013 for outsourcing jobs. EffortsarebeingmadetoincreasetheVendorbasetomeetthefutureproductiontargets.TheCompanyadoptedACF route for Ducts for RPCL, Yeramarus-1 Project,within short span of two and half months and alsointroducedandimplementedReverseAuctionforoutsourcingtenderswhichfacilitatedcostreductioninaconsiderablemanner.

The shop out-putwas 75%higher in financial termscomparedtopreviousyear.

ForeignTours

Duringtheyear2012-13,noexpenditurewasincurredonforeigntoursundertakenforbusinessactivities.

Directors’ResponsibilityStatement

IncompliancewiththeprovisionsofSec.217(2AA)oftheCompaniesAct,1956,itisherebyconfirmed:

In the preparation of Annual Accounts for theFinancial Year ended 31st March, 2013, theapplicable Accounting Standards have beenfollowedalongwithproperexplanationrelatingtomaterialdepartures;

The Directors have followed Accounting Policiesand applied them consistently and madejudgments and estimates that were reasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsoftheCompanyasattheendoftheFinancialYear2012-13andoftheProfitoftheCompanyforthatperiod;

The Directors have taken proper and sufficientcareforthemaintenanceofadequateaccountingrecords inaccordancewith theprovisionsof theCompaniesAct,1956forsafeguardingtheassetsoftheCompanyandforpreventinganddetectingfraudandotherirregularities;

TheDirectorshavepreparedtheAnnualAccounts

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fortheFinancialYearended31stMarch,2013ona‘goingconcern’basis.

CorporateGovernance

The Department of Public Enterprises has issuedguidelinesonCorporateGovernance.Theseguidelinesweremademandatory vide OMNo-18(8) 2005 GMDt.14-05-2010. The quarterly report on compliancewith the Corporate Governance requirementsprescribedbyDPEisalsosenttoAdministrativeMinistry(DHI)regularly.AreportontheCorporateGovernancealong with certificate on Corporate Governance isenclosedasAnnexure-2totheDirectors’Report.

OtherDisclosures

Information in accordance with the provisions ofSection 217(1) (e) of the Companies Act, 1956 readwith Companies (Disclosure of particulars in theReportoftheBoardofDirectors)Rules,1988regardingconservation of energy, technology absorption andforeign exchange earnings and outgo is detailed asunder:

ConservationofEnergy

YourCompanycontinued itsefforts in takingvariousmeasuresintheconservationofelectricity,LPG,petrol& diesel. Different measures taken to save energyduringtheyearinclude:

• Theexistingcapacitorbanksfor6nos.substationswere reconditioned. After doing the same, theoverall power factor of the factory is improved.Also close monitoring of capacitor banks(switching“ON”and“OFF”)tomaintainthepowerfactornearertounity(one)isbeingdone,whichresultedintosignificantsavingsinconsumptionofelectricalenergy.

• EOT cranes are reconditioned replacingconventional drives with VF Drives and therebysavinglotofenergy.Othermachineslikecolumn&boomweldingmachineanddrumshellrotatorswith advanced technologies are installed whichconsumeverylessenergy.

• Timers are installed for shop lighting of LMSbuilding(4bays)forautomaticswitching“ON”and“OFF”atpresettimesandtimesettingofall thetimersarechangedatan intervalofevery threemonthstherebysavinggoodamountofpower.

• ForconservationofLPG/Diesel, jobsareclubbedtogetherwhereveritispossiblewhileloadingthefurnace. Periodic cleaning or replacing the LPG/Diesel fired burners are carried out to ensureefficientworking.

• Timers are installed for street lights, parks,commonfacilities,etcatTownshipforautomaticswitching “ON” and “OFF” at preset times andtime setting of all the timers are changed at aninterval of every three months thereby savinggoodamountofpower.

• Alloldceilingfansarebeingreplacedphasewiseby new energy efficient fans in the townshipquarters(50%alreadyreplaced).

PowerandFuelcostasapercentageofGrossTurnover(netofExciseDuty),fortheyear2012-13is1.96%asagainst2.33%inthepreviousyear.

Research&Development

Company’sR&DDepartmentcontinueditseffortsfordesign and commercial production of new productsafterdevelopmentandtestingoftheirprototypes.

Thefollowingaresomeoftheimportantachievementsduringtheyear:

R&D has continued manufacturing, testing andsupply of Compact Heat Exchangers of Tejasaircraft for the Series production order from M/s HAL, Bangalore. During the year, CompactHeat Exchangers worth ` 349.50 Lakh werefabricated, tested and delivered to M/s.HAL,Bangalore.

Besides above, Pre-coolers worth ` 18.75 Lakhand Test Heat Exchangers worth ` 24.00 Lakh,were fabricated, tested and supplied to ADA,Bangalore.

Apart from above, Plate Fin Heat Exchangersworth` 65.83 Lakh,weremanufactured, testedandsuppliedtoHeavyWaterBoard,Mumbai.

TechnologyUpgradation

TheTechnologyformanufacturingofTitaniumDomesfor VSSSC, Trivandrum involving hot pressing ofTitaniumblanks for formingdishedendsof requireddimensionswithahighdegreeofaccuracyhasbeenupgraded.

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ForeignExchangeEarnings&Outgoings

Foreign exchange valued at `3.63 Crore was spenttowards procurement of raw material/services andcomponents and other expenses for execution ofordersquotedwiththetechnicalbackupofreputedpartiesabroad.TheforeignexchangeearningsduringtheyeararevaluedatNIL.

ParticularsofEmployees

TherewasnoemployeeoftheCompanywhoreceivedremunerationinexcessofthelimitsprescribedundertheSec.217(2A)oftheCompaniesAct,1956readwiththeCompanies(ParticularsofEmployees)Rules,1975.

EnvironmentalManagementandPollutionControl

Your Company is aware of its responsibility towardsthe ill-effects caused through pollution and it hastakenvariousmeasurestomaintaincleanandhygienicenvironmentinandaroundfactorypremises.Alargegreenbeltismaintainedinthefactoryandtownship.

NecessarystatutoryconsentsunderSection25/26ofWater(PreventionandControlofPollution)Act,1974andunderSection21ofAir(PreventionandControlofPollution)Act,1981andconsentforHazardousWasteAuthorizationhavebeenobtained fromAPPollutionControlBoardwhichisvalidupto30.04.2013.Renewalofconsentforair&water(PreventionandControlofPollution)validupto30.04.2014isinprogress.

Auditors

M/s Grandhy & Co, Chartered Accountants of

Visakhapatnam were appointed as the StatutoryAuditors of the Company for the year 2012-13. Theaudited accounts of the Company were presentedto the C & AG under Sec.619(4) of the CompaniesAct,1956.TherepliestothepointsreferredtointheAuditorsReportaregivenatAnnexure-3.

M/s Velamarthi & Associates, Cost Accountants ofVisakhapatnamwere appointed as Cost Auditors fortheyear2012-13andCostAuditReportwillbefiledbeforetheduedate(27.09.2013).Intheyear2011-12CostAuditwasnotapplicable.

CommentsofC&AG

Comments of Comptroller & Auditor General ofIndia,underSec.619(4)oftheCompaniesAct,1956ontheaccountsof theCompany for theyearended 31stMarch,2013,areplacedasAnnexuretothisreport.

Acknowledgements

The Directors wish to express their sincere thanksandappreciationforthecontinuedsupport,guidanceand cooperation received from the Department ofHeavyIndustry,GovernmentofIndia,GovernmentofAndhraPradesh,HoldingCompany(BHEL),Suppliers,ValuedCustomersandBankers.YourDirectorsarealsothankfultothePrincipalDirectorofCommercialAudit& ex-officioMember, Audit Board and the StatutoryAuditors for completion of audit in the shortestpossibletime.TheDirectorsalsotakethisopportunitytoexpresstheirappreciationfortheeffortsputinbytheemployeesatalllevels.

ForandonbehalfoftheBoardofDirectorsBharatHeavyPlateandVesselsLtd.,

Date:July18,2013Place:NewDelhi

C.P.ChengappaManagingDirector

B. Prasada RaoChairman

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ManagementDiscussionsandAnalysisReportAnnexure-1totheDirectors'Report

IndustryStructureandDevelopment

The Company is an Engineering Industry essentiallyestablishedtocatertotheneedsoftherequirementofcoresector industries likeRefineries,Steel,Fertilizer,Nuclear Power etc. It is engaged in manufacture,supplyanderectionofcapitalequipments/machineryneededforcoreindustries.TheCompanyhasbecomeawhollyownedsubsidiaryofBHELintheyear2008-09. The planned investment towards up-gradation,capital expenditure for Plants & Equipments andInfrastructure is under progress. Strategic tie-upsfor BHEL’s total support to enhance Industrial Boilercapability, sharing load of other plants of BHEL andtocatertotheneedofIndustrialBoilers&HRSGsarebeingenteredinto.

OpportunitiesandThreats

Opportunities

TheIndustryhasthepotentialforhighgrowthandtheopportunitiesbeforetheCompanyare:–(a)becominga hub for industrial boilers for BHEL, (b) supplyingPower Plant Components to BHEL and (c) cater todemandsinBHPV’sexistingportfolio.

Threats

i) Stiffcompetitionfromprivateplayers,ii) NationalandInternationalplayersunder-quoting

forconventionaljobs.iii) Risingcustomerexpectations.iv) Stringentdeliveryconditions.

Performance(`inCrore)

2012-2013 2011-2012

1. Turnover 240.27 155.80

2. ValueAdded 110.79 68.25

3. ProfitBeforeTax 35.04 10.44

4. ProfitAfterTax 35.04 10.44

5. FinanceCost(Interest) 0.96 1.40

6. ExtraordinaryIncome 4.14 0.16

7. CapitalEmployed 81.13 43.63

8. GrossBlock 83.04 82.64

9. NetBlock 3.96 4.49

10. Capital(WIP) 9.20 0.00

11. WorkingCapital 77.17 39.13

12. NetWorth (-)184.28 (-)219.32

Ratios

2012-2013 2011-2012

PBDITasapercentageofTurnover 13.65 8.16

PATaspercentageofTurnover 14.58 6.70

ValueAddedasa%ofGTO(netofED) 52.71 46.70

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Major achievements of the year included themanufacture and supply of following criticalequipments:

• IOCLParadipBoilerIII&IV BoilerDrums(2Nos)11.0Mtr.longwith120mm

thickshellweighingaround65MTwerefabricatedsuccessfully for the first time. Along with this,othercomponentslikeCS&LASWaterwallpanels(approx 320MT), Water wall Headers (41 Nos.),Economiser coils/Super Heater Coils were alsosuccessfullycompleted.

• HRSGModulesforKRIBHCO&OPAL3&4 HRSG Modules (12 Nos.) with P91 material for

KRIBHCO were manufactured for the first time.Alongwiththis,otherCS&LASModules(88nos.)forOPAL3&4werealsocompleted ina recordperiodofthreemonths.

• NitrogenStoragetanksforCPCL,Chennai&GSPC,Kakinada

NitrogenStorageTanksforCPCL,Chennai&GSPC,Kakinadawerecompleted.Theseordershadbeenreceivedafteralonggapofmorethan10years.

• CondensershellInternals 80 nos. Support plates for Condenser shell

internalsinvolvingdrillingof7000numberofholesoneachplatewithhighdegreeofaccuracyweresuccessfullymanufacturedforBHELHaridwar.

• BufferVesselforTISCOJamshedpur&RINL-Vizag 200 M3 Oxygen Buffer Vessel weighing around

106MTand200M3ArgonBufferVesselweighingaround74MTweremanufactured.

• HigherDiameterpipeBends 73nos.ofhigherdiameterpipebendswithand

without attachments involving Normalizing& Tempering (excluding bending), welding ofattachments, stress relieving, Edge preparation,surfacepreparationandpaintingwerecompletedforBHELPipingCentre,Chennai

• RiserPipes 586 MT of Riser Pipes were fabricated and

dispatchedtovariousBHEL-Projectsites. Inadditiontotheabove,ontheExternalServices

front, the Company has accomplished thefollowing:

(i) Erection, alignment, grouting, testing &Commissioning of 200 M3 Nitrogen buffervessel–1No.atM/sTatasteelLtd-Jamshedpur

is completed. This is an over dimensionalconsignment (Size: ID4.1MtrsX18.00Mtrslong&ApproximateWeight:143MT).

(ii) Erection,TestingandcommissioningofLiquidNitrogen storage facility (45 M3 capacity)for FCCU Unit atM/s CPCL-Manali Refinery,Chennaihasbeencompleted.

(iii) Erection, alignment and grouting of Oxygen& Argon buffer vessels – 4 Nos. have beencarriedoutatM/sRINL,Visakhapatnam(Size:ID3.9MtrsX19.20Mtrslong&ApproximateWeight:118MT–3Nos.andSize:ID3.0MtrsX19.7Mtrs long&ApproximateWeight: 75Mt–1No.).

Outlook

• BHPV’sreputationasaqualitysupplierofProcessPlant equipment continues to help in gettingfurtherordersfromoil,steelandfertilizerssectors.This coupled with executing more orders fromBHELwillsignificantlycontributetothecompany’sturnover in the coming years andwill put BHPVback on track. Continuous efforts are also beingmadetobagmoreordersfromexistingaswellasnewcustomers.

• InlinewiththeModernization&CapitalInvestmentstrategyadoptedbythecompany,` 230.91CroreModernizationschemewasapprovedandbeingimplemented for renovation and modernizationofthefacilitiesinaphasedmanner.Acommitteeconsisting of officials of BHEL and BHPV areregularlyreviewingitsprogress.

• Forbridgingidentifiedskillgapsatdifferentlevels,the process for recruitment of fresh ExecutivesandSupervisorshasstartedandwillbecontinuedduring2013-14.

• In line with the growth agenda, the areas ofcooperation between BHPV and BHEL are beingworked out in consultation with the businesssectorsandmanufacturingunitsofBHEL.

TheTargettedPerformanceParametersFor2013-14

OrderBooking : ` 480.00Crore

Turnover : ` 380.00Crore

OperatingResultsPBT : ` 34.30Crore

RisksandConcerns

• Speedy up-gradation of manufacturing facilitiesforexistinganddiversifiedbusiness.

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• Gain Customer’s confidence through speedycompletionofexistingprojects.

• Baggingmajorordersincompetitiveandpresentmarketscenario.

InternalControlSystemsandTheirAdequacyThe company has an Internal Audit Department forconductingauditwithdefinedAuditprogramme.TheInternalAuditDepartmentisheadedbyaDy.GeneralManager and reports to the Managing Director.The Company has formed an Audit Committee ofDirectorsandthefunctionsofInternalAuditandtheHalf yearly/ Quarterly reports are being periodicallyreviewed and corrective actions are taken forcontinuous improvement. The adequacy of internalcontrol procedures is reviewed and reported by theStatutoryAuditorsintheirAuditReport.TheVigilanceDepartment deals with vigilance and disciplinarycases.Yourcompany,beingaGovernmentcompany,isalsosubjecttoGovernmentAudit.Material Developments in Human Resources/Industrial Relations Front, Including Number ofPeopleEmployedThetotalnumberofemployees,asattheendofMarch2013,was 1123 as against 1186 at thebeginning oftheyear.ForHumanResourceDevelopmentandasapartofwelfaremeasures,varioustrainingprogramsasmentionedbelowwereorganized:1) In-Companytrainingprograms TheCompanyconducted18 in-companytraining

programmes covering 439 employees. Theprogrammes covered Executive, Supervisor andWorkmen / Staff category employees. Theseprogrammes included training on engineeringdesign software, Purchase policy & vigilanceguidelines,firesafety,healthawareness,vigilance,weldersrefreshercourses,etc.

2) Outstationtrainingprograms TwentysixExecutivesweresponsoredforfourteen

external/outstation training programmes duringthe year. These programmes were on latestdevelopmentsinCostAudit&AccountingRecordRules,ServiceTax,HumanResourceforCorporateSustainability,taxdeductionatsource,CorporateGovernance,administrativevigilance,EngineeringDesignSoftware,PublicRelationsstrategies,CostAudit,developmentsinGynaecology,OccupationalPhysiology,managementofischemicstroke,etc.

Atotalof465employeeswereprovidedtrainingduringtheyear.

IndustrialRelationsintheorganizationcontinuedtobeharmoniousandcordial.Participativecultureisbeingencouragedthroughvariousparticipatorybodiesandthediscussionsinthebodiescontributetowards improving work culture, industrialrelations,productivityandresolvingdifferences.

StatusofEmploymentandReservationofPH/SC/ST/Ex-Servicemen/OBCCategories

• The instructions/guidelines issued by theGovernmentofIndiafromtimetotimeinrespectof reservations toPH/SC/ST/Ex-Servicemen/OBCcategoriesarebeingregularlyfollowedbytheCompany.

• The Annual Statement in the prescribed formatshowingtherepresentationofSCs,STsandOBCason01.01.2013andnumberofappointmentsmadeduring theprecedingcalendaryear,as furnishedtotheGovernment,isgivenatAnnexure-A.

Manpower Strength of Physically ChallengedEmployeesason01.01.2013

• Presently we have a total of 26 PhysicallyChallenged Employees as on 01.01.2013. Thegroup-wise manpower in the Company as on01.01.2013isgivenatAnnexure-B.

CorporateSocialResponsibility

AsasociallyconsciousCorporateCitizen,theCompanyismaking efforts to contribute to the Society in theareas of Community Development and EnvironmentProtection.Duringtheyear,3BloodDonationcampswereorganizedinassociationwiththeIndianRedCrossSociety.TwoHealthawarenesscampswereconductedin the nearby villages. The Company is providingconcessionaleducationinEnglishMediumandSpecialCare School for which ` 32 Lakh (Provisional) werespent.TheCompanyconductedPulsePolioProgrammeandaFreeMedicalcampinthenearbyvillage.

CautionaryStatement

Statements in this Management Discussion andAnalysis reportdescribing theCompany’sobjectives,projections, expectations and assumptions may beforward-looking statements within the meaning ofapplicable laws and regulations. Actual results maydiffer materially from those expressed or implied.Important factors thatcouldaffect theoperationsofthe Company include economic conditions affectingdemand/supply, price conditions in the domesticand international markets, Government policiesand regulations, statutes, labour relations andotherincidentalfactors.

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Annexure–A

AnnualStatementShowingtheRepresentationofSCs,STsandOBCsason01.01.2013andNo.ofappointmentsmadeduringtheprecedingcalendaryear2012.

Groups RepresentativesofSCs/STs/OBCs(Ason01.01.2013)

No.ofappointmentsmadeduringthecalendaryear

ByDirectRecruitment BYPromotion ByOtherMethods

TotalNo.of

Employees

SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs

Group–A 199 37 10 24 14 3 2 4 3 -- -- 5 -- --

Group–B 291 50 58 43 19 4 2 7 22 7 1 -- -- --

Group–C 626 85 35 196 -- -- -- -- -- -- -- -- -- --

Group-D(Exc.SW) 8 2 -- 1 -- -- -- -- -- -- -- -- -- --

Group-D(SW) -- -- -- -- -- -- -- -- -- -- -- -- -- --

Total 1124 174 103 264 33 7 4 11 25 7 1 5 -- --

Annexure–B

REPRESENTATIONOFPRERSONSWITHDISABILITIES

Group

No.ofEmployees(Representation)(Ason01.01.2013)

DirectRecruitmentduringtheCalendaryear2012

Promotion

No.ofVacanciesreserved

No.ofVacanciesmade(Appointed)

No.ofVacanciesReserved

No.ofVacanciesmade(Appointed)

Total VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH

Group–A 199 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --

Group–B 291 -- 5 4 -- -- -- -- -- -- -- -- -- -- -- -- -- --

Group–C 626 2 1 14 -- -- -- -- -- -- -- -- -- -- -- -- -- --

Group–D 8 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --

Total 1124 2 6 18 -- -- -- -- -- -- -- -- -- -- -- -- -- --

(I)VHstandsforVisuallyHandicapped(Personssufferingfromblindnessorlowvision)

(II)HHstandsforHearingHandicapped(Personssufferingformhearingimpairment)

(III)OHstandsforOrthopedicallyHandicapped(Personssufferingfromlocomotordisabilityorcerebralpalsy).

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CorporateGovernanceReportAnnexure-2totheDirectors'Report

Preamble

Corporate Governance rests on four fundamentalpillars of Fairness, Transparency, Accountabilityand Responsibility. The core to good CorporateGovernance being compliance with the laws of theland,thishelpscompaniesintheirendeavourtowardsbeingagoodcorporatecitizen.CorporateGovernanceis a key element in improving efficiency and growthaswell as enhancing investor confidence. CorporateGovernanceisthesetofprocesses,customs,policies,laws,andinstitutionsaffectingthewayaCompanyisdirected,administeredandcontrolled.

Philosophy

The Company is committed to sound CorporatePractices based on conscience, openness, fairness,Professionalism and Accountability in buildingconfidence of its various stake holders such as Investors, customers, employees, Government,Vendorsandsocietyat large in ittherebypavingthewayfor its longtermsuccess.TheCompanybelievesthat the most important aspect of compliances isthe creationofa compliance-consciousenvironmentat every level. It is the constant endeavour of yourcompany to maintain the standards of ethics in allspheres of business activities. It also accords dueimportance to the adopted corporate values andobjectives and discharging as a corporate citizen.As a responsible citizen and a public Authority, theCompanyprovidesappropriateaccesstoinformationto the citizens of India under the provisions of theRighttoInformationAct-2005(RTIAct).

BoardofDirectors

TheBoardcomprisedoffiveDirectorsupto30.04.2012.The then Managing Director Shri A.S.Nagaraja, hasbeenrelievedfromtheposton30.04.2012duetohissuperannuation in BHPV. Shri P.V.Sridharan, Director(HR)whowas entrustedwith the Additional ChargeofDirector(Operations)from01.05.2012wasrelievedon 31.07.2012 due to his superannuation in BHPV.The Board as on 31.03.2013 is having 3 Directors. Shri Debasis Jana, Director, DHI was appointed aspart time official Director on the Board of BHPVrepresenting the Government of India, DepartmentofHeavy Industry (DHI) from21.03.2013 inplaceof

ShriR.P.Goyal,ShriC.P.Chengappa,GeneralManager,BHEL (OSD-EDofBHPV)wasappointedasManagingDirector of BHPV and assumed the charge as MD,BHPV with effect from 12.04.2013/FN which madetheBoardStrengthto4Directors.ShriG.UdayKumar,AGM, BHEL, (OSD-HR, BHPV) and Shri D.Asokan,AGM,BHEL,(OSD-Operations,BHPV)wereappointedas Director (HR) and Director (Operations) and theyassumedthechargeon30.05.2013ANand03.06.2013FN respectively. Due to the above appointmentsthe Board strength was increased from 4 to 6. TheDirectors shall not require to hold any qualificationshares.TheappointmentofDirectorsoftheCompanyismadebythePresidentofIndia.

Theterms&conditionsoftheappointmentincludingthe remuneration of all the Whole time/FunctionalDirectorswillbe issuedby theGovernmentof India.TheIndependentDirectorsarepaidsittingfeesaspertheguidelinesgivenbyDepartmentofHeavyIndustriesforattendingeachmeetingoftheBoard/Committee(s)andreimbursedactualexpenditureforattendingthemeetingsoftheBoard/Boardcommittee(s).

BoardProcedure

The Board meets regularly and is responsible forproper direction and management of the company.The whole time Directors manage the day to dayaffairsofthecompany.AdvancenoticesconveningtheBoardMeetingsaregiventoallDirectors.Sometimesmeetingswith shorter notice are convened tomeeturgentneedsorincaseofexigencies,resolutionsarepassed by circulation. Members of the Board havecompleteaccesstoallinformationandarefreetocallanyseniorofficialsduringthemeetingforadditionalinformation/clarification. The Board periodicallyreviews the compliance status of all the applicablelaws. All the decisions are taken after detaileddeliberationsbytheBoardMembersatthemeetings.

BoardMeetingsandAttendance

During the financial year ending 31st March, 2013,fourmeetingsoftheBoardofDirectorswereheldandthemaximumintervalbetweentheanytwomeetingswasnotmorethanFourcalendarmonths.TheBoardmeetings were held on 17.05.2012, 10.09.2012,19.12.2012and22.03.2013.Detailsofattendanceof

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AuditCommittee

During the year 2012-13, the Audit Committeewas reconstituted on appointment of Shri DebasisJana as part time official Director representing theGovernmentofIndia,DHIfrom21.03.2013inplaceofShriR.P.GoyalwiththeexistingDirectorsasMembers.The Audit Committee was again reconstituted onappointmentofShriC.P.Chengappa,GeneralManager,BHEL (OSD-ED,BHPV)asManagingDirectorofBHPVwhoassumedthechargewitheffectfrom12.04.2013/FN.FourmeetingsoftheAuditCommitteewereheldduring the year under review. The Annual Accountsof2012-13wereplacedbeforetheAuditCommitteeto approve& recommend to the Board of Directorsof the Company for approval in its meeting heldon 08.05.2013. As the two Independent Directorscompleted the tenure of appointment of 3 years inMarch2010,therearenoNon-official (Independent)Directors in the Audit Committee. The issue forappointment of part time Non-official Directors hasbeenbroughttothenoticeofDHI.

TheroleandpowersoftheAuditCommitteebrieflyaretoreviewthereportsoftheInternalAuditors,reviewof pending IR Paras issued by Govt. Audit, meetingthe Statutory Auditors and discuss their findings,suggestionsandother relatedmatters, reviewmajoraccounting policies followed by the company and

theDirectorsattheBoardMeetings,AnnualGeneralMeetingandthenumberofotherDirectorshipsheldbythemduring2012-13etc.arefurnishedbelow:

S. No.

NameofDirectors

Category/Period NumberofBoardMeetings

duringtenure

MeetingsAttended

WhetherattendedAGM

No.ofother

Director-ships held

1 ShriB.P.Rao Chairman/From24.10.2009FN 4 4 - 2

2 ShriA.S.Nagaraja

Director(Operations)&AdditionalchargeofMDFrom18.05.2011to30.04.2012.

- - Yes(Chairmanofthe

Meeting)

NIL

3 ShriR.P.Goyal ParttimeOfficial(Govt.Director)/From21.04.2011to21.03.2013

3 3 - NIL

4 ShriDebasisJana

ParttimeOfficial(Govt.Director)/From21.03.2013

1 1 - NiL

5 ShriP.V.Sridharan

Director(HR)/I/cFinanceFrom09.11.2009

1 1 - NIL

6 ShriB.D.Kaler SpecialDirectorappointedbyBIFR/From25.05.2011

4 4 - 1

AnnualFinancialstatementsbeforesubmissiontotheBoard of Directors of the Company. The Committeehasauthority to investigate intoanymatter referredtoitbytheBoard.

GeneralBodyMeetings

Detailsoflast3AnnualGeneralMeetings:-

Financialyear DateandtimeofAGM

Location

2009-10(44thAGM)

14thSeptember,2010at9.00a.m.

BHPVBoardRoom,Visakhapatnam

2010-11(45thAGM)

14thSeptember,2011at9.00a.m.

BHPVBoardRoom,Visakhapatnam

2011-12(46thAGM)

4thSeptember,2012at10.00a.m.

BHPVBoardRoom,Visakhapatnam

CodeofConduct

The Board of Directors has laid down the code ofBusiness conductandethics for theBoardmembersandSeniorManagementoftheCompany.

Thecodecomprises:

• GeneralMoralImperatives;

• SpecificprofessionalResponsibilitiesand

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• SpecificAdditionalprovisionsforBoardMembersandSeniorManagementPersonnel.

Acopyofthesaidcodehasbeenplacedonthewebsite‘www.bhpvl.com’ All Board Members and SeniorManagementofficialsof theCompanyhaveaffirmedtheircompliancewiththecode.AdeclarationtothiseffectisannexedtothisReport.

TrainingofBoardofDirectors

Thecompanyfurnishessetofdocumentsandbookletsto the Directors on their joining the Board. Thisincludes important data about the performance oftheCompany,Memorandum&ArticlesofAssociation,Corporate Governance guidelines, Delegation ofpowers, Product line brochures etc. A copy of themonograph on position, duties and liabilities ofDirectors is also circulated among the Directors. ApolicyonTrainingofDirectorshasbeenapprovedbytheBoard.

SubsidiaryCompanies

TheCompany isawhollyownedsubsidiaryofBHEL.BHPVdoesnothaveanysubsidiarycompany.

PlantLocation

M/s.BharatHeavyPlate&VesselsLtd., Nathayapalem,Visakhapatnam-530012, (AndhraPradesh)

Disclosures

TherewasnomateriallyrelatedpartytransactionsofthecompanywithitsDirectorsortheManagementorhisrelative,afirminwhichsuchaDirectororrelativeisapartneretc.thatmayhaveconflictwiththeinterestsofthecompanyattractingtheprovisionsofSec.297oftheCompaniesAct.TheCompanyisensuringtomakeappropriatedisclosuresandcomplywithvariouslawstomaintainethicalstandards.

StatutorycomplianceReporttogetherwiththestatusofthestatutoryduesisbeingplacedbeforetheBoard

regularly.Duringtheyear,presidentialdirectivesissuedbytheGovernmentofIndiahavebeencompliedwithbytheCompany.

During the year, no expenditure is debited to thebooksandaccountswhicharenotforthepurposeofbusiness expenditure and no expenseswhich are ofpersonalnaturehavebeenincurredfortheBoardofDirectorsandTopManagement.

TheCompanydoesnothavethemechanismofwhistleblower policy. However, no personnel/employeehavinganygrievancehasbeendeniedaccess to theAuditCommittee.

TheCompany iscomplyingwiththerequirementsofthe Guidelines on Corporate Governance for CPSEsissued by theDPE except the Composition of Boardand could not constitute the Sub-Committees asGovernmentofIndiaisyettofillupthevacanciesofparttimeNonofficialDirectors.

The Company always aims to present unqualifiedfinancialstatements.

As the Company is a non-listed Central PublicSector Enterprise, the requirements of the SEBI andStock Exchanges or provisions of the listing are notapplicable. However, during the year under review,the company compliedwith all the requirements ofbeingasubsidiarycompany,astheCompanyis100%subsidiaryofBHEL.

MeansofCommunication

TheCompanycommunicatesmajorachievementsandimportanteventstakingplaceinthecompanythroughpress,electronicmedia.Thecompany isalsohostingtheinformationonitsweb-site.TheCompanydisplaysitsannualReporton itswebsite for the information.Being a Government company, the records of thecompany are open for Audit of C & AG and forinspectionsbyVigilance/CBIetc.

DeclarationbyManagingDirectorregardingcompliancewiththecodeofconductbyboardmembersandseniormanagementduringthefinancialyear2012-13

I,C.P.Chengappa,ManagingDirector,BharatHeavyPlate&VesselsLimited,doherebydeclarethatalltheMembersoftheBoardofDirectorsandtheSeniorManagementTeamoftheCompanyhaveaffirmedtheircomplianceofthecodeofBusinessConductandEthicsoftheCompanyduring2012-13.

Place:VisakhapatnamDate:May2,2013

(C.P.Chengappa)ManagingDirector

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Auditors’CertificateonCorporateGovernanceTo

TheMembers, M/SBharatHeavyPlate&VesselsLtd, Visakhapatnam.

Sir,

Wehaveexaminedthecomplianceof theconditionsof theCorporateGovernancebyM/sBharatHeavyPlate&Vessels Ltd, (the Company) for the year ended 31stMarch, 2013 as stipulated in theDepartment of PublicEnterprises (DPE) Guidelines on CorporateGovernance issued dated 14thMay, 2010 for Central Public SectorEnterprises(CPSEs)andAnnexesthereof.

ThecomplianceofconditionsofCorporateGovernanceistheresponsibilityoftheManagement.Ourexaminationwas limitedtoproceduresand implementationthereof,adoptedbytheCompanyforensuringthecomplianceoftheconditionsofCorporateGovernance.It isneitheranauditnoranexpressiononopinionofthefinancialstatementoftheCompany.

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,subjecttothefollowing:

AsperCorporateGovernanceguidelinesforanotlistedCPSE,atleastonethirdoftheBoardMembersshouldbeIndependentDirectorsandtwothirdofthemembersoftheAuditCommitteeshallbeIndependentDirectors.DuetovacancyonaccountofexpiryofthetermofIndependentDirectorsfromtheBoard,theCompanycouldnotmeettheconditions.ThusthecompanydidnothaveIndependentDirectorsonitsBoardduringtheyear.

WecertifythattheCompanyhascompliedwiththeconditionsofCorporateGovernanceasstipulatedintheabovementionedGuidelines.

WefurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheCompanynortheefficiencyoftheeffectivenesswithwhichtheManagementhasconductedtheaffairsoftheCompany.

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Auditors'ReportAnnexure-3totheDirectors'Report

ToTHEMEMBERS,BHARATHEAVYPLATEANDVESSELSLIMITEDVISAKHAPATNAM

WehaveauditedtheaccompanyingfinancialstatementsofM/sBharatHeavyPlateandVesselsLimited,whichcomprisetheBalanceSheetasat31stMarch,2013,theStatementofProfitandLossandthecashflowstatementfortheyearendedandthesummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

Management’sResponsibilityfortheFinancialStatements

Managementisresponsibleforthepreparationofthesefinancialstatementsthatgiveatrueandfairviewofthefinancialposition,financialperformanceandcashflowsofthecompanyinaccordancewiththeaccountingstandardsreferredtosubsection(3C)ofthesection211oftheCompaniesAct,1956.Thisresponsibilityincludesthedesign,implementationandmaintenanceofinternalcontrolsrelevanttothepreparationandpresentationofthefinancialstatementsthatgivesatrueandfairviewandfreeofmaterialmis-statements,whetherduetofraudorerror.

Auditor’sResponsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewiththestandardsonauditing issuedbythe InstituteofCharteredAccountantsof India,thosestandards require thatwecomplywithethical requirementsandplanandperformtheaudit toobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmis-statement.

Anauditinvolvesperformingprocedures,includesexamining,onatestbasis,evidencesupportingtheamountsanddisclosures infinancialstatements.Theproceduresselecteddependontheauditor’s judgment, includingtheassessmentofrisksofmaterialmis-statementof thefinancialstatements,whetherdueto fraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttothecompany’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances.

An audit also includes assessing the accounting principles / policies used and significant estimatesmade bythemanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

InaccordancewiththeprovisionsofSection227oftheCompaniesAct,1956,wereportthat:

I. AsrequiredbytheCompanies(Auditors’Report)Order,2003,issuedbytheCentralGovernmentofIndiaundersub-section(4A)ofsection227oftheCompaniesAct,1956andonthebasisofsuchchecksofthebooksandrecordsof thecompanyasweconsideredappropriateandaccordingto the informationandexplanationsgiventous,weencloseintheannexureastatementonthemattersspecifiedinparagraphs4and5ofthesaidOrder.

II. FurthertoourcommentsintheAnnexuretoinparagraphIabove,wereportthat:

(a) Wehaveobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposeofouraudit.

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(b) Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasappearsfromourexaminationofthebooks.

(c) TheBalanceSheetandStatementofProfitandLossandcashflowstatementdealtwithbythisreportareinagreementwiththebooksofaccount.

(d) Inouropinion,theBalanceSheetandStatementofProfitandLossandcashflowstatementdealtwithbythisreportcomplywiththeAccountingStandardsreferredtoinsubSection(3C)ofSection211oftheCompaniesAct,1956;

(e) In termsofNotificationNo.GSR829(E)dated21-10-2003 issuedby theDepartmentofCompanyAffairs,GovernmentofIndia,theprovisionsofsection274(1)(g)oftheCompaniesAct,1956arenotapplicabletotheCompany;

(f) Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,the,saidaccountsreadtogetherwiththeAccountingPoliciesandExplanatoryNotesinNote33,givetheinformationrequiredbytheCompaniesAct,1956,inthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

(i) InthecaseoftheBalanceSheet,ofthestateofaffairsoftheCompanyasatMarch31,2013,

(ii) InthecaseofStatementofProfitandLoss,ofthePROFITfortheyearendedasonthatdate,and

(iii) Inthecaseofthecashflowstatement,ofthecashflowsfortheyearendedasonthatdate.

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AnnexuretotheAuditors’Report(ReferredtoinParaIofourreportofevendates)

TheannexurereferredtoinourreporttothemembersofBHPVLtd.fortheyearended31stMarch2013.Wereportthat

i (a) Thecompanyhasgenerallymaintainedproperrecordsshowingfullparticularsincludingquantitativedetailsandsituationofitsfixedassets.

(b) Weareinformedthatmanagementhasgenerallycarriedoutthephysicalverificationofaportionof the fixed assets in accordancewith their phased programmeof physical verification,which isconsideredreasonablehavingregardtothesizeoftheCompanyandnatureofitsbusinessandnomaterialdiscrepancieswerenoticedonsuchverification.

(c) TheCompanyhasnotdisposedoffanysubstantialpartof itsfixedassetssoastoaffect itsgoingconcernstatus.

ii (a) Asexplainedtousphysicalverificationofinventoryhasbeenconductedbythemanagementunderperpetual inventory programme at regular intervals during the year except for stock of work in

164

progressandfinishedgoodsatfewworksiteoffices,wheretheseareverifiedattheyearendwithreferencetotheinspectionreportsandproductionreportsoftheErectionDepartment.Inregardtostockslyingwithcontractors/fabricatorsandotherparties,confirmationswerereceivedinafewcasesonly.Inouropinionthefrequencyofverificationisreasonable.

(b) In our opinion procedures of Physical verificationof inventory followedby themanagement aregenerally reasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) Thecompanyhasmaintainedproperrecordsofinventoryandthediscrepanciesnoticedonphysicalverificationofinventorywithregardtothesizeandnatureofoperationofthecompanywerenotmaterialandhavebeenproperlydealtwithinthebooksofaccountofthecompany.

iii (a) Accordingtotheinformationandexplanationsgiventous,thecompanyhasnotgrantedanyloans,securedorunsecuredtocompanies,firmsandotherpartiescoveredintheregistermaintainedundersection301oftheCompaniesAct,1956.Accordingly,clauses(iii)(b)to(iii)(d)ofparagraph4oftheCompanies(Auditor’sReport)Order,2003arenotapplicabletothecompanyforthecurrentyear.

(b) Accordingtotheinformationandexplanationsgiventous,thecompanyhasnottakenanyloans,securedorunsecuredfromcompanies,firmsandotherpartiescoveredintheregistermaintainedundersection301oftheCompaniesAct,1956.Accordingly,clauses(iii)(f)to(iii)(g)ofparagraph4oftheCompanies(Auditor’sReport)Order,2003arenotapplicabletothecompanyforthecurrentyear.

iv Inouropinionandaccordingtotheinformationandexplanationgiventous,thereareadequateinternalcontrolsystemscommensuratewiththesizeofthecompanyandthenatureofitsbusinesswithregardtopurchaseofinventory,fixedassetsandsaleofgoodsandservices.

