About Bharat Heavy Electricals Ltd

Bharat Heavy Electricals Ltd (BHEL) is an integrated power plant equipment manufacturer and one of the largest engineering and manufacturing companies in India. The company is also one of the leading international companies in the power field. The company is engaged in the design, engineering, manufacture, construction, testing, commissioning and servicing of a wide range of products and services for the core sectors of the economy, viz. Power, Transmission, Industry, Transportation, Renewable Energy, Oil & Gas and Defence. The company offers over 180 products and provides systems and services to meet the needs of core sectors like power, transmission, industry, transportation, oil & gas, non-conventional energy sources and telecommunication. They have a wide-spread network comprising 17 Manufacturing Divisions, 2 Repair Units, 4 Regional Offices, 8 Service Centres, 4 Overseas Offices, 6 Joint Ventures, 15 Regional Marketing Centres, besides a large number of project sites spread all over India and abroad. This enables them to be close to its customers and cater to their specialized needs with total solutions - efficiently and economically. BHEL also has a widespread overseas footprint in 82 countries across all the six continents with cumulative overseas installed capacity of BHEL manufactured power plants nearing 10,000 MW including Belarus, Bhutan, Egypt, Indonesia, Iraq, Kazakhstan, Malaysia, New Zealand, Oman, Rwanda, Sudan, Tajikistan and UAE. Bharat Heavy Electricals Ltd was incorporated in the year 1964, ushering in the indigenous Heavy Electrical Equipment industry in India. The company received MOU Award for Excellence in Performance for 2004-05. They won International Asia Pacific Quality Award (IAPQA 2005) from the International Asia Pacific Quality Organization (APQO) for their Ranipet Unit. The company was the first engineering & Manufacturing organization as well as the first PSU in the country to received this award. During the year 2005-06, the company got FICCI Award for environmental conservation and pollution control, ICWAI National Award for Excellence in Cost Management-2005. During the year 2006-07, the company was conferred again the same ICWAI National Award for Excellence in Cost Management-2006. The company was qualified for the Business Standard Star Public Sector Company Award-2006 and also the CII Exim Award. The company is the first public sector company to receive the CII Exim award. In April 2007, the company opened a new line of business in the form of Gas Insulated Substations (GIS). The corporate R&D department of the company successfully developed an indigenous GIS. They also bagged the first letter of intent from the Andhra Pradesh Transmission Corporation (APTransco), for installing the first unit in the state. In May 2007, the company signed a MoU with Toshiba of Japan for know-how in higher horsepower locomotives. In August 2007, Uttar Pradesh government and BHEL came to an agreement for setting a 1,600 Mw thermal power project at Obra. The project has divided into two units of 800 Mw each. The cost of the project is estimated to be Rs 6,400 crore or Rs 4 crore per Mw. The deal covered 50 per cent equity participation by the BHEL and the rest by UP state government. DVC awarded turnkey contracts for setting up Koderma and Durgapur Steel thermal power stations of 1000 MW each to BHEL worth of Rs 6,500 crore. In September 10, 2007, NTPC Ltd and the company signed an MoU to form a joint venture company to carry out engineering, procurement and construction (EPC) activities in the power sector on 'mutually beneficial terms'. In December 2007, the company completed Phase I of its latest modernization drive with an investment of Rs 190 crore, to take their manufacturing capacity to 10,000 MW from 6,000 MW a year. In April 28, 2008, the company and NTPC Ltd incorporated a joint venture company, namely NTPC - BHEL Power Projects Pvt Ltd (NBPPPL) for carrying out EPC activities in the power sector. In September 1, 2007, the company and PTC incorporated a joint venture company, namely Barak Power Pvt. Ltd. In December 26, 2008, the company in association with TNEP incorporated a joint venture company name Udangudi Power Corporation Ltd to build, own and operate a 1600 MW (2x800 MW) Super Critical Thermal Power Plant at Udangudi. In April 15, 2009, the company promoted a joint venture company, namely Raichur Power Corporation Ltd with Karnataka Power Corporation Limited (KPCL) for setting up Supercritical Thermal Power Plant at Karnataka on build, own and operate basis. In February 25, 2010, the company promoted a joint venture company namely Dada Dhuniwale Khandwa Power Ltd, with Madhya Pradesh Power Generating Company Ltd (MPPGCL) for setting up of a 2x800MW Supercritical Thermal Power Plant at Khandwa, Madhya Pradesh on build, own and operate basis. In July 2010, GE signed a 10-year licensing agreement with the company. According to the agreement signed through GE Oil & Gas Italian entity Nuovo Pignone, GE's advanced range of high performance, high efficiency centrifugal compressors will be manufactured under license at BHELs production site in Hyderabad, India, for sale in India and in other South Asian territories. In September 8, 2010, the company signed a joint venture agreement with Government of Kerala for forming a joint venture company to acquire the Kasargod Unit of KEL which manufactures alternators for Railway Applications and other industrial Applications. In January 19, 2011, the company incorporated, BHEL Electrical Machines Ltd, with the company holding the majority stake of 51% and Government of Kerala retaining 49%. In 2011, the company bagged Rs.37,829 Million Mega Contract for installing 2x660 MW Supercritical Thermal Sets from Dainik Bhaskar Power Limited. The company also bagged major contract for 1,200 MW Thermal Power Plant. Singareni Collieries also placed Rs.40,710 Million Mega Contract for setting up thermal power plant in Andhra Pradesh In 2012, the company developed India's first Ultra High Voltage AC 1200 kV Transformer successfully commissioned. The company signs Rs.6,300 Million Contract with Abhijeet Projects Limited for setting up a 300 MW Thermal Power Plant in Visakhapatnam. The company bags contract for installing 160 MW Combined Cycle Power Plant at Ramgarh in Rajasthan. The company wins major contract for 500 MW thermal power plant; NTPC reposes confidence, places Rs.1,143 Crore order for setting up thermal unit at Vindhyachal. The company receives Rs.9,500 Million Mega Contract for 1,020 MW Hydroelectric Project in Bhutan. The company Signs MoU with Govt. of Tajikistan for setting up a 100 MW Hydro-Electric Power Project in the Republic of Tajikistan. In 2013, the company wins Rs.2650 Million contract from BPCL for Kochi Refinery project. The company wins ICAI National Award for Excellence in Cost Management for the eighth consecutive year. BHPV Merges with the company and becomes Seventeenth Unit of the company. The company wins Rs.25,690 Million Steam Generator Package Contract for 2x500 MW Lignite-fired Power Project. The company bags main plant package contract for 500 MW thermal power plant. The company is conferred BGR-ENERTIA Commemoration Award for Technology Enterprise Innovation - Conventional Energy. The company's first Supercritical Thermal Unit at Barh adds 660 MW to India's Power Generating Capacity. The company bags PSE Excellence Award 2013 for RnD, Technology Development and Innovation. The company also wins India Pride Award 2013 for Excellence in Heavy Industries. BHEL wins Rs.10,230 Million Turbine Generator Package Order In 2014, the company won order for 206 MW Hydro Electric Project in Punjab. The company also won highest ever Mega EPC Contract for 3x660 MW Supercritical Power Project. The company bags Rs.30,000 Million mega contract for 2x800 MW Supercritical Boilers against stiff International Competition. The company wins order for 120 MW Hydro Electric Project in Uttarakhand. The company wins DSIJ Award 2013 for the Most Efficient Maharatna PSU. The company bags National Intellectual Property Award 2014. The company signs MoU for setting up Renewable Energy Projects in Yemen. The company bags World Intellectual Property Organisation (WIPO) Award for Innovative Enterprises. The company achieves milestone in the Middle East market with the commissioning of another Gas Turbine-based Power Plant in Oman. The company commissions 600 MW Thermal Unit in Odisha. The company and BGGTS achieve major milestone, Successfully overhaul 104 MW Gas Turbine Generator Unit 1 at Pragati Power Project in record time. Rajasthan gets new Power Generating unit with the commissioning of 250 MW Coal-based thermal power plant by BHEL at Chhabra. The company achieves another Milestone with the successful Renovation, Modernisation and Uprating of 110 MW Unit, Working Life Extended by 15-20 Years. The company bags India Today Best Maharatna PSU Awards for Global Presence & Innovation & R&D. The company achieves major breakthrough, Wins country's first ever EPC contract for 800 MW rating Supercritical Power Project. The company also bags EPC contract for 2x660 MW rating Supercritical Power Project. The company wins order for 444 MW Hydro Electric Project. In Uttarakhand, the company wins contract for supply and installation of ESP package for 2x800MW Darlipali Supercritical Thermal Power Project. The company achieves another Milestone with Successful Renovation and Modernisation (R and M) of 110 MW Unit at Muzaffarpur Thermal Power Station; Working Life Extended by 15-20 Years. The company wins ICAI National Award for Excellence in Cost Management for the ninth consecutive year. The company bags PSE Excellence Award 2014 for R and D and Technology Development In 2015, the company, has commissioned its fourth 270 MW coal based thermal power plant at RattanIndia Power Limited, Nandgaonpeth in Amravati, Maharashtra. The company bags contract for 1,080 MW Manuguru Thermal Power Project from TSGENCO. The company has secured an order worth Rs 5,000 crore for setting up a 4x270 MW thermal power plant in the state of Telangana. President of Rwanda inaugurates Hydro Electric Plant set up by the company in Rwanda. The company has successfully constructed and commissioned the 28 MW Nyaborongo-1 hydro electric power plant in the African Region. The company Wins worth Rs.225 crors Order for 120 MW Hydro Electric Project in West Bengal. The company Commissions 660 MW Supercritical Thermal Unit in Bihar. The company commissions another 270 MW Thermal Unit in Maharashtra. The company has won worth Rs 3,810 crore order for setting up the 1x800 MW Supercritical Thermal power plant in Telangana. The company wins Power Cycle Piping package contract for revival of NTPC'S 3x660 MW Barh Super Thermal Power Proiect, Stage-I. The company bags Rs. 1,202 Crore Order for 370 MW Gas-based Combined Cycle Power Project. The company secures its single largest order worth Rs 17,950 cr. The company has inked a Memorandum of Understanding (MoU) with INTMA with an to set up a gas-based power project in Kazakhstan. The company also signs three strategic MoUs in Kazakhstan. On 4 March 2016, BHEL announced that it has achieved a significant milestone by successfully commissioning its first 700 MW supercritical thermal unit at Bellary Thermal Power Project in Karnataka. On 7 April 2016, BHEL announced that the company recorded the highest ever commissioning of projects of 15,059 MW in a single year in the fiscal 2015-16. On 25 May 2016, BHEL announced that it has successfully commissioned the first 800 MW Supercritical thermal unit in Karnataka, which is also the highest rating unit in the state. On 3 October 2016, BHEL announced that it has achieved another milestone in its services business by securing two Renovation & Modernization (R&M) contracts of Hydro Electric Plants (HEPs). Against stiff international competition, the company won prestigious orders worth around Rs 430 crore, for the R&M of the 6x60 MW Balimela HEP of Odisha Hydro Power Corporation Limited (OHPC) and the 3x60 MW Bairasiul HEP of National Hydro Power Corporation Limited (NHPC). On 15 November 2016, BHEL announced that it has achieved yet another milestone in expanding and consolidating its footprint in the international market by securing export orders for supply of industrial motors to Togo and Benin. Scancem International DA, Norway (Heidelberg Cement group) has placed the order for the motors for their cement plants, Ciments Du Togo S.A. & Cimbenin S.A, Benin. On 20 January 2017, BHEL inaugurated state-of-the-art 200 MW Solar Photovoltaic Module Manufacturing Line and upgraded 105 MW Solar Photovoltaic Cell Manufacturing Line at its Bengaluru