Furtheronthebasisofourexaminationandthebooksandrecordsofthecompany,andaccordingtotheinformationandexplanationgiventous,wehaveneithercomeacrossnorhavebeeninformedofanycontinuingfailuretocorrectmajorweaknessesininternalcontrolsystems.

v Accordingtotheinformationandexplanationgiventous,weareoftheopinionthattherearenocontractsandarrangements referred to inSection301of theAct during theyear that need tobe entered intheregistermaintainedunderthatSection.Accordingly,clause(v)(b)ofparagraph4oftheCompanies(Auditor’sReport)Order,2003isnotapplicabletothecompanyforthecurrentyear.

vi Accordingtotheinformationandexplanationgiventous,thecompanyhasnotacceptedanydepositsfrompublicduringyearwithinthemeaningofsection58Aand58AAoranyotherrelevantprovisionsoftheActandtheCompanies(AcceptanceofDeposits)Rules1975framedthereunder.

vii Inouropinion,thecompanyhasanInternalAuditSystemcommensuratewiththesizeandnatureofitsbusiness.

viii WehavebroadlyreviewedthebooksofaccountsandrecordsmaintainedbythecompanypursuanttotherulesmadebytheCentralGovernmentformaintenanceofcostrecordsundersection209(1)(d)oftheCompaniesAct,1956andareoftheopinionthatprimafacietheprescribedaccountsandrecordshavebeenmadeandmaintained.

Wehave,howevernotmadeadetailedexaminationoftherecordswithaviewtodeterminewhethertheyareaccurateandcomplete.

Management Reply: Statutory Cost Audit is under progress.

ix (a) Accordingtotheinformationandexplanationgiventous,andbooksandrecordsasproducedandexaminedbyus,inouropinion,thecompanyisgenerallyregularindepositingundisputedstatutoryduesincludingProvidentFund,InvestorEducationandprotectionFund,EmployeesStateInsurance,IncomeTax,SalesTax,WealthTax,ServiceTax,ExciseDuty,CustomsDuty,Cessandanyothermaterialstatutoryduesasapplicablewithappropriateauthorities.

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(b) According to the informationandexplanationgiven tous, thereareundisputedamountpayablein respectof IncomeTax,SalesTax/VAT,ServiceTax,ExciseDuty,CustomsDuty,Cessandotherstatutoryduesoutstandingasat31stMarch,2013foraperiodofmorethansixmonthsfromthedatetheybecomepayable.

Sl. No.

Nameofstatute

NatureofDues Amount(`inCrore)

1 ExciseDuty Saleorderassessment(CODnotpermittedBHPVtoappealfurthertoCESTAT)

2.73

Management Reply: Subject liability arisen as COD has not given clearance to BHPV to pursue the case in Cestat. However, this is included in the DRS in the list of waivers/ reliefs sought.

Accordingtotheinformationandexplanationgiventous,theparticularsofSalesTax,IncomeTax,Excise Duty, Service Tax, Customs Duty and Cesswhich have not been deposited on account ofdisputeareasunder.

Sl. No.

Nameofstatute NatureofDues Amount(`inCrore)

Forumwheredisputeispending

1. CentralSalesTaxAct,&WorksContractTaxAct.

SalesTax&WorksContractTax

5.89

0.54

1stAppellateAuthority/Dy.Commissioner/commissioner

Tribunal

2. CentralExciseAct,1944 Exciseduty 3.69

101.65

Commissioner(Appeals)

CESTAT,Bangalore

3. ServiceTaxundertheFinanceAct,1994

ServiceTax 19.16

1.45

Commissioner(Appeals)

CESTAT,Bangalore

Total 132.38

x Thecompanyhasaccumulated lossesamounting to` 21809.79LakhasatMarch31,2013and ithasnot incurredcashlossesduringthefinancialyearcoveredbyourauditandtheimmediatelyprecedingfinancialyear.

xi AccordingtotherecordsoftheCompanyexaminedbyusandtheinformationandexplanationsgiventous,thecompanyhasnotdefaulted inrepaymentofduestofinancial institutions,banksordebenturesholders.However,thecompanyhasnotyetredeemedsomevalueofBondsissuedduringtheyear1998-99.

Management Reply: Being a sick company under reference to BIFR, the company is facing acute funds shortage. Hence some of the payments could not be made. During the current FY, the company has repaid principal amount of ` 106.00 Lakh to 1 bondholder (previous year ` 5.00 Lakh to 1 bondholder), being full and final settlement. For the remaining unsecured bond holders liability towards principal and interest amounting to ` 564.95 Lakh (Principal- ` 99.50 Lakh plus Interest- ` 464.95 Lakh) has been provided in the books of accounts.

xii Thecompanyhasnotgrantedanyloansandadvancesonthebasisofsecuritybywayofpledgeofshares,debenturesandothersecurities.

xiii TheprovisionsofanyspecialstatuteapplicabletoChitFund/Nidhi/Mutualbenefitfund/Societiesarenotapplicabletothecompany.

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xiv In our opinion, the company is not dealing in or trading in shares, securities, debentures and otherinvestments.Accordingly,theprovisionsofclause4(xiv)oftheCompanies(Auditor’sReport)Order,2003arenotapplicabletotheCompany.

xv Inouropinionandaccordingtotheinformationandexplanationsgiventous,thecompanyhasnotgivenanyguaranteeforloanstakenbyothersfrombanksorfinancialinstitutionsduringtheyear.

xvi Asperinformationandexplanationgiventous,thecompanyhasnotobtainedanytermloanduringtheyear.

xvii Accordingtotheinformationandexplanationsgiventous,andonanoverallexaminationofthebalancesheetofthecompany,wereportthatnofundsraisedonshorttermbasishavebeenusedforlongterminvestment.

xviii Thecompanyhasnotmadeanypreferentialallotmentofsharestopartiesandcompaniescoveredintheregistermaintainedundersection301oftheCompaniesAct,1956duringtheyear.

xix Inouropinion,thecompanyhasnotissuedanydebenturesduringtheyear.

xx Thecompanyhasnotraisedanymoneybypublicissueduringtheyear

xxi Duringthecourseofourexaminationofthebooksandrecordsofthecompany,carriedoutinaccordancewiththegenerallyacceptedauditingpracticesinIndia,andaccordingtotheinformationandexplanationsgiventous,wehaveneithercomeacrossanyinstanceoffraudonorbythecompanynoticedorreportedduringtheyearnorhavewebeeninformedofanysuchcasebythemanagement.

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COMMENTSOFTHECOMPTROLLERANDAUDITORGENERALOFINDIAUNDERSECTION619(4)OFTHECOMPANIESACT,1956ONTHEACCOUNTSOFBHARATHEAVYPLATE&VESSELSLIMITED,VISAKHAPATNAMFORTHEYEARENDED31MARCH,2013

ThepreparationoffinancialstatementofBharatHeavyPlate&VesselsLimited,Visakhapatnamfortheyearended31March,2013inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,1956istheresponsibilityofthemanagementofthecompany.TheStatutoryAuditorappointedbytheComptrollerandAuditorGeneralofIndiaunderSection619(2)oftheCompaniesAct,1956isresponsibleforexpressingopiniononthesefinancialstatementsunderSection227oftheCompaniesAct,1956basedonthe independentauditin accordancewith the auditing and assurance standards prescribed by their professional body, the Instituteof Chartered Accountants of India. This is stated to have been done by them vide their Audit Report dated 08May,2013.

I,onthebehalfoftheComptrollerandAuditorGeneralofIndia,haveconductedasupplementaryauditunderSection 619(3) (b) of the Companies Act, 1956 of the financial statement of Bharat Heavy Plate & VesselsLimited,Visakhapatnamfortheyearendedon31March,2013.ThissupplementaryaudithasbeencarriedoutindependentlywithoutaccesstotheworkingpapersoftheStatutoryAuditorandislimitedprimarilytoinquiriesoftheStatutoryAuditorandcompanypersonnelandaselectiveexaminationofsomeoftheaccountingrecords.Onthebasisofmyaudit,nothingsignificanthascometomyknowledge,whichwouldgiverisetoanycommentuponorsupplementtoStatutoryAuditor’sreportunderSection619(4)oftheCompaniesAct,1956.

ForandonbehalfoftheComptroller&AuditorGeneralofIndia

Place:HyderabadDate:26June,2013

(N.Karunakaran)PrincipalDirectorofCommercialAudit

andEx-OfficioMember,AuditBoard,Hyderabad

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ForandonbehalfofBoardofDirectors

(A.S.S.Sarma)CompanySecretary

(SunithShome)GeneralManager

(Finance)

(C.P.Chengappa)ManagingDirector

(B. Prasada Rao)Chairman

AsperourreportofevendateForGrandhy&CoFRNNo.:001007S

CharteredAccountants

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BalanceSheetAsat31stMarch,2013

(`inCrore) Note Asat31stMarch,2013 Asat31stMarch,2012

EquityAndLiabilities1 Shareholders'Funds

(a)ShareCapital 1 3379.78 3379.78(b)Reserves&Surplus 2 -21807.78 -18428.00 -25311.55 -21931.77ShareApplicationmoneypendingallotment 3400.00 3400.00

2 Non-currentliabilitiesLong-termborrowings 3 23497.81 21887.18Deferredtaxliabilities(Net) 12 0.00 0.00OtherLongtermliabilities 4 1504.40 2522.47Long-termprovisions 5 1890.01 1118.10TotalNon-currentliabilities 26892.22 25527.75

3 CurrentliabilitiesShort-termborrowings 6 99.50 205.50Tradepayables 7 5223.71 4510.19OtherCurrentliabilities 8 13081.20 11772.84Short-termprovisions 9 1962.05 2344.23TotalCurrentLiabilities 20366.46 18832.76TotalEquity&Liabilities 32230.68 25828.74Assets

1 NonCurrentAssets 10(a) FixedAssets

(i)TangibleAssets 391.56 438.00(ii)IntangibleAssets 4.27 11.09(iii)CapitalWork-in-progress 919.68 0.40(iv)Intangibleassetsunderdevelopment 0.00 1315.51 0.00 449.49

(b) Non-currentInvetments 11 1.31 1.31(c) Deferredtaxassets(Net) 12 0.00 0.00(d) Long-termloansandadvances 13 256.21 274.04(e) Othernon-currentassets 14 5361.12 5618.64 2315.38 2590.732 CurrentAssets(a) CurrentInvestments 15 0.00 0.00(b) Inventories 16 5717.84 6699.86(c) TradeReceivables 17 13560.57 11626.28(d) Cash&cashequivalents 18 2793.24 1069.14(e) ShortTermLoans&Advances 19 3193.34 3366.34(f) OtherCurrentAssets 20 31.54 25296.53 26.90 22788.52

Total 32230.68 25828.74OtherNotestoAccounts: 33TheaccompanyingNotes1to20,33&SignificantaccountingpoliciesformanintegralpartoftheBalanceSheet.

A n n u A l R e p o R t2 0 1 2 - 1 3

169

ForandonbehalfofBoardofDirectors

(A.S.S.Sarma)CompanySecretary

(SunithShome)GeneralManager

(Finance)

(C.P.Chengappa)ManagingDirector

(B. Prasada Rao)Chairman

AsperourreportofevendateForGrandhy&CoFRNNo.:001007S

CharteredAccountants

Place:NewDelhiDate:May8,2013

(NareshChandraG.V.)M.No.:201754

Partner

StatementofProfitandLossFortheperiodended31March,2013

(`inLakh)

Note Fortheyearended31StMarch,2013

Fortheyearended31stMarch,2012

I Revenuefromoperations(Gross) 21 24026.85 15580.08Less:Exciseduty&ServiceTax 2432.71 1398.37Revenuefromoperations(Net) 21594.14 14181.71

II OtherOperationalIncome 22 234.33 504.44III OtherIncome 23 85.64 41.69

TotalRevenue 21914.11 14727.84IV Expenses

Accretion(Decretion)toWIP/FG 24 574.32 -432.09ConsumptionofMaterial,Erection&EngineeringExpenses

25 9744.26 7649.03

EmployeeRemuneration&BenefitsExpense 26 5160.59 4787.30OtherExpensesofManufactureAdministration,SellingandDistribution 27 1498.39 1170.97Provisions(net) 28 1657.49 282.04FinanceCosts 29 96.53 140.31Depreciation&AmortisationExpenses 93.11 102.35Less:CostofJobsdoneforinternaluseTotalExpenses 18824.69 13699.91

V Profit/(Loss)beforePriorperiodadjustments 3089.42 1027.93exceptionalitemsandtax

VI Add/Less:Exceptionalitems 30 414.35 16.24VII Add/Less:Priorperiodadjustments(net) 31 0.00 0.00VIII Profit(Loss)beforeTaxfortheyear 3503.77 1044.17IX Less:Taxexpense 32 0.00 0.00

Profit(Loss)afterTaxfortheyear 3503.77 1044.17Profit(Loss)fortheperiodfromcontinuingoperations

3503.77 1044.17

OtherNotestoAccounts: 33-34TheaccompanyingNotes21to34&SignificantaccountingpoliciesformanintegralpartoftheStatementofProfit&Loss

170

ForandonbehalfofBoardofDirectors

(A.S.S.Sarma)CompanySecretary

(SunithShome)GeneralManager

(Finance)

(C.P.Chengappa)ManagingDirector

(B. Prasada Rao)Chairman

AsperourreportofevendateForGrandhy&CoFRNNo.:001007S

CharteredAccountants

Place:NewDelhiDate:May8,2013

(NareshChandraG.V.)M.No.:201754

Partner

CashFlowStatementFortheperiodended31.03.2013

(`inLakh)

Details Fortheyearendedon31stMarch,2013

Fortheyearendedon31stMarch,2012

CashFlowfromOperatingActivities

NetProfit 3503.77 1044.17

Adjustmentsfor

Depreciation 93.11 102.35

Increase/DecreaseinInventory 982.02 -1442.77

DecreaseinLoans&advances 383.25 3625.44

Increase/DecreaseinTradeReceivables -5087.08 -4275.00

Increase/DecreaseinTradePayables/Liabilities 1335.24 999.52

Increase/DecreaseinProvisions 306.62 157.82

Total -1986.84 -832.64

A NetcashflowfromOperatingActivities 1516.93 211.53

CashflowfromInvestingActivities

PurchaseofFixedAssets -959.13 -110.94

Increase/Decreaseininvestments 0.00 0.00

B NetcashusedinInvestingActivities -959.13 -110.94

CashflowfromFinancingActivities

Increase/DecreaseinBorrowings 1580.65 263.80

InterestWaiver(ExtraOrdinaryitems) -414.35 -16.24

C NetCashgeneratedfromFinanceActivities 1166.30 247.56

Netincreaseincashandcashequivalents 1724.10 348.15

Cashandcashequivalentsasat1stApril,2012 1069.14 720.99

Cashandcashequivalentsasat31stMarch,2013 2793.24 1069.14

A n n u A l R e p o R t2 0 1 2 - 1 3

171

Note-1ShareCapital (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012Authorised:3,50,000EquitySharesof` 1,000/-each 3500.00 3500.00

Issued,SubscribedandPaidupCapital:3,37,978(Previousyear3,37,978)EquitySharesof` 1,000eachfullypaidup(Allthe3,37,978EquityShares 3379.78 3379.78of` 1,000/-eachareheldbytheHoldingCompany,M/s.BharatHeavyElectricalsLimited,NewDelhianditsnominee).Total 3379.78 3379.78

Note-2Reserves&surplus (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012(a)CapitalReserveOpeningBalance 2.01 2.01Add:Additions/Adjustments 0.00 0.00Less:Deductions/Adjustments 0.00 2.01 0.00 2.01(b)SecuritiesPremiumA/cOpeningBalance 0.00 0.00Add:Additions/Adjustments 0.00 0.00Less:Deductions/Adjustments 0.00 0.00 0.00 0.00(c)ForeignProjectReserveA/cOpeningBalance 0.00 0.00Add:Additions/Adjustments 0.00 0.00Less:Deductions/Adjustments 0.00 0.00 0.00 0.00(d)BondRedemptionReserveOpeningBalance 0.00 0.00Add:Additions/Adjustments 0.00 0.00Less:Deductions/Adjustments 0.00 0.00 0.00 0.00(e)GeneralReserveOpeningBalance 0.00 0.00Add:Additions/Adjustments 0.00 0.00Less:Deductions/Adjustments 0.00 0.00 0.00 0.00Profit/Lossfortheyear(StatementofProfit&Loss) 3503.77 1044.17BalanceofProfit(Loss)broughtforwardfromlastyear -25313.56 -26357.73ForeignProjectReservedwrittenback 0.00 0.00Profitavailableforappropriation -21809.79 -25313.56Less:Appropriation 0.00 0.00-ForeignProjectReserve 0.00 0.00-BondRedemptionReserve 0.00 0.00-GeneralReserve 0.00 0.00-Dividend 0.00 0.00-CorporateDividendTax 0.00 -21809.79 0.00 -25313.56Total -21807.78 -25311.55

172

Note-3Long-termborrowings (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

Secured

Debentures/Bonds 0.00 0.00

LoansfromStateGovernments 0.00 0.00

LoansfromFinancialInstitutions 0.00 0.00

Unsecured

PublicDeposits 0.00 0.00

TermLoansandAdvancesfrom

Govt.ofIndia 0.00 0.00

StateGovernments 0.00 0.00

FinancialInstitutions 0.00 0.00

ForeignFinancialInstitutions 0.00 0.00

Longtermmaturitiesoffinanceleaseobligations

Companies-(BHEL,HoldingCompany) 23497.81 21887.18

CreditsforAssetstakenonlease 0.00 0.00

23497.81 21887.18

Note-4Otherlong-termliabilities

Note-5Long-termprovisions

(`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

TradePayables 0.00 0.00

AdvancesReceivedfromcustomers/others 1468.63 2486.70

Deposits 35.77 35.77

Total 1504.40 2522.47

(`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

ContractualObligations 1214.66 525.86

ProvisionforEmployeeBenefits 675.35 592.24

Others 0.00 0.00

1890.01 1118.10

A n n u A l R e p o R t2 0 1 2 - 1 3

173

Note-6Short-termborrowings (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

Unsecured

FromBanks 0.00 0.00

CommercialPapers 0.00 0.00

Postshipmentcredit 0.00 0.00

Postshipmentcredit-EXIMBank 0.00 0.00

FromOthers

-fromcompanies 0.00 0.00

-fromfinancialinstitutions 0.00 0.00

CreditsforAssetstakenonlease 0.00 0.00

Others(OldBonds) 99.50 205.50

Total 99.50 205.50

Note-7Tradepayables (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

TradePayables 5223.71 4510.19

Total 5223.71 4510.19

174

Note-8Othercurrentliabilities

Note-9Short-termprovisions

(`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

CurrentMaturitiesoffinanceleaseobligation

Acceptances 0.00 0.00

AdvancesReceivedfromCustomers&Others 2933.03 2815.12

DepositsfromContractors&Others 977.61 921.06

UnclaimedDividend 0.00 0.00

OtherPayables/Liabilities 8705.61 7233.38

InterestAccruedbutnotdue 0.00 12616.25 0.00 10969.56

InterestAccrued&dueonLoansfrom

StateGovernments 0.00 0.00

FinancialInstitutions,Bonds&Others(oldbonds) 464.95 803.28

PackingCredit 0.00 0.00

InterestAccrued&dueon

PostShipmentCredit 0.00 0.00

GovernmentLoans 0.00 0.00

StateGovernmentLoans 0.00 0.00

CreditforAssetstakenonLease 0.00 0.00

FinancialInstitutions&Others 0.00 0.00

ForeignFinancialInstitutions 0.00 0.00

PublicDeposits 0.00 0.00

Total 13081.20 11772.84

(`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

Dividends 0.00 0.00

CorporateDividendTax 0.00 0.00

ContractualObligations 314.16 752.54

RetirementBenefits 0.00 0.00

Others 1647.89 1591.69

Total 1962.05 2344.23

A n n u A l R e p o R t2 0 1 2 - 1 3

175

Note-10Fixedassets (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

(i)TangibleAssets

GrossBlock 8243.60 8203.75

Less:AccumulatedDepreciation 7852.04 7765.75

Less:AccumulatedImpairment 0.00 0.00

Less:LeaseAdjustmentAccount

NetBlock 391.56 438.00

(ii)IntangibleAssets

GrossBlock 60.26 60.26

Less:AccumulatedDepreciation/Impairment 55.99 49.17

NetBlock 4.27 11.09

(iii)CapitalWorkinProgress

ConstructionWorkinProgressCivil 0.00 0.00

ConstructionStores(IncludinginTransit) 0.00 0.00

Plant&MachineryandotherEquipments

-UnderErection/Fabrication/AwaitingErection 919.68 0.40

-InTransit 0.00 0.00

-LeasedAssetsunderErection 0.00 0.00

-IntangibleAssetsunderdevelopment 0.00 0.00

Total 1315.51 449.49

176

(`inLakh)

GrossBlock Depreciation NetBlock

Particulars Costasat31.03.2012

Additions/adjustmentsduringthe

year

Deductions/adjustmentsduringthe

year

TotalCostasat

31.03.2013

Depn.OpeningBal.asat

01.04.2012

"Depn. Adjusts"

AccumulatedDepreciation

asat31.03.2013

Asat31.03.2013

Asat31.03.2012

Depn.forthe

year

Factory/OfficeComplex

FreeHoldland(incldevexp) 16.41 16.41 0.00 0.00 16.41 16.41

LeaseHoldland(incldevexp)

Roads,Bridges,Culverts 24.82 24.82 17.13 17.53 7.28 7.69 0.40

Buildings 979.43 979.43 880.17 891.45 87.98 99.26 11.28

LeaseholdBuildings

Drainage,sewerage,watersupply 44.23 44.23 37.10 38.05 6.18 7.13 0.95

Railwaysliding 18.38 18.38 18.38 18.38 0.00 0.00

Locomotives&wagons 16.61 16.61 16.61 16.61 0.00 0.00

Plant&Machinery 5247.83 37.10 5284.93 5057.36 5105.86 179.07 190.47 48.50

Electronicdataprocessingequipment 463.18 1.23 -60.26 404.16 451.06 -49.17 402.89 1.26 12.12 1.00

Electricalinstallations 151.97 151.97 151.97 151.97 0.00 0.00

ConstructionEquipment 442.68 442.68 442.68 442.68 0.00 0.00

Vehicles 55.86 55.86 50.68 51.69 4.18 5.18 1.01

Furniture&Fixtures 218.17 1.52 219.69 208.98 214.13 5.56 9.19 5.15

Assetstakenonlease

-Plant&Machinery

-EDPEquipment 91.05 91.05 41.46 56.80 34.25 49.59 15.34

IntangibleAssets

-Internallydeveloped

-Software

-Others

Others

-Software 0.00 60.26 60.26 0.00 49.17 55.99 4.26 0.00 6.82

-Technicalknowhow

-Others

TOTAL(A) 7770.63 39.85 0.00 7810.48 7373.58 0.00 7464.04 346.44 397.05 90.46

Township

FreeHoldland(incldevexp) 7.68 7.68 0.00 0.00 7.68 7.68 0.00

LeaseHoldland(incldevexp)

Roads,Bridges,Culverts 20.05 20.05 10.25 10.58 9.48 9.80 0.33

Buildings 387.50 387.50 366.93 367.90 19.60 20.57 0.97

LeaseholdBuildings

Drainage,sewerage,watersupply 21.57 21.57 18.80 19.20 2.37 2.77 0.40

Plant&Machinery

Electronicdataprocessingequipment

Electricalinstallations 47.39 47.39 36.17 37.13 10.26 11.22 0.96

Vehicles

Furniture&Fixtures 9.19 9.19 9.19 9.19 0.00 0.00

TOTAL(B) 493.38 0.00 0.00 493.38 441.34 0.00 443.99 49.39 52.04 2.65

TOTAL(A)+(B) 8264.01 39.85 0.00 8303.86 7814.92 0.00 7908.03 395.83 449.09 93.11

PreviousYear 8153.47 110.54 0.00 8264.01 7712.57 0.00 7814.92 449.09 460.91 102.35

Note-10AFixedAssetsDetails

A n n u A l R e p o R t2 0 1 2 - 1 3

177

Note-12Deferredtaxassets(Net) (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

Provisions 0.00 0.00

StatutoryDues 0.00 0.00

ModvatAdjustment 0.00 0.00

Others 0.00 0.00 0.00 0.00

DeferrredTaxliabilities

Depreciation 0.00 0.00

Others 0.00 0.00 0.00 0.00

NetDefferedTaxAssets 0.00 0.00

Note-11Non-currentinvestments (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

Long-term

Shares

Un-quoted(fullypaidup)

Trade

490Equitysharesof` 10/-each(fullypaidup)in

M/s.Engg.Projects(I)Ltd 1.26 1.26

OtherThanTrade

250Sharesof` 10/-each(fullypaidup)inBHPV

EmployeesConsumersCoperativeStoresLimited 0.02 0.02

10Sharesof` 50/-each(fullypaidup)inCuffeParade

PersopolisPremisesCooperativeSoceityLtd,Mumbai 0.01 0.01

20Sharesof` 50/-each(fullyPaidup)inHillView

CooperativeHousingSoceityLtd,Mumbai 0.01 0.01

SharemoneypaidinadvancetoM/sRitaEnterprises,

Mumbaiforallotmentof50sharesof` 10each 0.01 0.01

SharemoneypaidinadvancetoM/sAsishEnterprises

Mumbaiforallotmentof50sharesof` 10each 0.00 0.05 0.00 0.05

Total 1.31 1.31

178

Note-13Long-termloansandadvances (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

AdvancesforCapitalExpenditure 0.00 0.00

Deposits 117.33 117.33

AdvancestoEmployees 138.56 156.39

Interestaccruedanddueonloans 0.00 0.00

Others 0.00 255.89 0.00 273.72

Advance(Recoverableincashorkindorvaluetobereceived

Forpurchases 0.00 0.00

ToOthers 0.00 0.00 0.00 0.00

Deposits

BalancewithCustoms,PortTrust,OtherGovt.Authorities 0.00 0.00

Withothers 0.32 0.32 0.32 0.32

256.21 274.04

Less:Provision 0.00 0.00

256.21 274.04

Subclassification:

Secured,Consideredgood 0.00 0.00

Unsecured,Consideredgood 256.21 274.04

Doubtful 0.00 0.00

Note-14Othernon-currentassets (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

LongTermTradeReceivables 5361.12 2315.38

Less:Provisionsforbadanddoubtfuldebts 0.00 0.00

Less:AutomaticPriceReductionAdjustmenta/c 0.00 5361.12 0.00 2315.38

Total 5361.12 2315.38

Subclassification:

Secured,Consideredgood 0.00 0.00

Unsecured,Consideredgood 5361.12 2315.38

Doubtful 0.00 0.00

Note-15Currentinvestments (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

Current

Unquoted(FullyPaidup) 0.00 0.00

Otherthantrade 0.00 0.00

Total 0.00 0.00

A n n u A l R e p o R t2 0 1 2 - 1 3

179

Note-16Inventories (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

StoresandSpares:

-Production 427.02 407.43

-FuelStores 27.85 16.01

-Miscelleneous 294.30 749.17 241.74 665.18

Rawmaterial&Components 4033.47 4665.26

Materials-in-transit 162.56 51.21

MaterialswithFabricators/Contractors 0.00 0.00

LooseTools 22.21 21.47

Scrap(Estimatedrealisablevalue) 379.11 337.14

FinishedGoods 110.57 18.59

Work-in-progress(Includingitemswithsubcontractors)

1329.00 1995.30

6786.09 7754.15

Less:Provisionfornonmovinginventory 1068.25 1054.29

Total 5717.84 6699.86

@ValuedasperSignificantAccountingPolicyNumber9

Note-17Currenttradereceivables (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

-Debtsoutstandingforaperiodexceeding6months 11816.05 12096.51

-OtherDebts 9283.83 5734.34

21099.88 17830.85

Less:ProvisionforDoubtfulDebts 7539.31 6204.57

Less:AutomaticpricereductionadjustmentA/c 0.00 13560.57 0.00 11626.28

Total 13560.57 11626.28

CurrentTradeReceivablesincludeDeferreddebts

`236.92Lakh(Previousyear` 2075.84Lakh)

CurrentTradeReceivablesincludeGoodsdispatchedpendingbilling` NIL(Previousyear`NIL)

ParticularsofCurrentTradeReceivables

Secured,ConsideredGood 0.00 0.00

Unsecured,Consideredgood 13560.57 11626.28

Doubtful 7539.31 6204.57

180

Note-18Cashandcashequivalents (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

CashandStampsinhand 8.14 2.28

ChequesandDemandDraftsinHand 0.00 244.05

RemittancesinTransit 0.00 0.00

BalanceswithScheduledBanks:

CurrentA/c 1637.85 294.06

DepositA/c 1147.25 528.75

Depositsmorethan12monthsmaturityperiod 0.00 2785.10 0.00 822.81

Total 2793.24 1069.14

Note-19Short-termloansandadvances (`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012

Loans

LoanstoEmployees 0.00 0.00

MaterialIssuedonLoan 0.00 0.00

LoanstoOthers 0.00 0.00

LoanstoPSUs 0.00 0.00

Interestaccruedandordueonloans 0.00 0.00 0.00 0.00

Advances(Recoverableincashorinkindorforvaluetobereceived)

ToEmployees 120.50 113.41

ForPurchases 2276.76 2204.25

ToOthers 3219.11 5616.37 2905.86 5223.52

Deposits

BalancewithCustoms,PortTrust,OtherGovt.Authorities 201.84 802.95

InterCorporateDeposits/Loans 0.00 0.00

InterestaccruedonInterCorporateDeposits/Loans 0.00 0.00

Withothers 253.58 263.72

AdvanceTax/TDS(netofprovisionfortaxation) 93.69 549.11 55.65 1122.32

6165.48 6345.84

Less:Provisionfordoubtfulloansandadvances 2972.14 2979.50

3193.34 3366.34

ParticularsofLoanandAdvances

Secured,Consideredgood 0.00 0.00

Unsecured,Consideredgood 3193.34 3366.34

Doubtful 2972.14 2979.50

A n n u A l R e p o R t2 0 1 2 - 1 3

181

Note-20Othercurrentassets

Note-21Revenuefromoperations

(`inLakh)

Particulars Asat31stMarch,2013 Asat31stMarch,2012InterestAccruedonBankDeposits&Investments 31.54 26.90RentReceivableonLeasedAssets 0.00 0.00 0.00Less:UnearnedFinanceIncome 0.00 0.00 0.00 0.00

Total 31.54 26.90

(`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

Saleslessreturns 21820.46 13740.14Incomefromexternalerection&otherservices 2206.39 1839.94Revenuefromworkscontract 0.00 0.00AssetsGivenonFinanceLease 0.00 0.00Total 24026.85 15580.08

Note-22Otheroperationalincome

Note-23Otherincome

(`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

ExportIncentives 0.00 0.00RentalIncomeonleasedassets 0.00 0.00LeaseequalisationA/c 0.00 0.00 0.00 0.00Financeincomeonassetsgivenonfinancelease 0.00 0.00Scrap 45.58 211.12Receiptsfromsale/transferofsurplusstock 0.00 0.00Others 188.75 293.32Total 234.33 504.44

(`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

(A)OtherIncomeProfitonsaleofUnitsorBonds 0.00 0.00Profitfromsaleoffixedassets&capitalstores(NetCr.) 0.00 0.00Dividendoninvestments(Longterm-trade) 0.01 0.01Exchangevariation(Cr.Balance) 0.00 0.00Others(includinggrantsfromGOIorR&Dprojects) 0.00 0.00(B)InterestIncome*Fromcustomers 0.00 0.00Fromemployees 0.00 0.00Frombanks 85.63 41.68FromInvestments(Current.Otherthantrade) 0.00 0.00Others 0.00 0.00*(TDS` 2.22Lakh(PreviousYear` 1.72Lakh)Total 85.64 41.69

182

Note-24Accretion/(Decretion)toWIP&FG (`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

A.Work-in-Progress

Closingbalance 1329.00 1995.30

Openingbalance 1995.30 -666.30 1570.45 424.85

B.StockofFinishedGoods:

Closingbalance 110.57 18.59

Openingbalance 18.59 91.98 11.35 7.24

Total(A+B) -574.32 432.09

Note:

ElementofExciseDutyinFinishedGoods: `Lakh

ClosingStock 12.16 0.00

OpeningStock 0.00 0.00

Note-25Consumptionofmaterial,erectionandengineeringexpenses

Note-26Employeesremuneration&benefitsexpense

(`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

ConsumptionofRawMaterials&Components 9297.06 7115.22

ConsumptionofStores&spares 276.23 224.42

Erection&engineringExpenses-paymenttosubcontractors 170.97 309.39

Total 9744.26 7649.03

(`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

Salaries,Wages,Bonus,AllowancesandOtherbenefits 3804.16 3552.70

Contributiontogratuityfund 240.70 189.81

ContributiontoProvidentFundandOtherfunds 303.69 279.63

GroupInsurance 0.00 0.00

StaffWelfareExpenses 812.04 765.16

Total 5160.59 4787.30

A n n u A l R e p o R t2 0 1 2 - 1 3

183

Note-27Otherexpensesofmanufacture,administration,sellinganddistribution(`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

ResidentConsultantCharges 0.00 0.00

Royalty,TechnicalDocumentation&otherconsul.charges 0.00 0.00

Rent 0.00 0.00

ExciseDuty 16.78 25.17

Power&fuel 470.08 364.67

Rates&taxes 113.07 7.32

ServiceTax 0.00 0.00

ExchangeVariation(DrBalance) 0.11 0.00

Insurance 11.03 10.01

Repairs:

Buildings 158.38 75.21

Plant&Machinery 82.22 39.70

Others 32.91 273.51 19.72 134.63

Otherexpensesinconnectionwithexportorders 0.00 0.00

Lossoninvestmentswrittenoff 0.00 0.00

BadDebtswrittenoffduringtheyear 0.00 0.00

Carriageoutward 53.09 120.45

Travelling&Conveyance 49.40 44.86

Miscelleneousexpenses 511.32 463.86

CashDiscount 0.00 0.00

LiquidatedDamageschargedoff 0.00 0.00

GuaranteeFee 0.00 0.00

Pricediff.ontransferofstorestodivisionsunderconstruction 0.00 0.00

Donations 0.00 0.00

CorporateSocialResponsibility 0.00 0.00

Loss/premiumonredemptionofbonds 0.00 0.00

Lossonsaleofcapitalstores/fixedassets(NetDr) 0.00 0.00

Total 1498.39 1170.97

184

Note-28Provisions(Net) (`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

DoubtfulDebts,LiquidateddamagesandLoans&Advance

CreatedDuringtheyear 1334.74 0.00

Less:Writtenbackduringtheyear 0.00 1334.74 0.00 0.00

ContractualObligations

CreatedDuringtheyear 596.60 311.64

Less:Writtenbackduringtheyear 346.18 250.42 154.88 156.76

Others

CreatedDuringtheyear 72.33 125.28

Less:Writtenbackduringtheyear 0.00 72.33 0.00 125.28

Total 1657.49 282.04

Note-29Financecosts (`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

Intereston:

Bonds/Debentures/Central/StateGovt.Loans 76.01 135.85

Banks/FinancialInstitutions/Borrowings 0.00 0.00

DeferredCredits 0.00 0.00

ForeignFinancialInstitutions 0.00 0.00

Others 20.52 4.46

OtherBorrowingCosts 0.00 0.00

96.53 140.31

Less:BorrowingCostsCapitalised 0.00 0.00

Total 96.53 140.31

Note-30Exceptionalitems (`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

Income

WaiverofInterestonsettlementofoldbonds 414.35 16.24

Expenditure 0.00 0.00

ExceptionalItems(Net) 414.35 16.24

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Note-31Priorperioditems

Note-32Taxexpense

(`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

Income

Saleslessreturns 0.00 0.00

InterestIncome/others 0.00 0.00 0.00 0.00

Expenditure

ConsumptionofRawmaterial&components 0.00 0.00

Interest 0.00 0.00

Misc.expenses 0.00 0.00 0.00 0.00

Proirperiodadjustments(Net) 0.00 0.00

(`inLakh)

Particulars Fortheyearended31stMarch,2013

Fortheyearended31stMarch,2012

ForCurrentYear

-CurrentTax 0.00 0.00

-DeferredTax 0.00 0.00

ForEarlierYear

-Tax 0.00 0.00

-DeferredTax 0.00 0.00

Total 0.00 0.00

186

SignificantAccountingPolicies

1. BasisofpreparationofFinancialStatements

Thefinancialstatementshavebeenpreparedasofagoingconcernonhistoricalcostconventionandon accrual method of accounting in accordancewiththegenerallyacceptedaccountingprinciplesandtheprovisionsoftheCompaniesAct,1956asadoptedconsistentlybythecompany.

2. UseofEstimates

The preparation of Financial Statement inconformity with generally accepted accountingprinciples requires the management to makeestimatesandassumptionsthataffecttheincomeandexpenditureduringthereportingperiodandthe assets and liabilities including contingentliabilitiesatthedateoffinancialstatements.Thedifference between actual results and estimatesarerecognizedintheperiod inwhichresultsareknown.

3. FixedAssets

(a) Fixed assets (other than land acquired freefrom State Government) are carried at thecost of acquisition or construction or bookvalue less accumulated depreciation andimpairment,ifany.

(b) Cost includes value of internal transfers forcapital works, taken at actual/ estimatedfactory cost or market price, whichever islower.Effectofextraordinaryevents suchasdevaluation/ revaluation in respect of longterm liabilities/ loans utilized for acquisitionoffixedassetsisaddedto/reducedfromthecost.

(c) Land acquired free of cost from the StateGovernmentisvaluedat`1/-exceptforthatacquiredafter16th July1969, inwhich casethe same is valued at the acquisition priceof the State Government concerned, bycorrespondingcredittocapitalreserve.

4. FinanceLease

(A) AssetsGivenonLease

a) Assetsmanufacturedandgivenonfinancelease are recognized as sales at normalsaleprice/fairvalue/NPV.

b) Finance income is recognized over theleaseperiod.

c) Initial direct costs are expensed at thecommencementoflease.

(B) AssetsTakenonLease(a) Assets taken on lease are capitalized at

fairvalue/NPV/contractedprice.(b) Depreciation on the same is charged

at the rate applicable to similar type offixed assets as per Accounting Policy on‘Depreciation’. If the lease assets arereturnabletothelessoronexpiryofleaseperiod, the same is depreciated over itsuseful life or lease period, whichever isshorter.

(c) Lease payments made are apportionedbetweenfinancechargesandreductionofoutstanding liability in relation to assetstakenonlease.

(C) OperatingLease(a) Assets Given on Lease: Assets

manufactured and given on operatingleasearecapitalized.Leaseincomearisingthere from is recognizedas incomeovertheleaseperiod.

(b) Assets Taken on Lease: Lease paymentsmadeforassetstakenonoperatingleasearerecognizedasexpenseovertheleaseperiod.

5. IntangibleAssets IntangibleAssetsarecapitalizedatcostif:

(a) It is probable that the future economicbenefitsthatareattributabletotheassetwillflowtothecompany

(b) Thecompanywillhavecontrolovertheassetsand,

(c) The cost of these Assets can be measuredreliablyandismorethan`10,000/-.

Intangible assets are amortized over theirestimateduseful livesnot exceeding three yearsincaseofsoftwareandnotexceedingtenyearsincaseofothersonastraightlinepro-ratamonthlybasis.(a) Expenditure on research including the

expenditure during the research phase ofResearch&DevelopmentProjects ischargedtostatementofprofitandlossintheyearofincurrence.

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(b) Expenditure incurred on Developmentincluding the expenditure during thedevelopment phase of Research &DevelopmentProjectmeeting thecriteriaasperAccountingStandardonIntangibleAssets,istreatedasintangibleasset.

(c) FixedassetsacquiredforpurposesofResearchandDevelopmentarecapitalized.

6. BorrowingCosts(a) Borrowing costs that are attributable to the

manufacture, acquisition or construction ofqualifyingassets,are includedaspartof thecostofsuchassets.

(b) Aqualifyingassetisonethatnecessarilytakesmore than twelve months to get ready forintendeduseorsale.