based manufacturing plants. With the commencement of commercial operation of these lines, the annual manufacturing capacity of BHEL has been enhanced to 105 MW of Solar Cells and 226 MW of Solar Modules. On 24 January 2017, BHEL announced that the company in partnership with ABB, has secured a landmark order from Power Grid Corporation of India. BHEL's scope of work, is valued at Rs 1360 crore. On 7 March 2017, BHEL signed a Memorandum of Understanding (MoU) with National Environmental Engineering Research Institute (NEERI) for joint working on projects related to water and waste water treatment in the municipal segment. On 15 March 2017, BHEL announced that it has commenced commercial operation of its first 800 MW unit - highest-rating coal-based supercritical thermal power plant. The milestone was achieved for the first unit of the 2x800 MW Yeramarus thermal power station of Raichur Power Corporation Limited (RPCL), in Raichur district of Karnataka. Significantly, the commercial operation of this unit marks BHEL's foray as a developer into the field of power generation. Karnataka Power Corporation Ltd. (KPCL) and BHEL are the main equity partners of RPCL, the owner and operator of this power plant. On 5 April 2017, BHEL announced that it has achieved a capacity addition of 45,274 MW of utility sets during the 12th five year plan, surpassing the Government's capacity addition target by 9%. Notably, BHEL's capacity addition during the 12th five year plan was 78% higher than that in the 11th plan. On 25 April 2017, BHEL announced that its largest ever export order valued at Rs 10000 crore for setting up 1,320 MW (2x660 MW) Maitree Super Thermal Power Project in Bangladesh, has taken-off, following the issuance of the Notice To Proceed by the developer. The order has been secured from Bangladesh India Friendship Power Company (Pvt.) Limited (BIFPCL), a 50:50 JV company of NTPC, India and BPDB, Bangladesh. On 29 June 2017, BHEL announced that it has entered into a Technology Collaboration Agreement with Kawasaki Heavy Industries, Ltd. (KHI), Japan for the manufacture of stainless steel coaches and bogies for metros. The agreement covers establishing state-of-the-art design, engineering and manufacturing facilities at BHEL, India using Japanese technology. Significantly, it will also entitle BHEL for all technology advances and upgrades as well. On 8 August 2017, BHEL announced its maiden order win in Chile and Estonia. With maiden orders for transformer bushing from Niquel Electric Ltda., Chile and Electronic cards from SCANFIL OY Vana Sauga, Estonia, BHEL has now expanded its global footprint to 82 countries across all the six inhabited continents. The Board of Directors of BHEL at its meeting held on 10 August 2017 recommended issue of bonus shares in the ratio of 1 bonus equity share for every 2 existing equity shares held on record date. On 23 October 2017, BHEL announced that it has commenced the execution of the 4,000 MW Yadadri Supercritical Thermal Power Project (TPP). Significantly, the order valued at approximately Rs 20400 crore comprising five units of 800 MW supercritical sets, is not only the single-largest order for BHEL but also the highest value order ever placed in the power sector in India. The Yadadri project will be executed on fast track basis by BHEL in line with the company's strategy of focusing on revival of held up projects and their speedy execution. The Yadadri project will lead to a quantum jump in BHEL's executable outstanding order book and will help the company to enhance its growth momentum. On 12 December 2017, BHEL achieved yet another milestone in the South East Asian region with the successful commissioning of a 54 MW coal-fired captive power project in Indonesia. On 9 March 2018, BHEL announced that it has won a Rs 11700 crore order for setting up a 3x800 MW supercritical thermal power plant in Jharkhand. The order has been placed on BHEL by Patratu Vidyut Utpadan Nigam Limited (PVUNL) - a subsidiary of NTPC Ltd. in Joint Venture with Jharkhand Bijli Vitran Nigam Limited. Significantly, this is the single largest order ever placed by NTPC or its subsidiaries and the second largest order ever won by BHEL. On 21 March 2018, BHEL announced that it has entered into a Technology Collaboration Agreement (TCA) with HLB Power, Republic of Korea for in-house design and manufacture of Large size Gates and Dampers for use in coal fired power plants, to be commissioned or retrofitted with high capacity emission control equipment. BHEL has been supplying conventional Gates and Dampers manufactured at its Boiler Auxiliaries Plant, Ranipet for over three decades. This TCA will help in establishing the capability for in-house design, manufacture and testing of very large size Gates and Dampers. On 23 March 2018, BHEL announced that it has entered into a Technology Transfer Agreement with Indian Space Research Organisation (ISRO) for the manufacture of space-grade Lithium-ion cells of various capacities utilising the technology developed by ISRO at its Vikram Sarabhai Space Centre (VSSC). This transfer of technology will enable BHEL to manufacture Lithium-ion cells in-house for ISRO and other suitable applications. The Lithium-ion technology can also be further extended for use in the emerging areas of energy storage and e-mobility. BHEL will set up a state-of-the-art facility for manufacturing these cells at its Bengaluru unit. On 26 March 2018, BHEL announced that it has won an order for setting up a 75 MW Solar Photovoltaic (SPV) Power Plant on Engineering, Procurement and Construction (EPC) basis, in Gujarat. Significantly, this will be BHEL's largest Solar PV project till date. On 28 March 2018, BHEL announced its foray into lake purification under Smart City segment by bagging a prestigious order for purification of Telibandha Lake, from Raipur Smart City Limited (RSCL), including Operation & Maintenance for five years thereafter. This is the first ever order of its kind from the Smart Cities segment using Phytorid Technology developed by the National Environmental Engineering Research Institute (NEERI) under the Council of Scientific & Industrial Research (CSIR), which is an environment friendly technology. During the FY 2017-18, 4,149 MW of power generating capacity was commissioned / synchronised during the year. In addition, 170 MW of solar PV plants were also commissioned. With this, the worldwide installed base of power generating equipment supplied by BHEL has exceeded 183 GW. BHEL has commissioned/synchronised 4,319 MW of power generating sets in FY 2017-18. During the year 2018-19, BHEL commissioned an 800 MW supercritical unit at 1x800 MW TSGENCO / Kothagudem TPS on EPC basis; 3x110 MW Kishanganga hydroelectric project (HEP) was commissioned from m Srinagar, J&K in March, 2018; R&M works at Koradi Unit-6 were completed and the unit was upgraded from 210 MW to 228 MW. It commissioned 4x250 MW BRBCL Nabinagar Thermal Power Plant in Bihar; Bay hall of 4X30 MW Pulichintala hydroelectric project in Telangana; Turbine Hall of BHEL commissioned 5x30 MW Kalwakurthy Lift Irrigation Scheme (LIS); Both supercritical units of 2x660 MW Ib Valley project were synchronised in 2018-19 and made ready for capacity addition by BHEL. During the year 2018-19, BHEL carried out the renovation & modernization of 6 ESP Sets. Also, 2 C&I R&M projects (NTPC Farakka Unit-4 & 5) were commissioned, Koradi U-6 (which was uprated from 210 MW to 228 MW) achieved full load, and UPRVUNL Obra Unit-12 was synchronized. 5 MW Ground Mounted Solar Power Plant commissioned in hilly terrain at Berradol, H.P for Himachal Pradesh Power Corporation Limited. TANTRANSCO Thappkundu Substation (400 kV - 9 bays, 110 kV - 12 bays) was commissioned; POWERGRID Bhuj substation (765 kV - 10 bays, 400 kV - 7 bays) and Banaskantha Extn (765 kV - 6 bays) commissioned; POWEGRID Banaskantha substation (765 kV - 10 bays, 400 kV - 12 bays) and Sankhari substation (400 kV - 2 bays) commissioned; commissioned world's largest 800 kV multi-terminal HVDC project (North-East to Agra), which is under commercial operation since September, 2017; completed one year of successful field operation of its first own-make 145 kV GIS at TSTRANSCO Vittalwadi in Dec'18 including its O&M; 61 MW SPV plants commissioned during FY18-19; More than 160 MW CPP projects commissioned in 2018-19; commissioned first Solar based EV charging station along Delhi-Chandigarh Highway at Ethnic Resort, Rai, Sonepat (Haryana); In-house development completed for 50 KW EV charger, 67 KW induction motor, 130 KW Induction Motor and 125 KW Permanent Magnet Synchronous Motor (PMSM); completed the 220/20 kV Charikar & Doshi substations in Afghanistan. In 2019-20, BHEL commissioned SG packages for projects aggregating to 1,460 MW and ESP package for projects aggregating to 2,260 MW. In addition, it synchronized 1,206.15 MW from utility power projects and 2,103 MW from Lift Irrigation Scheme. 4x150 MW Kameng HEP commissioned in Arunchal Pradesh, commissioned largest pump motor sets for Kaleshwaram Lift Irrigation Scheme (LIS) project located on the Godavari river in Kaleshwaram, Telangana; 2x660 MW IB Valley Thermal Power Station commissioned by BHEL in Odisha; commissioned all four units of the 4X130 MW Parbati HEP in Himachal Pradesh. During the year 2019-20, BHEL carried out Renovation & Modernization of five numbers of Electro Static Precipitators, combustion modification of APCPL Jhajjar Unit No 1 & 3 R&M, and Condenser R&M of TANGEDCO Tuticorin Unit 1. Nine Air-Conditioned ACEMU local trains for Western Railway & Central Railway commissioned to provide metro for local commuters; 53 Diesel Electric Tower Cars for various zonal railways commissioned and dispatched; supplied and commissioned Diesel Electric Tower Cars,e IGBT based Composite Converter on 3-Phase Passenger locomotive developed; AUSC development on track; High Spin Rotor Test Rig commissioned; manufacturing technology for boiler tubes for high temperature application & alloy 617 blades established; commissioned 200+ electric substations and 5 major HVDC projects in 2020. In 2020-21, BHEL commissioned Utility boiler and STGs at IOCL Paradip, Odisha; Indian Railway's first 9000 HP freight locomotive equipped with propulsion system indigenously developed and supplied by BHEL including Traction Converter, Vehicle Control Unit (VCU) and high power Traction Motors was commissioned during the year; commissioned 6000HP WAG9H locomotives to Indian Railways; commissioned 1.7 MW SPV plant supplying power directly to traction grid of Indian Railways at Bina, Madhya Pradesh; Unit 1 of 4x270 MW Bhadradri Thermal Power Station commissioned in Telangana. 25 Supercritical Steam Generators (SGs) and 20 Supercritical Turbine Generators (TGs) were commissioned till March 31, 2021. In 2021-22, Floating Solar PV Plants including 100MW NTPC Ramagundam - largest in the country), 25 MW NTPC Simhadri and 22 MW NTPC Kayamkulam commissioned by BHEL during the year; 18,500+ MW Captive Power Plants commissioned. In October, 2021 commissioned ±800 kV, 6,000 MW Ultra High Voltage Direct Current (UHVDC) Link between the Western Region Grid (Raigarh, Chattisgarh) and the Southern Region Grid (Pugalur, Tamil Nadu). In September 2021, a 0.25 TPD Coal to Methanol plant at Hyderabad funded by DST was commissioned; Flue Gas Desulphurisation (FGD) Plant at Dadri commissioned in 2021. 80 MW of the 100 MW NTPC Ramagundam floating Solar PV - country's largest floating solar SPV plant, was commissioned by BHEL as on 31st March 2022 and the entire 100 MW commissioned thereafter. In 2022-23, the Unit 1 of Maitree Thermal power project in Bangladesh was synchronised in August 2022. The synchronisation of Unit 2 of Maitree project was commissioned in Jun'23. Unit 1 of North Karanpura 3x660 thermal power plant was synchronised in Oct'22. The Company supplied 800+ locomotives and other traction equipment for locomotives & EMUs; commissioned 240+ electric substations and 6 major HVDC projects; installed & commissioned 1.2+ GW solar portfolio; 18.8 GW Captive Power Plants commissioned in 2023. In the supercritical thermal power segment, BHEL commissioned 30 sets of supercritical Steam Generators (SGs) and 23 sets of supercritical Turbine Generators (TGs) till March 31, 2023. Three subcritical plants of West Bengal Power Development Corporation Limited (WBPDCL) commissioned; further commissioned 660 MW unit fitted with an Air Cooled Condenser (ACC) at 3x660 MW North Karanpura Super Thermal Power Plant in Jharkhand; 765/400kV substation commissioned at Raichur, Karnataka; DC Hall of +800 kV, 6000 MW UHVDC link between the Western Region Grid (Raigarh, Chattisgarh) and the Southern Region Grid (Pugalur, Tamil Nadu). implemented by BHEL.