(c) Other borrowing costs are recognized asexpense in the period in which they areincurred.

7. Depreciation(i) Depreciationonfixedassets(otherthanthose

usedabroadundercontract)ischargeduptothe total cost of the assets on straight-linemethodaspertheratesprescribedinScheduleXIVoftheCompaniesAct,1956,exceptwheredepreciation is charged at rates determinedon the basis of the technically assessedestimatedusefullivesshownhereunder:-

SingleShift

DoubleShift

Triple Shift

GeneralPlant&Machinery 8% 12% 16%Automatic/Semi-AutomaticmachinesAutomaticMachines 10% 15% 20%ErectionEquipment,capitalToolsTackles

20%

TownshipBuildings–SecondClass 2.5%–ThirdClass 3.5%RailwaySlidings 8%Locomotives&wagons 8%ElectricalInstallations 8%Office&Otherequipments 8%Drainage,Sewerage&watersupply

3.34%

ElectronicDataprocessingequipment

20%

In respect of additions to/deductions from thefixed assets, depreciation is charged on pro-ratamonthlybasis.(ii) Fixed assets used outside India pursuant to

long-termcontractsaredepreciatedoverthedurationoftheinitialcontract.

(iii) Fixed assets costing ` 10,000/- or less andthose whose written down value as at thebeginning of the year is ` 10,000/- or less,are depreciated fully. In so far as townshipbuildings are concerned, the cost pertenementisthebasisforthelimitof 10,000/.

(iv) At erection/project sites: The cost of roads,bridgesandculvertsisfullyamortizedoverthetenure of the contract, while sheds, railwaysidings, electrical installations and othersimilar enabling works (other than purelytemporaryerections,woodenstructures)aresodepreciatedafterretaining10%asresidualvalue.

(v) Purely Temporary Erection such as woodenstructuresarefullydepreciatedintheyearofconstruction.

(vi) Leasehold Land and Buildings are amortizedovertheperiodoflease.Buildingsconstructedon land takenon leasearedepreciatedovertheirusefullifeortheleaseperiod,whicheverisearlier.

8. Investments(i) Long–term investments are carried at cost.

Decline,otherthantemporary,inthevalueofsuchinvestments,isrecognizedandprovidedfor.

(ii) Current investments are carried at costor quoted/fair value whichever is lower.Unquotedcurrentinvestmentsarecarriedatcost.

(iii) The cost of investment includes acquisitionchargessuchasbrokerage,feesandduties.

Any reduction in the carrying amount & anyreversals of such reductions are charged orcreditedtotheStatementofProfit&Loss.

9. InventoryValuationi) Inventory is valued at actual/estimated cost

ornetrealizablevalue,whicheverislower.ii) FinishedgoodsinPlantandworkinprogress

arevaluedatactual/estimatedfactorycostorat97.5%oftherealizablevalue,whicheverislower.

188

iii) In respect of valuation of finished goodsin plant and work-in-progress, cost meansfactory cost; actual/estimated factory costincludesexcisedutypayableonmanufacturedgoods.

iv) Inrespectofrawmaterial,components,loosetools,storesandsparescostmeansweightedaveragecost.

v) a) For Construction contracts entered intoonorafter01.04.2003:

Where current estimates of cost andselling price of a contract indicates loss,the anticipated loss in respect of suchcontract is recognized immediatelyirrespectiveofwhetheror notworkhascommenced.

b) Forallothercontracts:

Where current estimates of cost andselling price of an individually identifiedproject forming part of a contractindicates loss, the anticipated loss inrespectofsuchprojectonwhichtheworkhadcommenced,isrecognized.

c) In arriving at the anticipated loss,total income including incentives onexports/deemed exports is taken intoconsideration.

vi) The components and other materialspurchased/manufactured against productionorders but declared surplus are charged offtorevenueretainingresidualvaluebasedontechnicalestimates.

10. RevenueRecognition

Salesare recordedbasedon the significant risksand rewards of ownership being transferredin favour of the customer. Sales include goodsdispatchedtocustomersbypartialshipment.

a. Forconstructioncontractsenteredintoonorafter1.04.2003

Revenue is recognized on percentagecompletionmethodbasedonthepercentageofactualcostincurreduptothereportingdatetothetotalestimatedcostofthecontract

b. Forallothercontracts.

(i) Recognition of Sales revenue in respectoflongproductioncycleitemsismadeontechnicalestimates.Whentheaggregate

value of shipments represents 30% ormore of the realizable value, they areconsidered at 97.5% of the realizablevalueorinit'sabsence,thequotedprice.Otherwise,theyareconsideredatactual/estimated factory cost or 97.5% of therealizable value,whichever is lower. Thebalance 2.5% is recognized as revenueon completion of supplies under thecontract.

(ii) Income from erection and projectmanagement

Percentageofcompletionortheintrinsicvalue, reckoned at 97.5% of contractvalue, balance 2.5% is recognized asincomewhenthecontractiscompleted

(iii) Income from Engineering servicesrenderedisrecognizedatrealizablevaluebasedonpercentageofworkcompleted

(iv) Income from supply/erection of non-BHPV equipments/systems and civilworks is recognizedbasedondispatchestocustomer/workdoneatprojectsite.

11. AccountingforForeignCurrencyTransactions

Transactionsinforeigncurrenciesarerecordedattheexchangeratesprevailingon thedateof thetransaction. Foreign currency monetary assetsandliabilitiesaretranslatedatyearendexchangerates. Exchange difference arising on settlementoftransactionsandtranslationofmonetaryitemsarerecognizedasincomeorexpenseintheyearinwhichtheyarise.

12. Translation of Financial Statements of IntegralForeignOperations

(i) Itemsofincomeandexpenditurearetranslatedat average rate except depreciations, whichis converted at the rates adopted for thecorrespondingfixedassets.

(ii)Monetary items are translated at the closingrate;non-monetaryitemscarriedathistoricalcost are translated at the rates in force onthe date of the transaction; non-monetaryitems carried at fair value are translated atexchange rates that existed when the valueweredetermined.

(iii) Alltranslationvariancesaretakentostatementofprofitandloss.

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13. EmployeeBenefits Provident Fund and Employees’ Family Pension

Scheme contributions are accounted for onaccrual basis. Liability for earned leave, gratuity,travel claims on retirement are accountedfor in accordance with actuarial valuation.Compensation under Voluntary RetirementSchemeischargedoffintheyearofincurrenceonapro-ratamonthlybasis.

14. Claimsby/againsttheCompany(i) Claims for liquidated damages against the

Company are recognized in accounts basedonmanagement’sassessmentoftheprobableoutcome with reference to the availableinformation supplemented by experience ofsimilartransactions.

(ii) Claimsforexportincentives/dutydrawbacks/duty refunds and insurance claims etc. aretakenintoaccountonaccrual.

(iii) Amounts due in respect of price escalationclaims and/or variations in contract workare recognized as revenue only when thereare conditions in the contracts for suchclaimsor variations and /or evidenceof theacceptability of the same from customers.However, escalation is restricted to intrinsicvalue.

15. ProvisionforWarranties(i) Forconstructioncontractsenteredintoonor

after01.04.2003 Thecompanyprovideswarrantycostat2.5%

of the revenue progressively as and whenit recognizes the revenue and maintain thesamethroughthewarrantyperiod.

(ii) Forallothercontracts Provisionforcontractualobligationsinrespect

ofcontractsunderwarrantyattheyearendismaintainedat2.5%ofthevalueofcontract.Inthecaseofcontractsforsupplyofmorethana single product 2.5% of the value of eachcompletedproductisprovided.

(iii)Warranty claims/expenses on rectificationwork are accounted for against naturalheadsasandwhen incurredandcharged toprovisionsintheyearend.

16. GovernmentGrants

GovernmentGrantsareaccountedwhenthereisreasonablecertaintyoftheirrealization.

Grants related to fixed depreciable assets areadjusted against the gross cost of the relevantassets while those related to non-depreciableassetsarecreditedtocapitalreserve.Grantsrelatedtorevenue,unless receivedascompensationforexpenses/losses,are recognizedas revenueoverthe period to which these are related on theprincipleofmatchingcoststorevenue.

Grants in the form of non-monetary assets areaccountedforattheacquisitioncost,oratnominalvalueifreceivedfree.

17. TaxesonIncome

Currenttaxisdeterminedonthebasisoftaxableincome in accordance with the provisions ofthe IncomeTaxAct, 1961.Deferred tax liability/asset resulting from timing difference betweenaccounting income and taxable income isrecognizedconsideringthetaxrateandlawsthathave been enacted or substantively enacted ason the balance sheet date. Deferred tax assetis accounted for and carried forward only tothe extent that there is reasonable certaintythat sufficient future taxable income will beavailable againstwhich such deferred tax assetscan be realized. Deferred tax assets in respectof unabsorbed depreciation and carry forwardof losses are recognized only if there is virtualcertainty that there will be sufficient futuretaxableincomeavailabletorealizedsuchassets.

18. Impairment

The carrying amount of cash generating units isreviewedateachbalancesheetdatewherethereis any indication of impairment. An impairmentloss is recognized in the statementofprofitandloss where the carrying amount exceeds therecoverableamountofthecashgeneratingunits.Animpairmentlossisreversedifthereischangeintherecoverableamountandsuchlosseithernolongerexistsorhasdecreased.

19. SegmentReporting

Segment reporting is in linewith theaccountingpolicies of the company. Revenue and expensesare identified to segments on the basis oftheir relationship to the operating activities ofthe segment. Revenue, expenses, assets andliabilitieswhicharenotallocabletosegmentsonareasonablebasis,areincludedunder"unallocatedrevenue/expenses/assets/liabilities".

190

Note:33NotesFormingPartofBalanceSheetandStatementofProfit&Loss

1. Estimatedamountofcontracts,netofadvances,remainingtobeexecutedoncapitalaccountandnot provided for are ` 9511.00 Lakh (previousyear ` 1111.00 Lakh). The above includes foracquisitionofintangibleassets.

2. Land andBuildings include380.48Acresof landfor which formal title transfer deeds have beenexecuted/ registered during the year 2009-10 inline with the Andhra Pradesh Government GONos MS 96 Dated 30.04.2007 and 696 Dated03.10.2008.

3. The impact of providing 100% depreciation onfixed assets costing up to ` 10000/- each onstatement of profit & Loss is ` 3.13 Lakh. Thisincludes` 1.90Lakhofdepreciationprovidedonadditionseachvaluingupto`10000/-

4. Saleslessreturns:

(a) Includes based on provisional prices ` Nil(PreviousYear`NIL)

(b) Includes additional claim for dispatchesmadeinearlieryearinaccordancewithpricesettlementwithRailwaysduringtheyear`Nil(PreviousYear`NIL).

(c) Escalation claims raised`NIL (PreviousYear `NIL)andEscalationclaimsonaccrualbasis `NIL(PreviousYear`NIL)

(d) Dispatchesofequipmentvaluedat` 459.55Lakh (Previous Year ` 107.04 Lakh) held onbehalfofcustomersattheirrequestforwhichpaymentreceivedbythecompany

(e) Excludesforpricereduction(netofrefund)duetodelayindeliveryasperthetermsofthecontract `NIL(previousyear`NIL)

5. ContingentLiabilities:

Claimsagainstthecompanynotacknowledgedasdebtsinclude–

(a) IncomeTaxAppeals– 31.56Lakhdepartmentappeals relate toDTA cases pending inHighCourt,AP(PreviousYear`31.56Lakh)againstwhich an amount of ` NIL was paid underprotest/adjustedfromrefunds(PreviousYear`NIL).

(b) SalesTaxDemands-`1377.85Lakh(PreviousYear`1528.51Lakh),againstwhich`734.69Lakh was paid under protest/Court orders(PreviousYear`760.08Lakh)

(c) Excise duty demands – ` 10533.75 Lakh(Previous Year ` 10456.06 Lakh), againstwhichanamountof`538.83Lakhwaspaidunder protest/ Court orders (Previous year `279.85Lakh)

(d) Customdutydemands–`NIL(Previousyear– `NIL)

(e) Court/Arbitration cases – ` 2018.65 Lakh(PreviousYear–`3194.66Lakh)

(f) Liquidateddamages– 504.30Lakh(Previousyear–`1084.23Lakh)

(g) CounterClaimbycontractors– NIL(Previousyear–`NIL)

(h) Service Tax demands – ` 2061.31 Lakh(PreviousYear`1913.71Lakh),againstwhichanamountof`NILwaspaidunderprotest/Courtorders(Previousyear`NIL)

(i) Others (including disputed staff cases, wagearrears of employees and English MediumSchoolstaff)– 10218.91Lakh(PreviousYear `10218.91Lakh)

(j) Bank Guarantees outstanding as on31.03.2013 – ` 386.55 Lakh (Previous Year `194.79Lakh)asperAS-29guidelines.

(k) Corporate guarantees outstanding as on31.03.2013 –` 1725.21 Lakh (Previous Year ` 1175.29 Lakh). In addition, a corporateguaranteefor`957.32LakhgivenbyBHELonbehalfofBHPVinfavorofRCF,Thaltowardsperformanceguarantee.

6. Balances shown under trade receivables, tradepayables, contractor’s advances, deposits andstock/materials lying with sub-contractors/fabricators are subject to confirmation,reconciliation&consequentialadjustment,ifany.There-conciliationiscarriedoutonongoingbasis&provisionswhereverconsiderednecessaryhavebeenmadeinlinewiththeguidelines.

A n n u A l R e p o R t2 0 1 2 - 1 3

191

7. Detailsregardingrentalsinrespectofassetstakenonleasepriorto1.4.2001are`NIL(PreviousYear`NIL)

8. Theamountofborrowingcostscapitalizedduringtheperiodare`NIL(PreviousYear`NIL)

9. Detailsofassetstakenonleaseonorafter1stApril2001aregivenbelow:

Sl.No.

Description Year Valuecapitalized

1 Computers/Peripherals

2009-10 `34.24Lakh

2 Computers/Peripherals

2010-11 `56.81Lakh

3 Computers/Peripherals

2011-12 `NIL

4 Computers/Peripherals

2012-13 `NIL

10. InlinewiththeguidancenoteonAS-15(revised),the company has got the actuarial valuation ofGratuityandLeaveSalary.

The Company has accounted the leaveencashmentexpenditurewith30daysamonthasbase forcomputationofencashmentof leaveasperspecificinstructionsfromDPEonthesubject.

11. Provision/contingent liability for liquidateddamagesandprovisionforcontractualobligationsareprovided/withdrawnaspertheadviceoftheCommercialDepartment.

12. The details of Research & DevelopmentExpenditure incurred during the year which isdeductibleundersection35(2AB)oftheIncomeTaxAct,1961.

CapitalExpenditure

Land : `NIL(PreviousYear`NIL)Building : `NIL(PreviousYear`NIL)PlantandMachinery

: `NIL(PreviousYear`NIL)

RevenueExpenditure

Salaries&Wages : `NIL(PreviousYear`NIL)MaterialConsumables/spares

: `NIL(PreviousYear`NIL)

Manufacturing&OtherExpenses

: `NIL(PreviousYear`NIL)

TotalRevenueExpenditure

: `NIL(PreviousYear`NIL)

13. RelatedpartyTransactionsasperAS18–

A) RelatedParties,wherecontrolexists(HoldingCompany)

Name of the party: Bharat Heavy ElectricalsLimited.

NatureofRelationship:HoldingCompany

B) Other Related Parties (Key ManagementPersonnel)

ShriC.P.Chengappa,ManagingDirector,BHPVLimited(witheffectfrom12.04.2013)

Shri A.S.Nagaraja,ManagingDirector, BHPVLimited(upto30.04.2012)

ShriP.V.Sridharan,Director(HR),BHPVLimited(upto31.07.2012)

(`inLakh)

Sl. No.

NatureofTransactions

HoldingCompanyi.e.BHEL

BHELEML(Subsidiary

ofBHEL)

KeyManagement

Personnel

1 Purchaseofgoods

1064.09 165.98 -

2 Saleofgoods 22264.85 -

3 TradeReceivables

12862.28 -

4 Advanceagainstorders

894.13 -

5 ShareCapitalAdvance

3400.00 -

6 CurrentTradePayables

- 102.91 -

7 OtherLiability

2.43 -

8 Loans/AdvancesTaken

23497.81 -

C) As at 31.03.2013, Eleven Holding CompanydeputedexecutivesareworkinginBHPV.ThesalariesandothercostsarebornebyHoldingcompanyandnotdebitedtoBHPVstatementofP&L.

14. (a) Expenditure on departmental Repair &

192

Maintenancewhichareasunder:

Plant&Machinery : `97.25lakh(PreviousYear`54.59Lakh)

Buildings : `83.74lakh(PreviousYear`77.01Lakh)

Others : `181.95lakh(PreviousYear`182.43Lakh)

(b) Agency Commission on exports included inexpenses in connection with exports ` NIL(previousyear`NIL)

(c) Expenditure on research & development`105.09Lakh(previousyear`100.07Lakh)

(d) RentResidential`NIL(previousyear` NIL)

(e) PaymenttotheAuditors(`inLakh)

2012-13 2011-12

AsAuditor 1.33 1.33

Taxationmatters 0.25 0.25

Co.Lawmatters NIL NIL

Managementservices NIL NIL

Otherservices 0.15 0.28

Reimbursementofexpenses

NIL 0.04

(f) Payment to Cost Auditors: ` 0.45 Lakh(previousyear`NIL)

(g) Expenditure on entertainment: ` 5.88 Lakh(previousyear`5.06Lakh)

(h) Expenditureonforeigntravel(`inLakh)

2012-13 2011-12

No.oftours NIL NIL

ExpenditureinRupees NIL NIL

(i) ExpenditureonPublicityandPublicRelations

(`inLakh)

2012-13 2011-12

Salariesallowances&otherbenefits

28.00 29.12

Otherexpenses 14.34 18.03

(j) Director's Fees: ` 0.09 Lakh (previous year ` 0.22Lakh)

15. The disclosure related to Construction Contractreceivedon,ContractrevenuerecognizedfortheyearasperrevisedAS-7inrespectofcontractinprogressattheendoftheyear

(a) Contract revenue recognized for the year` 13717.83 Lakh (Previous Year ` 10203.60Lakh)

(b) Aggregate amount of Cost incurred andrecognized profit (less recognized losses) ` 45303.34 Lakh (Previous year` 29973.10Lakh)

(c) Amount of advance received` 891.13 Lakh(previousyear` 1569.70Lakh)

(d) Amount of retentions (deferred debts) `5700.57Lakh(Previousyear 4457.33Lakh)

(e) In respect of dues from customers afterappropriatenettingoff-

Grossamountduefromcustomersforthecontractworkasanasset 14038.69Lakh(Previousyear`6067.03Lakh)

Gross amount due to customers for thecontractworkasaliability` NIL(Previousyear`223.47Lakh)

(f) Contingencies` NIL(Previousyear`NIL)

Theestimatesoftotalcostsandtotalrevenuein respect of construction contracts enteredonorafter1stApril,2003inaccordancewithAS-7 (revised) Construction contracts arereviewed and updated periodically duringthe year by a committee and necessaryadjustments aremade in the current year’saccount. It is impracticable to quantify theamountofchangeinestimates.

16. Remunerationpaid/payabletoDirectors(includingChairmanandManagingDirector)

Salaries&Allowances : `NIL(previousyear`NIL)

ContributiontoPF : `NIL(previousyear`NIL)

ContributiontoGratuityfund

: `NIL(previousyear`NIL)

Others : `NIL(previousyear`NIL)

Besides the above, the Managing Director/Director also permitted to avail Company'stransportonchargeablebasisforhis/herprivateuseasperrulesofthecompany.

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193

17. TheDisclosurerelatingtoDerivativeInstruments–NIL(PreviousYearNIL)

18. The disclosure relating to suppliers underMicroand Small Enterprise Development Act, 2006.Thecompanyhasnotreceivedanymemorandum(as required to be filed by the suppliers withthe notified authority under the Micro, Smalland Medium Enterprises Development Act,2006) claiming their status as on 31st March,2013 as micro, small or medium enterprises.Consequently,theamountpaid/payabletothesepartiesduringtheyearis`NIL.

19. ThedisclosurerelatingtoAccountingStandard-29

(a) (`inLakh)

LiquidatedDamages(Total) 2012-13 2011-12

Opening 3318.13 3029.45

Additions 284.77 295.81

Usage/Writeoff/payment 0.00 7.13

Withdrawal/adjustments 0.00 0.00

ClosingBalance 3602.90 3318.13

ContractualObligation(Total)

Opening 1278.40 1121.64

Additions 596.59 311.64

Usage/Writeoff/payment 0.00 0.00

Withdrawal/adjustments 346.18 154.88

ClosingBalance 1528.81 1278.40

(b) Liquidateddamagesareprovidedinlinewiththe Accounting Policy of the company andthesameisdealtsuitablyintheaccountsonsettlement or otherwise. Contingent liabilityrelating to liquidated damages is shown inpointno.5ofNoteno.33.

(c) The provision for contractual obligation ismade at the rate of 2.5% of the contractrevenue in line with significant AccountingPolicyNo.14tomeetthewarrantyobligationsasperthetermsandconditionsofthecontract.The same is retained till the completion ofthe warranty obligations of the contract.The actual expenses on warranty obligationmay vary from contract to contract and onyear to yeardependingupon the termsandconditionsoftherespectivecontract.

20. Previous year's figures have been rearranged/regrouped wherever practicable to make themcomparable to current year's presentation androundedofftothenearestthousandrupees.

21. Liability due tomicro and small enterprises hasbeendeterminedonthebasisofdatabaseofsuchundertakings created by units/divisions basedon the responses received from suppliers/sub-contractorsastotheirstatusandisgivenbelow:

2012-13 2011-12

` Lakh ` Lakh

TotaloutstandingduesofMicro&SmallEnterprises

NIL NIL

22. RevenuerecognitionasperSignificantaccountingpolicyNo:10A,hasbeencarriedoutinrespectallrelevantorders.

23. (a) The disclosure requirement of AccountingStandard5wasproperlycompliedwith.

(b) The Company has complied with theprovisionsofAS15andoperatingthesystemof making liability for Gratuity and Leavesalary based on Actuarial Valuation. Anamount of ` 1433.21 Lakh (Previous year ` 1530.27Lakh)isprovidedtowardsGratuityand` 734.08Lakh (Previousyear ` 643.74Lakh) is provided towards Leave Salary. ThecalculationofGratuityandLeaveSalaryasperActuarialValuationisasfollows.

(`inLakh)

Sl. No.

DetailsofGratuityandLeaveSalaryProvisions

Gratuity LeaveSalary

1 OpeningDefinedBenefitObligation

1530.37 643.74

2 InterestCost 122.44 51.49

3 CurrentServiceCost 60.68 26.92

4 BenefitsPaid -(338.06) -(224.27)

5 Actuarial(Gains)/LossesonObligation 57.57 236.19

6 ClosingDefinedBenefitObligation 1433.21 734.07

194

(c) Accounting Standard 17 - The CompanyoperatesinasingleprimarybusinessnamelyFabrication/ Erection on turnkey basis orotherwise.ThecomponentsmanufacturedbytheCompanyaremeantforutilizationinsuchprojectsonly. Therefore, theCompany feelsnoseparatedisclosureisrequired.

(d) Accounting Standard 20 – Computation ofEarningspershare(EPS)isasbelow:

(`inLakh)

Sl. No.

Description 2012-13 2011-12

1 No.ofShares 337978Nos

337978Nos

2 Profit/LossbeforeconsideringExtraOrdinaryItems 3089.42 1027.93

3 EPSbeforeconsideringExtraOrdinaryItems 0.009 0.003

4 Profit/LossafterconsideringExtraOrdinaryItems 3503.77 1044.17

5 EPSafterconsideringExtraOrdinaryItems 0.10 0.0031

(e) Accounting Standard 22 - In the absence ofcertaintyontheavailabilityoffuturetaxableincome,thedeferredtaxasset/liabilityisnotrecognized.

(f) AccountingStandard27–TheCompanydoesnothaveanyJointVentures.

(g) Accounting Standard 28 – Impairment ofassetshasnotbeencarriedoutasperAS-28,asthereisnoindicationofapotentiallossonimpairmentofassets.

(h) ForeignExchangeInflow&Outflow: ForeignExchangeInflowis`NIL(PreviousYear`NIL).Foreign Exchange Outflow is ` 363.07 Lakh(PreviousYear` 71.85Lakh)towardsimportofRawMaterial/Services/MIT/Others.

(i) The Company is consistently following themethodofvaluationofWIP.TheCompanyisconfident of controlling the future cost andcontainingthemwithintheestimates.

(j) Request for confirmations of balances weresentand reconciliationswith thepartiesarecarriedoutasanongoingprocess.CompanyismakingallouteffortsforreconciliationandrealizationoflongpendingTradeReceivables.

(k) Noamountispaid/payablebytheCompanyunder Section 441 A of the Companies Act,1956 (cess on turnover) since the rulesspecifying the manner in which the cessshallbepaidhasnotbeennotifiedyetbytheCentralGovernment.

24. Itemofexpenseandincomelessthan`OneLakhisnotconsideredforbookingunderpriorperiodItems.

25. The Companyhas changed its Accounting Policyin line with holding company policy, in respectof Use of Estimates, Translation of FinancialStatementsof Integral ForeignOperations,Taxeson Income, Impairment and Segment Reportingduringtheyear.Theimpactonaccountofchangeof accounting policies on Statement of Profit &LossisNIL.

26. In terms of GOI letter F.No.1 (11)/2004-PE (IV)DT. 07/05/08, BHEL has infused ` 34 Crore toBHPVasadditionalcapital.TheAuthorizedsharecapitalistobeincreasedbeforeissueofadditionalsharecapitalofaboveamount.Boardofdirectorshave examined the proposal of amendmentsto the Clause in Memorandum of AssociationandArticle in Articles of Association to increaseAuthorizedShareCapitalanddirectedtosendtheproposed amendments toDepartment of HeavyIndustriesforvetting.Accordingly,thedocumentswere sent toDHI for vetting. Pending receipt ofDHI clearance, the amount received from BHELtowards share capital is considered as advanceand is shown underUn-secured creditors in theBalancesheetuntil2010-11.

HoweveraspertheobservationofManagementCommittee (consisting of Managing Director-BHPV, Special Director appointed by BIFR andRepresentative of Monitoring Agency), theamount of ` 34.00 Crore received towardsAdditional Share Capital is accounted as Share

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Capital–PendingAllotmentduringtheyear2011-12.Thesamestatusiscontinuingevenin2012-13.

27. During the year 2012-13, GOI has consideredthe proposal ofmerger of BHPVwith BHEL andaccorded itsapprovalasper thecommunication

received from DHI vide letter No. F.No. 1(17)/2010-P.XI dated 06.03.2013. The formalities ofmakingapplicationtoBIFRandother formalitiesareunderprocess.

ForandonbehalfofBoardofDirectors

(A.S.S.Sarma)CompanySecretary

(SunithShome)GeneralManager

(Finance)

(C.P.Chengappa)ManagingDirector

(B. Prasada Rao)Chairman

Asperourreportofevendate

ForGrandhy&CoFRNNo.:001007S

CharteredAccountants

Place:NewDelhiDate:May8,2013

(NareshChandraGelliV.)M.No.:201754

Partner

196

Turnover ClosingStock OpeningStockTonnes(EQ) `inLakh Tonnes(EQ) `inLakh Tonnes(EQ) `inLakh

I) Fertilizer,Chemicalsand 14 472 0 0 2 11OtherEquipment (765) (1134) (2) (11) (2) (11)

Ii) CryogenicPlant&Vessels 703 2528 0 0 0 0(897) (2533) (0) (0) (0) (0)

Iii) Boiler&Components 10834 21027 164 111 32 8(6673) (11913) (32) (8) (0) (0)

Total 11551 24027 164 111 34 19(8335) (15580) (34) (19) (2) (11)

Note:Figuresinbracketsindicatepreviousyear'sfigures

Note-34Quantitative&OtherDataasClassifiedandCertifiedbyManagementfor2012-131.Turnover,ClosingandOpeningStocks

2.RawMaterial,ComponentsandStores&ToolsConsumed

2012-13 2011-12Qty Value Qty. Value

(`inLakh) (`inLakh)A. RawMaterialandComponents:1. CSPlates(intonnes) 4821 2132 4082 22222. SSPlates(intonnes) 48 143 162 4053. CSTubes(inmeters) 113510 1201 123781 8294. SSTubes(inmeters) 7649 49 5346 1505. HETubes(innumbers) 2381 87 972 216. OtherIron&SteelMaterialincludingcomponents. 5685 3487

TotalA: 9297 7115B. Stores&LooseTools 276 224

Total(A+B) 9573 7339

(`inLakh)2012-13 2011-12

3. (A) Valueofimports(CIF)A.RawMaterials&Components 348 74B.Materialsintransit 0 6Spares 21 5CapitalGoods 11 0

(B) ExpenditureinForeignCurrency(includingprovision)Royalty 0 0EngineeringFees 0 0Know-how 0 0OtherMatters 13 0

(C) Break-Upofimportedandindigenousrawmaterials,componentsandsparepartsconsumed:1.Valueofallimportedrawmaterialsincludingcomponentsandsparepartsconsumed duringtheyear

410 61

2.Valueofindigeneousmaterialincludingcomponents&sparesconsumedduringthe year

9163 7278

Total 9573 7339Percentageofitem(1)tototalconsumption 4.28 0.83

Percentageofitem(2)tototalconsumption 95.72 99.17(D) Amountremittedinforeigncurrenciesonaccountofdividends Nil Nil(E) Earningsinforeignexchange

Supplies-(FOB) 0 0Services 0 0

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Directors’ReportDearMembers,

Your Directors have pleasure in presenting beforeyouthesecondAnnualReportofyourcompany.Yourcompany has recorded an increase in turnover ofaround25.52%incomparisontolastyear.Thefinancialhighlightsfortheyear2012-2013areasunder:

1. Increase in turnover from ` 2113.76 Lakh to ` 2653.38lakh.

2. Fullrepaymentofworkingcapitalloanfundedbythe holding company of ` 170 Lakh along withinterest.

3. CommercialproductionofLTinductionmotors.4. Year end order book of around ` 21 Crore as

against` 4.73Croreinthepreviousyear.

Theoverallworkingofyourcompanyforthefinancialyear ended 31st March, 2013 have recorded a netloss of ` 54.96 lakhwhich ismainly due to lack orinsufficientordersduringthefirsthalfofthefinancialyear. The loss is carried over to the Balance Sheetunder Reserves and Surplus to be adjusted againstfutureprofits.

Your company is having ambitious future plans andtheobjective is todevelop specializedAlternators invariousfields.Barringunforeseencircumstances,yourDirectors are confident that the operations of yourcompanycanbeimprovedinthecurrentyear.

DirectorsResponsibilityStatement

YourDirectorsherebyconfirm–

ThatinthepreparationoftheAnnualAccountsfortheyear ended 31st March, 2013, applicable accountingstandards had been followed along with properexplanationrelatingtomaterialdepartures,wherevernecessary.

That the Directors had selected such accountingpolicies and applied them consistently and madejudgments and estimates that are reasonable andprudentsoastogiveatrueandfairviewofthestateofaffairsof thecompanyat theendof thefinancialyearandofthelossofthecompanyfortheyearended 31stMarch,2013.

ThattheDirectorshadtakenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsin accordancewith theprovisions of theCompaniesAct,1956forsafeguardingtheassetsofthecompanyand for preventing and detecting fraud and otherirregularities.

ThattheDirectorshadpreparedtheannualaccountsonanon-goingconcernbasis.

As your company has not bought back any sharesduring the period under report, the informationrelating to Section 217(2B) is not applicable to theCompany.

ThepresentBoardofDirectorsofthecompanyconsistsof only three Directors, including the Chairman oftheBoardandManagingDirector,bothofwhomarenominated by Bharat Heavy Electricals Limited, theholding company and one Director nominated byGovernment of Kerala. Pending categorization andappointmentofnewDirectors, theAuditCommitteeand other committees as mandated in the DPEGuidelineshavenotbeenconstitutedandthepresentBoardfunctionsasAuditCommitteealso.

Directors

ThereisnochangeintheconstitutionoftheBoardofDirectorsduringtheyearunderreport.

ShareCapital

Thereisnochangeinthesharecapitalduringtheyearunderreport.

Personnel

There were no employees drawing remuneration inexcessofthelimitsspecifiedunderSection217(2A)oftheCompaniesActduringtheyearunderreport.

CorporateGovernance

a. As Stated elsewhere in this report, the Boardof Directors is yet to be reconstituted withindependent and other Directors as mandatedin the Guidelines on Corporate Governance forCentral Public Enterprises issued by Ministry ofHeavy Industries and Public Enterprises. Various

BHELElectricalMachinesLimited

198

committees will be constituted on expansion oftheBoard.

b. CertificateoncorporategovernanceissuedbytheCompany’sstatutoryauditorsisenclosed.

Auditors

M/s.JacobIsack&Associates,CharteredAccountants,Kanhangad, having branch at Mangalore 575001,was appointed as Auditors of the company by theComptroller and Auditor General of India and theywillcontinuetilltheconclusionofthesecondAnnualGeneralMeeting.Necessaryresolutionforfixingtheirremuneration, pursuant to section 224(8)(aa) of theCompaniesAct,isbeingplacedattheAnnualGeneralMeeting.

Comments of the Comptroller andAuditorGeneralofIndia

ThecompanyhasreceivedaNilcommentsreportfromtheComptrollerandAuditorGeneralofIndia,whichisattachedwiththisreport.

Conservationofenergy,technologyupgradationandforeignexchangetransaction

Yourcompanywillnotcomewithinthelistofindustrieswhich has to compulsorily disclose the steps takenfor conservation of energy, technology upgradation,etc. However, all steps are being taken to minimizeandoptimizetheenergyconsumptionandtoreducethe costof operation. TheResearch&Developmentwing isbeingstrengthenedsothatthecompanycandevelopnewproducts.There isno foreignexchangeinflowduringtheperiodunderreport.Thetotalforeignexchangeoutflow forpurchaseof rawmaterialswasequivalent to` 30.21 Lakhduring the period underreport.

CorporateSocialResponsibility

Your company will not come within the guidelinesissued by the Department of Public Enterprises,

Ministry of Heavy Industries and Public Enterprises,Govt of India regarding mandatory spending onCorporateSocialResponsibility.

However,asaresponsiblecorporate,yourcompanyhasassociatedwithBHELEDN,Bangaloreinimplementingthe following projects with the financial assistancefromBHEL.

1. Providing 1.5 HP submersible pump set in theexisting borewell and electrical wiring at PilikiricolonyBedradka.

2. ProvidingelectricalwiringandinstallationoffansatAnganwadi(Daycarecentre),Kambar.

3. ProvidingelectricalwiringandinstallationoffansatAnganwadi,Kottakunnu.

4. Supplyandinstallation1.5HPsubmersiblepumpto the existing borewell at Government UpperPrimaryschool,Bedradka.

5. Providingelectricalwiringandsupplyoffansandsteel cupboards to Government Lower PrimarySchool,Kambar.

ResearchandDevelopment

Your company has associatedwith BHEL R&D groupHyderabad in their project of development ofpermanentmagnetgenerator(PMG)

Acknowledgement

YourDirectorswishestoplaceonrecordtheirsincereappreciation and thanks for the assistance renderedbytheholdingcompany,StateGovernmentandlocalbody authorities, State Bank of India, Company’sVendors and company’s customers and all othersconnectedwith the company. TheBoardalsoplaceson record their sincere appreciation for the whole-hearted co-operation extended by the Officers andotherstaffmembersofthecompany.

ForandOnBehalfoftheBoardofDirectors

Place:NewDelhiDated:July24,2013

(AnilAhuja)Chairman

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Auditors'ReportTothemembersofBHELElectricalMachinesLimited

We have audited the accompanying financialstatementsofBHELELECTRICALMACHINESLIMITED,which comprise the Balance Sheet as at March 31,2013, and the Statement of Profit and Loss andCashFlowStatementfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

Management’s Responsibility for the Financialstatements

Management is responsible for the preparation ofthese financial statements that give a true and fairviewof thefinancial position, financial performanceand cash flows of the Company in accordance withthe Accounting Standards referred to in sub-section(3C) of section 211 of the Companies Act, 1956("the Act"). This responsibility includes the design,implementationandmaintenanceof internalcontrolrelevant to the preparation and presentation of thefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’sResponsibility

Our responsibility is to express an opinion onthese financial statements based on our audit. WeconductedourauditinaccordancewiththeStandardson Auditing issued by the Institute of CharteredAccountants of India. Those Standards require thatwe comply with ethical requirements and plan andperform the audit to obtain reasonable assuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtainaudit evidence about the amounts and disclosuresin thefinancial statements. Theprocedures selecteddepend on the auditor’s judgment, including theassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheCompany’spreparationand fair presentation of the financial statements inordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluating

the appropriatenessof accountingpolicies usedandthereasonablenessoftheaccountingestimatesmadeby management, as well as evaluating the overallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,thefinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

a) inthecaseoftheBalanceSheet,ofthestateof affairs of the Company as at March 31,2013;

b) in the case of the Statement of Profit andLoss, of the loss for the year endedon thatdate;and

c) inthecaseoftheCashFlowStatement,ofthecashflowsfortheyearendedonthatdate.

1. AsrequiredbytheCompanies(Auditor’sReport)Order, 2003 (“theOrder”) issued by the CentralGovernmentofIndiaintermsofsub-section(4A)ofsection227oftheAct,wegiveintheAnnexureastatementonthemattersspecifiedinparagraphs4and5oftheOrder.

2. Asrequiredbysection227(3)oftheAct,wereportthat:

a) we have obtained all the information andexplanations which to the best of ourknowledgeandbeliefwerenecessaryforthepurposeofouraudit;

b) in our opinion proper books of accountas required by law have been kept bythe Company so far as appears from ourexaminationofthosebooks.

c) the Balance Sheet, Statement of Profit andLoss,andCashFlowStatementdealtwithbythisReportare inagreementwiththebooksofaccount.

200

d) inouropinion,theBalanceSheet,StatementofProfitandLoss,andCashFlowStatementcomply with the Accounting Standardsreferredto insubsection (3C)of section211oftheCompaniesAct,1956;

e) on the basis of written representationsreceived fromthedirectorsasonMarch31,2013, and taken on record by the Board ofDirectors,noneofthedirectorsisdisqualifiedasonMarch31,2013,frombeingappointed

as a director in terms of clause (g) of sub-section (1) of section274of theCompaniesAct,1956.

f) SincetheCentralGovernmenthasnotissuedany notification as to the rate at which thecess is tobepaidundersection441Aof theCompanies Act, 1956 nor has it issued anyRulesunderthesaidsection,prescribingthemanner inwhich suchcess is tobepaid,nocessisdueandpayablebytheCompany.

ForJacob&IsackassociatesCharteredAccountants

FRN:007675S

Place:MangaloreDate:April27,2013

K.P.MohammadIsack,B.Com.FCAPartner

MembershipNo.:204171

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AnnexuretotheAuditors'Report

TheAnnexure referred to inparagraph1of theOurReportofevendatetothemembersofBHELElectricalMachinesLimited,ontheaccountsofthecompanyfortheyearended31stMarch,2013.

On the basis of such checks as we consideredappropriate and according to the information andexplanationgiventousduringthecourseofouraudit,wereportthat:

1. (a) Thecompanyhasmaintainedproperrecordsshowingfullparticularsincludingquantitativedetailsandsituationofitsfixedassets.

(b) As explained to us, fixed assets have beenphysically verified by the management atreasonableintervals;nomaterialdiscrepancieswerenoticedonsuchverification.