Bharat Heavy Electricals Ltd Chairman Speech

Dear Shareholders,

It gives me pleasure to share the 59^th annual report of your company, for the year 2022-23. Overall business scenario in India has been robust with the country being one of the world's fastest-growing major economies, achieving a remarkable growth rate of 7.2% in FY 2022-23. The industrial production also witnessed a notable increase of 5.1% compared to the previous financial year. While the slowdown in the global economy and the geopolitical disturbances have had some impact on businesses, the continued expansion by domestic industries coupled with substantial investment in the infrastructure sector presents significant growth opportunities for your company. The company has taken a number of initiatives in the areas of business diversification, project execution, technology development, quality, manpower development, etc., in recent years, which, I am happy to say, have started showing results.

While financial parameters are the ultimate yardstick of an organisation's performance, it is important to remember that the physicals are the actual drivers for the financials. Further, it is essential for any organisation, especially a large one, to build for the future, by putting in place suitable enablers for long term sustainable growth. To this end, one of the most important changes that your company has seen in recent times is the change in operations ideology from being "Revenue Centric" to "Project Centric". The company has taken up focussed efforts in the area of project execution, including implementation of an Integrated Project Management System (IPMS), sequential despatches, advance engineering planning & action, enhanced delegation to project directors, site data digitization, etc., which have started paying off.

At the macro level, this can be seen from the fact that the company has achieved a doubling of erection tonnage at project sites over a period of three years (achieved 5.41 lakh MT in FY 2022-23) despite a declining order book and ‘NIL' thermal ordering over three years between Aug'19 to Sep'22. Further, the increase in liquidation against current year billing from 59% in FY 2018-19 to 86% in FY 2022-23 is proof of the quality of the output & billing. At a micro level, recent successes in two major projects Maitree and North Karanpura are specific cases demonstrating the outcome of these efforts. The Unit 1 of Maitree Thermal power project in Bangladesh was synchronised in August 2022 (in an overall period of 64 months, despite two waves of COVID and mass airlift of manpower from project site in between, as well as numerous border and visa related challenges). More recently, the synchronisation of Unit 2 of Maitree project was achieved on 28^th June, ahead of the commitment given at a high level G2G meeting, which was accepted to be a very tough target, even at the time it was being given. Nearer home, Unit 1 of North Karanpura fix660 thermal power plant was synchronised in Oct'22 and Unit 2 is moving towards synchronisation in Oct'23. This plant is the first utility scale power plant with Air Cooled Condensers for reducing water consumption and will result in saving of 30,500 million litres of water annually when all the three units are functioning, (this saving equals the annual need of around 1.5 million people). This ACC was commissioned by BHEL engineers despite the absence of OEM experts due to COVID related issues.

Key performance highlights for FY 2022-23 Coming to our performance for the year gone by :

• The company achieved revenue from operations of I23,365 Crore as against I21,211 Crore during the previous year, an increase of 10% and made a profit after tax (PAT) of I448 Crore against a PAT of I410 Crore in the previous year.

• Despite increase in total receivables by nearly 9% during FY 2022-23—primarily on account of execution of projects with adverse payment terms, there is a reduction in terms of number of days of Revenue from Operations from 571 days last year to 567 days in current year and the Trade Receivables in terms of number of days of Revenue from Operations, have reduced to 102 days as against 107 days during FY 2021-22

• The company secured orders worth I23,548 Crore, excluding taxes, which is the highest in the last five years. The reporting of order book has been done excluding taxes for better understanding of all stakeholders, and is in line with the reporting of revenue numbers. Industry sector segment order booking is at I9,537 Crore – highest in last 13 years with highest-ever orders in the defence sector, which also includes the order for 20 upgraded SRGMs (main gun on Indian warships) for which BHEL is the sole supplier in the country.

• The company won the only thermal EPC order—2x660 MW, NTPC Talcher Thermal Power Plant, awarded in the last four years, reasserting its market leadership position in the segment.

• The company recorded over 25% growth in the Spares & Services Business.

• The total outstanding order book as on 31^st March 2023 stands at I91,336 Crore, net of taxes (PY I90,084 Crore). With the receipt of the prestigious order for 80 nos. "Vande Bharat" trainsets in April 2023, the total outstanding order book has crossed I1 Lakh Crore (excluding taxes), which is the highest in last 4 years. In recent years, the company has twice won the ICAI Award for ‘Excellence in Financial Reporting' in the ‘Infrastructure and Construction Sector' category, reflecting the quality of accounting/ reporting practices.

Going forward

Various initiatives taken at the national level, in the areas of infrastructure development and technology self-reliance, in tune with the growing aspirations of 1.4 billion people, create a range of opportunities in the capital goods as well as energy sectors for your company. The AatmaNirbhar Bharat initiative launched by our Hon'ble Prime Minster is one such initiative opening up multiple opportunities and your company has been working relentlessly to capitalise on these emerging opportunities. In the conventional (power) sector, we are seeing a consensus emerging that, for economic development and for meeting the aspirations of our people as well as from an energy security perspective, thermal power cannot be phased out. This has brought around a revival in the thermal power sector – albeit for short to medium term—this is a breather which will further enable your company to diversify into new & futuristic businesses.

Expanding business scope in the thermal related areas, the company has made substantial progress in successfully developing in-house solution for flexible operation of coal-fired power plants (an imperative for integrating RE in the grid). The company has demonstrated the target performance parameters in the company's first order and further four orders have already been received. Issue of guidelines, for implementing flexiblisation capabilities in existing thermal sets by CEA, is expected to generate further business in this area. Spares and Services business is also picking up with focussed efforts, including long term agreements (for supply as well as services) with customers, advance procurement action/ stocking to reduce delivery times, and efforts to improve service deliveries. E_orts are on to focus on Nuclear business with MoU being signed with NPCIL and developmental efforts initiated in the area of Small Modular Reactors. The dispatch of BHEL's 44^th nuclear steam generator for GHAVP (Gorakhpur Haryana Anu Vidyut Pariyojana) demonstrates our capability in this domain. The company continues to maintain its lead position in Hydro power with the capability to design, engineer and manufacture custom-made hydro turbines & generators of various sizes up to 400 MW and offer customized R&M solutions for the vast fleet of ageing hydro turbo-generators. As far as diversification is concerned, the company is targeting at least 50% of its business to be from non-coal businesses. The company has achieved some notable successes in this area with industry segment order book going up to 40% of total order booking in the last year with highest-ever orders in defence sector including orders for upgraded SRGM, Heat Exchangers for fighter aircraft, maiden order for supply of Li-ion batteries for AMCA (making BHEL the sole Indian supplier of Li-ion batteries for next generation aircraft), etc. Further, BHEL continues to expand its role as a reliable partner for design, engineering and manufacturing of critical equipment for the strategic sectors with range of equipment including heat exchangers, control systems, turbines, motors, generators, etc.

One of BHEL's largest orders—for supply and 35 years' maintenance of 80 Vande Bharat trainsets—received in Apr'23 in consortium with M/s TRSL, is a landmark success which will open the way for future rail business, where huge expansion and modernisation plans are being rolled out – including in areas like semi-high speed trainsets, locomotives, signalling etc.

Yet another successful business initiative has been on the coal gasification front. The need for the country to utilise its vast coal reserves (in absence of any substantial gas/ oil reserves) has been recognised at various levels. At the same time, it is also accepted that, from a climate change perspective, the country will have to adopt clean coal technologies in a major way. BHEL has leveraged on its indigenously developed coal gasification technology—the world's first proven technology for gasification of high ash Indian Coals—and completed design & engineering of the gasifier for 2,000 TPD commercial scale plant. Further process of setting up a JV with Coal India Ltd, for setting up a Coal to Ammonium Nitrate plant is in advanced stages. This will open up a major business area for BHEL under the National Coal Gasification mission announced by our Hon'ble Prime Minister.

In line with the ‘National Hydrogen Mission', your company is geared up and exploring various areas in the green hydrogen value chain and is setting up a Centre of Excellence, at Varanasi. These efforts will pave the way for future scalable businesses in this area. These diverse initiatives collectively set the ground for BHEL's long-term growth prospects in the non-coal segment. They also demonstrate your company's commitment to sustainability, reduction of carbon footprint, and contribution towards global efforts in mitigating climate change.

The company has further signed technology agreements with M/s General Electric Technology GmbH Switzerland for enhanced rights of existing /uprated and new gas turbines models, M/s Sumitomo SHI-FW for subcritical and supercritical Circulating Fluidised Bed Combustion (CFBC) Boilers capable of firing a wide range of fuels, and M/s ABB for underslung propulsion equipment for rail segment which will provide the twin benefit of garnering orders in diversified businesses from domestic and international markets as well as help make BHEL self-sufficient in state-of-the-art technologies, in times to come.

Thecompanyhasalsomadenotableprogressinindigenisation and reduction on import reliance, both in its own business areas as well as for other CPSEs. For its own business, BHEL has developed in-house a number of equipment including for FGDs, etc., and has further been working with industry for supporting development by its vendors/ associates. Recent successes include development of Sucker Rod Pumps – a major requirement of the oil industry which was hitherto largely imported from China.

However, challenges still remain for the company. Rising material costs, though moderated by multiple cost optimisation efforts, continue to hurt profitability. This, combined with the fact that some of the orders currently under execution have been taken at very competitive rates, is likely to continue to hurt the bottom line in the near future. The company is continuing with strict cost control measures to deal with this situation. Going forward, new orders where cost hikes are factored in coupled with the company's efforts on improving project management and engagement of PMC for specific sites would further help improve profitability. The liquidity position of the company will continue to be constrained on account of adverse payment terms in ongoing orders and is expected to improve as these orders are substantially completed in the next two years. Delivery against these new orders obtained in recent years with continued focus on timely delivery, would further aid recovery.

Quality First Initiative

Another major initiative taken by your company is the ‘Quality First' initiative, launched in mission mode throughout the organization, for making quality a hallmark of the company's products & services being offered to the customers. Sustained efforts on this front resulted in BHEL being awarded the CII-EXIM Bank's first-ever 'Special Jury Commendation for Adoption and Nurturance of Business Excellence', reflecting your company's dedication to fostering and embracing excellence in all aspects of operations. Additionally, BHEL units HPBP Trichy, HEEP Haridwar, HEP Bhopal, and HPEP Hyderabad have received the prestigious "Platinum" recognition while PEM Noida, EDN

Bengaluru, BAP Ranipet and PSNR Noida bagged "Gold Plus" recognition in "CII EXIM Bank award for Business Excellence 2022". All 8 Quality Circle teams which participated at the 47^th International Convention on Quality Control Circles in Jakarta, won the Gold awards (highest category of award), vindicating BHEL's position as the pioneer of the quality circle movement in India.

Developing a committed workforce & leadership pipeline

Your company has been recognized as a model employer for decades and believes that a dedicated and committed workforce is the key to success of any organization. A number of initiatives have been taken in this direction including engagement of a leading consultancy organization for designing & implementing a roadmap for HR excellence. For long term succession planning, leadership development models through competency assessment have been created and curated individual development plans, etc., are being implemented. A number of efforts are also being made for enhancing employee engagement through communication initiatives, unit reach-out programs, etc. Additionally, in view of the changing business scenario, special emphasis is being given on continuous training, for making our workforce agile through unlearning, learning and relearning initiatives focused on new upcoming technologies.

Green BHEL/Harit BHEL

Actions to mitigate climate change are of paramount importance across the globe for a sustainable future, and our country has adopted the ‘Panchamrit' goals including commitment to become Net Zero by 2070. In line with our ethos as a sustainable company, we have undertaken a major initiative for "Making BHEL a Green Company" with the target of achieving Net Zero by the year 2047. In addition to making the company a model "Green Company" for the public sector, it is expected to support business performance by reducing costs and improve availability of borrowings & insurances, etc., in the long run. It would further help create a culture of innovation within the company to design, engineer and manufacture environment friendly products.

Skill Development Initiatives

Supporting the country's commitment towards skill development as well as leveraging BHEL's capabilities and infrastructure, your company has established a Common Engineering Facility Centre (CEFC) at Welding Research Institute (WRI), Trichy (the leading welding research institution in the country) and extension centres at Varanasi, Haridwar, Bhopal, Jhansi and Ranipet with support from Ministry of Heavy Industries (MHI), to train welders. The CEFC has already trained 2,000+ welders in the first year of its inception. This initiative will not just ensure availability of skilled welders for

BHEL's own sites but also contribute to various sectors in the country and the neighbourhood as well, where there is currently a shortage of skilled welders. The endeavour has also been appreciated by Hon‘ble Minister of Heavy Industries and the Hon‘ble Prime Minister of India.

Acknowledgement

The success of your company is only possible with the goodwill, constant support and encouragement of our stakeholders. I express my sincere gratitude to our valued customers as well as business partners for their persistent faith in our capabilities, to employees for their tireless efforts, passion and perseverance, members of Board for their guidance, and you, our esteemed shareholders, for your support and trust in the company. I would also like to thank various Ministries of Government of India, particularly the Ministry of Heavy Industries for their continuous support and valuable guidance throughout.

Your company has undertaken a journey to establish itself as a future-ready global engineering and manufacturing enterprise, and I am confident that with your support and cooperation, we will complete the same with flying colours. With best wishes,