(c) In our opinion and according to theinformation and explanations given to us,nofixedassethasbeendisposedduring theyearandthereforedoesnotaffectthegoingconcernassumption.

2. (a) As explained to us, inventories have beenphysically verified during the year by themanagementatreasonableintervals.

(b) In our opinion and according to theinformation and explanations given to us,the procedures of physical verification ofinventories followed by the managementare reasonable and adequate in relation tothesizeoftheCompanyandthenatureofitsbusiness.

(c) In our opinion and on the basis of ourexamination of the records, the Company isgenerally maintaining proper records of itsinventories. No material discrepancy wasnoticed on physical verification of stocksby the management as compared to bookrecords.

3. (a) Accordingtotheinformationandexplanationsgiventousandonthebasisofourexaminationofthebooksofaccount,theCompanyhasnotgrantedany loans, securedorunsecured, tocompanies, firms or other parties listed intheregistermaintainedunderSection301oftheCompaniesAct,1956.Consequently, the

provisionsofclausesiii(b),iii(c)andiii(d)oftheorderarenotapplicabletotheCompany.

(e) Accordingtotheinformationandexplanationsgiventousandonthebasisofourexaminationofthebooksofaccount,theCompanyhasnottaken loans from companies, firms or otherpartieslistedintheregistermaintainedunderSection301oftheCompaniesAct,1956.Thussubclauses(f)&(g)arenotapplicabletotheCompany.

4. Inouropinion andaccording to the informationand explanations given to us, there is generallyan adequate internal control procedurecommensurate with the size of the Companyand the nature of its business, for the purchaseof inventories & fixed assets and payment forexpenses&forsaleofgoods.Duringthecourseofouraudit,nomajorinstanceofcontinuingfailuretocorrectanyweaknessesintheinternalcontrolshasbeennoticed.

5. a) Based on the audit procedures applied byus and according to the information andexplanations provided by the management,theparticularsof contractsor arrangementsreferred to in section 301 of the Act havebeen entered in the register required to bemaintainedunderthatsection.

b) Asperinformation&explanationsgiventousandinouropinion,thetransactionenteredintobytheCompanywithpartiescoveredu/s301oftheActdoesnotexceedsfivelakhrupeesin a financial year therefore requirement ofreasonablenessoftransactionsdoesnotarise.

6. TheCompanyhasnotacceptedanydepositsfromthepubliccoveredundersection58Aand58AAoftheCompaniesAct,1956.

7. As per information & explanations given by themanagement,theCompanyhasadequateinternalaudit system commensurate with its size andnatureofitsbusiness.

8. As per information & explanations given by themanagement, maintenance of cost records hasbeenprescribedbytheCentralGovernmentunderclause(d)ofsub-section(1)ofsection209ofthe

202

Actandweareoftheopinionthatprimafacietheprescribedaccountsandrecordshavebeenmadeandmaintained.

9. (a) According to the records of the Company,undisputed statutory dues includingProvident Fund, Investor Education andProtectionFund,Employees’StateInsurance,Income Tax, Sales-tax, Wealth Tax, ServiceTax, Custom Duty, Excise Duty, cess to theextent applicable and any other statutorydueshavegenerallybeenregularlydepositedwith the appropriate authorities. Accordingtotheinformationandexplanationsgiventoustherewerenooutstandingstatutoryduesason31stMarch,2013 foraperiodofmorethansixmonths fromthedate theybecamepayable.

(b) Accordingtotheinformationandexplanationsgiven to us, there is no amount payable inrespectofincometax,wealthtax,servicetax,salestax,customsdutyandexcisedutywhichhave not been deposited on account of anydisputes.

10. TheCompanyis2yearsold.Hence,notapplicable.

11. Based on our audit procedures and on theinformation and explanations given by themanagement, we are of the opinion that, theCompany has not defaulted in repayment ofduestoafinancialinstitution,bankordebentureholders.

12. According to the information and explanationsgiven tous, theCompanyhasnotgranted loansandadvanceson thebasisof securitybywayofpledgeofshares,debenturesandothersecurities.

13. TheCompanyisnotachitfundoranidhi/mutualbenefit fund/society. Therefore, the provision ofthis clause of the Companies (Auditor's Report)

Order,2003(asamended)isnotapplicabletotheCompany.

14. According to informationandexplanationsgivento us, the Company is not trading in Shares,Securities, Debentures & other Investments.Hence,notapplicable.

15. According to the information and explanationsgiven to us, the Company has not given anyguaranteesfor loantakenbyothersfromabankorfinancialinstitution.

16. Based on our audit procedures and on theinformationgivenbythemanagement,wereportthattheCompanyhasnotraisedanytermloansduringtheyear.

17. BasedontheinformationandexplanationsgiventousandonanoverallexaminationoftheBalanceSheetoftheCompanyasat31stMarch,2013,wereport that no funds raised on short-term basishavebeenusedfor long-terminvestmentbytheCompany.

18. Based on the audit procedures performed andthe informationandexplanations given tousbythe management, we report that the Companyhasnotmadeanypreferentialallotmentofsharesduringtheyear.

19. The Company has no outstanding debenturesduringtheperiodunderaudit.

20. TheCompanyhasnotraisedanymoneybypublicissueduringtheyear.

21. Based on the audit procedures performed andthe information and explanations given to us,we report that no fraud on or by the Companyhas been noticed or reported during the year,norhavewebeen informedof suchcaseby themanagement.

ForJacob&IsackassociatesCharteredAccountants

FRN:007675S

Place:MangaloreDate:April27,2013

K.P.MohammadIsack,B.Com.FCAPartner

MembershipNo.:204171

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COMMENTSOFTHECOMPTROLLERANDAUDITORGENEREALOFINDIAUNDERSECTION619(4)OFTHECOMPANIESACT,1956ONTHEACCOUNTSOFBHELELECTRICALMACHINESLIMITED,KASARAGODFORTHEYEARENDED31MARCH2013

ThepreparationoffinancialstatementsofBHELElectricalMachinesLimited,Kasaragod,fortheyearended 31March2013inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,1956istheresponsibilityofthemanagementofthecompany.ThestatutoryauditorappointedbytheComptrollerandAuditorGeneralofIndiaunderSection619(2)oftheCompaniesAct,1956isresponsibleforexpressingopinionon these financial statements under Section 227of the CompaniesAct, 1956basedon independent audit inaccordancewith theAuditing andAssurance Standardsprescribedby thierprofessional body, the InstituteofCharteredAccountantsofIndia.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated27.04.2013.

I,onbehalfoftheComptrollerandAuditorGenrealofIndia,haveconductedasupplementaryauditunderSection619(3)(b)oftheCompaniesAct,1956ofthefinancialstatementofBHELElectricalMachinesLimited,Kasaragod for the year ended31March2013. This supplementary audit has been carriedout independentlywithoutaccesstotheworkingpapersoftheStatutoryAuditorandislimitedprimarilytoinquiriesoftheStatutoryAuditorandcompanypersonalandaselectiveexaminationofsomeoftheaccountingrecords.Onthebasisofmyaudit,nothingsignificanthascometomyknowledgewhichwouldgiverisetoanycommentuponorsupplementtoStatutoryAuditor'sreportunderSection619(4)oftheCompaniesAct,1956.

Forandonthebehalfofthe Comptroller&AuditorGenrealofIndia

(M.V.Rajeshwari) PRINCIPALDIRECTOROFCOMMERCIALAUDIT

ANDEX-OFFICIOMEMBERAUDITBOARD,CHENNAI

Place:Chennai Date:June04,2013

204

BalanceSheetAsatMarch31st,2013 (`inLakh)

Particulars NoteNo. Asat31.03.2013 Asat31.03.2012I. EquityandLiabilities(1) Shareholder'sFund

a.ShareCapital 1 1050.00 1050.00b.ReservesandSurplus 2 -92.48 957.52 -37.52 1012.48

(2) Non-currentliabilities(a)Long-termborrowings(b)Deferredtaxliabilities(Net)(c)Otherlongtermliabilities(d)Longtermprovisions 3 258.37 258.37 236.94 236.94

(3) CurrentLiabilities(a)Short-termborrowings 4 317.78 186.40(b)Tradepayables 5 891.83 377.43(c)Othercurrentliabilities 6 172.64 123.32(d)Short-termprovisions 7 21.41 1403.66 687.15TOTAL 2619.55 1936.57

II. ASSETS(1) NonCurrentAssets

(a)FixedAssets(i)Tangibleassets 8 869.16 963.30(ii)Intangibleassets(iii)Capitalwork-in-progress 869.16 963.30(b)NonCurrentInvestments(c)Deferredtaxassets 75.37(d)Longtermloans&advances 9 21.35(e)Othernoncurrentassets 96.72

(2) Currentassets(a)Currentinvestments 10 0.00 0.00(b)Inventories 11 417.49 382.88(c)Tradereceivables 12 1156.64 557.90(d)Cashandcashequivalents 13 56.65 21.09(e)Shorttermloansandadvances 14 22.89 11.40(f)Othercurrentassets 1653.67 973.27TOTAL 2619.55 1936.57SignificantaccountingpoliciesOthernotestofinancialstatements 26TheaccompanyingNotes1to26andsignificantaccountingpoliciesformanintegralpartofthefinancialstatements.

ForandonbehalfofBoardofDirector

K.BharathKumarShettyManager(Finance)

Cdr.(Retd)K.ShamsuddinDirector

L.GopalakrishnanManagingDirector

AsperourreportofevendateattachedForJacob&IsackAssociates

CharteredAccountantsFRNNo.:001007S

Place:MangaloreDate:April27,2013

K.P.mohammadIsackPartner

M.No.:204171

A n n u A l R e p o R t2 0 1 2 - 1 3

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StatementofProfit&Lossfortheyearended31.03.2013 (`inLakh)

Particulars NoteNo. Fortheyearended31.03.2013

Fortheyearended31.03.2012

I. Revenuefromoperations(Gross) 15 2653.38 2113.76

Less:Exciseduty&servicetax -181.20 -185.25

2472.18 1928.51

II. Otheroperationalincome 16 13.08 13.64

III. Otherincome 17 4.80 4.04

TOTALREVENUE(ItoIII) 2490.06 1946.19

IV. Expenses

Consumptionofmaterial,erectionandengineeringexpenses 18

1811.23 1482.89

Accretion/(decretion)toWIP&FG 19 -27.83 -187.54

Employeebenefitsexpenses 20 563.25 498.59

Otherexpensesofmanufacture,administration,sellinganddistribution 21 149.60 119.58

Provisions(net) 22 -32.50

Financecosts 23 23.79 9.76

Depreciation&amortisationexpense 8.1 100.48 92.93

Less:Costofjobsdoneforinternaluse

Totalexpenses 2620.52 1983.71

V. Profit/(loss)beforepriorperiodadjustments,exceptionalitemsandtax -130.46 -37.52

Priorperiodadjustments(Net) 24 0.13

Lesstaxexpenses/(TaxIncome) 25 75.37

VI. Profit/(loss)fortheperiodfromcontinuingoperations -54.96 -37.52

Significantaccountingpolicies

Othernotestofinancialstatements 26

TheaccompanyingNotes1to26andsignificantaccountingpoliciesformanintegralpartofthefinancialstatements.

ForandonbehalfofBoardofDirector

K.BharathKumarShettyManager(Finance)

Cdr.(Retd)K.ShamsuddinDirector

L.GopalakrishnanManagingDirector

AsperourreportofevendateattachedForJacob&IsackAssociates

CharteredAccountantsFRNNo.:001007S

Place:MangaloreDate:April27,2013

K.P.mohammadIsackPartner

M.No.:204171

206

CashFlowStatementfortheyearended31.03.2013

(`inLakh)

2012-13 2011-12

A. CASHFLOWFROMOPERATINGACTIVITIES

Netprofit(loss) -130.33 -37.52

adjustmentfor

Depreciation 100.48 92.93

Provisionfordoubtfuldebts

Provisions(Longterm) 21.43

InterestExpenditure

OperatingProfit -8.42 55.41

Adjustmentsfor

(increase)/decreaseintrade&otherreceivables -631.58 -569.30

(increase)/decreaseininventories -34.61 -382.88

Increase/(Decrease)inTradeandotherpayments 585.13 737.69

NetCashflowfromoperatingActivities -81.06 -214.49

B. CASHFLOWFROMINVESTINGACTIVITIES

Saleofassets

Interestreceived

(Purchaseoffixedassets) -6.34 -6.23

NetCashfrominvestingActivities -6.34 -6.23

C. CASHFLOWFROMFINANCINGACTIVITIES

Increase/(Decrease)inlongtermborrowing

Increase/(Decrease)inshorttermborrowing 131.38 186.40

Netcashfromfinancingactivities 131.38 186.40

NetIncrease/(Decrease)incash/Cashequivalents 35.56 21.09

OpeningCashbalance 21.09 0

Cash/Cashequivalentsattheendoftheperiod 56.65 21.09

ForandonbehalfofBoardofDirector

K.BharathKumarShettyManager(Finance)

Cdr.(Retd)K.ShamsuddinDirector

L.GopalakrishnanManagingDirector

AsperourreportofevendateattachedForJacob&IsackAssociates

CharteredAccountantsFRNNo.:001007S

Place:MangaloreDate:April27,2013

K.P.mohammadIsackPartner

M.No.:204171

A n n u A l R e p o R t2 0 1 2 - 1 3

207

Note1-ShareCapital

Note2-Reserves&surplus

Note3-Long-termprovisions

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Authorised

15000000numerofshares@` 10/-each 1500.00 1500.00

Issued,subscribedandpaidupcapital 1050.00 1050.00

10500000shares@` 10/-fullypaidup

(BHELanditsnomineesholding-5355000@ 10/-each-51%-(Previousyear5355000shares@` 10/-each)

GovernmentofKeralaanditsnomineesholding-5145000shares@ ` 10 each - 49% - (Previous year KEL Kochiholding5096000shares@` 10/-eachandGovernmentofKeralaholding49000shares@`10/-each)

1050.00 1050.00

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Profit/Lossfortheyear

(StatementofProfit&Loss) -54.96 -37.52

Balanceofprofit(loss)broughtforwardfromlastyear -37.52

Foreignprojectreserveswrittenback

Profitavailableforappropriation -92.48 -37.52

(`inLakh)

Asat31.03.2013 Asat31.03.2012

ContractualObligation-Longterm

Provisionforemployeebenefits

Leavebenfitsaccrued-Longterm 15.06

Gratuityaccured-Longterm 243.31 236.94

Otherlong-termprovisions

258.37 236.94

208

Note4-Short-termborrowings

Note5-Tradepayables

Note6-Othercurrentliabilities

Note7-Short-termprovisions

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Secured

Loans&advancesfrombanks

Cashcredit(Cr.balance)(securedbyhypothecationoffixedassets,rawmaterials,components,stores&spares,work-in-progress,finishedgoods,tradereceivablesandothercurrentassets) 317.78 11.50

Unsecured

-fromCompanies 174.90

(Last year KEL ` 4.90 Lakh, BHEL ` 170 Lakh)

This has been serviced in full 317.78 186.40

(`inLakh)

Asat31.03.2013 Asat31.03.2012

TradePayables 891.83 377.43

Includes stale cheques for ` 9111/- 891.83 377.43

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Advancesreceivedfromcustomers&others 84.32 79.18

DepositsfromContractors&others 1.02 0.24

Otherpayables/liabilities 87.30 43.90

172.64 123.32

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Provisionforemployeebenefits

Leaveencashment 1.52

Gratuity 13.93 15.45

Othershorttermprovision

UnrealisedmarginonSale 5.96

(AsperAS9) 21.41 0.00

A n n u A l R e p o R t2 0 1 2 - 1 3

209

Note8-Fixedassets

Note8.1-Fixedassetsason31.03.2013

(`inLakh)

Asat31.03.2013 Asat31.03.2012

(i)Tangibleassets

Grossblock 1062.57 1056.24

Less:Accumulateddepreciation -193.41 -92.94

Less:Accumulatedimpairement

Less:Leaseadjustmentaccount

NetBlock 869.16 963.30

Refer details to Annexure 8.1

Sl. No.

DESCRIPTION GROSSBLOCK DEPRECIATION NETBLOCK

Costason

01.04.12

Additions/Adjustmentsduringthe

year

Deductions/Adjustmentsduringthe

year

TotalCostason

31.03.2013

Depreciationason

01.04.2012

DepreciationDuringthe

year

Depreciationupto

31.03.2013

Ason31.03.2013

Ason31.03.2012

1 Freeholdland(includingdevelop-mentexpenses) 31.15 0.00 0.00 31.15 0.00 0.00 0.00 31.15 31.15

2 Buildings 337.43 0.00 0.00 337.43 11.40 11.40 22.80 314.63 326.03

3 Plant&Machinery 642.05 2.56 -6.41 638.20 77.05 76.17 153.22 484.98 565.00

4 ElectronicDataProcessingEquipment 4.56 1.50 -0.63 5.43 0.67 1.07 1.74 3.69 3.89

5 ElectricalInstallations 33.83 0.00 -0.64 33.19 2.71 2.65 5.36 27.83 31.12

6 Vehicles 0.44 0.00 0.00 0.44 0.02 0.04 0.06 0.38 0.42

7 Furniture&fixtures 0.00 0.45 -0.33 0.12 0.00 0.01 0.01 0.11 0.00

8 OfficeandOtherequipments 6.03 1.84 -0.56 7.31 0.36 0.56 0.92 6.39 5.67

9 FixedAssetscostingupto`10,000/- 0.73 8.57 0.00 9.30 0.73 8.57 9.30 0.00 0.00

Total 1056.22 14.92 -8.57 1062.57 92.94 100.47 193.41 869.16 963.28

210

Note9-Non-currentassets

Note10-Currentinvestment

Note11-Inventories

(`inLakh)

Asat31.03.2013 Asat31.03.2012

NoncurrentLoansandadvances

Advancetax 19.37

InterestaccruedonAdvancetax 1.20

TDS 0.78

(As reflected in 26AS - ` 0.74 Lakh)

21.35 0.00

(`inLakh)

Asat31.03.2013 Asat31.03.2012

CurrentInvestments

MarginmoneydepositswithSBIforoperatingLetterofcredits

MarginmoneyonLCisclassifiedunderCashandbankaspertherequirmentofScheduleVI-Thepreviousyearfiguresarealsoregroupedaccordingly

0.00 0.00

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Stores&spareparts

Production 2.17 1.93

Fuelstores

Miscellaneous 2.17 1.93

Rawmaterial&components 199.95 187.90

Material-in-transit 199.95 5.51 193.41

Scrap(atestimatedrealisablevalue)

Finishedgoods 90.59 123.70

Work-in-progress@ValuedasperSignificantAccountingPolicyNo.6

124.78 63.84

417.49 382.88

A n n u A l R e p o R t2 0 1 2 - 1 3

211

Note12-Tradereceivables

Note13-Cash&cashequivalents

Note14-Short-termloansandadvances

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Debtsoutstandingforaperiodexceedingsixmonths 76.55 30.26

Otherdebts 1080.09 527.64

Less:Provisionforbad&doubtfuldebts 0.00

Less:Automaticpricereductionadjustmenta/c 0.00

1156.64 557.90

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Cash&Stampsinonhand 0.28 0.15

Cheques,DemandDraftsonhand

Remittancesintransit

BalanceswithScheduledBanks

CurrentAccount 0.27 0.14

DepositAccount 56.10 20.80

Margin money on LC 55.67

Accrued interest 0.43

Depositsmorethan12monthsmaturityperiod

56.65 21.09

(`inLakh)

Asat31.03.2013 Asat31.03.2012

Advances(Recoverableincashorinkindorforvaluetobereceived)

Tosubsidiaries

Toemployees 2.80 10.96

Forpurchases 0.17 1.06

ToOthers 7.92 10.89 -25.65 -13.63

Deposits

Balance with customs, Port Trust and other GovtAuthorities

0.03 0.03

Others 11.97 5.22

AdvanceTax/TDS(NetofProvisionforTaxation) 12.00 19.78 25.03

22.89 11.40

ParticularsofLoansandadvances:-

Secured,consideredgood

Unsecured,consideredgood 22.89 11.40

Doubtful

212

Note15-Revenuefromoperations (`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Saleslessreturns 2570.75 2093.60

Incomefromexternalerection&otherservices 82.63 20.16

RevenuefromWorksContract 0.00

AssetsgivenonFinancelease

2653.38 2113.76

Note18-Consumptionofmaterial,erection&engineeringexpense(`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Consumptionofrawmaterial&components 1714.39 1461.24

Consumptionofstores&spares 14.44 8.87

ErectionandEngineeringexp.-paymenttosubcontractors 82.40 12.78

1811.23 1482.89

Note16-Otheroperationalincome (`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

ExportIncentives

Rentalincomeonleasedassets

Leaseequalisationaccount

Financeincomeonassetsgivenonfinancelease

Exchangevariation(Cr.Balance)

Scrapsale 12.79 13.64

Others 0.29

Receiptfromsale/transferofsurplusstock

13.08 13.64

Note17-Otherincome (`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Fromcustomers

Fromemployees

Frombanks-InterestonTDR-TDS` 16,884 2.40 4.04

InterestonAdvancetax/TDS 1.20

FromInvestments(Current-Otherthantrade)

Miscreceipts 1.20

4.80 4.04

A n n u A l R e p o R t2 0 1 2 - 1 3

213

Note19-Accretion/DecretiontoWIP&FG

Note20-Employeebenefits

Note21 -Otherexpensesofmanufacturing, administration, selling anddistribution

(`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Work-in-progress

ClosingBalance 124.78 63.84

OpeningBalance 63.84 60.94 63.84

FinishedGoods

ClosingBalance 90.59 123.70

OpeningBalance 123.70 -33.11 123.70

27.83 187.54

NOTE:ElementofExcisedutyinFinishedGoods

ClosingBalance 9.96 13.61

OpeningBalance 13.61 0.00

(`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Salaries,wages,bonus,allowances&otherbenefits 452.19 397.19

Contributiontogratuityfund

Contributiontoprovidentandotherfunds 49.68 45.22

Staffwelfareexpenses 61.38 56.18

563.25 498.59

(`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Rent:Residential 1.99 1.76

Exciseduty(OnFGandscrap) -2.23 14.92

Power&Fuel 43.91 35.39

Rates&Taxes 8.51 14.41

Servicetax(GTAoutwards) 0.49 0.31

Insurance 1.91 1.14

Repairs 11.22 2.06

Carriageoutward 18.88 13.97

Travelling&conveyance 17.96 12.16

(IncludingTA/DAtoDirectors:-` 5.72Lakh)

Miscellaneousexpenses 46.91 23.46

Liquidateddamageschargedoff 0.05

149.60 119.58

214

Note22-Provisions

Note23-Financecost

Note24-Priorperiodadjustments

Note25-Taxincome&deferredtaxasset

(`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Doubtfuldebts,LiquidatedDamagesandLoans&advances

Createdduringtheyear

Lesswrittenbackduringtheyear

ContracutalObligations

Createdduringtheyear

Lesswrittenbackduringtheyear

Others

Createdduringtheyear

Lesswrittenbackduringtheyear 0.00 32.50

0.00 32.50

(`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Debentures/Bonds,CentralandStateGovt.Loan

Banks/financialInstitutionsborrowings 7.67

DeferredCredits

Others(onWCLfromBHELof` 170Lakh) 16.12 9.76

OtherBorrowingCosts

Less:BorrowingCostcapitalised

23.79 9.76

(`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

Income

Interest 0.08Others 0.61 0.69Less

ExpenseOtherexpenses 0.56

Net 0.13 0.00

(`inLakh)

Fortheyearended31.03.2013 Fortheyearended31.03.2012

DeferredtaxAsset

Openingbalance 0.00Createdduringtheyear 75.37Closingbalance 75.37 0.00

In accordance with AS 22

A n n u A l R e p o R t2 0 1 2 - 1 3

215

SignificantAccountingPolicies

1 BasisofPreparationofFinancialStatements

Thefinancialstatementshavebeenpreparedasofagoingconcernonhistoricalcostconventionandon accrual method of accounting in accordancewiththegenerallyacceptedaccountingprinciplesandtheprovisionsoftheCompaniesAct1956asadoptedbytheCompany

2 UseofEstimates

The preparation of the financial statements inconformity with generally accepted accountingprinciples requires the management to makeestimatesandassumptionsthataffecttheincomeandexpenditureduringthereportingperiodandthe assets and liabilities including contingentliabilities at the date of financial statements.The difference between the actual results andestimates are recognized in the period inwhichtheresultsareknown.

3 FixedAssets

Fixedassetsarecarriedatthecostofacquisitionor construction or book value less accumulateddepreciation. Cost includes value of internaltransfers for capital works, taken at actual/estimated factory cost/market price, whicheveris lower. Effects of extraordinary events such asdevaluation/revaluation in respect of long termliabilities/loansutilizedfortheacquisitionoffixedassetsisaddedtoreducedfromthecost.

4 IntangibleAssets

A. Intangibleassetsarecapitalizedatcostif

a. It is probable that the future economicbenefitsareattributabletotheassetwillflowtothecompanyand

b. The companywill have control over theassetsand

c. Thecostoftheseassetscanbemeasuredreliably and is more than ` 10000/-intangible assets are amortised overtheirestimatedusefullivesnotexceedingthree years in case of software and notexceedingtenyearsincaseofothersonastraightlinepro-ratamonthlybasis.

B. a. Expenditure on research including theexpenditure during the research phaseof Research & Development Projects ischargedtoStatementofprofitandlossintheyearofincurrence.

b. Expenditure incurred on developmentincluding the expenditure during thedevelopment phase of Research andDevelopmentProjectmeetingthecriteriaas per the Accounting standard onintangible assets is treated as intangibleasset.

c. Fixed assets acquired for purposes ofresearchanddevelopmentarecapitalised.

5 Depreciation

DepreciationonfixedassetsischargeduptototalcostoftheassetsonstraightlinemethodaspertheratesprescribedinScheduleXIVofthecompaniesAct, 1956, exceptwheredepreciation is chargedatratesdeterminedonthebasisofthetechnicallyestimatedusefullivesshownhereunder:-

Single Double Triple Shift Shift Shift

GeneralPlant&Machinery 8% 12% 16%

Buildings(Thirdclass) 3.5%

Electricalinstallations 8%

Officeandotherequipments 8%

Electronicdataprocessing 20% Equipments

In respect of additions/deductions from thefixed assets, depreciation is charged on pro-ratamonthlybasis.

Fixedassetscosting` 10,000/-or lessorwhosewrittendownvalueasattheopeningoftheyearis` 10,000/-orless,aredepreciatedfully.

6 InventoryValuation

i) Inventoryisvaluedatactual/estimatedcostornetrealizablevalue,whicheverislower.

ii) FinishedgoodsinPlantandworkinprogressarevaluedatactual/estimatedfactorycostor97.5%oftherealizablevalue,whicheverislower

216

iii) Inrespectofvaluationoffinishedgoodsinplantand work-in-progress, cost means factory cost,actual/estimatedfactorycostincludesexcisedutypayableonmanufacturedgoods.

iv) In respect of raw material, components, loosetools, stores and spares, cost means weightedaveragecost.

v) The component and material purchased/manufactured against production orders butdeclared surplus are charged off to revenueretaining residual value based on technicalestimates.

7 RevenueRecognition

Salesarerecordedbasedonsignificantrisksandrewardsofownershipbeingtransferredinfavourofthecustomer

8 EmployeeBenefits

Provident fund and Employees’ Family pensionscheme contributions are accounted for onaccrualbasis. Liability forEarned leave,Halfpayleave, Gratuity are accounted for in accordancewith actuarial valuation. The actuarial liability isdeterminedwith reference to employees at thebeginning of each calendar year. Liability duetowardscontributorymedicalschemeisaccountedbasedonthesalaryatthecommencementofthecalendaryear.

9 BorrowingCosts

Borrowing costs that are attributable to themanufacture, acquisition or construction ofqualifying assets, are includedaspartof costofsuchassets.

A qualifying asset is one that takes more thantwelvemonths to get ready for intendeduseorsale.

Otherborrowingcostsarerecognizedasexpenseintheperiodinwhichtheyareincurred.

10 Claimsby/AgainsttheCompany

i) Claims for liquidated damages against theCompany are recognised in accounts based

on management’s assessment of the probableoutcome with reference to the availableinformation supplemented by experience ofsimilartransactions.

ii) Claimsforexportincentives/dutydrawbacks/dutyrefunds and insurance claims etc are taken intoaccountonaccrual.

iii) Amountsdueinrespectofpriceescalationclaimsand/orvariation incontractworkarerecognizedas revenue only when there are conditions inthecontracts forsuchclaimsorvariationand/orevidence of the acceptability of the same fromcustomers. However, escalation is restricted tointrinsicvalue

11 TaxesonIncome

Currenttaxisdeterminedonthebasisoftaxableincome in accordance with the provisions ofthe IncomeTaxAct, 1961.Deferred tax liability/asset resulting from timing difference betweenaccounting income and taxable income isrecognisedconsideringthetaxrateandlawsthathave been enacted or substantively enacted ason the balance sheet date. Deferred tax assetis accounted for and carried forward only tothe extent that there is reasonable certaintythat sufficient future taxable income will beavailable againstwhich such deferred tax assetscan be realised. Deferred tax assets in respectof unabsorbed depreciation and carry forwardof losses are recognised only if there is virtualcertainty that there will be sufficient futuretaxableincomeavailabletorealisesuchassets.

12 Impairment

Thecarryingamountofcashgeneratingassetsisreviewedateachbalancesheetdatewherethereis any indication of impairment. An impairmentloss is recognised in the statementofprofitandloss where the carrying amount exceeds therecoverableamountofthecashgeneratingassets.Animpairmentlossisreversedifthereischangeintherecoverableamountandsuchlosseithernolongerexistsorhasdecreased.

A n n u A l R e p o R t2 0 1 2 - 1 3

217

Note-26OtherNotestoFinancialStatements

1. InlinewiththejointventureagreementbetweenBHELandGovernmentofKerala,5096000numberofshareswithfacevalue` 10eachheldbyKeralaElectrical & Allied Engineering Co. Ltd. as on31.03.2012, was transferred to government ofKerala.Thetransferwasexecutedon28.12.2012.Along with the existing 49000 shares, the totalholding by government of Kerala thus gotenhanced to 5145000 shares. The shareholdingpattern of the company as on 31.03.2013 is asdetailedunder:

Share holder Numberofshares

Valueofshares %

BHELanditsnominees 5355000 ` 53550000-00 51%

GovernmentofKeralaanditsnominees 5145000 ` 51450000-00 49%

2. EmployeegratuityandleaveencashmentduesareevaluatedthroughactuarialvaluationinlinewithAS-15.

3. Short term working capital loan amount of ` 170 Lakh advanced by M/s BHEL pending ason 01.04.2012 has been fully repaid along withtheaccruedinterestason31.03.2013.Detailsofinterestdisclosedunderrelatedpartydisclosure.

4. Theprovisionforhalfpayleaveason31.03.2013isnilasthecompanydoesnothavehalfpayleavescheme in force. The provision of ` 220365/-incorporated in the books of accounts during2011-2012 is merged with the provision forgeneralleaveencashment.

5. Trade payable includes ` 9111/- being stalechequesand` 103618duetosmallscaleunits.

6. As per the significant accounting policy salesare recorded based on the significant risks andrewardsofownershipbeingtransferredinfavourofthecustomer.Intwocases,theconsignmentsagainst invoices raised on 30.03.2013 havereachedthecustomeronlyon01.04.2013.AsperAS9,theunrealizedmarginof` 5.96Lakhisnotrecognizedinthebooksofaccounts.

7. The impact of providing full depreciation as pertheaccountingpolicy,onassetscostinglessthan` 10,000/-andalsowhosewrittendownvalueislessthan` 10,000/-ason01.04.2012isasunder.

Depreciationprovided@100% ` 856819-00 NormalDepreciation ` 91223-00 Excessamountcharged ` 765596-00

8. Balances under trade receivables, tradepayables, deposits, materials lying with sub-contractors/fabricators are reconciled and letterof confirmation has been obtained where everpossible.Inallothercases,reconciliationiscarriedout on an ongoing basis & provisions whereverconsiderednecessaryhavebeenmadeinlinewiththeguidelines.

9. An amount of ` 572361/- being the travellingexpensesoftheManagingDirector/OtherDirectorhas been included under the head travellingexpenses.

Breakupdetails

TAandDAtoManagingDirector:-` 543393.00 TAandDAtootherDirector:-` 28968.00

10. Contingentliabilities:-

a. Claimsagainstthecompanynotacknowledgedasdebt/deductible.

(`inLakh)

1 Retentiononaccountofliquidateddamages imposedby ICFChennaifor which request for waival, stillunderconsideration. 51.39

2 Retention by ICF Chennai onaccountofpricefallclause 6.72

3 Retention by various Railways onstatutoryratevariationclause 8.57

Total 66.68

Effortsarestillonandthecompanyishopefulof getting waival towards the LD / price/statutoryvariationclauseimposed.

b. Details of letter of credit established infavour of suppliers pending clearance ason 31.03.2013 is ` 315.70 Lakh. Supplies

218

againsttheseLettersofcreditswerereceived,accountedandreflectedinthetradepayableaccount.

c. Detailsofbankguaranteesissued,pendingason31.03.2013is` 54.99Lakh.

d. Billsroutedthroughbankbysupplierspendingclearanceason31.03.2013isnil.

11. Inventoryincludesthefollowing:

a. Material sent for job working – at cost ` 403851.00

b. Material sent for DG set installation: ` 179692.00

12. Detailsofmiscreceipts

a. Noticepayfromresignedemployee:` 115785.00

b. Applicationfees:` 1100.00

c. Others(includingroundingoff):` 3130.00

13. Liquidated damages charged off ` 4800/- beingrecoverybyBHELBhopaltowardsdelayedsupplies.

14. RelatedpartytransactionsasperAS18

A. Relatedpartywherecontrolexists

Nameof relatedparty:-BharatHeavyElectricals Limited

Natureofrelationship:-Holdingcompany

B. Otherrelatedparties(Keymanagementpersonnel)

Shri. L. Gopalakrishnan Managing Director (on deputationfromBHEL)

Transactionswiththerelatedparty

(`inLakh)

Sl. No.

Natureoftransaction

Holdingcompany

KeyManagementpersonnel

1 Saleofgoods 309.06 -

2 Amountduefrom 15.05

3 Advanceagainstordersreceived 32.11 -

4 InterestonWCLpaid 16.12 -

15. Detailsofpriorperiodexpensesandincome

A. Priorperiodexpense

a. Unloadingcharges :-` 13500.00

b. Repairstomachinery :-` 42499.00

Total :-` 55999.00

B. PriorperiodIncome

a. Tenderdocumentcost :-` 25515.00

b. Freightcharges :-` 15825.00

c. InterestonTDR :-` 7877.00

d. TransitInsuranceclaim :-` 20135.00

16. Miscellaneousexpensesfurnishedundernote21includes,

A. PaymenttoAuditors

a. Statutoryauditfees :-` 25000.00

b. Taxauditfees :-` 2500.00

c. VATauditfees :-` 4000.00

B. Others

a. GuestExpenses :-` 126632.00

17. ExpenditureonRent:-

a. Guesthouse(Net) :-` 167718.00

b. Recreationclub :-` 31200.00

18. Break-upofrepairsandmaintenance

a. Building :-` 184952.00

b. Plant&machinery :-` 578209.00

c. Others :-` 267280.00

19. DisclosureasperAS7–Nil

20. RemunerationpaidtotheDirectors(includingtheManagingDirector)

a. Salariesandallowances :-` NIL

b. ContributiontoPF :-`NIL

c. ContributiontoGratuity :-` NIL

The Managing Director is permitted to availthe company’s vehicle for his private use onchargeablebasisaspertherulesofthecompanysubjecttoDPEguidelines

The Managing Director is provided with thebachelor accommodation in the company guesthouseonrecoverablemonthlyratesfixedbythecompany.

21. Asnoseparategratuityfundexistsinthecompany,thegratuity accruals (expenses for the year) aregrouped under the general heading salary andother allowances. The last year’s figures areregroupedaccordingly.

A n n u A l R e p o R t2 0 1 2 - 1 3

219

22. QuantitativeDetails-Production,SalesandClosingStock(`inLakh)

OPStock Production Sales CLStock

Item Qty(Nos)

Value Qty(Nos)

Value Qty(Nos)

Value Qty(Nos)

Value

BAGPupto110KVA 17 13.30 115 80.70 128 91.85 4 2.15

BAGPabove110KVA 11 38.47 43 97.79 49 117.98 5 18.28

25KWTrainlightingAlternators 11 16.53 142 300.99 153 317.52

320KVAU/SDGSets 0 0 0 0.00 0 0.00

SpecialAlternators/AuxAlternators 11 41.70 40 122.28 42 132.94 9 31.04

DGSets 0 0 16 281.60 16 281.60

SLRPC(500KVA)U/SDGset 1 82.37 1 82.37

570KVADGSetforPowerCar 25 710.59 25 710.59

InductionMotors 68 136.82 68 136.82

Spares 0 0.08 148.74 119.67 29.15

Services&Installation 0 0 63.33 63.33

GSOS 0 0 417.51 417.51

ED 13.62 177.55 181.20 9.97

Grossturnover 50 123.70 450 2620.27 482 2653.38 18 90.59

23. ConsumptionofImportantRawMaterials(`inLakh)

OPStock Purchases ClosingStock Consumption

Item Unit Qty Value Qty Value Qty Value Qty Value

Lamination Kgs 49063.00 58.09 82648.34 113.53 48345.60 66.41 83365.74 105.21

DieselEngine Nos 0.00 0.00 42.00 517.56 0.00 42.00 517.56

Copper Kgs 8165.88 41.42 52606.05 121.77 10813.25 25.03 49958.68 138.16

Steel&Aluminium Kgs 31785.75 16.71 108127.52 56.11 25572.13 13.27 114341.14 59.55

Casting Bulk 12.54 104.69 18.96 0.00 98.27

Bearings&Others Bulk 8.30 113.06 10.32 0.00 111.04

ControlPanel Nos 0.00 1.00 7.29 0.00 1.00 7.29

Generators Nos 0.00 23.00 347.40 0.00 23.00 347.40

TorroidalCoreNos 0.00 1306.00 31.91 314.00 7.67 992.00 24.24

Others 52.77 327.81 60.47 0.00 320.11

189.83 1741.13 202.13 1728.83

220

24. ConsumptionofImportedandIndigenousMaterials(`inlakh)

Fortheyearended31.03.2013

Fortheyearended31.03.2012

RawMaterials:

Imported 1.41% 24.24 2.76% 40.52

Indigenous 98.59% 1690.15 97.24% 1420.72

Total 1714.39 1461.24

StoresAndSpareParts

Imported 0.00 0.00

Indigenous 14.44 8.87

Total 14.44 8.87

TotalConsumption 1728.83 1470.11

CIFValueOfImports

RawMaterials 31.91 40.52

CapitalGoods

25. DeferredTaxAsset

Year2011-2012

Lossfortheyear 37.52

Lessdepreciationasperaccounts 92.93 -55.41

AddDepreciationasperIncometaxAct 138.09

Add/Deductfortimingdifferences 0.00 138.09

NetLosscarryforwardasperIncometax 82.68

Year2012-2013

Lossduringtheyear 130.33

Lessdepreciation 100.48 29.85

AddDepreciationasperIncometaxAct 119.76

Add/Deductfortimingdifferences 0.00 119.76

NetLosscarryforwardasperIncometax 149.61

TotalLoss 232.29

DeferredTaxAsset 75.37

AsperAS22andinlinewiththeexplanationnote9onAS22,asprofitsduring2013-14isexpected,deferredtaxassetshasbeenbookednow.