Bharat Heavy Electricals Ltd Company History

Bharat Heavy Electricals Ltd (BHEL) is an integrated power plant equipment manufacturer and one of the largest engineering and manufacturing companies in India. The company is also one of the leading international companies in the power field. The company is engaged in the design, engineering, manufacture, construction, testing, commissioning and servicing of a wide range of products and services for the core sectors of the economy, viz. Power, Transmission, Industry, Transportation, Renewable Energy, Oil & Gas and Defence. The company offers over 180 products and provides systems and services to meet the needs of core sectors like power, transmission, industry, transportation, oil & gas, non-conventional energy sources and telecommunication. They have a wide-spread network comprising 17 Manufacturing Divisions, 2 Repair Units, 4 Regional Offices, 8 Service Centres, 4 Overseas Offices, 6 Joint Ventures, 15 Regional Marketing Centres, besides a large number of project sites spread all over India and abroad. This enables them to be close to its customers and cater to their specialized needs with total solutions - efficiently and economically. BHEL also has a widespread overseas footprint in 82 countries across all the six continents with cumulative overseas installed capacity of BHEL manufactured power plants nearing 10,000 MW including Belarus, Bhutan, Egypt, Indonesia, Iraq, Kazakhstan, Malaysia, New Zealand, Oman, Rwanda, Sudan, Tajikistan and UAE. Bharat Heavy Electricals Ltd was incorporated in the year 1964, ushering in the indigenous Heavy Electrical Equipment industry in India. The company received MOU Award for Excellence in Performance for 2004-05. They won International Asia Pacific Quality Award (IAPQA 2005) from the International Asia Pacific Quality Organization (APQO) for their Ranipet Unit. The company was the first engineering & Manufacturing organization as well as the first PSU in the country to received this award. During the year 2005-06, the company got FICCI Award for environmental conservation and pollution control, ICWAI National Award for Excellence in Cost Management-2005. During the year 2006-07, the company was conferred again the same ICWAI National Award for Excellence in Cost Management-2006. The company was qualified for the Business Standard Star Public Sector Company Award-2006 and also the CII Exim Award. The company is the first public sector company to receive the CII Exim award. In April 2007, the company opened a new line of business in the form of Gas Insulated Substations (GIS). The corporate R&D department of the company successfully developed an indigenous GIS. They also bagged the first letter of intent from the Andhra Pradesh Transmission Corporation (APTransco), for installing the first unit in the state. In May 2007, the company signed a MoU with Toshiba of Japan for know-how in higher horsepower locomotives. In August 2007, Uttar Pradesh government and BHEL came to an agreement for setting a 1,600 Mw thermal power project at Obra. The project has divided into two units of 800 Mw each. The cost of the project is estimated to be Rs 6,400 crore or Rs 4 crore per Mw. The deal covered 50 per cent equity participation by the BHEL and the rest by UP state government. DVC awarded turnkey contracts for setting up Koderma and Durgapur Steel thermal power stations of 1000 MW each to BHEL worth of Rs 6,500 crore. In September 10, 2007, NTPC Ltd and the company signed an MoU to form a joint venture company to carry out engineering, procurement and construction (EPC) activities in the power sector on 'mutually beneficial terms'. In December 2007, the company completed Phase I of its latest modernization drive with an investment of Rs 190 crore, to take their manufacturing capacity to 10,000 MW from 6,000 MW a year. In April 28, 2008, the company and NTPC Ltd incorporated a joint venture company, namely NTPC - BHEL Power Projects Pvt Ltd (NBPPPL) for carrying out EPC activities in the power sector. In September 1, 2007, the company and PTC incorporated a joint venture company, namely Barak Power Pvt. Ltd. In December 26, 2008, the company in association with TNEP incorporated a joint venture company name Udangudi Power Corporation Ltd to build, own and operate a 1600 MW (2x800 MW) Super Critical Thermal Power Plant at Udangudi. In April 15, 2009, the company promoted a joint venture company, namely Raichur Power Corporation Ltd with Karnataka Power Corporation Limited (KPCL) for setting up Supercritical Thermal Power Plant at Karnataka on build, own and operate basis. In February 25, 2010, the company promoted a joint venture company namely Dada Dhuniwale Khandwa Power Ltd, with Madhya Pradesh Power Generating Company Ltd (MPPGCL) for setting up of a 2x800MW Supercritical Thermal Power Plant at Khandwa, Madhya Pradesh on build, own and operate basis. In July 2010, GE signed a 10-year licensing agreement with the company. According to the agreement signed through GE Oil & Gas Italian entity Nuovo Pignone, GE's advanced range of high performance, high efficiency centrifugal compressors will be manufactured under license at BHELs production site in Hyderabad, India, for sale in India and in other South Asian territories. In September 8, 2010, the company signed a joint venture agreement with Government of Kerala for forming a joint venture company to acquire the Kasargod Unit of KEL which manufactures alternators for Railway Applications and other industrial Applications. In January 19, 2011, the company incorporated, BHEL Electrical Machines Ltd, with the company holding the majority stake of 51% and Government of Kerala retaining 49%. In 2011, the company bagged Rs.37,829 Million Mega Contract for installing 2x660 MW Supercritical Thermal Sets from Dainik Bhaskar Power Limited. The company also bagged major contract for 1,200 MW Thermal Power Plant. Singareni Collieries also placed Rs.40,710 Million Mega Contract for setting up thermal power plant in Andhra Pradesh In 2012, the company developed India's first Ultra High Voltage AC 1200 kV Transformer successfully commissioned. The company signs Rs.6,300 Million Contract with Abhijeet Projects Limited for setting up a 300 MW Thermal Power Plant in Visakhapatnam. The company bags contract for installing 160 MW Combined Cycle Power Plant at Ramgarh in Rajasthan. The company wins major contract for 500 MW thermal power plant; NTPC reposes confidence, places Rs.1,143 Crore order for setting up thermal unit at Vindhyachal. The company receives Rs.9,500 Million Mega Contract for 1,020 MW Hydroelectric Project in Bhutan. The company Signs MoU with Govt. of Tajikistan for setting up a 100 MW Hydro-Electric Power Project in the Republic of Tajikistan. In 2013, the company wins Rs.2650 Million contract from BPCL for Kochi Refinery project. The company wins ICAI National Award for Excellence in Cost Management for the eighth consecutive year. BHPV Merges with the company and becomes Seventeenth Unit of the company. The company wins Rs.25,690 Million Steam Generator Package Contract for 2x500 MW Lignite-fired Power Project. The company bags main plant package contract for 500 MW thermal power plant. The company is conferred BGR-ENERTIA Commemoration Award for Technology Enterprise Innovation - Conventional Energy. The company's first Supercritical Thermal Unit at Barh adds 660 MW to India's Power Generating Capacity. The company bags PSE Excellence Award 2013 for RnD, Technology Development and Innovation. The company also wins India Pride Award 2013 for Excellence in Heavy Industries. BHEL wins Rs.10,230 Million Turbine Generator Package Order In 2014, the company won order for 206 MW Hydro Electric Project in Punjab. The company also won highest ever Mega EPC Contract for 3x660 MW Supercritical Power Project. The company bags Rs.30,000 Million mega contract for 2x800 MW Supercritical Boilers against stiff International Competition. The company wins order for 120 MW Hydro Electric Project in Uttarakhand. The company wins DSIJ Award 2013 for the Most Efficient Maharatna PSU. The company bags National Intellectual Property Award 2014. The company signs MoU for setting up Renewable Energy Projects in Yemen. The company bags World Intellectual Property Organisation (WIPO) Award for Innovative Enterprises. The company achieves milestone in the Middle East market with the commissioning of another Gas Turbine-based Power Plant in Oman. The company commissions 600 MW Thermal Unit in Odisha. The company and BGGTS achieve major milestone, Successfully overhaul 104 MW Gas Turbine Generator Unit 1 at Pragati Power Project in record time. Rajasthan gets new Power Generating unit with the commissioning of 250 MW Coal-based thermal power plant by BHEL at Chhabra. The company achieves another Milestone with the successful Renovation, Modernisation and Uprating of 110 MW Unit, Working Life Extended by 15-20 Years. The company bags India Today Best Maharatna PSU Awards for Global Presence & Innovation & R&D. The company achieves major breakthrough, Wins country's first ever EPC contract for 800 MW rating Supercritical Power Project. The company also bags EPC contract for 2x660 MW rating Supercritical Power Project. The company wins order for 444 MW Hydro Electric Project. In Uttarakhand, the company wins contract for supply and installation of ESP package for 2x800MW Darlipali Supercritical Thermal Power Project. The company achieves another Milestone with Successful Renovation and Modernisation (R and M) of 110 MW Unit at Muzaffarpur Thermal Power Station; Working Life Extended by 15-20 Years. The company wins ICAI National Award for Excellence in Cost Management for the ninth consecutive year. The company bags PSE Excellence Award 2014 for R and D and Technology Development In 2015, the company, has commissioned its fourth 270 MW coal based thermal power plant at RattanIndia Power Limited, Nandgaonpeth in Amravati, Maharashtra. The company bags contract for 1,080 MW Manuguru Thermal Power Project from TSGENCO. The company has secured an order worth Rs 5,000 crore for setting up a 4x270 MW thermal power plant in the state of Telangana. President of Rwanda inaugurates Hydro Electric Plant set up by the company in Rwanda. The company has successfully constructed and commissioned the 28 MW Nyaborongo-1 hydro electric power plant in the African Region. The company Wins worth Rs.225 crors Order for 120 MW Hydro Electric Project in West Bengal. The company Commissions 660 MW Supercritical Thermal Unit in Bihar. The company commissions another 270 MW Thermal Unit in Maharashtra. The company has won worth Rs 3,810 crore order for setting up the 1x800 MW Supercritical Thermal power plant in Telangana. The company wins Power Cycle Piping package contract for revival of NTPC'S 3x660 MW Barh Super Thermal Power Proiect, Stage-I. The company bags Rs. 1,202 Crore Order for 370 MW Gas-based Combined Cycle Power Project. The company secures its single largest order worth Rs 17,950 cr. The company has inked a Memorandum of Understanding (MoU) with INTMA with an to set up a gas-based power project in Kazakhstan. The company also signs three strategic MoUs in Kazakhstan. On 4 March 2016, BHEL announced that it has achieved a significant milestone by successfully commissioning its first 700 MW supercritical thermal unit at Bellary Thermal Power Project in Karnataka. On 7 April 2016, BHEL announced that the company recorded the highest ever commissioning of projects of 15,059 MW in a single year in the fiscal 2015-16. On 25 May 2016, BHEL announced that it has successfully commissioned the first 800 MW Supercritical thermal unit in Karnataka, which is also the highest rating unit in the state. On 3 October 2016, BHEL announced that it has achieved another milestone in its services business by securing two Renovation & Modernization (R&M) contracts of Hydro Electric Plants (HEPs). Against stiff international competition, the company won prestigious orders worth around Rs 430 crore, for the R&M of the 6x60 MW Balimela HEP of Odisha Hydro Power Corporation Limited (OHPC) and the 3x60 MW Bairasiul HEP of National Hydro Power Corporation Limited (NHPC). On 15 November 2016, BHEL announced that it has achieved yet another milestone in expanding and consolidating its footprint in the international market by securing export orders for supply of industrial motors to Togo and Benin. Scancem International DA, Norway (Heidelberg Cement group) has placed the order for the motors for their cement plants, Ciments Du Togo S.A. & Cimbenin S.A, Benin. On 20 January 2017, BHEL inaugurated state-of-the-art 200 MW Solar Photovoltaic Module Manufacturing Line and upgraded 105 MW Solar Photovoltaic Cell Manufacturing Line at its Bengaluru based manufacturing plants. With the commencement of commercial operation of these lines, the annual manufacturing capacity of BHEL has been enhanced to 105 MW of Solar Cells and 226 MW of Solar Modules. On 24 January 2017, BHEL announced that the company in partnership with ABB, has secured a landmark order from Power Grid Corporation of India. BHEL's scope of work, is valued at Rs 1360 crore. On 7 March 2017, BHEL signed a Memorandum of Understanding (MoU) with National Environmental Engineering Research Institute (NEERI) for joint working on projects related to water and waste water treatment in the municipal segment. On 15 March 2017, BHEL announced that it has commenced commercial operation of its first 800 MW unit - highest-rating coal-based supercritical thermal power plant. The milestone was achieved for the first unit of the 2x800 MW Yeramarus thermal power station of Raichur Power Corporation Limited (RPCL), in Raichur district of Karnataka. Significantly, the commercial operation of this unit marks BHEL's foray as a developer into the field of power generation. Karnataka Power Corporation Ltd. (KPCL) and BHEL are the main equity partners of RPCL, the owner and operator of this power plant. On 5 April 2017, BHEL announced that it has achieved a capacity addition of 45,274 MW of utility sets during the 12th five year plan, surpassing the Government's capacity addition target by 9%. Notably, BHEL's capacity addition during the 12th five year plan was 78% higher than that in the 11th plan. On 25 April 2017, BHEL announced that its largest ever export order valued at Rs 10000 crore for setting up 1,320 MW (2x660 MW) Maitree Super Thermal Power Project in Bangladesh, has taken-off, following the issuance of the Notice To Proceed by the developer. The order has been secured from Bangladesh India Friendship Power Company (Pvt.) Limited (BIFPCL), a 50:50 JV company of NTPC, India and BPDB, Bangladesh. On 29 June 2017, BHEL announced that it has entered into a Technology Collaboration Agreement with Kawasaki Heavy Industries, Ltd. (KHI), Japan for the manufacture of stainless steel coaches and bogies for metros. The agreement covers establishing state-of-the-art design, engineering and manufacturing facilities at BHEL, India using Japanese technology. Significantly, it will also entitle BHEL for all technology advances and upgrades as well. On 8 August 2017, BHEL announced its maiden order win in Chile and Estonia. With maiden orders for transformer bushing from Niquel Electric Ltda., Chile and Electronic cards from SCANFIL OY Vana Sauga, Estonia, BHEL has now expanded its global footprint to 82 countries across all the six inhabited continents. The Board of Directors of BHEL at its meeting held on 10 August 2017 recommended issue of bonus shares in the ratio of 1 bonus equity share for every 2 existing equity shares held on record date. On 23 October 2017, BHEL announced that it has commenced the execution of the 4,000 MW Yadadri Supercritical Thermal Power Project (TPP). Significantly, the order valued at approximately Rs 20400 crore comprising five units of 800 MW supercritical sets, is not only the single-largest order for BHEL but also the highest value order ever placed in the power sector in India. The Yadadri project will be executed on fast track basis by BHEL in line with the company's strategy of focusing on revival of held up projects and their speedy execution. The Yadadri project will lead to a quantum jump in BHEL's executable outstanding order book and will help the company to enhance its growth momentum. On 12 December 2017, BHEL achieved yet another milestone in the South East Asian region with the successful commissioning of a 54 MW coal-fired captive power project in Indonesia. On 9 March 2018, BHEL announced that it has won a Rs 11700 crore order for setting up a 3x800 MW supercritical thermal power plant in Jharkhand. The order has been placed on BHEL by Patratu Vidyut Utpadan Nigam Limited (PVUNL) - a subsidiary of NTPC Ltd. in Joint Venture with Jharkhand Bijli Vitran Nigam Limited. Significantly, this is the single largest order ever placed by NTPC or its subsidiaries and the second largest order ever won by BHEL. On 21 March 2018, BHEL announced that it has entered into a Technology Collaboration Agreement (TCA) with HLB Power, Republic of Korea for in-house design and manufacture of Large size Gates and Dampers for use in coal fired power plants, to be commissioned or retrofitted with high capacity emission control equipment. BHEL has been supplying conventional Gates and Dampers manufactured at its Boiler Auxiliaries Plant, Ranipet for over three decades. This TCA will help in establishing the capability for in-house design, manufacture and testing of very large size Gates and Dampers. On 23 March 2018, BHEL announced that it has entered into a Technology Transfer Agreement with Indian Space Research Organisation (ISRO) for the manufacture of space-grade Lithium-ion cells of various capacities utilising the technology developed by ISRO at its Vikram Sarabhai Space Centre (VSSC). This transfer of technology will enable BHEL to manufacture Lithium-ion cells in-house for ISRO and other suitable applications. The Lithium-ion technology can also be further extended for use in the emerging areas of energy storage and e-mobility. BHEL will set up a state-of-the-art facility for manufacturing these cells at its Bengaluru unit. On 26 March 2018, BHEL announced that it has won an order for setting up a 75 MW Solar Photovoltaic (SPV) Power Plant on Engineering, Procurement and Construction (EPC) basis, in Gujarat. Significantly, this will be BHEL's largest Solar PV project till date. On 28 March 2018, BHEL announced its foray into lake purification under Smart City segment by bagging a prestigious order for purification of Telibandha Lake, from Raipur Smart City Limited (RSCL), including Operation & Maintenance for five years thereafter. This is the first ever order of its kind from the Smart Cities segment using Phytorid Technology developed by the National Environmental Engineering Research Institute (NEERI) under the Council of Scientific & Industrial Research (CSIR), which is an environment friendly technology. During the FY 2017-18, 4,149 MW of power generating capacity was commissioned / synchronised during the year. In addition, 170 MW of solar PV plants were also commissioned. With this, the worldwide installed base of power generating equipment supplied by BHEL has exceeded 183 GW. BHEL has commissioned/synchronised 4,319 MW of power generating sets in FY 2017-18. During the year 2018-19, BHEL commissioned an 800 MW supercritical unit at 1x800 MW TSGENCO / Kothagudem TPS on EPC basis; 3x110 MW Kishanganga hydroelectric project (HEP) was commissioned from m Srinagar, J&K in March, 2018; R&M works at Koradi Unit-6 were completed and the unit was upgraded from 210 MW to 228 MW. It commissioned 4x250 MW BRBCL Nabinagar Thermal Power Plant in Bihar; Bay hall of 4X30 MW Pulichintala hydroelectric project in Telangana; Turbine Hall of BHEL commissioned 5x30 MW Kalwakurthy Lift Irrigation Scheme (LIS); Both supercritical units of 2x660 MW Ib Valley project were synchronised in 2018-19 and made ready for capacity addition by BHEL. During the year 2018-19, BHEL carried out the renovation & modernization of 6 ESP Sets. Also, 2 C&I R&M projects (NTPC Farakka Unit-4 & 5) were commissioned, Koradi U-6 (which was uprated from 210 MW to 228 MW) achieved full load, and UPRVUNL Obra Unit-12 was synchronized. 5 MW Ground Mounted Solar Power Plant commissioned in hilly terrain at Berradol, H.P for Himachal Pradesh Power Corporation Limited. TANTRANSCO Thappkundu Substation (400 kV - 9 bays, 110 kV - 12 bays) was commissioned; POWERGRID Bhuj substation (765 kV - 10 bays, 400 kV - 7 bays) and Banaskantha Extn (765 kV - 6 bays) commissioned; POWEGRID Banaskantha substation (765 kV - 10 bays, 400 kV - 12 bays) and Sankhari substation (400 kV - 2 bays) commissioned; commissioned world's largest 800 kV multi-terminal HVDC project (North-East to Agra), which is under commercial operation since September, 2017; completed one year of successful field operation of its first own-make 145 kV GIS at TSTRANSCO Vittalwadi in Dec'18 including its O&M; 61 MW SPV plants commissioned during FY18-19; More than 160 MW CPP projects commissioned in 2018-19; commissioned first Solar based EV charging station along Delhi-Chandigarh Highway at Ethnic Resort, Rai, Sonepat (Haryana); In-house development completed for 50 KW EV charger, 67 KW induction motor, 130 KW Induction Motor and 125 KW Permanent Magnet Synchronous Motor (PMSM); completed the 220/20 kV Charikar & Doshi substations in Afghanistan. In 2019-20, BHEL commissioned SG packages for projects aggregating to 1,460 MW and ESP package for projects aggregating to 2,260 MW. In addition, it synchronized 1,206.15 MW from utility power projects and 2,103 MW from Lift Irrigation Scheme. 4x150 MW Kameng HEP commissioned in Arunchal Pradesh, commissioned largest pump motor sets for Kaleshwaram Lift Irrigation Scheme (LIS) project located on the Godavari river in Kaleshwaram, Telangana; 2x660 MW IB Valley Thermal Power Station commissioned by BHEL in Odisha; commissioned all four units of the 4X130 MW Parbati HEP in Himachal Pradesh. During the year 2019-20, BHEL carried out Renovation & Modernization of five numbers of Electro Static Precipitators, combustion modification of APCPL Jhajjar Unit No 1 & 3 R&M, and Condenser R&M of TANGEDCO Tuticorin Unit 1. Nine Air-Conditioned ACEMU local trains for Western Railway & Central Railway commissioned to provide metro for local commuters; 53 Diesel Electric Tower Cars for various zonal railways commissioned and dispatched; supplied and commissioned Diesel Electric Tower Cars,e IGBT based Composite Converter on 3-Phase Passenger locomotive developed; AUSC development on track; High Spin Rotor Test Rig commissioned; manufacturing technology for boiler tubes for high temperature application & alloy 617 blades established; commissioned 200+ electric substations and 5 major HVDC projects in 2020. In 2020-21, BHEL commissioned Utility boiler and STGs at IOCL Paradip, Odisha; Indian Railway's first 9000 HP freight locomotive equipped with propulsion system indigenously developed and supplied by BHEL including Traction Converter, Vehicle Control Unit (VCU) and high power Traction Motors was commissioned during the year; commissioned 6000HP WAG9H locomotives to Indian Railways; commissioned 1.7 MW SPV plant supplying power directly to traction grid of Indian Railways at Bina, Madhya Pradesh; Unit 1 of 4x270 MW Bhadradri Thermal Power Station commissioned in Telangana. 25 Supercritical Steam Generators (SGs) and 20 Supercritical Turbine Generators (TGs) were commissioned till March 31, 2021. In 2021-22, Floating Solar PV Plants including 100MW NTPC Ramagundam - largest in the country), 25 MW NTPC Simhadri and 22 MW NTPC Kayamkulam commissioned by BHEL during the year; 18,500+ MW Captive Power Plants commissioned. In October, 2021 commissioned ±800 kV, 6,000 MW Ultra High Voltage Direct Current (UHVDC) Link between the Western Region Grid (Raigarh, Chattisgarh) and the Southern Region Grid (Pugalur, Tamil Nadu). In September 2021, a 0.25 TPD Coal to Methanol plant at Hyderabad funded by DST was commissioned; Flue Gas Desulphurisation (FGD) Plant at Dadri commissioned in 2021. 80 MW of the 100 MW NTPC Ramagundam floating Solar PV - country's largest floating solar SPV plant, was commissioned by BHEL as on 31st March 2022 and the entire 100 MW commissioned thereafter. In 2022-23, the Unit 1 of Maitree Thermal power project in Bangladesh was synchronised in August 2022. The synchronisation of Unit 2 of Maitree project was commissioned in Jun'23. Unit 1 of North Karanpura 3x660 thermal power plant was synchronised in Oct'22. The Company supplied 800+ locomotives and other traction equipment for locomotives & EMUs; commissioned 240+ electric substations and 6 major HVDC projects; installed & commissioned 1.2+ GW solar portfolio; 18.8 GW Captive Power Plants commissioned in 2023. In the supercritical thermal power segment, BHEL commissioned 30 sets of supercritical Steam Generators (SGs) and 23 sets of supercritical Turbine Generators (TGs) till March 31, 2023. Three subcritical plants of West Bengal Power Development Corporation Limited (WBPDCL) commissioned; further commissioned 660 MW unit fitted with an Air Cooled Condenser (ACC) at 3x660 MW North Karanpura Super Thermal Power Plant in Jharkhand; 765/400kV substation commissioned at Raichur, Karnataka; DC Hall of +800 kV, 6000 MW UHVDC link between the Western Region Grid (Raigarh, Chattisgarh) and the Southern Region Grid (Pugalur, Tamil Nadu). implemented by BHEL.