A n n u A l R e p o R t2 0 1 2 - 1 3

223

IndependentAuditors'ReportToTheBoardofDirectorsof BharatHeavyElectricalsLimited

ReportontheConsolidatedFinancialStatements

WehaveauditedtheaccompanyingconsolidatedfinancialstatementsofBharatHeavyElectricalsLimited(the“Company”) and its subsidiaries and joint ventures (collectively referred to as “the Group”), which comprisetheConsolidatedBalanceSheetasatMarch31,2013, theConsolidatedStatementofProfitandLossand theConsolidatedCashFlowStatementfortheyearthenendedandasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

Management’sResponsibilityfortheConsolidatedFinancialStatements

Management is responsible for the preparation of these consolidated financial statements that give a trueand fairviewof theconsolidatedfinancialposition,consolidatedfinancialperformanceandconsolidatedcashflowsof theGroup in accordancewith accountingprinciples generally accepted in India includingAccountingStandardsreferredtoinSection211(3C)oftheCompaniesAct,1956(“theAct”).Thisresponsibilityincludesthedesign,implementationandmaintenanceofinternalcontrolrelevanttothepreparationandpresentationoftheconsolidatedfinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditors’Responsibility

Ourresponsibility is toexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewiththeStandardsonAuditingissuedbytheInstituteofCharteredAccountantsof India. Those Standards require thatwe complywith ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the consolidated financial statements are free frommaterialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in theconsolidatedfinancial statements. Theprocedures selecteddependon theauditor’s judgement, including theassessmentoftherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheGroup’spreparationandpresentationoftheconsolidatedfinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,andbasedonconsiderationoftheindividualreportsoftheotherauditorsonthefinancialstatementsasstatedinpara1belowandprovisionalfinancialstatementsasstatedinpara2below,theconsolidatedfinancialstatementsgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

(a) inthecaseoftheConsolidatedBalanceSheet,ofthestateofaffairsoftheGroupasatMarch31,2013;

224

(b) inthecaseoftheConsolidatedStatementofProfitandLoss,oftheprofitoftheGroupfortheyearendedonthatdateand

(c) inthecaseoftheConsolidatedCashFlowStatement,ofthecashflowsoftheGroupfortheyearendedon thatdate.

OtherMatters

1. TheauditofthefollowingentitiesinBHELgrouphasbeencarriedoutbytheotherauditorswhosereporthasbeenfurnishedtous,andouropinion,insofarasitrelatestoAssets,RevenueandNetCashFlowsfortheentities,isbasedsolelyonthereportsoftheotherauditors.

(`inCrore)

NameoftheCompany Assets Revenue NetCashFlows

A.Subsidiaries

BharatHeavyPlateandVesselsLimited 322.31 243.47 17.24

BHELElectricalMachinesLimited 26.20 26.71 0.36

B.JointVentures

BHEL-GEGasTurbineServicesPrivateLimited 214.11 413.55 36.57

2. InrespectofthefollowingJointVentureswedidnotcarryouttheaudit.Theseunauditedfinancialstatementshavebeencompiledbythemanagement,andouropinion,insofarasitrelatestotheassetsandrevenuesincludedinrespectoftheseJointVentures,isbasedsolelyonthesecompiledfinancialstatementsasfurnishedtousbythemanagement.SincethefinancialstatementofthesejointventuresforthefinancialyearendedMarch31,2013werenotaudited ,anysubsequentadjustment to thebalancescouldhaveconsequentialeffectsontheattachedconsolidatedfinancialstatements.

(`inCrore)

NameoftheCompany Assets Revenue NetCashFlows

DadaDhuniwaleKhandwaPowerLtd 23.09 0.38 -0.19

RaichurPowerCorporationLtd 1559.69 - 0.13

NTPCBHELPowerProjectsLimited 97.13 58.91 -2.42

LaturPowerCompanyLimited 2.76 0.21 0.03

3. TheaccountsofPowerPlantPerformanceImprovementsLtdaJointVentureofBHELhavenotbeenconsolidatedasthesaidcompanyisunderliquidationandfullamountofequityinvestmenthasbeenprovided.

ForGandhiMinocha&coCharteredAccountants

FRN000458N

ForS.N.Dhawan&Co.CharteredAccountants

FRN000050N

Date:May23,2013Place:NewDelhi

(BhupinderSingh)M.No092867

(SureshSeth)M.No010577

A n n u A l R e p o R t2 0 1 2 - 1 3

225

ConsolidatedBalanceSheetAsatMarch31,2013 (`inCrore)

Particulars NoteNo. Figuresasat31.03.2013 Figuresasat31.03.2012I. EQUITYANDLIABILITIES(1) Shareholders'Funds

(a) Sharecapital 1 489.52 489.52(b) Reserves&surplus 2 30043.21 30532.73 24913.54 25403.06

(2) MinorityInterest 4.70 4.97(3) Non-currentliabilities

(a) Long-termborrowings 3 1233.03 282.07(b) Otherlongtermliabilities 4 5811.43 7574.74(c) Longtermprovisions 5 5962.52 13006.98 5023.80 12880.61

(4) Currentliabilities(a) Short-termborrowings 6 1390.54 86.75(b) Tradepayables 7 9753.80 10352.67(c) Othercurrentliabilities 8 14025.89 16031.98(d) Short-termprovisions 9 3038.06 28208.29 2670.24 29141.64TOTAL 71752.70 67430.28

II. ASSETS(1) Noncurrentassets(a) Fixedassets

(i) Tangibleassets 10 4337.28 4195.57(ii) Intangibleassets 329.74 323.08(iii) Capitalwork-in-progress 2329.48 1739.20(iv) Intangibleassetsunderdevelopment 39.42 7035.92 24.21 6282.06

(b) Non-currentinvestments 11 5.94 5.94(c) Deferredtaxassets(net) 12 1555.80 1549.48(d) Long-termloansandadvances 13 929.78 957.45(e) Othernon-currentassets 14 10814.43 13305.95 9416.26 11929.13(2) Currentassets(a) Inventories 15 11869.03 13633.40(b) Tradereceivables 16 29370.29 26551.33(c) Cashandbankbalances 17 7845.05 6734.33(d) Shorttermloansandadvances 18 2123.73 2148.04(e) Othercurrentassets 19 202.73 51410.83 151.99 49219.09

TOTAL 71752.70 67430.28SignificantAccountingPoliciesOthernotestofinancialstatements 32TheAccompanyingNotes1to32&Significantaccountingpoliciesformanintegralpartoftheconsolidatedfinancialstatements.

ForandonbehalfofBoardofDirectors

(I.P.Singh)CompanySecretary

(P.K. Bajpai)Director(Finance)

(B. Prasada Rao)ChairmanandManagingDirector

AsperourreportofevendateattachedForS.N.Dhawan&Co.CharteredAccountants

FRN-000050N

ForGandhiMinocha&Co.CharteredAccountants

FRN-000458N

Place:NewDelhiDate:May23,2013

(SureshSeth)Partner

M.No.10577

(BhupinderSingh)Partner

M.No.092867

226

ConsolidatedStatementofProfitandLossFortheyearended31stMarch,2013 (`inCrore)

Particulars NoteNo.

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

I. Revenuefromoperations(Gross) 20 50672.84 49897.57Less:Exciseduty 1930.15 1862.40Less:Servicetax 636.38 436.22Revenuefromoperations(Net) 48106.31 47598.95

II. Otheroperationalincome 21 809.53 756.27III. Otherincome 22 1128.76 1272.03

Totalrevenue(ItoIII) 50044.60 49627.25IV. Expenses

Costofmaterialconsumption,erectionandengineeringexpenses 23 28171.38 29132.69(Increase)/Decreaseinworkinprogress&finishedgoods 24 121.20 -829.90Employeebenefitsexpense 25 5824.00 5529.37Financecosts 26 127.61 53.07Depreciation&amortisationexpense 10.1 957.18 803.24Otherexpensesofmanufacture,administration,sellinganddistribution 27 3808.31 3251.16Provisions(net) 28 1583.76 1405.53Less:Costofjobsdoneforinternaluse 75.86 104.11Totalexpenses 40517.58 39241.05

V. Profitbeforepriorperiodadjustments,exceptionalitemsandtax 9527.02 10386.20

VI. Add/less:Priorperiodadjustments(net) 29 -0.45 -19.13VII. Add/Less:Exceptionalitems 30 4.14 0.16VIII. Profitbeforetaxfortheyear 9530.71 10367.23IX. Less:Taxexpense 31

a)Currrenttax 2843.93 2664.28b)Deferredtax -6.32 2837.61 615.69 3279.97

X. Profitfortheyearbeforeminorityinterest 6693.10 7087.26Less:Minorityinterest -0.27 -0.18

XI. Profitafterminorityinterestfortheyear 6693.37 7087.44Earningspershare(Basic&Diluted)(Referpointno.15ofNote32)in` 27.35 28.96FaceValueperShare(Referpointno.15ofNote32)in` 2.00 2.00SignificantAccountingPoliciesNotestoFinancialStatements 32Theaccompanyingnotes1to32&significantaccountingpoliciesformanintegralpartoftheconsolidatedfinancialstatements.TotalRevenueincludes`470.48Crore(previousyear`335.49Crore)shareofjointlycontrolledentities.TotalExpensesincludes`405.75Crore(previousyear`279.18Crore)shareofjointlycontrolledentities.

ForandonbehalfofBoardofDirectors

(I.P.Singh)CompanySecretary

(P.K. Bajpai)Director(Finance)

(B. Prasada Rao)ChairmanandManagingDirector

AsperourreportofevendateattachedForS.N.Dhawan&Co.CharteredAccountants

FRN-000050N

ForGandhiMinocha&Co.CharteredAccountants

FRN-000458N

Place:NewDelhiDate:May23,2013

(SureshSeth)Partner

M.No.10577

(BhupinderSingh)Partner

M.No.092867

A n n u A l R e p o R t2 0 1 2 - 1 3

227

ConsolidatedCashFlowStatementfortheyearendedMarch31,2013

(`inCrore)

2012-13 2011-12A. CASHFLOWFROMOPERATINGACTIVITIESNetProfitBeforeTaxasperStatementofProfitandLoss 9530.71 10367.23Adjustmentfor

Depreciation/Amortisation 957.95 805.91LeaseEqualisation 0.29 -3.82Provisions(Net) 438.03 540.70BadDebts&LD&investmentwrittenoff 378.87 97.30ProfitonsaleofFixedassets -3.42 -4.01ProfitonsaleofLongTermInvestments -31.50Financecosts 127.61 53.07Interest/DividendIncome -632.59 -837.02

OperatingProfitbeforeWorkingCapitalchanges 10765.95 11019.36Adjustmentfor

Trade&OtherReceivables -4646.53 -8806.90Inventories 1767.62 -2615.91TradePayable&Advances -3021.89 2899.91

Cashgeneratedfromoperations 4865.15 2496.46DirectTaxesPaid(Netofrefund) -3113.97 -3197.09NETCASHINFLOW/(OUTFLOW)FROMOPERATINGACTIVITIES 1751.18 -700.63

B. CASHFROMINVESTINGACTIVITIESPurchaseofFixedAssets -1755.30 -1585.48SaleandDisposalofFixedAssets 29.01 2.07SaleandDisposalofLong-termInvestments 31.50InvestmentinSubsidiary&JointVentures 0.00 5.36Interest&Dividendincome 581.85 996.52NETCASHUSEDININVESTINGACTIVITIES 1112.94 581.53

C. CASHFLOWFROMFINANCINGACTIVITIESProceedsfromShort-term&Long-termborrowings(Net) 2267.45 179.77DividendPaid(includingtaxondividend) -1673.50 -1818.93Financecosts -121.48 -50.75NETCASHUSEDINFINANCINGACTIVITIES -472.47 1689.91

D. NETINCREASE/(DECREASE)INCASHANDCASHEQUIVALENTS 1110.72 -2972.07OpeningBalanceofCashandCashEquivalents 6734.33 9706.40ClosingBalanceofCashandCashEquivalents(Refernoteno.17) 7845.05 6734.33

Note1:Cash&CashEquivalentsconsistsofcashandbankbalance,margindeposit&depositswithbanks.2:Previousyear'sfigureshavebeenregrouped/rearrangedwherevernecessary.3:Cash&CashEquivalentsincludes`3.52Crore(`2.18Crore)unclaimeddividendlyingindesignatedbankaccounts.

ForandonbehalfofBoardofDirectors

(I.P.Singh)CompanySecretary

(P.K. Bajpai)Director(Finance)

(B. Prasada Rao)ChairmanandManagingDirector

AsperourreportofevendateattachedForS.N.Dhawan&Co.CharteredAccountants

FRN-000050N

ForGandhiMinocha&Co.CharteredAccountants

FRN-000458N

Place:NewDelhiDate:May23,2013

(SureshSeth)Partner

M.No.10577

(BhupinderSingh)Partner

M.No.092867

228

1-ShareCapital(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Authorised

1000,00,00,000equitysharesof` 2each(previousyear1000,00,00,000equitysharesof`2each) 2000.00 2000.00

Issued,Subscribed&PaidupCapital 489.52 489.52

244,76,00,000 fullypaidequitysharesof`2each(previous year 244,76,00,000 equity shares of `2each)

a) Out of which 122,38,00,000 equity shares of ` 2 each (previous year 122,38,00,000 equitysharesof`2each)allottedasbonusshares

b) The reconciliation of the number of equitysharesoutstandingissetoutbelow:

Number Amount Number Amount

Sharesoutstandingatthebeginningoftheyear 2447600000 489.52 489520000 489.52

Sharesissuedduringlastyeartowardssplitofsharesfrom` 10to`2pershare - - 1958080000

-

Sharesboughtbackduringtheyear - - - -

Sharesoutstandingattheendoftheyear 2447600000 489.52 2447600000 489.52

c) Detailsof sharesheldbyshareholdersholdingmorethan5%sharesattheyearend

No.ofshares

%ageofholding

No.ofshares

%ageofholding

PresidentofIndia(POI)alongwithnominees 1657552000 67.72% 1657552000 67.72%

LifeInsuranceCorporationofIndia 141433662 5.78% 141433662 5.78%

FaceValuepershare(`) 2.00 2.00

A n n u A l R e p o R t2 0 1 2 - 1 3

229

2-Reserves&surplus

3-Long-termborrowings

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Capitalreserve

OpeningBalance 2.74 2.74

Add:Additions - -

Less:Deductions - 2.74 - 2.74

Generalreserve

Openingbalance 23871.82 18868.78

Add:transferfromsurplusofprofit&loss 5004.09 5003.04

Less:Deductions 28875.91 23871.82

Surplusfromstatementofprofit&loss

Openingbalance 1038.98 793.97

Add:netprofitfortheyear 6693.37 7087.44

Less:Adjustments -0.46

Profitavailableforappropriation 7731.89 7881.41

Less:Appropriation-

-Generalreserve 5004.09 5003.04

-Dividend(includinginterimdividendof ` 535.55Crore,previousyear`681.93Crore) 1339.66 1582.65

-Corporatedividendtax(including`86.92 Crore,previousyear`110.62Crore) 223.58 1164.56 256.74 1038.98

30043.21 24913.54

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Secured

Loansfrombanks 304.22 -

LoansfromPowerFinanceCorporationLtd. 799.31 158.38

(SecuredagainstassetspertainingtoYerramurusThermalPowerProject)

1103.53 158.38

Unsecured

Longtermmaturitiesoffinanceleaseobligations 129.50 123.69

129.50 123.69

1233.03 282.07

Includes`1103.82Crore(previousyear`158.64Crore)shareofjointlycontrolledentities.

230

4-Otherlong-termliabilities

5-Long-termprovisions

6-Short-termborrowings

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Tradepayables 756.09 603.52

Advancesreceivedfromcustomers&others 4964.99 6849.65

Depositsfromcontractors&others 90.35 121.57

5811.43 7574.74

Includes`15.64Crore(previousyear`18.35Crore)shareofjointlycontrolledentities.

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Provisionforemployeebenefits 2196.52 2085.57

ContractualObligation 3621.41 2802.19

Otherlong-termprovisions 144.59 136.04

5962.52 5023.80

Includes`6.13Crore(previousyear`4.54Crore)shareofjointlycontrolledentities.

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Secured

Loansfrombanks*

WorkingcapitaldemandloanfromKPCL 100.35 84.49

Cashcredit 3.18 0.12

*(securedbyhypothecationofrawmaterials,components,stores&spares,work inprogress,finishedgoods,TradeReceivablesandothercurrentassets)

Packingcredit 1286.00 -

(securedbyfirstchargebywayofhypothecationof rawmaterials,components,work-in-progress,finishedgoods,stores, TradeReceivables andother current assets bothpresentandfuture)

Unsecured

Fromcompanies 0.01 0.08

Frombonds 1.00 2.06

1390.54 86.75

Repayablewithinaperiodof6to9monthsatinterestraterangingfrom7.25%to7.50%

Includes`100.36Crore(previousyear`84.52Crore)shareofjoinltycontrolledentities.

A n n u A l R e p o R t2 0 1 2 - 1 3

231

7-Tradepayables

9-Short-termprovisions

8-Othercurrentliabilities

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

TradePayables 9678.67 10241.74

Acceptances 75.13 110.939753.80 10352.67

Includes `144.81Crore(previousyear`94.15Crore)shareofjointlycontrolledentities.

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Provisionforemployeebenefits 488.71 402.30

Proposeddividend 808.87 905.48

Corporatedividendtax 137.47 146.89

Contractualobligation 1391.21 1065.68

Othershort-termprovisions 211.80 149.89

3038.06 2670.24

Includes `9.01Crore(previousyear`11.11Crore)shareofjointlycontrolledentities.

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Currentmaturitiesoffinanceleaseobligation 75.38 62.68

Advancesreceivedfromcustomers&others 11301.42 13174.08

DepositsfromContractors&others 485.15 448.05

Unclaimeddividend 3.52 2.18

Otherpayables/liabilities* 2140.99 2328.31

Interestaccruedbutnotdue 5.38 1.50

Interestaccruedanddueon:

StateGovernmentLoans 2.33 2.33

Financelease 7.07 4.82

Bonds&others 4.65 8.03

14025.89 16031.98

Advancesreceivedfromcustomers&othersincludevaluationadjustment

-`5759.02Crore(previousyear`7150.34Crore)

Includes`37.64Crore(previousyear`103.14Crore)shareofjointlycontrolledentities.

*includesEmployeesduesandStatutorydues

232

10-Fixedassets(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

(i) Tangibleassets

Grossblock 10555.85 9530.68

Less:Accumulateddepreciation 6221.92 5338.75

Less:Leaseadjustmentaccount -3.35 -3.64

NetBlock 4337.28 4195.57

(ii) Intangibleassets

Grossblock(includinggoodwillonconsolidation) 528.05 486.47

Less:Accumulateddepreciation 198.31 163.39

Netblock 329.74 323.08

(iii) Capitalworkinprogress

Constructionwork-in-progress-Civil 309.47 376.51

Constructionstores(includingintransit) 11.27 9.99

Plant&machineryandotherequipments

-UnderErection/Fabrication/awaitingerection 1731.32 1078.62

-Intransit 277.30 273.79

Leasedassetsundererection 0.12 0.28

2329.48 1739.20

(iv) Intangibleassetsunderdevelopment 39.42 24.21

39.42 24.21

Total 7035.92 6282.06

RefertodetailsinNoteno.10.1

Includes` 1198.13Crore(previousyear`437.66Crore)shareofjointlycontrolledentities.

A n n u A l R e p o R t2 0 1 2 - 1 3

233

Note10.1Fixedassets-consolidated

(`inCrore)

GrossBlock Depreciation NetBlockCostAsat

31.03.2012

Additions/adjustmentsduringthe

year

Deductions/adjustmentsduringthe

year

CostAsat

31.03.2013

Leaseadjustment

Account

Depreciation/Amortisation

upto31.03.2013

Asat31.03.2013

Asat31.03.2012

Depreciation/Amortisationfortheyear

Factory/OfficeComplex(i)TangibleAssetsFreeholdland(incl.developmentexp.) 31.75 0.94 14.41 18.28 18.28 31.75Leaseholdland(incl.developmentexp.) 6.05 0.15 0.00 6.20 0.41 5.79 5.66 0.01Roads,bridgesandculverts 20.79 5.83 0.02 26.60 5.34 21.26 16.91 1.45Buildings 1346.75 258.80 0.48 1605.07 603.28 1001.79 866.43 123.57Leasholdbuildings 3.31 0.19 3.12 1.39 1.73 1.98 0.05Drainage,sewerageandwatersupply 21.80 3.39 0.02 25.17 12.03 13.14 10.30 0.56Railwaysiding 15.05 1.56 16.61 9.25 7.36 6.38 0.60Locomotivesandwagons 31.13 13.35 44.48 21.03 23.45 11.77 1.67Plant&Machinery 6036.38 562.06 18.28 6580.16 4051.40 2528.76 2614.70 644.64Electronicdataprocessingequipments 141.75 8.09 1.84 148.00 140.82 7.18 6.33 2.34Electricalinstallations 278.98 23.51 0.19 302.30 121.29 181.01 175.80 18.16ConstructionEquipment 217.39 36.86 0.62 253.63 168.59 85.04 78.50 30.19Vehicles 20.10 0.07 1.05 19.12 16.65 2.47 3.51 0.51Furniture&fixtures 45.70 9.26 0.64 54.32 17.25 37.07 31.80 3.52Office&otherequipments 147.61 23.86 1.24 170.23 82.04 88.19 74.39 9.65Fixedassetscostingupto`10,000/- 97.63 10.05 1.57 106.11 106.11 10.03Capitalexpenditure 0.44 0.44 0.44AssetsGivenonLease 497.15 497.15 3.35 493.79 6.71 3.79 0.15P&Mtakenonlease 0.16 0.16 0.16EDPEquipmenttakenonlease 341.13 81.08 20.89 401.32 233.55 167.77 156.58 68.26Office&otherequipmenttakenonlease 6.43 1.46 0.91 6.98 3.39 3.59 3.87 0.85TotalTangibleAssets-factory 9307.32 1040.48 62.35 10285.45 3.35 6088.21 4200.59 4100.45 916.21(ii)IntangibleAssetsGoodwillonconsolidation 185.87 185.87 185.87 185.87-InternallydevelopedSoftware 0.66 0.66 0.61 0.05 0.08Others 29.97 10.19 0.06 40.10 23.45 16.65 15.73 9.29-OthersSoftware 119.88 20.93 0.12 140.69 120.30 20.39 9.88 10.40TechnicalKnow-how 141.30 10.58 0.00 151.88 45.10 106.78 110.45 14.24Others 8.85 8.85 8.85 0.05 0.05TotalIntangibleAssets-Factory 485.87 42.36 0.18 528.05 198.31 329.74 321.98 34.06TotalofFactoryAssets 9793.19 1082.84 62.53 10813.50 3.35 6286.52 4530.33 4422.43 950.27Township/Residential(i)TangibleAssetsFreeholdland(incl.developmentexp.) 2.17 2.17 2.17 2.17Leaseholdland(incl.developmentexp.) 1.99 0.05 2.04 0.62 1.42 1.41 0.02Roads,bridgesandculverts 5.29 0.59 5.88 3.11 2.77 2.27 0.09Buildings 134.95 44.19 3.13 176.01 68.08 107.93 69.10 3.18Leaseholdbuildings 0.27 0.27 0.21 0.06 0.07 0.01Drainage,sewerageandwatersupply 17.41 0.17 0.00 17.58 14.72 2.86 3.07 0.38PlantandMachinery 17.55 2.27 0.01 19.81 12.56 7.25 6.37 1.37Electricalinstallations 18.20 0.89 0.09 19.00 15.35 3.65 3.32 0.49Vehicles 1.08 0.01 1.07 1.02 0.05 0.07 0.01Furniture&fixtures 0.94 0.12 0.03 1.03 0.45 0.58 0.57 0.07Office&otherequipments 21.67 1.36 0.10 22.93 14.98 7.95 7.80 1.11Fixedassetscostingupto`10,000/- 2.44 0.18 0.01 2.61 2.61 0.18TotalTangibleAssets-Township 223.96 49.82 3.38 270.40 133.71 136.69 96.22 6.91TotalofTownshipAssets 223.96 49.82 3.38 270.40 133.71 136.69 96.22 6.91TotalTangibleAssets 9531.28 1090.30 65.73 10555.85 3.35 6221.92 4337.28 4196.67 923.12TotalIntangibleAssets 485.87 42.36 0.18 528.05 198.31 329.74 321.98 34.06Totaloffactory&township 10017.15 1132.66 65.91 11083.90 3.35 6420.23 4667.02 4518.65 957.18Previousyear 8344.13 1716.38 43.36 10017.15 3.64 5502.14 4518.65 3609.71 803.24GrossBlockasat31.03.2013includesassetscondemnedandretiredfromactiveuse`61.57Crore(Previousyear`59.20Crore)NetBlockasat31.03.2013includesassetscondemnedandretiredfromactiveuse`0.14Crore(Previousyear`0.18Crore)GrossBlockexcludescostofassetspurchasedoutofgrantreceivedfromGovtofIndiaforresearchasexecutingagencysincethepropertydoesnotvestwiththeCompany.

2012-13 2011-1230.81 30.81

Thereisnoimpairmentlossinfixedassetsduringtheyear.GrossBlockincludes `21.12Crore(previousyear`31.43Crore)shareofjointcontrolledentities.Depreciationfortheyearincludes`1.58Crore(previousyear`1.28Crore)shareofjointcontrolledentities.

234

11-Non-currentinvestments (`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

LongTermInvestments(atcost)

UnquotedShares(Fullypaidup):

TRADE:

1402 (previous year 1402) Equity shares of ` 10/- each(Previousyear`10each)ofEngineeringProjects(India)Ltd. * *

490(previousyear490)Equitysharesof 10/-each(Previousyear`10each)ofEngg.Projects(I)Ltd. 0.01 0.01

728960(previousyear728960)Equitysharesof`10/-eachofAPGasPowerCorporationLtd. 0.91 0.91

5000000 (Previous year 5000000) Equity shares of ` 10/-eachofNeelachalIspatNigamLtd. 5.00 5.92 5.00 5.92

JointVenturesCompanies

1999999 (previous year 1999999) Equity Shares of ` 10/-eachofPowerplantPerformanceImprovementLtd. 2.00 2.00

Less:Provisionfordimunitioninvalue 2.00 0.00 2.00 0.00

OTHERTHANTRADE

3sharesof` 100/-eachofBHELHouseBuildingCooperativeSocietyLtd.,Hyderabad * *

250 shares of` 10/- eachof BHPVEmployees ConsumersCooperativeStoresLtd. * *

10sharesof` 50/-eachofCuffeParadePersopolisPremisesCooperativeSocietyLtd.,Mumbai * *

20sharesof` 50/-eachofHillViewCooperativeHousingSocietyLtd.,Mumbai * 0.01 * 0.01

ShareMoneypaidinadvance

M/s.RitaEnterprises,Mumbaiforallotmentof50sharesof `10each

* *

M/s.AsishEnterprises,Mumbaiforallotmentof50sharesof `10each

* *

*Valueoflessthan`1lakh/-

5.94 5.94

AggregatevalueofUnquotedInvestments 5.94 5.94

AggregateprovisionindiminutioninvalueofInvestments

2.00 2.00

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235

12-Deferredtaxassets(Net)

13-Long-termloansandadvances

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Provisions 1091.82 1021.00

Statutarydues 484.03 555.64

ModvatAdjustment 60.79 75.57

Others 34.18 37.37

1670.82 1689.58

DeferredTaxLiabilities

Depreciation 115.02 140.10

Deferredtaxassets(net) 1555.80 1549.48

Includes`4.36Crore(previousyear`3.24Crore)shareofjointlycontrolledentities.

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Capitaladvance 325.67 308.52

Deposits 54.30 44.52

Loanstoemployees 1.47 1.68

LoanstoPublicSectorUndertakings 12.00 16.00

LoanstoOthers 0.00 0.01

Interestaccruedandordueonloans 0.56 394.00 0.78 371.51

Advances(Recoverableincashorinkindorforvaluetobereceived)

Forpurchases 104.27 402.95

ToOthers 70.04 174.31 118.02 520.97

Deposits

Balancewithcustoms,PortTrustandotherGovt.Authorities 42.54 38.56

AdvanceTax/TDS(NetofProvisionforTaxation) 341.94 71.90

952.79 1002.94

Less:Provisions 23.01 45.49

929.78 957.45

Subclassification:-

Secured,consideredgood 12.16 17.81

Unsecured,consideredgood 917.62 939.64

Doubtful 23.01 45.49

952.79 1002.94

Includes:

DuefromOfficers 0.03 -

Includes`264.67Crore(previousyear`287.61Crore)shareofjointlycontrolledentities.

236

14-Othernon-currentassets

15-Inventories

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Longtermtradereceivables 13099.34 11505.74

Less:Provisionforbad&doubtfuldebts 1804.85 1749.90

Less:Automaticpricereductionadjustmenta/c 577.83 10716.66 361.38 9394.46

Pre-operativeExpenses/Preliminaryexpenses 97.77 21.80

10814.43 9416.26

Subclassification:Longtermtradereceivables

Secured,consideredgood - -

Unsecured,consideredgood 10716.66 9394.46

Doubtful 2382.68 2111.28

13099.34 11505.74

Longtermtradereceivablesincludedeferreddebts-

-`9859.62Crore(previousyear` 8194.77Crore)

Includes`9.34Crore(previousyear`1.41Crore)shareofjointlycontrolledentities.

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Rawmaterial&components 4516.79 4971.92

Material-in-transit 708.70 5225.49 1859.24 6831.16

Work-in-progress(includingitemswithsub-contractors)

4202.73 4841.46

Finishedgoods 1361.39 953.79

Interdivisiontransfersintransit 297.06 1658.45 199.60 1153.39

Stores&spareparts

Production 243.40 214.56

Fuelstores 24.22 15.19

Miscellaneous 48.15 315.77 38.29 268.04

Materialswithfabricators/contractors 234.95 316.70

Loosetools 44.58 46.38

Scrap(atestimatedrealisablevalue) 67.21 68.35

Nonmovinginventory 185.30 176.62

Less:Provisionfornon-movinginventory 65.45 119.85 68.70 107.92

11869.03 13633.40

RefertoSignificantAccountingPolicyNo.9regardingmodeofvaluation

Includes` 44.30Crore(previousyear`13.84Crore)shareofjoinltycontrolledentities.

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237

16-Tradereceivables

17-Cash&BankBalances

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012Debtsoutstandingforaperiodexceedingsixmonths 11781.57 10426.34Otherdebts 18668.74 16924.51

30450.31 27350.85Less:Provisionforbad&doubtfuldebts&automaticpricereductionadjustment 1080.02 799.52

29370.29 26551.33Tradereceivablesincludedeferreddebts--(` 7243.93Crore(previousyear` 6100.13Crore))Tradereceivablesincludegoodsdespatchedpendingbilling-(` 1705.16Crore(previousyear` 1717.07Crore))Tradereceivablesincludevaluationadjustment--(` 1274.42Crore(previousyear` 1475.07Crore))

Particularsofcurrenttradereceivables:

Secured,consideredgood - -Unsecured,consideredgood 29370.29 26551.33Doubtful 1080.02 799.52

30450.31 27350.85

Includes` 116.03Crore(previousyear` 117.73Crore)shareofjointlycontrolledentities.

(`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012Cash&CashequivalentsBalanceswithBanks* 2673.27 1717.06FixedDepositshavingmaturitylessthan3months 1300.00 1250.00Cheques,DemandDraftsonhand 420.03 365.79Cash&Stampsinonhand 1.19 1.27Marginmoneydeposit 0.56 0.21OtherBankBalancesFixedDeposithavingmaturitymorethan3months&lessthan12months 3450.00 3400.00

7845.05 6734.33*IncludesEarmarkedagainstunclaimeddividend 3.52 2.18Non-repatriableaccount 13.16 19.28Includes`84.49Crore(previousyear`51.44Crore)shareofjointlycontrolledentities.

238

18-Short-termloansandadvances (`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

Loans

LoanstoEmployees 0.15 0.16

MaterialsIssuedonloan 9.74 9.74

Loanstoothers 0.01 0.01

LoanstoPublicSectorUndertakings 4.00 4.00

Interestaccruedandordueonloans 2.65 16.55 1.59 15.50

Advances (Recoverable in cash or in kind or forvaluetobereceived)

Tosubsidiaries 0.55 0.00

Toemployees 32.30 32.21

Forpurchases 721.90 963.03

ToOthers 1035.50 1790.25 889.59 1884.83

Deposits

Balancewithcustoms,PortTrustandotherGovt.Authorities

342.07 295.01

Others 56.94 40.35

2205.81 2235.69

Less:Provisionfordoubtfulloans&advances 82.08 87.65

2123.73 2148.04

ParticularsofLoansandadvances:-

Secured,consideredgood 6.19 4.25

Unsecured,consideredgood 2117.54 2143.79

Doubtful 82.08 87.65

2205.81 2235.69

Includes:

DuefromDirectors - -

DuefromOfficers 0.11 0.15

Includes` 69.72Crore(previousyear` 18.55Crore)shareofjointlycontrolledentities.

19-Othercurrentassets (`inCrore)

Figuresasat31.03.2013 Figuresasat31.03.2012

InterestAccruedonBanksDepositsandinvestments 201.27 151.37

OtherCurrentAssets 1.46 0.62

202.73 151.99

Includes` 2.44Crore(previousyear` 1.11Crore)shareofjointlycontrolledentities.

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239

20-Revenuefromoperations (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Saleslessreturns 43802.51 44408.37

Income from external erection & other services &revenuefromworkscontract 6870.33 5489.20

50672.84 49897.57

Includes` 465.01Crore(previousyear` 329.41Crore)shareofjointlycontrolledentities.

21-OtherOperationalIncome (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

ExportIncentives 24.27 11.95

Rentalincomeonleasedassets 0.93 0.93

Leaseequalisationaccount -0.29 0.64 3.82 4.75

Scrapsale 283.94 309.83

Receiptfromsale/transferofsurplusstock 0.07 0.17

Others 500.61 429.57

809.53 756.27

Includes` 0.07Crore(previousyear` 0.06Crore)shareofjointlycontrolledentities.

22-OtherIncome (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

A.Otherincome

ProfitonsaleofLongTermInvestments 31.50 0.00

Profitfromsaleoffixedassets&capitalstores(net) 3.42 4.01

Dividend 19.00 16.98

Exchangevariation(net) 141.57 99.32

Others (including grants of ` 0.33 Crore (previous year 0.33Crore)fromGovtofIndiaforR&DProjects) 319.68 331.46

Total(A) 515.17 451.77

B.InterestIncome

Fromcustomers 0.03 2.56

Frombanks 542.63 792.82

Others 70.93 24.88

Total(B) 613.59 820.26

TotalOtherIncome Total(A+B) 1128.76 1272.03

Includes` 5.40Crore(previousyear` 6.02Crore)shareofjointlycontrolledentities.

240

23-Costofmaterialconsumption,erectionandengineeringexpenses(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Consumptionofrawmaterial&components 23239.40 24697.81

Consumptionofstores&spares 590.59 569.04

ErectionandEngineeringexp.-paymentto sub-contractors 4341.39 3865.84

28171.38 29132.69

Includes ` 371.88Crore(previousyear` 251.96Crore)shareofjointlycontrolledentities.

24-Increase/(Decrease)inworkinprogress&finishedgoods(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Work-in-progressClosingBalance 4204.10 4842.50OpeningBalance 4842.50 -638.40 4142.64 699.86FinishedGoodsClosingBalance 1362.15 954.27OpeningBalance 954.27 407.88 859.13 95.14Inter-divisiontransferintransit 109.32 34.90

-121.20 829.90NOTE:ElementofExcisedutyinFinishedGoodsClosingBalance 126.59 99.97OpeningBalance 99.97 81.96

Includes` 0.46Crore(previousyear` 0.26Crore)shareofjointlycontrolledentities.

25-Employeebenefitsexpense (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Salaries,wages,bonus,allowances&otherbenefits 4910.26 4643.31

Contributiontogratuityfund 144.76 152.74

Contributiontoprovidentandotherfunds 302.17 279.44

Groupinsurance 11.80 12.15

Staffwelfareexpenses 455.01 441.73

5824.00 5529.37

Includes`14.04Crore(previousyear`11.08Crore)shareofjointlycontrolledentities.

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241

26-Financecosts

27-Otherexpensesofmanufacture,administration,Selling&distribution

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Interestexpenses 43.60 26.70

OtherBorrowingCosts 84.01 26.37

127.61 53.07

Less:BorrowingCostcapitalised 0.00 0.00

127.61 53.07

Includes`1.14Crore(previousyear`0.29Crore)shareofjointlycontrolledentities.

(`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Royalty,technical,Residentconsultant'scharges&otherconsultancycharges 126.76 81.67

Rent 86.18 96.54

Exciseduty 307.28 248.70

Power&Fuel 562.18 515.10

Rates&taxes 72.96 46.34

Servicetax 13.22 15.16

Insurance 125.95 133.60

Repairs:

Buildings 97.17 80.39

Plant&machinery 38.97 36.51

Others 153.41 139.31

Otherexpensesinconnectionwithexports 28.28 26.79

Losseswrittenoff 1.06 0.09

Baddebtswrittenoff 28.13 22.68

Carriageoutward 574.16 624.41

Travelling&conveyance 200.72 185.51

Miscellaneousexpenses 1004.22 887.19

Liquidateddamageschargedoff 349.68 74.53

Donations 0.03 0.17

Corporatesocialresponsibility&sustainabilitydevelopmentexpenses 37.95 36.47

3808.31 3251.16

Includes`16.87Crore(previousyear`15.28Crore)shareofjointlycontrolledentities.

242

28-Provisions(net) (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Doubtfuldebts,LiquidatedDamagesandLoans&advancesCreatedduringtheyear 1209.26 973.61Lesswrittenbackduringtheyear 819.57 389.69 345.30 628.31ContracutalObligationsCreatedduringtheyear 1793.43 1198.64Lesswrittenbackduringtheyear 647.70 1145.73 333.81 864.83OthersCreatedduringtheyear 87.59 53.81Lesswrittenbackduringtheyear 39.25 48.34 141.42 -87.61

1583.76 1405.53Includes`1.41Crore(previousyear`0.46Crore)shareofjointlycontrolledentities.

29-Priorperiodadjustments(net) (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

INCOMESaleslessreturns 1.97 -19.32Otheroperationalincome 0.00 0.30Otherincome 0.13 0.17Interestincome 0.00 2.10 -0.21 -19.06EXPENDITUREPaymenttoSubcontractors 0.06ConsumptionofRawmaterial&components 0.47 1.64Depreciation 0.77 2.67Misc.Expenses 1.25 2.55 -4.24 0.07

-0.45 -19.13Includes`0.02Crore(previousyear`0.13Crore)shareofjointlycontrolledentities.

30-Exceptionalitems (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

Waiverofinterest -4.14 -0.16-4.14 -0.16

Includes`nil(previousyear`nil)shareofjointlycontrolledentities.

31-Taxexpense (`inCrore)

Figuresforthecurrentyearended31.03.2013

Figuresforthepreviousyearended31.03.2012

a)Currenttaxforcurrentyear 3063.78 3296.26excessprovisioncreatedinearlierearlierswrittenback -219.85 2843.93 -631.98 2664.28b)Deferredtaxcharge/(credit) -6.32 615.69

2837.61 3279.97Includes`20.65Crore(previousyear`17.34Crore)shareofjointlycontrolledentities.

A n n u A l R e p o R t2 0 1 2 - 1 3

243

SignificantAccountingPolicies(ConsolidatedFinancialStatement)

1. BasisofpreparationofFinancialStatements

Thefinancialstatementshavebeenpreparedasofagoingconcernonhistoricalcostconventionandon accrual method of accounting in accordancewiththegenerallyacceptedaccountingprinciplesandtheprovisionsoftheCompaniesAct,1956asadoptedconsistentlybytheCompany.

2. Useofestimates

The preparation of financial statements inconformity with generally accepted accountingprinciples requires the Management to makeestimatesandassumptionsthataffecttheincomeandexpenditureduringthereportingperiodandthe assets and liabilities including contingentliabilitiesatthedateoffinancialstatements.Thedifferencesbetweenactualresultsandestimatesarerecognizedintheperiodinwhichresultsareknown.

3. FixedAssets

(a) Fixed assets (other than land acquired freefrom State Government) are carried at thecost of acquisition or construction or bookvalue less accumulated depreciation andimpairment,ifany.

(b) Cost includes value of internal transfers forcapital works, taken at actual / estimatedfactory cost or market price, whichever islower.Effectofextraordinaryevents suchasdevaluation / revaluation in respect of longtermliabilities/ loansutilizedforacquisitionoffixedassetsisaddedto/reducedfromthecost.

(c) Land acquired free of cost from the StateGovernment is valued at ` 1/- except forthat acquired after 16th July 1969, in whichcase the same is valued at the acquisitionpriceoftheStateGovernmentconcerned,bycorrespondingcredittocapitalreserve.

4. Leases

FinanceLease

A) i) AssetsGivenonLeasePriorto1stApril,2001

Assetsmanufacturedandgivenonfinancelease are capitalized at the normal saleprice/fair value/contracted price andtreatedassales.

Depreciation on the same is chargedat the rate applicable to similar type offixed assets as per Accounting Policy on‘Depreciation’. Against lease rentals,matching charge ismade through LeaseEqualizationAccount.

Finance income is recognized over theleaseperiod.

(ii) AssetsGivenonLeaseonorafter1st April, 2001

Assetsmanufacturedandgivenonfinancelease are recognized as sales at normalsaleprice/fairvalue/NPV.

Finance income is recognized over theleaseperiod.

Initial direct costs are expensed at thecommencementoflease.

B) AssetsTakenonLeaseonorafter1stApril,2001

Assets taken on lease are capitalized at fairvalue/NPV/contractedprice.

Depreciation on the same is charged at therateapplicabletosimilartypeoffixedassetsas per Accounting Policy on ‘Depreciation’.If the lease assets are returnable to thelessoronexpiryof leaseperiod, thesame isdepreciatedoveritsusefullifeorleaseperiod,whicheverisshorter.

Lease payments made are apportionedbetween finance charges and reduction ofoutstandingliabilityinrelationtoassetstakenonlease.

244

OperatingLease

A)AssetsGivenonLease

Assetsmanufacturedandgivenonoperatingleasearecapitalized.Leaseincomearisingtherefromisrecognizedasincomeovertheleaseperiod.

B)AssetsTakenonLease

Lease payments made for assets taken onoperating lease are recognized as expense overtheleaseperiod.

5. IntangibleAssets

A. Intangibleassetsarecapitalizedatcostif

a. it is probable that the future economicbenefitsthatareattributabletotheassetwillflowtothecompany,and

b. the company will have control over theassets,and

c. thecostoftheseassetscanbemeasuredreliablyandismorethan` 10,000/-

Intangible assets are amortized overtheirestimatedusefullivesnotexceedingthree years in case of software and notexceedingtenyearsincaseofothersonastraightlinepro-ratamonthlybasis.

B. a. Expenditure on research including theexpenditure during the research phaseof Research & Development Projects ischargedtostatementofprofitandlossintheyearofincurrence.

b. Expenditure incurred on Developmentincluding the expenditure during thedevelopment phase of Research &DevelopmentProjectmeetingthecriteriaasperAccountingStandardonIntangibleAssets,istreatedasintangibleasset.

c. Fixed assets acquired for purposes ofresearchanddevelopmentarecapitalized.

6. BorrowingCosts

Borrowing costs that are attributable to themanufacture, acquisition or construction ofqualifyingassets,areincludedaspartofthecostofsuchassets.

A qualifying asset is one that necessarily takesmore than twelve months to get ready forintendeduseorsale.

Otherborrowingcostsarerecognizedasexpenseintheperiodinwhichtheyareincurred.

7. Depreciation

(i) Depreciationonfixedassets(otherthanthoseusedabroadundercontract)ischargeduptothe total cost of the assets on straight-linemethodaspertheratesprescribedinScheduleXIVoftheCompaniesAct,1956,exceptwheredepreciation is charged at rates determinedon the basis of the technically assessedestimatedusefullivesshownhereunder:-

SingleShift

DoubleShift

Triple Shift

GeneralPlant&Machinery

8% 12% 16%

Automatic/Semi-AutomaticMachines

10% 15% 20%

ErectionEquipment,CapitalToolsTackles

20%

TownshipBuildings

–SecondClass 2.5%

–ThirdClass 3.5%

RailwaySidings 8%

Locomotives&Wagons 8%

ElectricalInstallations 8%

Office&OtherEquipments 8%

Drainage,Sewerage&Watersupply 3.34%

ElectronicDataProcessingEquipment 20%

In respect of additions to/deductions fromthe fixed assets, depreciation is charged onpro-ratamonthlybasis.

(ii) Fixed assets used outside India pursuant tolongtermcontractsaredepreciatedoverthedurationoftheinitialcontract.

(iii) Fixed assets costing ` 10,000/- or less andthose whose written down value as at the

A n n u A l R e p o R t2 0 1 2 - 1 3

245

beginning of the year is ` 10,000/- or less,are depreciated fully. In so far as townshipbuildings are concerned, the cost per tene-mentisthebasisforthelimitof` 10,000/-.

(iv) Aterection/project sites : Thecostof roads,bridgesandculvertsisfullyamortizedoverthetenure of the contract, while sheds, railwaysidings, electrical installations and othersimilar enabling works (other than purelytemporaryerections,woodenstructures)aresodepreciatedafterretaining10%asresidualvalue.

(v) Purely Temporary Erection such as woodenstructuresarefullydepreciatedintheyearofconstruction.

(vi) Leasehold Land and Buildings are amortizedovertheperiodoflease.Buildingsconstructedon land takenon leasearedepreciatedovertheirusefullifeortheleaseperiod,whicheverisearlier.

InthecaseofBGGTS(50%JV)

Depreciationonfixedassetsisprovidedusingthestraight line method over the useful life of theassetsasestimatedbythemanagement.TheratesofdepreciationprescribedinScheduleXIVtotheCompaniesAct,1956areconsideredtheminimumrates.Ifthemanagement’sestimateoftheusefullifeof afixedasset at thetimeof acquisitionofthe asset or of the remaining useful life on asubsequentreviewisshorterthantheenvisagedintheaforesaidschedule,depreciationisprovidedat a higher rate based on the management’sestimateoftheusefullife/remainingusefullife.Pursuant to this policy, depreciation on assetshas been provided at the rates based on thefollowingusefullivesoffixedassetsasestimatedbymanagement.

Assetcategory Estimatedusefullife

Plantandmachinery 2-15 ElectricalInstallations 3-10 CivilStructures 5-10 Furnitureandfixtures 1-8 Computers 3 Officeequipment 3-5

Depreciationiscalculatedonapro-ratabasisfrom/uptothemonththeassetsarepurchased/sold.Individual assets costing less than `5000/- eacharedepreciatedinfullintheyearofpurchase.

InthecaseofRaichurPowerCorporationLimited(43%JV)

Depreciation isprovidedonstraight linemethodat the rates prescribed in the Electricity SupplyAct,1948.Inrespectofassetsforwhichratesarenot specified in the Electricity SupplyAct, 1948,depreciation is provided at the rates specifiedunderscheduleXIVoftheCompaniesAct,1956.

Assetsaredepreciatedtotheextentof90%ofthecostand10%isretainedasresidualvalue.

Depreciationonadditionstoassetsisprovidedforthefullyearirrespectiveofthedateofaddition.

InthecaseofNTPCBHELPOWERPROJECTSPVTLTD,

Depreciationonfixedassets is chargedupto thetotalcostoftheassetsonastraightlinemethodaspertheratesprescribedinScheduleXIVoftheCompaniesAct,1956.

8. Investments

(i) Long–term investments are carried atcost. Decline, other than temporary, in the valueofsuch investments, isrecognizedandprovidedfor.

(ii) Current investments are carried at costor quoted/fair value whichever is lower.Unquoted current investments are carried atcost.

(iii) The cost of investment includes acquisitionchargessuchasbrokerage,feesandduties.

Any reduction in thecarryingamount&anyreversals of such reductions are charged orcreditedtothestatementofProfitandLoss.

9. InventoryValuation

(i) Inventory is valued at actual/estimated costornetrealizablevalue,whicheverislower.

(ii) FinishedgoodsinPlantandworkinprogressinvolvingHydroandThermalsetsincludinggasbasedpowerplants,boilers,boilerauxiliaries,

246

compressors and industrial turbo sets arevaluedatactual/estimatedfactorycostorat97.5% of the realizable value, whichever islower.

(iii) In respect of valuation of finished goodsin plant and work-in-progress, cost meansfactory cost; actual/estimated factory costincludesexcisedutypayableonmanufacturedgoods.

(iv) Inrespectofrawmaterial,components,loosetools,storesandsparescostmeansweightedaveragecost.

(v) a) ForConstructioncontractsenteredintoonorafter01.04.2003:

Where current estimates of cost andsellingpriceofacontractindicatesloss,theanticipatedlossinrespectofsuchcontractis recognized immediately irrespective ofwhetherornotworkhascommenced.

b) Forallothercontracts:

Where current estimates of cost andselling price of an individually identifiedprojectformingpartofacontractindicatesloss, the anticipated loss in respect ofsuch project on which the work hadcommenced,isrecognized.

c) In arriving at the anticipated loss, totalincome including incentives on exports/deemedexportsistakenintoconsideration.

(vi) The components and other materialspurchased/manufacturedagainstproductionorders but declared surplus are charged offtorevenueretainingresidualvaluebasedontechnicalestimates.

InthecaseofBGGTS(50%JV)

Traded stock is valued at the lower of cost andnetrealizablevalue.Costisdeterminedunderthefirst-in-first-outmethod.

10. RevenueRecognition

Salesarerecordedbasedonsignificantrisksandrewardsofownershipbeingtransferredinfavorofthe customer. Sales include goodsdispatched tocustomersbypartialshipment.

A. Forconstructioncontractsenteredintoonorafter1.4.2003

Revenue is recognized on percentagecompletionmethodbasedonthepercentageofactualcostincurreduptothereportingdatetothetotalestimatedcostofthecontract.

B. Forallothercontracts

(i) Recognition of sales revenue in respectof long production cycle items (Hydroand Thermal sets including gas-basedpower plants, boilers, boiler auxiliaries,compressorsandindustrialturbosets) ismade on technical estimates.When theaggregatevalueofshipmentsrepresents30%ormoreoftherealizablevalue,theyareconsideredat97.5%oftherealizablevalue or in its absence, quoted price.Otherwise,theyareconsideredatactual/estimated factory cost or 97.5% of therealizable value,whichever is lower. Thebalance 2.5% is recognized as revenueon completion of supplies under thecontract.

(ii) Income from erection and projectmanagement services is recognized onworkdonebasedon:

Percentageofcompletion;or

The intrinsic value, reckoned at 97.5%of contract value, the balance 2.5% isrecognizedas incomewhenthecontractiscompleted.

(iii) Income from engineering servicesrenderedisrecognizedatrealizablevaluebasedonpercentageofworkcompleted.

(iv) Income from supply / erection of non-BHELequipment/systemsandcivilworksis recognized based on dispatches tocustomer/workdoneatprojectsite.

11. AccountingforForeignCurrencyTransactions

Transactionsinforeigncurrenciesarerecordedattheexchangeratesprevailingon thedateof thetransaction. Foreign currency monetary assetsandliabilitiesaretranslatedatyearendexchange

A n n u A l R e p o R t2 0 1 2 - 1 3

247

rates. Exchangedifferencearisingonsettlementoftransactionsandtranslationofmonetaryitemsarerecognizedasincomeorexpenseintheyearinwhichtheyarise.

12. Translation of Financial Statements of IntegralForeignOperations

(i) Items of income and expenditure aretranslatedataveragerateexceptdepreciation,which is converted at the rates adopted forthecorrespondingfixedassets.

(ii) Monetary itemsaretranslatedattheclosingrate;non-monetaryitemscarriedathistoricalcost are translated at the rates in force onthe date of the transaction; non-monetaryitems carried at fair value are translated atexchange rates that existed when the valueweredetermined.

(iii) AlltranslationvariancesaretakentostatementofProfitandLoss.

InthecaseofBGGTS(50%JV)

Forwardcontractsareentered intotohedgetheforeigncurrencyriskoftheunderlyingoutstandingattheyearend.Thepremiumordiscountonallsuch contracts arising at the inception of eachcontract isamortisedasexpenseor incomeoverthelifeofthecontract.Theexchangedifferenceson such a forward contract is the differencebetween i) the foreign currency amount of thecontract translated at the exchange rate on thereportingdate,orthesettlementdatewherethetransaction is settled during the period and (ii)the same foreign currency amount translated atthelatterofthedateofinceptionoftheforwardexchange contract or the last reporting date.Anyprofitor lossarisingonsuchcancellationorrenewalofsuchaforwardcontractisrecognisedasincomeorexpensefortheyear.

13. EmployeeBenefits

Provident Fund and Employees’ Family PensionScheme contributions are accounted for onaccrualbasis.Liability forEarnedLeave,HalfPayLeave, Gratuity, Travel claims on retirement andPost RetirementMedical Benefits are accountedfor in accordance with actuarial valuation.

Compensation under Voluntary RetirementSchemeischargedoffintheyearofincurrenceonapro-ratamonthlybasis.

14. Claimsby/againsttheCompany

(i) Claims for liquidated damages against theCompany are recognized in accounts basedonmanagement’sassessmentoftheprobableoutcome with reference to the availableinformation supplemented by experience ofsimilartransactions.

(ii) Claimsforexportincentives/dutydrawbacks/duty refunds and insurance claims etc. aretakenintoaccountonaccrual.

(iii) Amounts due in respect of price escalationclaims and/or variations in contract workare recognized as revenue only when thereare conditions in the contracts for suchclaims or variations and/or evidence of theacceptability of the same from customers.However, escalation is restricted to intrinsicvalue.

15. ProvisionforWarranties

i) Forconstructioncontractsenteredintoonorafter01.04.2003:

Thecompanyprovideswarrantycostat2.5%of the revenueprogressively as andwhen itrecognises the revenue and maintain thesamethroughthewarrantyperiod.

ii) Forallothercontracts:

Provisionforcontractualobligationsinrespectofcontractsunderwarrantyattheyearendismaintainedat2.5%ofthevalueofcontract.Inthecaseofcontractsforsupplyofmorethana single product 2.5% of the value of eachcompletedproductisprovided.

(iii)Warranty claims/ expenses on rectificationwork are accounted for against naturalheadsasandwhen incurredandcharged toprovisionsintheyearend.

16. GovernmentGrants

GovernmentGrantsareaccountedwhenthereisreasonablecertaintyoftheirrealization.

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Grants related to fixed depreciable assets areadjusted against the gross cost of the relevantassets while those related to non-depreciableassetsarecreditedtocapitalreserve.Grantsrelatedtorevenue,unless receivedascompensationforexpenses/losses,are recognizedas revenueoverthe period to which these are related on theprincipleofmatchingcoststorevenue.

Grants in the form of non-monetary assets areaccountedforattheacquisitioncost,oratnominalvalueifreceivedfree.

17. TaxesonIncome

Currenttaxisdeterminedonthebasisoftaxableincome in accordance with the provisions ofthe IncomeTaxAct, 1961.Deferred tax liability/asset resulting from timing difference betweenaccounting income and taxable income isrecognisedconsideringthetaxrateandlawsthathave been enacted or substantively enacted ason the balance sheet date. Deferred tax assetis accounted for and carried forward only tothe extent that there is reasonable certaintythat sufficient future taxable income will beavailable againstwhich such deferred tax assets

can be realised. Deferred tax assets in respectof unabsorbed depreciation and carry forwardof losses are recognised only if there is virtualcertainty that there will be sufficient futuretaxableincomeavailabletorealisesuchassets.

18. Impairment

The carrying amount of cash generating units isreviewedateachbalancesheetdatewherethereis any indicationof impairment .An impairmentlossisrecognisedinthestatementofprofitandloss where the carrying amount exceeds therecoverableamountofthecashgeneratingunits.Animpairmentlossisreversedifthereischangeintherecoverableamountandsuchlosseithernolongerexistsorhasdecreased.

19. SegmentReporting

Segment reporting is in linewith theaccountingpolicies of the company. Revenue and expensesare identified to segments on the basis of theirrelationship to the operating activities of thesegment.Revenue,expenses,assetsandliabilitieswhich are not allocable to segments on areasonablebasis,areincludedunder"Unallocatedrevenue/expenses/assets/liabilities.''

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1 TheConsolidatedFinancialStatementsrelatetoBharatHeavyElectricalsLimited(thecompany),itsSubsidiariesanditsinterestinJointVentureentities.TheconsolidatedFinancialStatementshavebeenpreparedonthefollowingbasis:-

BasisofAccounting:

i) Thefinancialstatementsofthesubsidiarycompaniesandinterestinjointventuresintheconsolidationaredrawnuptothesamereportingdateasoftheparentcompany.

ii) TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithAccountingStandard-21on"ConsolidatedFinancialStatements”andAccountingStandard-27on“FinancialReportingofinterestinJointVentures”.

PrinciplesofConsolidation:

(a) The Financial Statements of the Parent Company and its Subsidiary companies have been combinedonaline-by-linebasisbyaddingtogetherthebookvaluesoflikeitemsofassets,liabilities,incomeandexpenses after fully eliminating the intra-group balances and intra-group transactions and unrealizedprofitsorlossesinaccordancewithAccountingStandard-21on“ConsolidatedFinancialStatements”.

(b) The financial statements of Joint Venture entities have been combined by applying proportionateconsolidation method on a line-by-line basis on items of assets, liabilities, income and expenses inaccordancewithAccountingStandard-27on“FinancialReportingofInterestsinJointVentures”.

(c) The consolidated financial statements have been prepared using uniform accounting policies for liketransactionsandothereventsinsimilarcircumstancesandarepresentedtotheextentpossible,inthesamemannerastheParentCompany’sseparatefinancialstatementsexceptasotherwisestatedintheSignificantAccountingPolicies.

(d) Thedifferencebetween the costs of investments in the subsidiaryover thenet assets at thetimeofacquisitionofshares intheSubsidiary isrecognized intheFinancialStatementsasGoodwillorCapitalReserveasthecasemaybe.

(e) Minorityinterest'shareofnetlossofconsolidatedsubsidiaryfortheyearisadjustedagainsttheincomeofthegroupinordertoarriveatthenetincomeattributabletoshareholderofthecompany.

(f) Minority interest share of net liabilities of consolidated subsidiary is identified and presented inconsolidatedbalancesheetseparatefromassets/liabilities&equitiesofthecompanyshareholder.

2 TheConsolidatedFinancialStatementsincludestheresultoffollowingentities:

NameofCompany CountryofIncorporation

Proportion(%)ofShareholdingason31.03.2013

Proportion(%)ofShareholdingason31.03.2012

SubsidiaryCompany

1) BharatHeavyPlateandVesselsLtd.(BHPV) India 100 100

2) BHELElectricalMachinesLtd.(BHELEML) India 51 51

JointVentureCompanies

1) BHEL-GEGasTurbineServicesLtd. India onesharelessthan50% onesharelessthan50%

2) NTPC-BHELPowerProjectsPvt.Ltd. India 50 50

3) UdangudiPowerCorporationLtd. India - 50

4) DadaDhuniwaleKhandwaPowerLtd. India 50 50

5) RaichurPowerCorporationltd. India 43 46

6) LaturPowercompanyLtd. India 50 50

32-Othernotestoconsolidatedfinancialstatements

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(a) ThefinancialstatementsofBHPVandBHELEMLareconsolidatedbasedontheauditedfinancialstatementfortheyearendedon31.03.2013.

(b)The interest inJointVentureCompanies inrespectofBHEL-GEGasTurbineServicesLtd. isconsideredbasedonauditedfinancialstatementsfortheyearendedason31.03.2013.

(c) TheinterestinJointVentureinrespectofPowerPlantPerformanceImprovementLtd.(PPIL)havenotbeenconsideredinpreparationofConsolidatedFinancialStatementsasthecompanyisunderliquidationandfullamountofequityinvestmenthasbeenprovidedfordiminutioninthevalueofinvestment.

(d) The interest in JointVenture in respectof NTPCBHELPowerProjectsPrivate Limited,RaichurPowerCorporation Ltd., Dada Dhuniwale Khandwa Power Ltd. and Latur Power Company Ltd. is consideredbasedonunauditedfinancialstatementsfortheyearendedon31.03.2013.

(e) BHEL'sentireequitystakeofUdangudiPowerCorporationLimitedwassoldon26.03.2013

2012-2013 2011-2012

3 Estimated amount of contracts, net of advances, remaining to beexecutedoncapitalaccountandnotprovidedfor `inCrore 450.82 640.57

Theaboveincludesforacquisitionofintangibleassets `inCrore 1.65 13.84

In view of the nature of business, being long term constructioncontractstheremaybeothercommitmentsforpurchaseofmaterialetc.,whichhasbeenconsideredasnormalbusinessprocess,hencenotbeendisclosed.

4 Landandbuildingsincludes

a) i) Acresoflandforwhichformaltransfer/leasedeedhavenotbeenexecuted Acres 8662.27 8662.27

ii) Number of flats for which formal transfer/ lease deedhavenotbeenexecuted[NetBlock`0.12Crore(previousyear`0.13Crore)]

Nos. 12 12

iii) Numberofbuildingsforwhichformaltransfer/leasedeedhavenotbeenexecuted[NetBlock`5.21Crore(previousyear`5.35Crore)]

Nos. 1 1

iv) Acres of land for which the cost paid is provisional;registration charges and stamp duty (net of provisionalreadymade),ifany,wouldbeaccountedforonpayment. Acres 51.52 91.52

b) Acres of land leased to Ministry of Defence, Govt. of IndiaDepartments&others Acres 31.27 31.27

c) AcresoflandbeingusedbyMinistryofDefenceandforwhichfurtherapprovalofthecompetentauthorityforcontinuanceoflicencingofthislandisawaited. Acres 180.00 180.00

d) Acresoflandunderadversepossession.(Costoflandmentionedabovein4(a)(i),(a)(iv),(b),(c)&(d)isnotmaterial)

Acres 377.93 122.94

5 The impacton theprofitofproviding100percentdepreciationonfixedassetsupto` 10,000/-each,withoutconsideringsuchimpactofearlieryears,isasunder:

100% depreciation on assets upto ` 10,000/- charged off in theaccountingyear. `inCrore 11.62 23.06

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Normaldepreciationonabove. `inCrore 3.36 5.79Excessamountcharged. `inCrore 8.26 17.27

6 Saleslessreturnsa Includesbasedonprovisionalprices `inCrore 261.87 242.89b includes forescalation claims raised in accordancewith sales

contracts,inclusiveofescalationclaimsonaccrualbasis,totheextentlatestindiceswereavailable; `inCrore 2136.62 2156.26

c includesdespatchesofequipmentheldonbehalfofcustomersat their request for which payment has been received byCompany;and `inCrore 156.15 31.95

d excludes for price reduction (net of refund) due to delay indeliveryasperthetermsofthecontract. `inCrore 201.19 263.79

7 Contingentliabilities:A Claimsagainstthecompanynotacknowledgedasdebt:i) a IncomeTaxPendingAppeals `inCrore 34.36 48.86

b Againstwhichpaidunderprotestincludedunderthehead"depositothers" `inCrore 0.00 0.00

ii) a SalesTaxDemand `inCrore 890.36 748.23b Againstwhichpaidunderprotestincludedunderthehead

"AdvancesRecoverable" `inCrore 129.19 105.99iii) a ExciseDutydemands `inCrore 438.90 424.64

b Againstwhichpaidunderprotestincludedunderthehead"AdvancesRecoverable" `inCrore 13.91 10.64

iv) a CustomDutydemands `inCrore 2.63 2.66b Againstwhichpaidunderprotestincludedunderthehead

"AdvancesRecoverable" `inCrore 0.06 0.06v) Court&Arbitrationcases `inCrore 746.57 591.18vi) a LiquidatedDamages `inCrore 3381.71 2299.28

b AmountdeductedbycustomerstowardsLDincludedinvi)a `inCrore 2005.50 1579.19vii) CounterClaimbycontractors `inCrore 0.61 0.61viii) a ServiceTaxDemand `inCrore 186.03 151.31

b Againstwhichpaidunderprotest `inCrore 0.00 0.00ix) Others `inCrore 158.88 208.53x) Corporate Guarantee given on behalf of subsidiary company

(BHPV)`inCrore 6.56 9.57

(Inviewofthevariouscourtcasesandlitigationsandclaimsdisputedbythecompanyfinancialimpactastooutflowofresourcesisnotascertainableatthisstage).

8 Cashcredit limit frombanksaggregating to` 5,000Crore (previousyear` 3,000Crore)andCompany’scounterguarantee/indemnityobligationsinregardtobankguarantee/lettersofcreditlimitaggregatingto`50,000Crore(previousyear`52,000Crore)sanctionedbytheconsortiumbanksaresecuredbyfirstchargebywayofhypothecationofrawmaterials,components,work inprogress,finishedgoods,stores,tradereceivableandothercurrentassetsbothpresentandfuture.Theoutstandingbankguaranteesasat31.03.2013is`41,786Crore(previousyear`38,200Crore)andCorporateGuaranteeason31.03.2013is `4,417.71Crore(Previousyear`4,448.14Crore).

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9 Balances shown under Trade Receivables, Trade Payables, contractor’s advances, deposits and stock/materialslyingwithsub-contractors/fabricatorsaresubjecttoconfirmation,reconciliation&consequentialadjustment,ifany.Thereconciliationiscarriedoutonongoingbasisasthecompanyisinthebusinessoflongtermconstructioncontracts&provisionswhereverconsiderednecessaryhavebeenmadeinlinewiththeguidelines.

10 a) ThedisclosuresrelatingtoConstructionContractsenteredonorafter01.04.2003aspertherequirementofAccountingStandard-7(Revised)areasfollows:

(`inCrore)

2012-13 2011-12

Contractrevenuerecognisedfortheyear 42268.26 42170.73

InrespectofContractinprogressattheendofyear:

Costincurredandrecognisedprofits(lessrecognisedlosses) 207720.39 166825.51

Amountofadvancereceived 7912.90 10257.22

Amountofretentions(deferreddebts) 16932.57 13533.88

Inrespectofduesfromcustomersafterappropriatenettingoff

Grossamountduefromcustomerforthecontractworkasanasset 2833.23 2728.40

Grossamountduetocustomerforthecontractworkasaliability 2655.14 4030.50

Contingencies - -

b) Theestimatesoftotalcostsandtotalrevenueinrespectofconstructioncontractsenteredonorafter1stApril,2003inaccordancewithAccountingStandard(AS)-7(R)ConstructionContractsarereviewedandupdatedperiodicallytoascertainthepercentagecompletionforrevenuerecognition.However,itisimpracticabletoquantifytheimpactofchangeinestimates.

11 Thedisclosurerelatingtoderivativeinstruments:

a) Thederivativeinstrumentsthatarehedgedandoutstandingason31.03.2013isNil(previousyearNil).

b) Theforeigncurrencyexposuresthatarenothedgedbyaderivativeinstrumentorotherwiseareasunder:

2012-13 2011-12

a)Assets/Receivables(i.e.Debtors)

Inforeigncurrency

inUS$ inCrore 62.73 55.72

inEURO inCrore 60.61 46.69

inLYD inCrore 0.88 0.87

inRO inCrore 0.03 0.03

InIndiancurrency

inUS$ `inCrore 3383.78 2779.88

inEURO `inCrore 4160.17 3123.98

inLYD `inCrore 37.17 35.60

inRO `inCrore 4.78 4.48

inOthers `inCrore 35.19 43.59

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b)Liabilities(i.e.Advancesfromcustomers/creditors)

Inforeigncurrency

inUS$ inCrore 37.65 36.17

inEURO inCrore 32.62 34.17

inLYD inCrore 1.42 1.49

InIndiancurrency

inUS$ `inCrore 2066.01 1818.06

inEURO `inCrore 2297.00 2347.33

inLYD `inCrore 61.00 62.18

inOthers `inCrore 151.22 230.31

12 a) ExpenditureondepartmentalRepair&maintenancewhichareasunder:

(`inCrore)

2012-13 2011-12

Plant&Machinery 193.09 178.30

Buildings 59.82 54.93

Others 33.14 36.75

b) Agency Commission on exports included in expenses inconnectionwithexports 18.87 17.54

c) Expenditureonresearch&development 338.23 321.26

d) RentResidential 59.14 74.68

e) PaymenttoAuditors

AsAuditors 0.58 0.52

includespaidabroad 0.01 0.04

Reimbursementofexpenses 0.16 0.16

Taxationmatters(includingcertification) 0.13 0.14

includespaidabroad 0.00 0.02

Otherservices 0.35 0.34

f) PaymenttoCostAuditors 0.13 0.01

g) Expenditureonentertainment 8.35 8.05

h) Expenditureonforeigntravel 19.82 16.76

i) ExpenditureonPublicityandPublicrelations

Salariesallowances&otherbenefits 11.75 10.69

Otherexpenses 15.14 15.29

j) Director'sFees 0.14 0.25

13 AsrequiredbyAS-18'RelatedPartyDisclosures'aregivenbelow:

i) RelatedParties-JointVentureCompanies

1 PowerplantPerformanceImprovementLtd.

2 BHEL-GEGasTurbineServicesPvt.Ltd.

3 NTPC-BHELPowerProjectsPvt.Ltd.

4 UdangudiPowerCorporationLtd.(Upto26.03.2013)

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5 LaturPowercompanyLtd.6 RaichurPowerCorporationLtd.7 DadaDhuniwaleKhandwaPowerLtd.

ii) KeyManagementPersonnelS/ShriB.P. Rao, Atul Saraya, O. P. Bhutani, M.K. Dube and P. K. Bajpai, R. Krishnan(w.e.f 01.04.2012), C.P.Chengappa,L.Gopalakrishnan,AnandK.Bansal,P.K.Verma,C.V.Rajagopalan,BhavarajuSrinivasaRao,ArupRoychoudhary,I.J.Kapoor,Y.K.Rastogi,SubodhGupta,W.V.K.KrishnaShankar,VijendraNanavati,A.V. Krishnan,RakeshMathur, P.Bhaskar,M.R.Kamble, R.Nagaraja,C.V.Rajagopalan, B. S. Rao,AnilAhuja, K. Shamsuddin,Mohd. Suleman,MGWaghmode, J. K. Srinivasan,V. S. Patil, N.RaviChander, S. SrinivasaRao,QuekBoonSingh,MaheshPalashikar,D.Asokan,G.Udaykumar,Rajeev Srivastava, T. T. Joseph, Rajiv Sachdeva, Yogesh Gupta, K. Gnanadesikan, G. Rajgopal and T.Jeyaseelan.

iii) DetailsofTransactionsJointVentures 2012-13 2011-12PurchaseofGoodsandServices `inCrore 86.70 98.14

SalesofGoodsandservices `inCrore 2757.14 654.23

ReceivingofServices `inCrore 0.00 97.52

RenderingofServices `inCrore 303.63 46.98

Dividendincome `inCrore 16.66 16.96

Royaltyincome `inCrore 0.90 0.63

Purchaseofshares `inCrore - 22.50

SaleofShares `inCrore 64.00 0.00

AmountsduetoBHELattheendoftheyear `inCrore 978.18 595.06

AmountsduefromBHELattheendoftheyear `inCrore 588.65 1022.24

Advancedeposittowardsissueofshares `inCrore - -

ProvisionforDoubtfuldebts `inCrore 4.39 0.76

Advancesgiven `inCrore 2.20 8.36

Note:MajorityoftransactionsarewithBGGTS,NBPPLandRaichurpowercorporationLtd.KeyManagementPersonnel(KMP)PaymentofSalaries `inCrore 2.53 2.90

RelativesofKMPAmountsduetoBHELattheendoftheyear `inCrore 0.01 0.00

PaymentofSalaries `inCrore 0.25 0.20

14 LeaseDetailsofassetstakenonleaseonorafter1stApril2001areasunder:i) FinanceLease:

a. OutstandingbalanceofMinimumLeasepayments 2012-13 2011-12notlaterthanoneyear `inCrore 90.43 82.04

laterthanoneyearandnotlaterthanfiveyears `inCrore 150.83 144.24

laterthanfiveyears `inCrore 0.00 0.00

Totalminimumleasepaymentsatthebalancesheetdate `inCrore 241.26 226.28

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b. PresentValueof(a)abovenotlaterthanoneyear `inCrore 75.38 62.68laterthanoneyearandnotlaterthanfiveyears `inCrore 129.50 123.69laterthanfiveyears `inCrore 0.02 0.00TotalPresentValueatthebalancesheetdate `inCrore 204.90 186.37

c.1 Financecharges `inCrore 36.36 39.91c.2 PresentvalueofResidualvalue,ifany `inCrore 0.00 0.01

ii) Thecompanyisinthepracticeoftakinghousesforemployees,officebuildingsandEDPequipmentsetc.onoperatingleasebothascancellableandnon-cancellable.

iii) OperatingLeaseThe future minimum lease payments under non-cancellableoperatingleaseareasunder:

2012-13 2011-12

notlaterthanoneyear `inCrore 2.54 5.10laterthanoneyearandnotlaterthanfiveyears `inCrore 5.04 5.80laterthanfiveyears `inCrore 4.40 1.49

iv) Details regarding rentals in respect of assets taken on leasepriorto1.4.2001areasgivenbelow:CostofAssetsLand&Buildings `inCrore 0.01 0.01Computers&peripherals `inCrore 0.00 0.00RentalspayableoverunexpiredperiodofleaseLand&buildings `inCrore 0.02 0.02Computers&peripherals `inCrore 0.00 0.00

15 EarningsperShare:2012-13 2011-12

WeightedaveragenumberofEquitySharesoutstandingduringtheyear(A)

Nos.inCrore

244.760 244.760

NominalValueofEquityShare (`) 2.00 2.00NetProfitfortheyearafteradjustingminorityinterest(B) `inCrore 6693.37 7087.44BasicandDilutedEarningsPerShare(B)/(A) (`) 27.35 28.96

16 ThedisclosurerelatingtoAccountingStandard-29 (`inCrore)a) LiquidatedDamages 2012-13 2011-12

Opening 1170.62 697.96Additions 652.27 558.82Usage/Writeoff/payment -433.04 -74.53Withdrawal/adjustments -33.36 -11.63ClosingBalance 1356.49 1170.62ContractualObligationOpening 3867.87 2997.00Additions 1793.43 1198.64Usage/Writeoff/payment -154.31 -133.48Withdrawal/adjustments -494.37 -194.29ClosingBalance 5012.62 3867.87

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b) LiquidateddamagesareprovidedinlinewiththeAccountingPolicyofthecompanyandthesameisdealtsuitably intheaccountsonsettlementorotherwise.ContingentliabilityrelatingtoliquidateddamagesisshowninitemNo.7ofNote-32.

c) Theprovisionforcontractualobligationismadeattherateof2.5%ofthecontractrevenuein linewithsignificantAccountingPolicytomeetthewarrantyobligationsasperthetermsandconditionsofthecontract.Thesameisretainedtillthecompletionofthewarrantyobligationsofthecontract.Theactualexpensesonwarrantyobligationmayvaryfromcontracttocontractandonyeartoyeardependinguponthetermsandconditionsoftherespectivecontract.

17 Itemofexpenseandincomelessthan`OneLakharenotconsideredforbookingunderPriorPeriodItems.

18 During theyear2012-13,GOIhas considered theproposalofmergerofBHPVwithBHELandaccordedits approval as per the communication received fromDHI vide letterNo. F. No. 1(17)/ 2010-P.XI dated06.03.2013.TheformalitiesofmakingapplicationtoBIFRandotherformalitiesareunderprocess.

19 For certain items, the Company and its Joint Ventures have followed different accounting policies asindicatedinSignificantAccountingPolicies.However,impactofthesameisnotmaterial.Theshareofjointlycontrolledentitieshasbeenindicatedineachschedulesofannualaccountbywayofanote.

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20-SegmentInformation-Consolidated(`inCrore)

Fortheyearended31.3.2013 Fortheyearended31.3.2012

A. PRIMARYSEGMENT-BUSINESSSEGMENTS

Power Industry Total Power Industry Total

I SEGMENTREVENUE

a. SegmentRevenue 40041.78 10655.33 50697.11 38191.81 11717.71 49909.52

b. Inter-SegmentRevenue - - - - - -

c. OperatingRevenue-External(a)-(b) 40041.78 10655.33 50697.11 38191.81 11717.71 49909.52

II SEGMENTRESULTS

a. SegmentResults 8625.34 2233.02 10858.36 8238.79 3353.99 11592.78

b. Unallocatedexpenses(Netofincome) 1200.04 1172.48

c. ProfitbeforeFinancecost&IncomeTax(a)-(b) 9658.32 10420.30

d. Financecost 127.61 53.07

e. NetProfitbeforeIncomeTax(c)-(d) 9530.71 10367.23

f. IncomeTax 2837.61 3279.97

g. NetProfitafterIncomeTax 6693.10 7087.26

III ASSETS&LIABILITIES

a. SegmentAssets 48254.35 13200.27 61454.62 45063.97 13592.64 58656.61

b. UnallocatedAssets 10298.08 8773.67

c. TotalAssets 71752.70 67430.28

d. SegmentLiabilities 31228.93 7300.31 38529.24 32447.46 8226.30 40673.76

e. UnallocatedLiabilities 2686.03 1348.49

f. TotalLiabilities 41215.27 42022.25

IV OTHERINFORMATION

a. Costincurredduringtheperiodtoacquirefixedassets(Incl.CWIP) 1548.56 212.93 1118.02 446.61

b. Depreciation 711.50 193.84 599.74 152.70

c. NonCashExpenses(otherthandepreciation) 1362.91 370.87 1397.25 122.87

B. SECONDARYSEGMENT-GEOGRAPHICALSEGMENTS

WithinIndia

OutsideIndia

Total WithinIndia

OutsideIndia

Total

1. NetSales/IncomefromOperations 49750.35 946.76 50697.11 48431.98 1477.54 49909.52

2. TotalAssets 71249.22 503.48 71752.70 66948.40 481.88 67430.28

3. CostincurredduringtheperiodtoacquireFixedAssets 1803.00 0.07 1803.07 1600.42 0.15 1600.57

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Notes:

1. The primary segments have been identified as 'Power and Industry' based on the orders booked by therespectivebusinesssectors.TheorderbookedbyInternationaloperationgroupistakentoPowerorIndustryasthecasemaybe.

2. BGGTS(JV) is inthebusinessofsaleofpartsandcomponentsofgasturbines,Engineeringservices,repairservicesandupraterepairsandotherjointventuresareinsettinguppowerprojectsorunderpowerbusinessthesamehasbeenconsideredunder'PowerSegment'.