Bharat Heavy Electricals Ltd Directors Reports

Dear Members,

The Board of Directors takes pleasure in presenting the 59^th Annual Report on the business and operations of your Company and the Audited Financial Statements for the year ended March 31, 2023.

Financial Results

State of Company Affairs

The company posted a growth of 10% in Revenue from Operations, achieving 23,365 Crore during FY 2022-23 as against 21,211 Crore in last financial year and a growth of 9.3% in Profit After Tax achieving 448 Crore as against 410 Crore in the previous year.

The results of continued focus in recent years on project execution, closures and physical performance have become clearly visible with erection tonnage at project sites at a record 5.41 lakh MT (doubled over a period of previous 3 years) despite decline in order book on the back of ‘nil' ordering in thermal sector for over three years as well as increase in liquidation of Current Year billing to 86% in FY 2022-23 from 59% over the past four years. This is a clear indication of success of the major initiatives including implementation of Integrated Project Management System (IPMS) for real time project monitoring, Site Data Digitization for ensuring single source of data, focus on sequential supplies and technical & financial closure of completed projects. Focused project management efforts saw excellent results with commissioning of North Karanpura Unit 1, Nation's first utility scale thermal power plant fitted with Air Cooled Condenser (ACC), as well as commissioning of Unit 1 of the prestigious 2x660 MW Maitree Super Thermal Power Project, Bangladesh. Further, Unit 2 of the Maitree Project has been synchronized on 28 June 2023 ahead of a very tough time target given by Government of Bangladesh, for the same.

Diversification efforts in recent years saw fruits in the form of signing of MoU with Coal India Ltd for setting-up of 2,000 TPD Coal to Ammonium Nitrate plant based on BHEL's indigenous technology for gasification of high ash Indian coal (first proven technology for the same), which has been followed with completion of engineering, optimization & validation by international experts and formation of the Joint Venture is progressing well. Further efforts for increasing our rail transportation business led to award of prestigious order for manufacturing and maintenance of 80 sets of "Vande Bharat" trainsets. This project is being taken-up by BHEL as lead partner in consortium with Titagarh Rail Systems Ltd. and is valued at over 23,000 Crore excluding taxes (BHEL share at about 13,500 Crore).

With regard to future growth perspective, the order booking for the company in FY 2022-23 touched 23,548 Crore (net of taxes), which is highest in the last 5 years. It is also pertinent to note that the company's efforts in the Industry Sector have borne fruits and the order booking at 9,537 Crore (net of taxes) is highest in the last 13 years, with its share at 40% of the yearly order book. The reporting of order book is done excluding applicable taxes for better understanding of all stakeholders, and is in line with the reporting of revenue numbers. The total outstanding order book as on 31^st March 2023 stands at 91,336 Crore, net of taxes (PY 90,084 Crore). With the receipt of the prestigious "Vande Bharat" trainset order in April 2023, the total outstanding order book has crossed 1 Lakh crore (excluding taxes), which is the highest in last 4 years.

The increase in revenue in FY 2022-23 has been achieved despite challenges persisting for material availability on account of geopolitical issues and scarcity of key inputs such as semiconductors. The spares & services business, which has been a focus area for your company, recorded a growth of about 25%.

Material cost in the recent past has been a challenge, not only for BHEL but also across the industry spectrum, domestic as well as global. Though metal prices have seen some corrections, they are still at substantially elevated levels. Despite these constraints, your company was able to maintain the material cost during FY 2022-23, at levels similar to previous year. In the coming year, rising raw material prices as well as execution of old projects, won through highly competitive bidding, are expected to continue to affect the financial position & liquidity of the company.

Higher fuel prices have adversely impacted the bottom-line. Furthermore, inflation in general is also putting persistent pressures on operational budgets which are being dealt through stringent budgetary controls measures. The company is focusing on project completion despite poor margins in civil revenues, which would continue to challenge the bottom-line.

Your company optimized the inventory levels by unlocking the blocked inventories, and during the year 2022-23, 230 Crore worth of non-moving inventory was liquidated. The efforts in sale of scrap, disposal of non-moving inventory, etc., in the company have helped increase other operational income and has assisted in improving EBITDA levels to 1,231 Crore, up by about 11% from EBITDA of 1,106 Crore for FY 2021-22. Profit After Tax for FY 2022-23 was further aided by the gains made in the taxation area. During the year, the company received Income Tax refunds (including interest) totalling 266 Crore, which have helped in the net cash generation as well as the bottom line.

Other operational income, directly contributing to bottom line, reached its highest levels at 1,229 Crore during FY 2022-23, which is up by 16% over FY 2021-22. The increase in Profit After Tax was also aided by continued stringent budgetary control on Manufacturing, Administrative and S&D expenses, which have been at their lowest level at 6.6% of Revenues, reflecting strong budgetary controls in the company. Concerted efforts & thrust on ‘Project Centric' operations resulted in liquidation of current year billing at 86% in FY 2022-23, which is similar to last year. The trade receivables in terms of no. of days of Revenue from Operations, have reduced to 102 days during FY 2022-23, as against 107 days during FY 2021-22. The Trade Receivables were at 6,544 Crore as on 31^st March 2023 ( 6,229 Crore as on 31^st March 2022) and Contract Assets stand at 29,740 Crore as on 31^st March 2023 ( 26,940 Crore as on 31^st March 2022). Though overall receivables have increased during FY 2022-23, there is a reduction in terms of no. of days of Revenue from Operations from 571 days last year to 567 days current year. The increase in receivables is mainly on account of skewed payment terms in contracts under execution that resulted in higher accumulation of deferred debts that are payable on completion of intermediate and final milestones.

Due to high investment in contract assets, the company had some pressures on cash position. However, the company retained its debt free status with closing positive cash & bank balance (net of short-term borrowings) of 1,258 Crore, and has enough leverage to invest in capex and diversification initiatives.

Transfer to Reserve

The company has not transferred any amount to the Reserves during FY 2022-23.

Dividend

The Board of Directors, in its meeting held on May 26, 2023 has recommended a final dividend @20 % ( 0.40 per share of 2 each), amounting to 139.28 Crore, out of profit for FY 2022-23, subject to your approval. The Company has a dividend distribution policy in place in pursuance of the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"). Dividend distribution policy is available on the Company's website at https://www.bhel.com/dividend-distribution-policy-bhel-0.

Deposits

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 during FY 2022-23.

Capital & Finance

During FY 2022-23, the company has met its CAPEX and operating fund requirements through internal accruals. The company invests any available surplus funds to maximize the interest income to the company. To meet any intermittent operational fund requirement, short term borrowing options used by the company including WCDL, Commercial Papers (listed on NSE and BSE), PCFC, etc. PCFC borrowings provide a natural forex hedge to the company. The company continues to retain its status as Zero Debt Company.

Loans and Investments

There are no instances of investments by the loanee in the company or its subsidiary.

Credit Rating

The credit ratings of your Company are as follows:

Persistent efforts by the company during the financial year for cutting down miscellaneous expenses and liquidation of old outstanding resulted in positive cash flows from operations and helped maintain the credit rating of the organization.

Material Changes and Commitments affecting the Financial Position

There are no material changes and commitments affecting the financial position of the Company between the end of FY 2022-23 and the date of this report. There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

Suspension of Trading

The Equity Shares of the company are listed on NSE & BSE. The shares of the company were not suspended from trading during FY 2022-23.

Directors' Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors confirm that: a) In the preparation of the Annual Accounts, the applicable Accounting Standards (Ind AS) have been followed along with proper explanations relating to material departures;

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

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

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

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

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

Management Discussion & Analysis

This report conveys the Management's perspective on the external environment, company's strategy for the future, operating and financial performance, risks and concerns, and initiatives taken in various areas during the year; such as diversification of business areas, revamping project execution, cost optimization, technology development, digitalization, quality, etc.

In the midst of a continuously challenging business and economic environment, your company has continued to focus on regaining growth. Strengthening the core business, focus on execution, and determined efforts towards diversification including increased business in non-coal areas are critical enablers for long term sustainable growth. For further details, please refer Annexure-I to the Board's report.

Corporate Governance

Pursuant to Regulation 34 of the SEBI (Listing Obligations

& Disclosure Requirements) Regulations, 2015, a report on Corporate Governance (including Board & Committee Meetings details) is given at Annexure-II to the Board Report together with the following, i. Certificate of Non-Disqualification of Directors under Schedule V of the SEBI Listing Regulations. ii. Auditors certificate on Corporate Governance under SEBI Listing Regulations & Department of Public Enterprises (DPE) guidelines on Corporate Governance. iii. Secretarial Audit Report under Section 204 (1) of the Companies Act, 2013.

Declaration of Independence

Declaration under Section 149(6) of the Companies Act, 2013 pertaining to criteria of independence has been given by the Independent Directors to the Board of Directors. All the Independent Directors have registered themselves on the online database of the Indian Institute of Corporate Affairs (IICA), notified under Section 150 of the Companies Act, 2013. In the opinion of the Board, the Independent Directors possess integrity and necessary expertise & experience.

Compliances

In addition to focus on many other areas, the company continuously reviews and strengthens its compliance of systems and processes.

• The Company considers sound_Corporate Governance as one of its core values committing itself to maintaining_high degree of transparency in disclosures.

• To strengthen compliance mechanism across various laws, a quarterly legal compliance report on the Applicable laws/ Acts is reviewed by the Board of Directors.