3. BHPV(SubsidiaryCo.)isinthebusinessoffabrication/erectiononindustrialboiler,fertilizer,chemicalsandotherequipmentandBHELEML(SubsidiaryCo.)manufacturingofrotatingelectricalmachines,consideredunder'Industrysegment'.

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TenYearsFinancials(`inCrore)

2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04

I EARNINGS/OUTGOINGS

Earnings

Turnover(Gross) 50156 49510 43337 34154 28033 21401 18739 14525 10336 8662

RevenuefromOperations(Net) 47618 47228 41566 32861 26212 19305 17237 13374 9527 8019

OtherOperationalIncome 807 751 680 493 514 422 379 277 420 313

OtherIncome 1121 1266 1021 1155 983 1023 445 280 236 200

TotalEarnings 49546 49245 43267 34509 27709 20750 18061 13931 10183 8532

Outgoings

Costofmaterialconsumption,Erection&EngineeringExpenses 27899 28908 23209 20672 17620 11821 10182 8145 5871 4230

(Increase)/Decreaseinworkinprogress&FinishedGoods 116 (823) (127) (787) (1152) (827) (181) (386) (540) 31

Employeebenefitexpenses 5753 5466 5397 6540 2984 2608 2369 1879 1650 1640

Otherexpensesofmanufacture,administration,sellinganddistribution(Incl.priorperioditems)

3777 3242 2537 2057 1823 1644 1496 1177 1212 1363

Provisions(Net) 1566 1403 2715 -934 1281 778 172 283 126 21

Less:Costofjobdoneforinternaluse 76 104 69 121 61 38 28 36 19 24

Outgoingsbeforefinancecost&depreciation 39035 38092 33662 27427 22495 15986 14009 11062 8301 7260

Profitbeforedepreciation,financecost&tax 10511 11153 9605 7082 5214 4763 4052 2869 1882 1272

Depreciation 953 800 544 458 334 297 273 246 219 198

GrossProfit 9558 10353 9061 6624 4880 4466 3779 2623 1663 1074

FinanceCost 125 51 55 33 31 36 43 59 81 60

Profitbeforetax 9432 10302 9006 6591 4849 4430 3736 2564 1582 1014

TaxExpense(Net) 2817 3262 2995 2280 1711 1571 1321 885 628 357

Profitaftertax 6615 7040 6011 4311 3138 2859 2415 1679 953 657

Dividend 1323 1567 1525 1141 832 746 600 355 196 147

CorporateDividendTax 221 254 249 191 141 127 93 50 27 19

RetainedProfit 5071 5219 4237 2979 2165 1986 1722 1274 731 491

II WHATTHECOMPANYOWNED

FixedAssets

GrossBlock 10783 9707 8050 6580 5225 4443 4135 3822 3629 3460

Less:AccumulatedDepreciation&LeaseAdj. 6325 5410 4649 4165 3754 3462 3146 2840 2585 2365

NetBlock 4458 4297 3401 2415 1471 981 989 982 1044 1095

CapitalWIPincl.IntangibleAssetsunderdevelopment 1172 1348 1733 1530 1157 658 302 185 95 108

Non-CurrentInvestments 429 462 439 80 52 8 8 8 9 29

DeferredTaxAssets(Net) 1551 1546 2164 1527 1840 1338 935 674 518 498

CurrentAssets,Loans&Advancesandothernoncurrentassets 62518 59123 51523 42915 36901 27906 20980 16331 13343 10425

Totalassets 70128 66776 59260 48467 41421 30892 23214 18180 15010 12155

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2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04

III WHATTHECOMPANYOWED

LongTermBorrowings 129 123 102 81 105 61 58 539 524 528

Liabilities&Provisions 39555 41280 39004 32489 28377 20056 14368 10340 8459 6349

Totalliabilities 39684 41403 39106 32570 28482 20117 14426 10879 8983 6877

IV NETWORTHOFTHECOMPANY

ShareCapital 490 490 490 490 490 490 245 245 245 245

Reserves&Surplus 29954 24883 19664 15427 12449 10285 8544 7057 5782 5051

Less:DeferredRevenueExpenditure - - - - - - - - - 18

NetWorth 30444 25373 20154 15917 12939 10775 8788 7301 6027 5278

V NETWORKINGCAPITAL 24273 17892 12551 10426 8524 7850 6612 5991 4884 4076

VI CAPITALEMPLOYED 29161 22651 16391 12968 10091 8873 7640 7001 5950 5212

VII VALUEADDED 19460 19098 18476 13171 9894 8323 7182 5683 4254 3680

VIII RATIOS

PBDITtototalassets(%)# 15.4% 17.7% 17.8% 15.8% 14.4% 17.6% 19.6% 17.3% 13.9% 11.5%

Grossprofittocapitalemployed(%)# 36.9% 53.0% 61.7% 57.5% 51.5% 54.1% 51.6% 40.5% 29.8% 21.5%

Turnover/grossblock 4.7 5.1 5.4 5.2 5.4 4.8 4.5 3.8 2.8 2.5

Earningspershare(`) 27.03 28.76 24.56 17.61 12.82 11.68 9.86 6.86 3.90 2.69

Networthpershare(`) 124.38 103.67 82.34 65.03 52.86 44.02 35.90 29.83 24.62 21.56

CurrentRatio 1.64 1.43 1.32 1.32 1.30 1.40 1.50 1.60 1.58 1.65

TotalDebt/Equity 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.08 0.09 0.10

ReturnonNetWorth 21.7% 27.7% 29.8% 27.1% 24.3% 26.5% 27.5% 23.0% 15.8% 12.5%

Grossprofitmargin 19.1% 20.9% 20.9% 19.4% 17.4% 20.9% 20.2% 18.1% 16.1% 12.4%

Netprofitmargin 13.2% 14.2% 13.9% 12.6% 11.2% 13.4% 12.9% 11.6% 9.2% 7.6%

#Onthebasisofaverageassetsandcapitalemployed

Figuresarerestatedonpost-splitmadein2011-12andbonusissueof1:1in2007-08

TenYearsFinancials(Contd.)

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Reconciliation of Profit (Standalone) determined under Indian GAAP with NetIncomeinaccordancewithUSGAAPfortheyear2012-13

Notes ` Crore US$(Million)

Profitaftertax(Standalone)determinedunderIndianGAAP 6614.73 1216.18

AdjustmenttoconformwithUSGAAP

RentalIncome(lease) 1 (0.15) (0.03)

IncomefrominvestmentinJointVentures&SubsidiaryCompanies 2 59.83 11.00

Employeebenefitsexpense 3 (31.22) (5.74)

Research&DevelopmentExpenses 4 (26.92) (4.95)

Depreciation&amortisationexpense 5 27.07 4.98

Priorperioditems(incl.provisionfortaxation/deferredtax`(-)61.03Crore) 6 (60.59) (11.14)

IncomeTaxadjustments 7 9.99 1.84

NetincomeinaccordancewithUSGAAP 6592.74 1212.14

1US$=54.39(ClosingExchangerate)

NotestoReconciliationofNetProfitdeterminedunderIndianGAAPwithNetIncomeinaccordancewithUSGAAP.

ThefollowingnotesshowthedifferencebetweenIndianGAAPandUSGAAPandnecessaryadjustmenttoarriveatNetIncomeundertheUSGAAP.

1. RentalIncome(Lease)

AsperIndianGAAPassetsgivenonleaseclassifiedasfinanceleasepriorto1.4.2001arecapitalisedatthenormalsaleprice/fairvalue/contractedpriceanddepreciationonthesamehasbeencharged.Leaserentalincomeisrecognisedafteradjustingleaseequalisation.UnderUSGAAPassetsgivenonfinancelease,financeincomeisonlyrecognisedovertheleaseperiod.

2. IncomefromInvestmentinJointVentures&SubsidiaryCompanies

AsperIndianGAAPdividendincomefromjointventures/subsidiarycompaniesisrecognisedandprovisionfordimunitioninvalue,ifany,ismadefortheinvestmentinjointventures.UnderUSGAAPshareofincome/lossgeneratedbyjointventures/subsidiarycompaniesisrecognisedintheincomestatementinproportiontoholding.

3. Employeebenefitsexpense

Asper IndianGAAPProvisionfor leaveencashment(compensatedabsences) isaccountedforonactuarialbasis.UnderUSGAAPcompensatedabsencesisaccountedonaccrualbasis.

4. Research&DevelopmentExpenses

As per IndianGAAPR&D expenses in the nature of development are capitalised and amortised over theestimatedusefullifeandshownunderdepreciation/amortisation.UnderUSGAAPamortisationofR&DassetsischargedasR&Dexpenses.

5. Depreciation&amortisationexpense

AsperIndianGAAPdepreciationischargedtoIncomestatementonassetsgivenonfinanceleasepriorto1.4.2001.UnderUSGAAPassetsgivenonfinancelease,financeincomeisrecognised.AsperIndianGAAPamortisationofR&Dassetsisshownunderdepreciation/amortisation.UnderUSGAAPamortisationofR&DassetsischargedasR&Dexpensestoincomestatement.

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Auditor’sReportonUSGAAPReconciliation

6. Priorperioditems AsperIndianGAAPpriorperioditemsarereportedseparatelyintheincomestatementfortheyear.UnderUS

GAAPpriorperioditemsareaccountedbyadjustmenttoprioryearsunderretainedprofits.

7. IncomeTaxadjustments IncometaxadjustmentshasbeenmadeonUSGAAPadjustments.

AsperourreportofevendateForS.N.Dhawan&Co.CharteredAccountantsFRN000050N

(S.K.Khattar) (P.K.Bajpai)Partner Director(Finance)M.No.84993

Date:August3,2013Place:NewDelhi

WehaveauditedtheReconciliationofNetProfitofBharatHeavyElectricalsLimitedfortheyearended31stMarch,2013underIndianGAAPtoNetIncomeinaccordancewithUSGAAP(“theReconciliation”).

TheReconciliationistheresponsibilityoftheCompany’smanagement.Ourresponsibilityistoexpressanopinionbasedonouraudit.Inouropinion,suchReconciliation,whenconsideredinrelationtothebasicfinancialstatementstakenasawhole,presentsfairlyinallmaterialrespects,theinformationsetforththerein.

ForS.N.Dhawan&Co.CharteredAccountantsFRN000050N

(S.K.Khattar)PartnerM.No.84993

Date:August3,2013Place:NewDelhi

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EconomicValueAdded(EVA)EVAistherelevantyardstickformeasuring“economicprofits”.EVAisthecompany’snetoperatingprofitaftertax,afterdeductingthecostofcapital.Companies,whichearnreturnshigherthanthecostofcapital,createwealthfortheshareholdersandontheotherhandcompaniesearningreturns lowerthanthecostofcapital,destroyshareholderswealth.

`Croreexceptasotherwisestated

2012-13 2011-12 2010-11 2009-10 2008-09

Costofcapital

Costofequity(%) 15.0 14.9 14.0 13.3 13.4

Weightedaveragecostofcapital(WACC)(%) 14.9 15.0 14.1 13.3 13.4

Averagecapitalemployed 25906 19521 14680 11540 7751

EconomicValueadded

NOPAT 6509 6953 5867 4206 3047

Less:Costofcapital 3852 2921 2074 1536 1039

Economicvalueadded 2657 4032 3793 2670 2008

EnterpriseValue

MarketValueofequity 43322 62940 100971 117027 73944

Add:Debt 1500 193 163 128 149

Less:Cashandcashequivalents 7732 6672 9630 9790 10315

Enterprisevalue 37090 56461 91504 107365 63778

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ValueAdditionStatement(`inCrore)

Description 2012-13 2011-12 2010-11 2009-10 2008-09

A.GenerationofValueAddition

ValueofProduction(lessexciseduty)

47219 47815 41527 33598 27351

Less-DirectMaterial,Power&Fueland

PaymentstoContractors 27759 28717 23051 20427 17458

ValueAdded 19460 19098 18476 13171 9894

Less-OtherOperatingExp 3196 2479 3461 845 567

(Netofincome)

NetValueAddition 16264 16619 15015 12326 9327

%tovalueofproduction 34.44% 34.76% 36.16% 36.69% 34.10%

B.ApplicationofValueAddition

Employeespayments 5753 5466 5410 5243 4113

%tonetvalueaddition 35.37% 32.89% 36.03% 42.54% 44.10%

Depreciation 953 800 544 458 334

%tonetvalueaddition 5.86% 4.81% 3.62% 3.72% 3.58%

Financingcharges:

-Interestonborrowings 125 51 55 34 31

%tonetvalueaddition 0.77% 0.31% 0.36% 0.27% 0.33%

TaxProvision(IncomeTax.,Def.tax,FBT&PriorPeriod)

2818 3262 2994 2280 1711

%tonetvalueaddition 17.32% 19.63% 19.94% 18.50% 18.34%

Dividend(incl.dividendtax) 1544 1821 1775 1332 974

%tonetvalueaddition 9.49% 10.95% 11.82% 10.81% 10.43%

RetainedProfit 5071 5219 4237 2979 2164

%tonetvalueaddition 31.18% 31.41% 28.22% 24.17% 23.21%

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PerformanceAnnualPlan2012-13

2009-10 2010-11 2011-12 2012-132008-090

7000

6000

1000

4688

3944

5661

6448 6561

2000

3000

4000

5000

Contribution to Exchequer

(`inCrore)

CategoryofInvestment 2012-13 2011-12

Schemes 549 805

Modernisation&Rationalization,others 72 69

ScienceandTechnology 14 8

CustomerProjectRelatedCapitalInvestment 117 240

Total 752 1122

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ProductProfileTHERMALPOWERPLANTS

• Steam Generators, Steam Turbines, TurboGenerators along with regenerative feed cycleup to 800 MW capacities for fossil-fuel, andcombined-cycleapplications,capability todesignand manufacture Steam Generators, steamturbineswithsupercriticalsteamcycleparametersandmatchingTurboGeneratorsofupto1000MWunitsize

• Condensers,CondensateExtractionPumps,BoilerFeedPumps,ValvesandHeatExchangersmeetingaboverequirementofTGSetsupto1000MW

NUCLEARPOWERPLANTS

• Steamgenerator&TurbinesandmatchingTurbo-Generators,Condensersupto700MWcapacity

• Heatexchangers

• Pressurevessel

• Reactorvessels

GAS-BASEDPOWERPLANTS

• Gas turbines and matching generators rangingfrom25to292MW(ISO)rating

• Gas turbine-based co-generation and combined-cyclesystemsforindustryandutilityapplications

HYDROPOWERPLANTS

• Custom-built conventional hydro turbines ofKaplan, Francis and Pelton types with matchinggenerators,pumpturbineswithmatchingmotor-generators upto 300 MW, Bulb turbine withmatchinggeneratorsupto10MW

• HighcapacitypumpsalongwithmatchingmotorsforLiftIrrigationSchemes(upto150MW)

• Electro Hydraulic Microprocessor based DigitalGovernorforconventionalturbines

• Microprocessor based Digital Controller for liftirrigationschemes

• Mini/microhydrosetswithPLCbasedcompactDigitalGovernorupto15MW

• StaticexcitationsystemsforHydrogenerators&motors

• BrushlessexciterforHydrogenerators&motors

• SpecialpurposeMotorGeneratorsets

• Spherical (rotary) valves, butterfly valves andauxiliariesforhydrostations

DGPOWERPLANTS

• HSD, LDO, FO, LSHS, natural gas based dieselgeneratorpowerplants,unitratingofupto20MWandvoltageupto11kV,foremergency,peakingaswellasbaseloadoperationsonturnkeybasis

INDUSTRIALSETS

• Industrialturbo-setsofratingfrom7to150MW

• Industrial steam turbines and gas turbines fordriveapplicationsandco-generationapplications

• Reheat steam turbines andmatching generatorsrangingfrom120to200MWcaptive,utilityandcombinedcyclepowerplants

CASTINGSANDFORGINGS

• Sophisticated heavy castings and forgings ofcreep resistant alloy steels, stainless steel andother grades of alloy steels meeting stringentinternational specifications for components ofsub critical, supercritical and ultra super criticaltechnology

BOILERS

• Steamgeneratorsforutilities,rangingfrom30to800MWcapacity, using coal, lignite, oil, naturalgasoracombinationofthesefuels;capabilitytomanufactureboilerswithsupercriticalparametersupto1000MWunitsize

• Steam generators for industrial applications,rangingfrom40to450t/hourcapacity,usingcoal,naturalgas, industrialgases,biomass, lignite,oil,Bagasseoracombinationofthesefuels

Pulverizedfuelfiredboilers

Stokerboilers

Bubblingfluidizedbedcombustion(BFBC)boilers

Circulating fluidized bed combustion (CFBC)boilersupto250MW

Heat-recoverysteamgenerators(HRSG)

Chemicalrecoveryboilersforpaperindustry,

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rangingfromcapacityof100to1000t/dayofdrysolids

BOILERAUXILIARIES

• Fans

Axialreactionfansofsinglestageanddoublestageforcleanairapplicationanddustladenhot gases applications up to 200°C, withcapacity ranging from 40 to 1300m3/s andpressurerangingfrom400to1,500mmwc

Axialimpulsefansforbothcleanairandfluegas applications up to 200°C, with capacityrangingfrom25to600m3/sandpressureup300to700mmwc

Single and double-suction radial fans (plateaerofoil bladed) for clean air anddust-ladenhot gases applications up to 400°C, withcapacity ranging from 4 to 660m3/s andpressurerangingfrom200to3000mmwc

• Air-Preheaters

TubularAirPreheatersforindustrialandutilityboilers

Rotaryregenerativeair-Preheatersforboilersandprocessfurnaces

Large rotary regenerative air-Preheaters forutilitiesofcapacityupto800MW

• Pulverizers

Bowl mills of slow and medium speed forcoalfiredthermalstationswithcapacityfrom 18t/hourto110t/hourcateringto67.5MWto800MWthermalpowerstations

Tubemillsforpulverizinglow-gradecoalwithhigh ash content from 30t/ hour to 110t/hourcateringto110MWto500MWthermalpowerstations

• ElectrostaticPrecipitators(ESP)

Electrostatic precipitators of any capacitywith outlet emission as low as 17 mg/Nm3

(efficiency up to 99.97%) for utility andindustrial applications including Bio massfiredboilers,cementplants,steelplants,sodarecoveryboilersetc

• GuillotineGates&Dampers

Guillotine gates with electric / pneumaticactuator. Sizes up to 6mheight& 7mwidth(withsplit)100%leakproofwithsealair

Bi-planedamperswithelectricactuator.Sizesupto7mheight&5mwidth.100%leakproofwithsealair

Louverdampers(Openclose/Regulating)withelectric/pneumaticactuator.Sizesupto7mheight&5mwidth

Controldampers(Regulating)withpneumaticactuator. Sizes up to 11m height (splitconstruction)&4.5mwidth

• BagFiltersforUtilityandIndustrialapplications

• Fluegasdesulphurization(FGD)systemswithseawater/limestoneslurryscrubber

• Steel Chimneys for Heat Recovery SteamGenerators (HRSG), Industrial Boilers, auxiliaryboilersandotherfluegasexhaustapplications

SOOTBLOWERS

• Long retractable soot blowers (LRSB) for travelupto12.2m

• Furnacetemperatureprobe(FTP)fortravellength6.9mand8.3m

• Long Retractable Non-rotating (LRNR) sootblowerswithforwardblowingforAirheaters

• AshdischargevalveforCFBCboilerapplication

• Sootblowerswithintegralstarters

• SootblowerSequentialPLCcontrolpanel

• RacktypeLongRetractableSootblowers

• Wallblowers

• RotarySootblowers

VALVES

• High and Low-pressure turbines Bypass Valves& hydraulic system for utilities and industrialapplication

• High and medium-pressure Valves, Cast andForged Steel Valves of Gate, Globe, Non-Return(Swing-Check and Piston Lift-Check) types forsteam,oilandgasdutiesupto950mmdiameter,

270

maximumpressure class 4500 (791 kg/cm2) and650°Ctemperature

• Hot re-heat and cold re-heat Isolating Devicesup to 900 mmmaximum class 1500 and 650°Ctemperature

• High-capacity Spring Loaded Safety Valves forset pressure up to 372 kg/cm2 and temperatureupto630°C,andautomaticelectricallyoperatedpressure relief valves for set pressureup to 210kg/cm2andtemperatureupto593°C

• Safety relief valves for applications in power,processandotherindustriesforsetpressureupto421kg/cm2andtemperatureupto537°C

• Reactive cum absorptive type vent Silencersmaximumdiameterof2700mm

• DirectWaterLevelGauges

• Angle Drain Valves - Single & Multi Stage forTurbineDrainApplication

• SevereServiceControlValvesforRH&SHSprayLines

• Quick Closing Non return Valves for Extractionlines and Cold Reheat Non Return valves, up to800mmdiameter,158kg/cm2pressureand540°Ctemperature

PIPINGSYSTEMS

• Power cycle piping, Constant load Hangers,Variable spring Hangers, Hanger components,Low Pressure piping including CirculatingWaterPipingforpowerstationsupto1000MWcapacityincludingSuperCriticalsets

• Piping systems for Nuclear Power Stations,CombinedCyclePowerPlants&IndustrialboilersandforpowerplantsinProcessIndustries

SEAMLESSSTEELTUBES

• Hot-finishedandcold-drawnseamlesssteeltubeswith a range varying fromouter diameter of 19to133mmandwallthicknessof2to14mm, incarbonsteelandlow-alloysteelstosuitASTM/APIandotherinternationalspecifications

• Rifledtubes

• Spiralfinnedtubes

CONDENSERANDHEATEXCHANGERS

• SurfaceCondenser:

236MW&700MWforNuclearpowerplants

12.5MWMarineapplications

IndustrialCondensers

• FeedWaterHeaters(HPHeaters,LPHeaters,DrainCoolersetc.)

Thermal-07to500MW(sub-critical)&300-800MW(supercriticalwithsinglestream)

Nuclear236MW,500MWand700MWrating

• MoistureSeparator&Reheater(MSR):

236MW,500MW&700MWNuclearsets

• LiveSteamReheater(LSR):

500MWFBRNuclearsets

• Auxiliary Heat Exchangers for Turbo and HydroGenerators:

AirCoolers(Frame&TubeType)

OilCoolers(Shell&TubeTypeandPlugInType)

HydrogenCoolers(Frame&TubeType)

• AuxiliaryHeatExchangersforTransformers:

OilCoolers(Shell&TubeTypeSingleTubeorConcentricDoubleTubeType)(Frame&TubeType)

• AuxiliaryHeatExchangersforGeneralApplication

Water-WaterCoolers(Shell&TubeType)

• Industrial Heat Exchangers for Refineries, Petro-Chemicals&Fertilizerindustries

• ButterflyValves(Fabricated/castbody&door)

• FlashTanksforthermal&nuclearsets

• Service Tanks, Storage Tanks & Pressure vesselsforThermal,Nuclearsetsofallratings&industrialapplications

• CS/SS/Non-ferrousshellandtubeheatexchangersand pressure vessels (For all applicationsirrespectiveofrating)

• Air-cooledheatexchangersforGTGuptoFr-9FE,andCompressorapplicationsofallratings

• Steamjetairejectorsforallcondensersupto150MW

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• Deaeratorsfrom7MWto800MW

• Glandsteamcondensers7MWto150MW

• Gascoolersforallpossiblecompressorapplications

• Oilcoolers-STGupto150MW,GTGuptoFr-9FE,

• GeneratorAircoolersupto150MWSTGandGTGupto9FA

PUMPS

• Pumpsforvariousapplicationstosuitutilitiesuptoacapacityof1000MW

• Boilerfeedpumps(motororsteamturbinedriven)

• Boilerfeedboosterpumps

• Condensateextractionpumps

• Circulatingwaterpumps.(Alsoknownas-CoolingwaterPumps)

DESALINATIONANDWATERTREATMENTPLANTS

• ReverseOsmosis (RO) based Desalination Plantsfor treatingseawater,highBrackishandbrackishwaterfordomesticandindustrialapplications

• Reverse Osmosis based Demineralization(RO-DM) Plants for Power Plant to generate Water for Service/Potable/Boiler Feed Make-uprequirements

• Various types of Pre-Treatment (Membranebased/Conventional) Systems to condition raw-watersuitableforROApplication

• Sewage&effluentTreatmentPlantsforwaterre-useandre-cycling

• Operation&Maintenanceofplants

AUTOMATIONANDCONTROLSYSTEMS

• SteamGenerator/BoilerControls

• SteamTurbineControls

• BoilerFeedPump(BFP)DriveTurbineControl

• StationControlandInstrumentation/DCS

• Offsite/Offbasecontrols/BalanceofPlantControls

Ashhandling

CoalHandling

WaterSystem

MillRejectSystem

Condensateon-linetubecleaningsystem

GasBoosterCompressor

• HydroPowerPlantControlSystem

• GasTurbineControlSystem

• Nuclear Power Plant Turbine& Secondary Cyclecontrolsystem

• Powerblockofsolarthermalpowerplant

• IndustrialAutomation

• Sub-Station Automation (SAS) and SupervisoryControl&dataAcquisitionSystem(SCADA)

• ElectricalControlSystem(ECS)forRefineries

• EnergyManagementSystem(EMS)forPowerPlant

POWERELECTRONICS

• Excitationsystem

• ACDriveSystem

• StaticStarters

• InductionHeatingEquipment

TRANSMISSIONSYSTEMCONTROL

• HighVoltageDirectCurrent(HVDC)system

• FlexibleACTransmissionsystem(FACTS)

Fixed series compensation (FCS)/ Thyristorcontrolledseriescompensation(TCSC)

StaticVARCompensation(SVC)System

ControlledShuntReactor(CSR)

StaticCompensator(STATCOM)

POWERSEMICONDUCTORDEVICES

• Diodes-Rangingfrom1400-4400V/250-2000A

• Thyristors-Rangingfrom1400-7000V/150-4950A

SOLARPHOTOVOLTAICS

• Mono/MultiCrystallineCells(125and156mm)

• Mono/MultiCrystallineModules(37to270Wp)

• PV Systems: Grid Interactive, Hybrid and standalonePVpowerplants

• Spacegradesolarpanels

• SpaceGradeBatteries

DEFENCEELECTRONICS

• IntegratedPlatformManagementsystem(IPMS)

272

• IntegratedBridgeSystem(IBS)

• MachineryControlRoom(MCR)Simulator

• TrainingSimulatorforVehicles,platforms,radars,weapons, missiles and CBT for all defence andpara-militaryforces

• Weapon Fire control system, Avionics, radiocommunication Products, Electronic warfaresystemandEarlyWarningSystems

• GuncontrolSystemforMainBattleTanks(MBT)

SOFTWARESYSTEMSOLUTION

• MeritOrderrating

• PerformanceAnalysis,Diagnostics&Optimization(PADO)forThermalUtilities

• PerformanceCalculation&Optimizationsystem

• OPCconnectivityfromDCStothirdpartysystems

• EnterpriseAssetManagementSystem(EAMS)

• EnterpriseResourcePlanning(ERP)

• OperatorTrainingSimulator

• PowerHouseintranetsoftware

• AlarmAnalysissystem

• RealTimePerformanceDataMonitoringsystem

• HistoricalReplaySystem

SWITCHGEAR

Medium Voltage Vacuum Switchgear of varioustypesforindoorandoutdoorapplicationsforvoltageratings up to 36 kV and Gas insulated switchgears (36KV-145kV)

• Indoorswitchgearsupto12kV,50kA,3500Amp.for thermal, nuclear, hydro and combined cyclePowerPlantProjects

• Indoor switchgears up to 36 kV, 31.5 kA, 2500Amp.forIndustriesandrefineries

• IndoorVacuumcircuitbreakers12kV,25kA,1250amp.fordistributionsystem

• OutdoorVacuumcircuitbreakers36kV,25kA,2000Amp.fortransmissionanddistributionsegment

• Outdoor Vacuum circuit breakers 12 kV, 25 kA,1250amp.fordistributionsegment

• Outdoor pole mounted 1 Ph, Vacuum circuit

breaker 25 kV, 25 kA, 1600 amp. for tracksiderailwayapplication

• OutdoorpolemountedAutorecloser/sectionaliser/capacitorswitchfor12kVruralsegment

• Gasinsulatedswitchgears36kV,25kA,1600Amp.forrefineries,urbans/s

• Gas insulated switchgears 145 kV, 40 kA, 2500Amp.fortransmissionsegment

• SF6circuitbreakers(145kV-800kV)

BUSDUCTS

• Bus-ducts with associated equipment to suitgeneratorpoweroutputofutilitiesofup to800MWcapacity.

TRANSFORMERS

• Powertransformersforvoltageupto1200kV

• Generatortransformers(upto500MVA,400kV, 3Ph/400MVA,400kV,1Ph)

• Autotransformers(upto1000MVA,400kV,3Ph/600MVA,400kV,1Ph/1000MVA,765kV,1Ph/1000MVA,1200kV,1Ph)

• ConverterTransformers/SmoothingReactors(upto600MVA,±500kV)/(upto254MVAr,±500kV)forpowerstations.

• ShuntReactors(upto150MVAr,420kV,3Ph/110MVAr,765kV,1Ph)

• Controlled Shunt Reactors (up to 200 MVA, 420kV,3Ph/150MVAr,420kV,1Ph/110MVAr,765kV,1Ph)

• Phase Shifting Transformers (up to 315 MVA, 400 kV, 3 Ph, up to 333MVA420 kV, 1 Ph, PST(1000MVAbankin3Ph)fortransmissionlines)

• Instrumenttransformers

Currenttransformersupto400kV

Electro-magneticvoltagetransformersupto220kV

Capacitorvoltagetransformers(33KVto1200kV)

• SpecialTransformers

Rectifiertransformer(Upto120kA,132kV)

Furnacetransformer(Upto33kV,60MVA)

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• TractionTransformer

Freightlocotransformerupto25kV,7475kVAfor3phasedrivelocomotives

ACEMUtransformerupto25kV,1550kVA

• ESP(HVR)Transformer100kV1400mA

• Drytypetransformerupto15000kVA

Smoothingreactorsupto3.3mH,2700Amp.

DryTypereactorupto300mH,120Amp.

DCChokeupto0.5mH,4600Amp.

• Castresindrytypetransformersupto15MVA33kV

INSULATORS

• High-tensionceramicinsulators

Disc insulators for AC/DC applications,rangingfrom45to420kNelectro-mechanicalstrength,forcleanandpollutedatmospheres.Suitablefor800kVAC&DCapplication

Pininsulatorsupto33kVincludingradiofreedesign

Hollow porcelains up to 800 kV forTransformers,SF6circuitbreakers

Solidcoreinsulatorsupto400kVforBusPost&Isolatorsforsubstationapplications

Solid core porcelain insulators for 25 kVRailwayTraction

Composite Insulators for 25 kV RailwayTractionandupto400kVtransmissionlines

• WearResistantMaterial(Ceralin)

CeramicLinersforWearResistantApplicationin Thermal Power Station and other variousapplications

INDUSTRIALANDSPECIALCERAMICS

• EWLI –ElectronicWater Level Indicators used inBoilerDrumWaterLevelMonitoring(BHELVISIONsystem), Ceramic and Tungsten Carbide FlowBeansforChristmastreevalves

CONTROLPANEL

• LT Switchgear, SCAP, Thyristor, RAPCON andSTATCONPanels

CAPACITORS

• H.T.CapacitorsforPowerfactorcorrection(MotorCapacitors)3.3to11kVdeltaconnectedCapacitorbanks

• H.T. Capacitors for Shunt, Series & SVC (StaticVAR compensation), Harmonic filter & HVDCapplications(3.3kVto500kV,1Ph/3Phcapacitorbanksofrating0.5MVArto250MVAr)

• CapacitorDividerforCVT

• CouplingCapacitorforPLCC

• Surge Capacitor for protection of Generators &Transformers(11kVto40kV)

• RoofCapacitorfortractionlocomotive

CapacitorDividerforCVTupto1200kV

CouplingCapacitorforPLCCupto400kV

BUSHINGS

• 52 to 400 kV OIP condenser bushings fortransformerapplications

• 25kVLocomotivebushings

• Special application bushings like cable box andwallbushing

ONLOADTAPCHANGERS(OLTC)

On Load Tap Changer for various application likePower Transformer, Furnace Transformer, StationTransformer,RectifierTransformeretc

• On Load Tap Changer up to 400 kV classTransformer

• Off Circuit Tap Switch up to 400 kV ClassTransformer

ELECTRICALMACHINES

AC Squirrel cage, Slip ring, Synchronous, Variablespeed motors; Industrial Alternators and Motorsfor Hazardous areas aremanufactured as per rangesummarized below. Special-purpose machines aremanufacturedonrequest

o Voltage,Frequency&Enclosure

o Voltage-AC-415Vto13800V

o Frequency-50Hz&60Hz

o Enclosure -SPDP,TETV,CACW,CACA&DuctVentilated

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• ACMachinesforSafeAreaApplication

InductionMotors

Squirrelcagemotors-150kWto21000kW

Slipringmotors-150kWto10000kW

Synchronousmotors-1000kWto20000kW

VariablespeedMotors

150kWto21000kW(Squirrelcagemotors)

1000kWto20000kW(Synchronousmotors)

• AC Machines for Hazardous Area Application(FixedspeedorwithVFD)

Flame-proof squirrel cage Induction motors(Ex‘d’)(150kWto1500kW)

Non-sparking squirrel cage Inductionmotors(Ex‘n’)(150kWto4000kW(higherratingsonrequest))

Increased safety squirrel cage Inductionmotors (Ex ‘e’) (150kW to4000kW (higherratingsonrequest))

Pressurizedmotors(Ex‘p’)

o 150kWto21000kW(Squirrelcagemotors)

o 1000kWto20000kW(Synchronousmotors)

• MillDutyMotors(150kWto5000kWwithspeedbasespeed>150rpm)forsteelmills

• IndustrialAlternators(Steamturbine,GasturbineandDieselenginedriven)(3000kVAto25000kVA)

• InductionGenerators (300 kVA to 6000 kVA) formini/microHEP

• 2 Pole Gas Turbine driven Generators up to 270MWandmatchingExciters

• 4 Pole Gas Turbine driven Generators up to 60MWandmatchingExciters

• 2 Pole Steam Turbine driven Generators up to 270MWandmatchingExciters

• 4 Pole Steam Turbine driven Generators up to 60MWandmatchingExciters

• PermanentMagnetBasedGeneratorsupto5MW.

• GasTurbinegeneratorsupto270MW

COMPRESSORS

• Multi stage Centrifugal compressors along

with auxiliary system for various applicationsare manufactured and supplied with followingconfiguration&parameters

Model–

o Horizontallysplittypeupto40bardesignpressure

o Vertically split typeup to350bardesignpressure

Capacity–300000m3/hr

Gas–Air,CO2,N2,H2,NH3,NaturalGas,WetGas,Propyleneetc.

Industry – Refineries, Fertilizers, Oil & Gas,Steel,Power

Internationalstandard–API617

Testing capability–MRT, Performance test, Full load, full pressure full speed test,CompleteUnitTest

Driver–SteamTurbine,GasTurbine,Motor

CONTROLGEAR

• IndustrialControlGear

Electroniccontrollersforindustries/powerplants

Digital Excitation control system (1000 A,400VDC/,400VDCwithredundantthyristorstacks&DCfieldbreaker)

LargecurrentrectifierswithPLCBaseddigitalcontrols

DigitalHydraulic/compactGovernors

DigitalAVR(1Ph,300VDC/3Ph,400VDC)

Control panels and cubicles for applicationsin steel, aluminium, cement, paper, rubber,mining,sugarandpetrochemicalindustries

• OilRigControls

ACpowercontrolroom

DCpowercontrolroom

PowerPack(DGsets)

o ACControlModule

o DCControlModule

Driller’sConsole

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Cable set, cable trays, cable box and crewroomforoilrigs.

DGset forOil rigapplication (63/250/380/ 500KVA)

• Contactors

LTairbreaktypeACforvoltagesupto660V

LTairbreaktypeDCcontactorsforvoltagesupto600V

HTvacuumtypeACforvoltagesupto11kV

• TractionControlGear

Control gear equipments for AC Electric &Diesel Electric Locomotives, EMUs, DEMU,DETC, metro railways and other tractionapplications

EP contactors, EM contactors, EM relays,Reversers & EP Offload switches, Isolatingswitches, resistors, resistor panels etc. fortractionapplications

Mastercontrollers

Main Starting Resistors (MSR) & Dynamicbrakingresistors(DBR)

Controlcubicles

Excitationcontrol&VoltageregulatorpanelsforDELocos

Rectifiers (upto 1200V), converter/ inverterforAC/DCEMUs

Auxconverters/StaticInverterforACLocos

• ControlandRelayPanels

Control & Protection panels for EHVTransmissionProjectsforvoltagesupto400kV

SynchronizingTrolley/SwingPanels

Protection panels for large Generators upto 600MW for thermal, nuclear, hydro andcombinedcyclePowerPlantProjects

Remote Control and relay panels for MVSwitchgear

Turbinegaugepanelsforhydrosets

Outdoortypecontrolpanelsandmarshallingkiosks

Remote Transformer Tap-Changer Controlpanels

LTSwitchGear,SCAP&ThyristorPanel

TRANSPORTATIONEQUIPMENT

• TractionMachines

AC traction motors (upto 1150 kW) for alllocos&EMUs

DC traction motors (upto 630 kW) for allrangesoflocos&EMUs

ACtractionalternators(upto3860kW)forallrangesofDElocos&EMUs

DCtractiongeneratorsupto2000kW

Motorgeneratorsets(upto25kW)foralltypeofrequirements

Auxiliarygeneratorsandexciters(upto50kW)foralltypeofrequirements

Eddycurrentclutchforradiatorfan

DC blowermotors (upto 50kW) for dynamicbrakingsystem

Tractiongradegearsandpinions

• TransportationSystems

Tractionsystems

Urbantransportationsystems

ACelectriclocomotives(upto5000HP,25kVAC,1500VDC)

AC-DCdualvoltageelectriclocomotives

Diesel-electric (Upto 2600 HP) & Dieselhydrauliclocomotives

Batterypoweredlocomotive

OHErecording-cum-testcar

Bogies

Dynamictrackstabilizers

Wellwagon

RailcumRoadvehicle

Utilityvehicle

Ballastcleaningmachines

TRACTIONDRIVESYSTEM

• Traction Drive system comprising traction

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converter,auxiliaryconverterandVehicleControlElectronicsfor:

6000HPGTO/IGBTbasedACLocomotives

1600HPACElectricalMultipleUnit(EMUs)

1400 HP Diesel Electrical Multiple Units(DEMUs)

OILFIELDEQUIPMENT

• OilRigs–Avarietyofon-shoredrilling rigswithAC-SCRandACtechnology,work-overrigs,mobilerigs, for drilling up to depths of 9,000 metres,completewithmatchingdraw-worksandhoistingequipmentincluding:

Mastandsubstructure

Rotating equipment: Draw works; Rotary;Swivels;TravellingBlocks

independentRotarydriveunit

MudSystemincludingpumps

Powerpacksandrigelectrics

Riginstrumentation

Rigutilitiesandaccessories

RefurbishmentandupgradationofBHELandNonBHELmakeOilRigs

DCOilrigmotorsofallrequiredranges

Oilrigalternatorsofallrequiredranges

• WellheadsandX-masTreesupto15000psi,MudLine Suspension, Choke and Kill manifold, CBMWellheads, DSPM H- Manifold Assembly, Mudvalves, ESP hangers, Block type X-mas Trees &LandingBasesforCasingHeads

DISTRIBUTED POWER GENERATION AND SMALLHYDROPLANTS

• Windelectricgeneratorofupto600kWrating

• Small hydro power plants up to 25MW stationcapacity

SYSTEMSANDSERVICES

• PowerGenerationSystems

Turnkeypowerstations/EPCcontracts

Combined-cyclepowerplants

Cogenerationsystems

Captivepowerplants

ConcepttoCommissioningsolutionsforSolarPhotovoltaicsystemsuptoMWprating

Modernization and renovation of powerstationsandRLAstudies

Softwarepackagesincludingsimulatorsforutilities

Erection, commissioning, support services,sparesmanagementandconsultancyservicesforalltheabovesystems

• TransmissionSystems

Sub-stations/switchyards

ShuntandSeriescompensationsystems

Powersystemanalysisandcontrols

HVDCtransmissionsystems

INDUSTRIALSYSTEMS

• Complete CoalHandling Plant andAshHandlingPlant including Civil & Structural, Mechanical,ElectricalworksandAutomationsystems

• CompleteMineWinderSystems

• CompleteElectrics,Drives,Controls&AutomationSystems for Processing & Compacting of RawMaterials, Iron Making, Primary & SecondarySteelMaking,Casters& steel Finishing likeMills& process Lines for both long products & flatproducts

• CompleteRawMaterialHandlingSystemincludingCivil & Structural, Mechanical, Electrical andAutomationsystemsforSteelandotherindustries

• Complete Electrics & Automation Systems forHigh Current Rectifiers for Aluminium SmeltersandProcessingMillsforAluminiumPlants

• AutomatedStorage&RetrievalSystems(ASRS)

• BalanceofPlant(BOP)forHydropowerplants

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BHELinIndia

CORPORATE OFFICENEW DELHI

BUSINESS OFFICES

BENGALURU

BHUBANESWAR

CHANDIGARH

CHENNAI

GUWAHATI

RANCHI

JABALPUR

JAIPUR

KOLKATA

1

2

3

4

5

6

7

8

9

LUCKNOW

MUMBAI

NEW DELHI

RAIPUR

SECUNDERABAD

VADODARA

10

11

12

13

14

15

MANUFACTURING UNITS

BENGALURU

BHOPAL

GOINDWAL

HARIDWAR

2114

HYDERABAD

JAGDISHPUR

JHANSI

RANIPET

TIRUCHIRAPPALLI

3

4

6

7

815

9

10

RUDRAPUR11

13

5

12

SECUNDERABAD

VADODARA

VARANASI

A

SERVICE CENTRES

CHANDIGARH

NAGPUR

NOIDA

PATNA

KOLKATAB

C

D

E

F

G

H

CORPORATE R&DHYDERABAD

A

3

12

8

10

15

11

C

7

13

14

6

2

B9

1

5

4

A6

5 11

D

9E

B3G

C

7F

1 2

144D10

12 13

REGIONAL OFFICES(POWER SECTOR)

NOIDA (NORTHERN REGION)

KOLKATA (EASTERN REGION)

NAGPUR (WESTERN REGION)

CHENNAI (SOUTHERN REGION)

SUBSIDIARIES- BHPV LTD. VISHAKHAPATNAM- BHEL ELECTRICAL MACHINES LTD.,KASARAGOD, KERALA

A

B

C

D

8 H15

16

THIRUMAYAM16

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BURUNDI

GlobalBusiness

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BURUNDI

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BusinessResponsibilityReportofBHEL:2012-13Section-A:GeneralInformationabouttheCompany

1. CorporateIdentityNumber(CIN)oftheCompany:L74899DL1964GOI004281

2. Name of the Company: BHARAT HEAVYELECTRICALSLIMITED

3. Registered address: BHEL House, Siri Fort, NewDelhi–110049

4. Website:www.bhel.com

5. E-mailid:query@bhel.in

6. FinancialYearreported:2012-13

7. SectorsthattheCompanyisengagedin:Referto‘CorporateProfile’,AnnualReport2012-13

8. Listthreekeyproducts/servicesthattheCompanymanufactures/provides

I. Steam Turbines, Generators, Boilers &accessoriesforThermalpowerplant

II. Power & instrument transformers, reactors,switchgears, insulators & HVDC system forTransmissionsegment

III. Locomotives,propulsionequipment,tractionmotors/alternators,VCBsforTransportationSector

9. TotalnumberoflocationswherebusinessactivityisundertakenbytheCompany

i. Number of International Locations (Providedetailsofmajor5)

BHELhas10overseasoffices.Majorfivearein Muscat Oman, Jakarta Indonesia, AlmatyRepublic of Kazakhstan, Thimpu Bhutan andDubaiUAE.

ii. NumberofNationalLocations

Thecompanyhas16manufacturingdivisions,2 repair units, 4 regional offices, 8 servicecentres,and15regionalcentres.

10. Markets served by the Company – Local/State/National/International/

BHEL serves national as well as internationalmarkets.

Section-B:FinancialDetailsoftheCompany (FY2012-13)

1. Paidupcapital : `489.52Crore2. TotalTurnover : `50156.48Crore3. TotalProfitafterTax : `6614.73Crore4. Totalexpensesincurred1

onCSR : `63Crore

5. List of activities in which expenditure on CSRhas been incurred: Refer to Corporate SocialResponsibility & Sustainability DevelopmentunderManagementDiscussion&Analysis,AnnualReport2012-13

1 Including` 28Croreoutoftheprovisioncreatedin2011-12

Section-C:OtherDetails

1. DoestheCompanyhaveanySubsidiaryCompany/Companies?

Yes,BHELhastwosubsidiarycompanies.

2. Do the Subsidiary Company / Companiesparticipate in the BR Initiatives of the parentcompany?Ifyes,thenindicatethenumberofsuchsubsidiarycompany(s)

Yes,bothparticipateinBRinitiativesofBHEL.

3. Do any other entity/entities (e.g. suppliers,distributorsetc.)thattheCompanydoesbusinesswith, participate in the BR initiatives of theCompany? If yes, then indicate the percentageof such entity/entities? [Less than30%, 30-60%,Morethan60%]

Yes. Stakeholders like our customers, sub-contractors, vendors participate in BR initiativesofBHEL.

SectionD:BRInformation

1. DetailsofDirector/DirectorsresponsibleforBR

a) DetailsoftheDirector/BRHeadresponsibleforimplementationoftheBRpolicy/policies

Sl. No. Particulars Details

1 DINNumber(ifapplicable) 03053133

2 Name RKrishnan

3 Designation Director(HR)

4 Telephonenumber 01126001003

5 e-mailid rkrishnan@bhel.in

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2. Principle-wise(asperNVGs)BRPolicy/policies(ReplyinY/N)

Sl. No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9

1 Doyouhavepolicy/policiesfor.... Y Y Y Y Y Y N Y Y

2 Has the policy being formulated in consultationwiththerelevantstakeholders?

Y Y Y Y Y Y N Y Y

3 Does the policy conform to any national /internationalstandards?Ifyes,specify?(50words)

Y Y Y Y Y Y N Y Y

4 HasthepolicybeingapprovedbytheBoard?Is yes, has it been signed by MD/owner/CEO/appropriateBoardDirector?

Y Y Y Y Y Y N Y Y

5 Does the company have a specified committeeof the Board/ Director/Official to oversee theimplementationofthepolicy?

Y Y Y Y Y Y N Y Y

6 Indicatethelinkforthepolicytobeviewedonline? Linkshavebeenprovidedwhereverapplicable

7 Hasthepolicybeenformallycommunicatedtoallrelevantinternalandexternalstakeholders?

Y Y Y Y Y Y N Y Y

8 Does the company have in-house structure toimplementthepolicy/policies?

Y Y Y Y Y Y N Y Y

9 Does the Company have a grievance redressalmechanismrelatedtothepolicy/policiestoaddressstakeholders’ grievances related to the policy/policies?

Y Y Y Y Y Y N Y Y

10 Has the company carried out independent audit/evaluation of the working of this policy by aninternalorexternalagency

Y Y Y Y Y Y N Y Y

Notes:

1. Wehavevariouspracticesestablishedbasedontheseprinciples,butdonothaveformalpolicydocumentwithrespecttosomeofthem.Weplantobringoutsuchpoliciesinduecourseoftime.

2. OnceapolicyisapprovedbytheBoard,itneednotbenecessarilysignedbyCMD/BoardDirector.

3. PoliciesandproceduresoftheorganizationaresubjecttoISO9001/ISO14001/OHSAS18001Audits,CAGAudits,ParliamentaryCommitteereview,ReviewbyBoard/CommitteeofFunctionalDirectors/BoardLevelCommittee/ManagementCommitteeetc.

4. BHELisamemberofindustry/tradeassociationsviz.,CII,FICCI,IEEMAetc.andparticipatesinpolicyadvocacythroughthesebodies.

2a. IfanswertoS.No.1againstanyprinciple,is‘No’,pleaseexplainwhy:(Tickupto2options)

Sl. No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9

1 ThecompanyhasnotunderstoodthePrinciples

2 Thecompanyisnotatastagewhereitfindsitselfinapositiontoformulateandimplementthepoliciesonspecifiedprinciples

3 Thecompanydoesnothavefinancialormanpowerresourcesavailableforthetask

4 Itisplannedtobedonewithinnext6months

5 Itisplannedtobedonewithinthenext1year √

6 Anyotherreason(pleasespecify)

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Note: We have various practices established based on theseprinciples,butdonothaveformalpolicydocumentwithrespecttosomeofthem.Weplantobringoutsuchpoliciesinduecourse

oftime.

3. GovernancerelatedtoBR

• Indicate the frequencywithwhich the Board ofDirectors,CommitteeoftheBoardorCEOtoassessthe BR performance of the Company. (Within 3months,3-6months,Annually,Morethan1year)

Within3months

• DoestheCompanypublishaBRoraSustainabilityReport? What is the hyperlink for viewing thisreport?Howfrequentlyitispublished?

BHELpublishesitsAnnualEnvironmentSustainabilityReport. The latestEnvironmentSustainabilityReportcanbeaccessedthroughthelink:

http://www.bhel.com/healthsafety/BHEL%20Sustainbility%20Report%20Final%20for%20Print.pdf

SectionE:Principle-wiseperformance

Principle1:Ethics,TransparencyandAccountability

ThecompanyhasaBoardapproved‘CodeforBusinessConduct&Ethics’ forallBoardMembersandSeniorManagementpersonnelwhichcanbeviewedthroughthefollowinglink:

http://www.bhel.com/investor_relations/pdf/Code%20of%20Business%20Conduct%20and%20Ethics.pdf

In addition, as part of BHEL’s persisting endeavor toset a high standard of conduct for its employees(other than thosegovernedby standingorders), the‘BHEL Conduct, Discipline and Appeal Rules, 1975’areinplace.TheCompanyissubjecttoRTIAct2005andauditbyStatutoryAuditors(undersection224ofthe Companies Act, 1956), CAG audit under section619 of the Companies Act, 1956. The company hasalso signed a MoU with Transparency Internationaltoadopt‘IntegrityPact’tomakepublicprocurementand contracting more transparent by binding boththe parties to ethical conduct. Under delegation ofpowerofvariousfunctionaries,accountability iswelldefined.WorksPolicy,PurchasePolicyandotherpolicydocumentsfacilitatetransparencyinourworkingandcommitmentofhighestorderofintegrity.

The Company also has a Shareholders’/Investors’Grievance Committee (SIGC) specifically to lookinto matters related to redressal of shareholdersand investors complaints. As reported by KarvyComputersharePrivateLimited(RTA),1048complaintswerereceivedfromtheshareholdersduringtheyearunderreviewandallcomplaintswereredressedupto31stMarch,2013.

Principle2:Productslifecyclesustainability

BHEL products & services are fuel efficient, energyefficient, environment friendly and are known forworld-class performance. Performance of BHELsuppliedpowerplantequipmentaredrivenbylowerauxiliarypowerconsumption,higherplantefficiency,lowerdesignheat rate&betterPLF -all resulting inlowerlifecyclecost.

Four prime products which have incorporatedenvironmental concerns in their design are PowerPlants operating with Steam at Supercriticalparameters, Circulating Fluidized Bed CombustionBoilers(CFBC),SolarPVandElectrostaticprecipitator(ESP).

BHEL is also implementinge-procurement inphasedmanner as business improvement and sustainablebusinesspractice.Reusablematerialsarebeingusedforpackingetc.

BHEL has pioneered entrepreneurship developmentin and around its manufacturing units by providingregularsupporttoSMEsthroughknowledgesharing,training anddevelopment and resourcemobilizationetc.

Companyhasaninstitutionalisedmechanismtorecycleproductsandwastes in-housetotheextent feasible.Forexample,eachMTof themoltensteelproducedatourCFFPunitcontains54%oftherecycledscrap(ofCFFP)and45%ofMSScrap(fromotherBHELunits),thusmakingitanalmosta100%recycledproduct.

Principle3:Employee'swell-being

BHEL has been a frontrunner in the area of humanresourcemanagementandhavedocumentedtheHRMpoliciesandrulesintheformofaCodifiedPersonnelManual to ensure transparency and uniformity ofimplementation.

1. The total number of regular employees as on31.03.2013:48,399

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2. Totalnumberofemployeeshiredontemporary/contractualbasis:

i. Temporary : Nil

ii. Casual : Nil

iii. Contractual : 14003

3. Numberof permanentwomenemployees ason31.03.2013:2674

4. Numberofpermanentemployeeswithdisabilitiesason31.03.2013:928

5. Yes. BHEL has multiple employees' unionsoperatingatunit/divisionlevel.

6. Thedataforpercentageofpermanentemployeeswho are member of recognised employeeassociationisnotavailable.

7. In2012-13,companyhasreceived2complaintsofsexualharassmentwhichhavebeendisposedoffsatisfactorily.Further,nocomplaintofchildlabour/forced labour/involuntary labour/discriminatoryemploymenthasbeenreceived.

8. Duringtheyear2012-13,totalnumberoftrainingmandays per employee is 4.95. Also 152multi-skilling/skill up gradation programmes wereconductedcoveringapproximately3000artisans.8390VocationalTrainees(386586mandays)and6139ActApprentices (1103205mandays)weretrainedindifferentunits.

Principle4:Stakeholderengagement

Yes, the company has identified Customers,Employees, Shareholders,VendorsandSocietyas itsstakeholders. BHELhas processes in place to ensureinclusion of stakeholder concerns and expectations.Keyissuesareidentifiedthroughongoingstakeholderengagementandaddressedbyprogrammesoractionplans with clear and measurable targets. BHEL hasclearly identified the disadvantaged, vulnerable &marginalised stakeholder in the vicinity of the BHELmanufacturingunitsandtheirconcernsareaddressedasperCSRschemetotheextentpossible.

Principle5-HumanRights

BHELpoliciesareinlinewiththeprinciplesofHumanRights,TheConstitutionofIndiaandvariousapplicableLaws. BHEL has special provisions for ensuringsafeguardofwomenemployeeattheworkplace.No

instanceofHumanRightsabusehasbeenreportedintheCompany.

Further,BHELisalifetimememberofUnitedNationsGlobalCompact(UNGC),IndiaNetwork.Thecompanyreports its performance on 10 Principles of UNGCeveryyearthroughCommunicationonProgresswhichis uploaded on company web-site also for publicviewingwhichcanbeaccessedat:

http://www.bhel.com/healthsafety/BHEL's%20Communication%20on%20Progress%202012-13.pdf

Principle6:Environment

Sustainability is an integral part of the company’sstrategyas stated inMissionStatement–“ProvidingSustainableBusinesssolutionsinthefieldsofEnergy,Industry&Infrastructure”.

All manufacturing Units of the company and PowerSector Regions are accredited to internationalstandards viz. ISO-14001 for environmentalmanagement systems and have ‘Health, Safetyand Environment (HSE)’ policy. The EnvironmentManagementSystem(EMS)providesforanexcellentframeworktoidentify/assesspotentialenvironmentalrisksandaddresstheminstructuredmanner.Aspertheapplicablestatutes,theEnvironmentalStatementshowing related environmental compliance issubmitted to the respective State pollution ControlBoardbyallmanufacturingunits.

Theorganization is also striving tominimize internalcarbonfootprintsthroughvariousinitiativeslikesettingupa250KWSolarpowerPlantatmanufacturingunitat Bhopal in 2012-13. Previously such solar powerplantshavebeensetupatEDNBangaloreandCorpR&DHyderabad.

BHEL has also undertaken R&D initiatives towardsCO

2 reduction and/or CO2 capture through Oxy-fuel combustion, Biomass combustion, Ammoniabased CO2 sequestration systems etc. Pilot scaledemonstrationofco-firing Indiancoalswithbiomasslikericehuskandwoodpelletswerecarriedandtrialsweresuccessfullycompletedduring2012-13with20%wtbiomass and80%wtpulverised coal.Atpresent,establishmentof400kWOxy-FuelcombustiontestrigisinprogressatBHEL-Trichy.

UndertheaegisoftheNationalMissiononCleanCoalTechnology, BHEL in association with IGCAR, NTPC

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andotherorganizationsisdevelopingAdvancedUltraSupercritical Technology. In conformity with greenenergy initiative, an energy efficient largest singlecylinder non-reheat steam turbine for 100-140MWapplication has already been developed to harnesswasteheat.

There is no show cause or undesirable observation/report from CPCB/SPCB during the entire year 2012-13.

Principle7:Policyadvocacy

BHELisamemberoftradeandchamber/associations.SomeofthemareCII,SCOPE,FICCI,IEEMA,WECandASSOCHAM.

BHEL participates in policy advocacy through thesebodies for promoting company's interests throughknowledge sharing. Some of the recent examplesof its public advocacy activities are focused towardsdevelopment of Indian Power Sector and IndianManufacturing Industry, strengtheningof technologybaseincountryandgrowthofPublicSectorEnterprisesthroughbettergovernance.

Principle8:Inclusivegrowth

BHEL has well structured CSR programme towardsinclusive growth and equitable development. Thecompany supports numerous social initiativesacross the country by undertaking projects throughspecialized agency like NGO, Govt. agency etc.

TowardsvariousCSRinitiatives,totalamountof`63Crorehasbeenspent in2012-13.RefertoCorporateSocial Responsibility & Sustainability Developmentunder Management Discussion & Analysis, AnnualReport 2012-13 for details of various initiativesundertaken during the year. Impact assessment oftheseinitiativeswillbetakenupsubsequently.

Principle9:Customervalue

Customer values are enshrined in our corporateculture.CustomerfocusispartofourVision,MissionandValuesstatements.Thefocustowardscustomersand end users of the products is evident from thefactthatwith57%shareinIndia’sinstalledelectricitygeneration capacity, BHEL equipped power plantsgenerate nearly 66% of the electricity testifyinghighercustomervaluepropositionofitsproductsandservices.

GivingdiversifiedandlargescaleoperationsofBHEL,customer complaints are handled by respectivebusiness units / project divisions. The feedbackof customer is taken regularly through customersatisfaction surveys, customers’ meets and face-to-faceinteractions.

There isnocasefiledbyanystakeholderagainstthecompanyregardingunfairtradepractices,irresponsibleadvertisingand/oranti-competitivebehaviourduringthelastfiveyears.

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Bharat Heavy Electricals LimitedRegd. Office : BHEL House, Siri Fort, New Delhi - 110 049

Notice

Notice is hereby given that the 49th Annual GeneralMeeting of the Members of BHARAT HEAVYELECTRICALSLIMITEDwillbeheldonFriday,the20th

September, 2013 at 10 A.M. at FICCI Auditorium,BarakhambaRoad(TansenMarg),NewDelhi-110001,totransactthefollowingbusinesses:-

ORDINARYBUSINESS

1. To receive, consider and adopt the AuditedBalanceSheetoftheCompanyasat31stMarch,2013and theStatementofProfit&Loss for thefinancialyearendedonthatdatetogetherwiththeDirectors’ReportandAuditors’Reportthereon.

2. Todeclaredividendfortheyear2012-13.

3. ToappointaDirector inplaceofShriP.K.Bajpai,whoretiresby rotationandbeingeligible,offershimselfforre-appointment.

4. ToappointaDirectorinplaceofShriAtulSaraya,whoretiresby rotationandbeingeligible,offershimselfforre-appointment.

5. ToauthorizetheboardtofixtheremunerationoftheAuditorsfortheyear2013-14.

SPECIALBUSINESS

6. To consider and, if thought fit, to pass with orwithoutmodification,thefollowingresolutionasanOrdinaryResolution:

“RESOLVED THAT Ms. Kusumjit Sidhu, who wasappointed as an Additional Director pursuant toArticle67(iv)oftheArticlesofAssociationoftheCompanyreadwithSection260oftheCompaniesAct, 1956 w.e.f. 10.05.2013 to hold Office uptothe date of this Annual GeneralMeeting and inrespect of whom, the Company has received anoticeinwritingfromaMember,pursuanttotheprovisionsof Section257of theCompaniesAct,1956,beandisherebyappointedasaDirectoroftheCompany.”

7. To consider and, if thought fit, to pass with orwithoutmodification,thefollowingresolutionasanOrdinaryResolution:

“RESOLVEDTHATShriW.V.K.KrishnaShankar,whowasappointedasanAdditionalDirectorpursuanttoArticle67(iv)oftheArticlesofAssociationoftheCompanyreadwithSection260oftheCompaniesAct, 1956 w.e.f. 01.08.2013 to hold Office uptothe date of this Annual GeneralMeeting and inrespect of whom, the Company has received anoticeinwritingfromaMember,pursuanttotheprovisionsof Section257of theCompaniesAct,1956,beandisherebyappointedasaDirectoroftheCompany,liabletoretirebyrotation.”

ByOrderoftheBoardofDirectors

Place :NewDelhiDated:August14,2013

(I.P.Singh)CompanySecretary

286

Notes:-1. AMEMBER ENTITLED TOATTENDANDVOTE AT

THEMEETINGISENTITLEDTOAPPOINTAPROXYTO ATTEND AND VOTE INSTEAD OF HIMSELFAND THE PROXY NEED NOT BE A MEMBER OFTHE COMPANY. PROXY FORMDULY COMPLETEDSHOULDBEDEPOSITEDATTHEREGISTEREDOFFICEOFTHECOMPANYNOTLESSTHANFORTY-EIGHTHOURS (48 HOURS) BEFORE THE SCHEDULEDTIMEOFTHEANNUALGENERALMEETING.BLANKPROXYFORMISENCLOSED.

2. Relevant Explanatory Statement pursuant toSection 173(2) of the Companies Act, 1956, inrespect of Special Business, as set out above isannexedhereto.

3. Brief resume of each of the Directors proposedfor appointment and re-appointment is given atAnnexure-IItotheDirectors’Report.

4. S/ShriP.K.BajpaiandAtulSaraya,Directors,retireby rotation and being eligible, offer themselvesforre-appointment.However,asperthetermsoftheirappointment,thetenureofS/ShriP.K.BajpaiandAtulSarayaasDirectorsofthecompanywillexpireon31stMay,2015and30thNovember,2013respectively.

5. TheRegisterofMembersandShareTransferbooksof the Company shall remain closed from 11th

September, 2013 to 20th September, 2013 (bothdaysinclusive)forthepurposeofpaymentoffinaldividend,ifany,approvedbytheMembers.

6. Members are advised to submit their NationalElectronic Clearing Service/Electronic ClearingService (NECS/ECS) mandate in the form (givenelsewhereintheAnnualReport)dulyfilledinandsigned,toenabletheCompanytomakeremittancebymeansofNECS/ECS.

7. TheBoardofDirectorshasrecommendedafinaldividendof164.5%onthePaid-upEquityShareCapital(` 3.29pershare)oftheCompanybesidesan interim dividend of 106% (` 2.12 per Share)alreadypaidduringtheyear2012-13.

8. The final dividend on the Equity Shares asrecommendedby theBoardofDirectors for theyearended31stMarch,2013, ifapprovedbytheshareholders at the Annual General Meeting,will be payable within 30 days from the dateof declaration of dividend i.e. on or before 19thOctober,2013, to thoseshareholderswhosenameappear:-

i. As Beneficial Owners of shares as at theclosureofbusinesshourson10thSeptember,2013asperthelisttobefurnishedbyNSDL/CDSL in respect of the shares held in theElectronicmode;and

ii. AsMembers in the Register ofMembers ofthe Company after giving effect to all validshare transfer requests in physical formwhich are lodged with the Company/RTAonor before the closeof business hourson 10thSeptember,2013.

9. Pursuant to section 205A(5) read with Section205C of the Companies Act, 1956, as amended,the dividend amounts which remain unpaid/unclaimed for a period of 7 years, are requiredto be transferred to the “Investor EducationandProtectionFund” constitutedby theCentralGovernment. After that, there remains no claimofthememberswhatsoeveronthesaidamount.Accordingly, the final dividend for the FinancialYear 2005-06 and interim dividend for FinancialYear 2006-07, which remains unclaimed, areproposed to be transferred to the said accounton 21st October, 2013 and 1st March, 2014respectively.

Members who have not claimed / encashedtheirDividendsofarforthefinancialyearended31st March, 2006 or any subsequent financialyear(s)mayapproachtheCompanyforobtainingpaymentsthereofbeforeexpiryofthestipulated 7yearsperiod.

10. Membersmayavailfacilityofnominationinterms

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of section109Aof theCompaniesAct, 1956,bynominatinginForm-2B(enclosedwiththeAnnualReport) anyperson towhom their shares in theCompanyshallvestintheeventoftheirdeath.

11. PursuanttoSection619(2)readwithSection224(8)(aa)oftheCompaniesAct,1956,theAuditorsof aGovernmentCompanyare appointedor re-appointedbytheComptrollerandAuditorGeneral(C&AG)ofIndiaandtheirremunerationisfixedbytheCompanyintheAnnualGeneralMeeting.TheGeneralMeetingmay,authorizetheBoardtofixup an appropriate remuneration of Auditors forthe year 2013-14 as may be deemed fit by theBoard.

12. CorporateMembersarerequestedtosendadulycertified copy of the Board Resolution/Powerof Attorney authorizing their representative toattend and vote on their behalf at the AnnualGeneralMeeting.

13. Membersarerequestedtonotifyimmediatelyanychangeofaddress:-

i. to their Depository Participants (DPs) inrespect of their electronic share accounts;and

ii. totheCompanyatitsRegisteredofficeortheRegistrar&ShareTransferAgent(M/s.KarvyComputershare Private Ltd.) in respect oftheirphysicalshares,ifany,quotingtheirfolionumber,Banker’snameandaccountnumber

toensurepromptandsafereceiptofdividendwarrants.

14. Memberswhoholdsharesindematerialisedformare requested towrite theirClient IDandDP IDNumbers and thosewhohold shares in physicalform are requested towrite their Folio NumberintheattendanceslipforattendingtheMeeting.However,entrytotheAuditoriumwillbestrictlyonthebasisofentryslipavailableatthecountersatthevenueandtobeexchangedwithattendanceslip.

15. Membersarerequestedto:-

i. bring their Attendance Slip duly completedandsignedatthevenueofthemeeting.

ii. quote their Folio/DP& Client ID Nos. in allcorrespondence.

iii. notethatnobriefcaseorbagwillbeallowedtobetakeninsidetheauditoriumforsecurityreasons.

iv. note that no gifts will be distributed at theAGM.

ByOrderoftheBoardofDirectors

Place:NewDelhiDated:August14,2013

(I.P.Singh)CompanySecretary

288

AnnexuretotheNoticeEXPLANATORY STATEMENT PURSUANT TO SECTION173(2)OFTHECOMPANIESACT,1956

The following explanatory statement sets out thematerial facts relating to the businessmentioned inItemNo.6and7of theaccompanyingNoticedated14.08.2013.

ITEMNO.6

Ms. Kusumjit Sidhu, aged 57 years is AdditionalSecretary& Financial Adviser (AS& FA)Departmentof Industrial Policy and Promotion (DIPP), MinistryofCommerce& Industry.AsperthedirectionoftheGovt.ofIndia,Ms.KusumjitSidhuwasappointedasanAdditionalDirectoroftheCompanyw.e.f.10.05.2013.Havingbeensoappointed,Ms.KusumjitSidhuholdsofficetillthedateofensuingAnnualGeneralMeetingbyvirtueofSection260oftheCompaniesAct,1956readwithArticle67(iv)oftheArticlesofAssociationoftheCompanyandiseligibleforappointment.

IntermsofSection257oftheCompaniesAct,1956,the Company has received a Notice in writing fromaMemberalongwithadepositof`500/-,proposingcandidature ofMs. Kusumjit Sidhu for the Office ofDirectoroftheCompany.

None of the Directors of the Company except Ms. Kusumjit Sidhu is, in any way, concerned orinterestedintheresolution.

TheBoardofDirectorscommends theresolution forapprovaloftheShareholders.

ITEMNO.7

Shri W.V.K. Krishna Shankar, aged 58 years is aMechanical Engineer from University VisveswarayyaCollegeofEngineering,BangaloreUniversityandhasa Diploma in Management. As per the direction ofthe Govt. of India, Shri W.V.K. Krishna Shankar wasappointedasanAdditionalDirectorof theCompanyw.e.f. 01.08.2013. Having been so appointed, ShriW.V.K.KrishnaShankarholdsofficetillthedateofensuingAnnualGeneralMeetingbyvirtueofSection260 of the Companies Act, 1956 read with Article67(iv) of theArticles of Associationof the Companyandiseligibleforappointment.

IntermsofSection257oftheCompaniesAct,1956,the Company has received a Notice in writing fromaMemberalongwithadepositof`500/-,proposingcandidature of Shri W.V.K. Krishna Shankar for theOfficeofDirectoroftheCompany.

None of the Directors of the Company except ShriW.V.K.KrishnaShankaris, inanyway,concernedorinterestedintheresolution.

TheBoardofDirectorscommends theresolution forapprovaloftheShareholders.

ByOrderoftheBoardofDirectors

Place:NewDelhiDated:August14,2013

(I.P.Singh)CompanySecretary

Bharat Heavy Electricals LimitedRegd. Office : BHEL House, Siri Fort, New Delhi - 110 049

Bharat Heavy Electricals LimitedRegd. Office : BHEL House, Siri Fort, New Delhi - 110 049

FORMOFPROXY

ATTENDANCESLIP

FOLIONO./DPID/CLIENTIDNO.

NO.OFSHARES

I/We............................................................................................................................................................................................... of.................................................................................................................................................................................................... intheDistrictof.......................................................................................................................beingamember/membersoftheBharatHeavyElectricalsLtd.,herebyappoint……………………….……………..……...………………….of ...............................................in theDistrictof .....................................................................or failinghim/her…………………...........................................................of ............................................................... in theDistrict of ............................................................................asmy/ourproxytovoteforme/usonmy/ourbehalfatthe49thAnnualGeneralMeetingoftheCompanytobeheldon 20thSeptember,2013andatanyadjournmentthereof.

Signedthis..............dayof..........................................2013.

Pleaseaffix

revenuestamp

Notes: a) TheformshouldbesignedacrossthestampasperspecimensignatureregisteredwiththeCompany. b) TheformshouldbedepositedattheRegisteredOfficeoftheCompanyforty-eighthoursbeforethetimefixedforholding

theMeeting.

49thANNUALGENERALMEETINGtobeheldonFriday,the20thdayofSeptember,2013at10.00AMatFICCIAuditorium,BarakhambaRoad(TansenMarg),NewDelhi-110001.

NAMEOFTHEATTENDINGMEMBER(INBLOCKLETTERS)

Folio./DPID-CLIENTIDNo.

No.ofsharesheld

NameofPROXY

(INBLOCKLETTERS,TOBEFILLEDINIFTHEPROXYATTENDSINSTEADOFTHEMEMBER)

Iherebyrecordmypresenceatthe49thAnnualGeneralMeetingon20thSeptember,2013.

SignatureofMember/Proxy

THISATTENDANCESLIPDULYFILLEDTOBEHANDEDOVERATTHEENTRANCEOFTHEMEETINGHALL

TEARHER

E

Bharat Heavy Electricals LimitedRegd. Office : BHEL House, Siri Fort, New Delhi - 110 049

DearShareholder(s),Re:PaymentofdividendthroughNationalElectronicClearingServices(NECS)/ElectronicClearingServices(ECS)PursuanttoCircularNo.CIR/MRD/DP/10/2013dated21.03.2013,SEBIhasmandatedthatcompanieswhosesecuritiesarelistedonthestockexchangesshalluse,eitherdirectlyorthroughtheirRTA,anyRBIapprovedelectronicmodeofpaymentsuchasECS/NECSetc.IncaseyouhavenotalreadysenttheNECS/ECS/BankAccountparticularstoourRegistrar,M/sKarvyComputersharePvt.Ltd.ortoyourDepositoryParticipant(DP)(incaseofdematholding),wewouldrequestyoutoprovidethesaidparticularsintheformatgivenbelowtofacilitateprompt,safe&correctpaymentofdividend,ifdeclaredinthe49thAnnualGeneralMeetingofthecompanytobeheldon20thSeptember,2013.PleaseensurethatthedetailssubmittedbyyoutotheRegistrar/DParecorrectasanyerrorthereincouldresultinthedividendamountbeingcreditedtowrongaccount.Paymentofdividend throughNECS/ECSand /or to thedesignatedBankAccount,whichwill appearon thedividendwarrant,willhelptopreventfraudulentencashmentofdividendwarrants.Kindlyhelpusinthisendeavourtoserveyoubetter.Yoursfaithfully

(I.P.Singh)CompanySecretary

P.S.Incaseyouareholdingsharesindematform,kindlyadviceyourDepositoryParticipanttotakenoteofyourBankaccountparticulars/NECS/ECSmandate.

FORMFORNECS/ECSMANDATE/BANKACCOUNTPARTICULARSI/We……………………………………………………doherebyauthoriseBHEL/myDepositoryParticipantto: Printthefollowingdetailsonmy/ourdividendwarrant CreditmydividendamounttomyBankaccountbyNECS/ECS (Strikeoutwhicheverisnotapplicable)My/ourFolioNo………..……........................orDPIDNo................…………………….ClientA/cNo...............……………………....……ParticularsofBankAccount:A. BankName :.......................................................................……………………………….B. BranchName :.……………………………………………………………......................................... (AddressforMandateonly) ..…………………………………………….........................................................C. 9digitcodenumberofthebank&branchas :…………………………………………………………….......................................... appearingontheMICRchequeD. IFSCCode :.........................................................................................................E. AccountType(Saving/Current) :……………………………………………………………..........................................F. AccountNo.asappearingonthechequebook :……………………………………………………………..........................................G. STDcode&TelephoneNo.ofShareholder :……………………………………………………………..........................................I/weshallnotholdtheCompanyresponsibleiftheNECS/ECScouldnotbeimplementedortheBankdiscontinuestheNECS/ECS,foranyreason.

Pleaseattach(i)photocopyofachequeorablankcancelledchequeissuedbyyourbankrelatingtoyouraboveaccountforverifyingtheaccuracyofthe9digitcodenumberAND(ii)acopyofyourPANcardwiththisform.

TEARHER

E

M/sKarvyComputersharePvt.Ltd.UNIT:BHEL17-24,VittalRaoNagar,MadhapurHYDERABAD-500081

.........................................................SignatureoftheShareholder

Mailto

TEARHER

E

Form2B[Seerules4CCCand5DofCompanies(CentralGovt.'s)GeneralRules&Forms,1956]

NOMINATIONFORM(Tobefilledbyindividual(s)applyingsinglyorjointly)

I/We............................................................and...............................................and.........................the holdersofShares,DPID………………….Client ID…………………………./ Folio No……………………..bearing number (s)................................................ ofBharatHeavyElectricalsLtd.wishtomakeanominationanddoherebynominatethefollowingperson(s)inwhomallrightsoftransferand/oramountpayableinrespectofsharesshallvestintheeventofmyorourdeath.

Name(s)andAddress(es)ofNominee(s)

Name:......................................................................................................................................................................................

Address:...................................................................................................................................................................................

.................................................................................................................................................................................................

DateofBirth*:.........................................................................................................................................................................

(*tobefurnishedincasethenomineeisaminor)

**TheNomineeisaminorwhoseguardianis.........................................................................................................................

NameandAddress………………………………………………………………………………….....………..................................................................

(**tobedeletedifnotapplicable)

Signature:........................................................................ Address:...............................................................................

Name:.............................................................................. ..............................................................................................

Date:....................................................................................

Signature:........................................................................ Address:...............................................................................

Name:.............................................................................. ..............................................................................................

Date:....................................................................................

Signature:........................................................................ Address:...............................................................................

Name:.............................................................................. ..............................................................................................

Date:....................................................................................

Address,NameandSignatureoftwowitnesses:

NameandAddress Signaturewithdate

1.

2.

Instructions:1. TheNomination canbemadeby individuals only applying/holding shareson their ownbehalf singlyor jointly,Non-individuals

including society, trust,body corporate,partnershipfirm,KartaofHinduUndividedFamily,holderofpowerof attorney cannotnominate.Ifthesharesareheldjointly,alljointholderswillsignthenominationform.Spaceisprovidedasaspecimen,iftherearemorejointholders,moresheetscanbeaddedforsignaturesofholdersofsharesandwitness.

2.AminorcanbenominatedbyaholderofsharesandinthateventthenameandaddressoftheGuardianshallbegivenbytheholder.3. ThenomineeshallnotbeaTrust,Society,Bodycorporate,Partnershipfirm,KartaofHinduUndividedFamilyoraPowerofAttorney

holder.Anon-residentIndiancanbeanomineeonrepatriablebasis.4. Nominationstandsrescindedupontransferofshare.5. TransferofshareinfavourofanomineeshallbevaliddischargebyaCompanyagainstthelegalheir.6. TheintimationregardingNomination/NominationFormshallbefiledinduplicatewithCompany/RegistrarandShareTransferAgent

oftheCompanywhowillreturnonecopythereoftotheshareholder.7.Incaseyouareholdingsharesindematform,kindlyadviceyourDepositoryParticipanttotakenoteofnominationdetails.

Bharat Heavy Electricals LimitedRegd. Office : BHEL House, Siri Fort, New Delhi - 110 049

A N N U A L R E P O R T2 0 1 2 - 1 3

295

Hot & hygienic mid-day meals provided to school children

through Akshay Patra Foundation at Kamrup district of Assam Village women in Munger district (Bihar) being taught

sanitary napkin making for better health and hygiene

Support to patients afflicted with haemophilia under CSR

project “Heal a Soul” CMD flags off Mobile Medical Unit from Power Sector Eastern

Region, Kolkata for operation in Durgapur region of

West Bengal

Promoting quality education through establishment of 10

integrated learning centres for 300 deprived childrenEnvironment & species protection through afforestation of

barren land at Ramdurga, Koppal district, Karnataka

CorporateSocialResponsibility

296

Project “Katha Reading League” in 10 MCD schools of Delhi to

prevent slum children from dropping out of schoolsRefurbishment works carried out at Tadong Senior Secondary

School, Sikkim damaged by earthquake

BHEL vehicles carrying relief materials for the victims of

natural calamity in Uttarakhand Undertaking a unique campaign- “Vision to all, BHEL’s call” to

garner eye-pledges from BHEL employees. CMD handing over

the pledges to Director, LV Prasad Eye Institute, Hyderabad

Van provided for easy transport of blood to blood bank and

day care centre established at Thane (Mumbai) for patients

and children affected with Thalassemia Support to Govt. Of India's initiative to provide skill training to

50 youth from the state of Jammu & Kashmir to enhance their

employability

CorporateSocialResponsibility