• Being a listed company, compliance with the SEBI_ – (Listing Obligations and Disclosure_ Requirement) Regulations, 2015 is ensured._ There is no adverse comment from SEBI for the FY 2022-23 on any financial matter.

• The Company has complied with the applicable secretarial standards.

• For preparation of financial statements, the company ensures compliance to the_Indian Accounting Standards (Ind AS), Guidance Notes and other authoritative literature issued by the ICAI, Companies Act 2013 and other applicable statutes. The company endeavours to constantly improve its disclosures and transparency standards in the Financial Statements.

Contribution to the Exchequer

The Company, over the years, has been consistently making significant contribution to the Exchequer, and maintaining high standards of integrity with respect to tax compliances. During the current year, the company's contribution to exchequer stood at over 3,831 Crore.

Audit Committee

The Company has in place a Board Level Audit Committee in terms of the requirements of the Companies Act, 2013 read with rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, the details in respect of which are given in the Corporate Governance Report. All the issues are fairly and transparently deliberated in the meetings which are held at regular intervals. The views and suggestions of the Board Level Audit Committee members are taken into account and imbibed into the Company's processes. Further, there has been no instance where the Board of Directors have not accepted the recommendation of the Board Level Audit Committee.

Details of changes in Directors & Key Managerial Personnel Appointment

Ms. Arti Bhatnagar, Additional Secretary & Financial Advisor, Ministry of Commerce & Industry has been appointed as Part-time Offcial Director w.e.f. February 14, 2023.

Shri Ramesh Patlya Mawaskar has been appointed as Part-time Non-Offcial (Independent) Director w.e.f. June 8, 2023. Shri Jai Prakash Srivastava, Director (E, R&D) & Director (Finance) - additional charge has been designated as Chief Financial Officer (CFO) of the Company w.e.f. May 26, 2023. Shri Krishna Kumar Thakur has been appointed as Whole Time (Functional) Director w.e.f. July 4, 2023 and has taken charge as Director (Human Resources).

In accordance with applicable statutory provisions and Article 67(iv) of the Articles of Association of the Company, Ms. Arti Bhatnagar, Shri Ramesh Patlya Mawaskar and Shri Krishna Kumar Thakur having been appointed as additional directors, shall hold directorship upto the 59^th Annual General Meeting of the Company and are eligible for appointment as Directors at the Meeting.

Further, pursuant to Section 152 of the Companies Act, 2013 and Article 67(i) of the Articles of Association of the Company, Shri Upinder Singh Matharu and Shri Jai Prakash Srivastava will retire by rotation at the Annual General Meeting and being eligible, offers themselves for re-appointment.

Cessation

Dr. Raj K. Agarwal, who was appointed as Part-time Non-Offcial (Independent) Director on November 9, 2021, ceased to be a Director of the Company consequent to his resignation on September 12, 2022 from BHEL's Board of Directors. Dr. Raj K. Agarwal tendered his resignation citing his pre-occupation in personal affairs and inability to devote sufficient time towards discharge of his responsibilities as an Independent Director of the Company. Further, he also confirmed that there are no other reasons other than those provided by him for resignation.

Shri Raj Kamal Bindal and Shri Manish Kapoor, who were appointed as Part-time Non-o_cial (Independent) Directors on January 31, 2020, ceased to be Directors of the Company on completion of their tenure on January 27, 2023. Shri Shashank Priya, then Special Secretary & Financial Adviser, Ministry of Commerce & Industry who was appointed as Part-time Offcial Director on October 4, 2019, ceased to be Part-time Offcial Director on February 14, 2023. Shri Subodh Gupta who was appointed as Director (Finance) w.e.f. April 18, 2018 ceased to be Director (Finance) w.e.f. April 18, 2023 in terms of Ministry of Heavy Industries' communication dated May 17, 2023. Further, he also ceased to be CFO of BHEL w.e.f. April 18, 2023.

The Board of Directors place on record their deep appreciation for the valuable services rendered as well as advice and guidance provided by Dr. Raj K. Agarwal, Shri Raj

Kamal Bindal, Shri Manish Kapoor, Shri Shashank Priya and Shri Subodh Gupta during their respective tenure on the BHEL Board.

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

CEO/ CFO Certificate

CEO/CFO certificate as per Regulation 17(8) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is placed at Annexure- III to the Board's Report.

Consolidated Financial Statements

The brief on consolidated financial statements prepared pursuant to section 129 (3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirement) Regulations 2015, is given in section 1.8.3 under Management Discussion & Analysis.

Sustainable Development

We, at BHEL, tirelessly endeavour for sustainable operations in our various business processes & activities. Our mission statement – ‘Providing sustainable business solutions in the fields of Energy, Industry & Infrastructure' bears testimony to our commitment for contributing towards Sustainable Development and aspires to augment the industrial effort in this direction. Sustainable development at BHEL addresses all three pillars of sustainability; namely- Environmental, Economic and Social. Being a responsible and sustainable organisation, BHEL strives towards integration of environmental, health, social equity and economic vitality within the organisation and beyond. Manifestation of this vision is evident in our actions apropos greener product development, increased renewable energy generation and usage, efficient water management, enhanced green cover, emission reduction, optimization of natural resources usage and improved energy efficiency and conservation. The brief of some of these activities that help us move towards a sustainable future are given in Annexure-IV to the Board's Report.

Green Company

Climate change has today occupied the centre stage in policy making across the globe and is seriously impacting the way businesses work. At the national level, Govt. of India has adopted ‘Panchamrit' to deal with these challenges as well as committed to Net Zero target by 2070. As part of our ethos for sustainable development, the company has now undertaken a major initiative for "Making BHEL a Green

Company". This initiative will further strengthen BHEL's position as a responsible and sustainable organization. In addition to generating goodwill for the company, it is expected to reduce costs and improve availability of borrowings & insurance in the long run and will also help to create a culture of innovation within the company to design, engineer and manufacture environment friendly products.

Business Responsibility and Sustainability Report

In line with the requirement of the listing regulations, Business Responsibility and Sustainability Report providing disclosures in environmental, social and governance perspectives is enclosed at Annexure-V to the Board's Report.

Achievements of R&D and Technological Development

BHEL, in line with country's vision towards net zero carbon emissions by 2070 for a sustainable future, has realigned its innovation ecosystem for development of cleaner technologies. The company is working towards development of products and systems in new business areas; such as coal to chemicals, high efficiency thermal plants, rail transportation, defence, aerospace, hydrogen value chain, downstream oil & gas, etc.

In FY 2022-23, BHEL has incurred an expenditure of 691 Crore towards R&D activities, which is approx. 3% of the revenue. This includes expenditure incurred on R&D projects taken up for development of new products, processes and systems as well as efforts made for modifications/ improvements in products and designs against customer requirements. During the year, BHEL has filed 503 patents and copyrights applications, enhancing the company's intellectual capital to more than 5400 nos. Approx. 19% of the company's revenue, amounting to 4,212 Crore has been achieved from its in-house developed products, systems and services. Further details of major developments have been provided in Annexure-VI to the Board's Report.

Implementation of Offcial Language

Offcial Language cells and Offcial Language Implementation Committees have been established in all Units/Divisions/ Offices of BHEL, with Rajbhasha Officers working in all these cells. Additionally, in the last two years, a lot of emphasis has been given on Rajbhasha implementation. More than 100 Rajbhasha Chakras have been formed across the company to motivate the employees to use Hindi in their day to day offcial work and expedite Rajbhasha implementation which has enhanced the use of Hindi across the Company. Quarterly meetings were held by the committees in all the Units/ Divisions including Corporate Office during the year. Several activities in the form of events, workshops, competitions were organized during the year. Your company is also contributing as a member in the Testing Committee of the Memory Based Translation Software ‘Kanthastha 2.0' and its mobile-app version by the Department of Offcial Language, Ministry of Home Affairs, Government of India. Further details have been provided in Annexure-VIII to the Board's Report.

Vigil Mechanism

BHEL advocates the principles of Good Governance, Transparency, Probity and Ethics so as to ensure highest level of integrity in its functioning. The company has in place a full-fledged Vigil Mechanism consisting of Vigilance, Internal Audit, Whistle Blower Policy, Independent External Monitors as well as Board Level Committee.

Vigilance function of BHEL is headed by Chief Vigilance Officer (CVO) who acts as an extended arm of Central Vigilance Commission (CVC) for monitoring the affairs of the Company. Units & Divisions of BHEL have a Vigilance set-up headed by a senior officer reporting to the CVO. A panel of Independent External Monitors (IEMs) is in place to oversee implementation of Integrity Pact, and address concerns related to the same. The Company also encourages reporting of unfair & unethical practices and has a Whistle Blower Policy which provides adequate safeguard to the complainant against victimization. The "Board Level Audit Committee" (BLAC) reviews the functioning of the Whistle Blower / Vigil Mechanism, and annual review of the Vigilance function is also done by CMD / Board of Directors through structured meeting(s). Further, details are provided in Annexure-VIII to the Board's Report.

Health, Safety & Environment (HSE)

BHEL focusses on developing sustainable practices for ensuring the safety & health of its workforce as well as protecting the planet from various environmental impacts of its operations. We believe that good health, safety and environmental performance will result in long-term benefits, in terms of enhanced customer loyalty, valuable partnerships & collaborations and sustainable development. BHEL, in its pursuit of achieving the highest levels of Occupational, Health & Safety and Environmental performance, has got its manufacturing units and Power Sector regions certified under Occupational Health and Safety Certification (ISO 45001:2018) and Environmental Management Systems Certification (ISO 14001:2015). To enhance regular compliance, internal audits of manufacturing units and project sites are also carried out by a team of HSE experts from within the organisation. Further details are provided in Annexure-VIII to the Board's Report.

Data and Cyber Security

In today's hyper connected world, data and cyber security is of paramount importance, especially for the country's foremost engineering organization in heavy engineering sector. In this regard, BHEL has implemented advanced security measures to protect its IT assets and data from cyber threats. These measures include a multi-layered defence system that incorporates the latest technologies such as perimeter security for datacentres, data networks, applications, and end user devices. Further details have been included in Section 1.16 of the Board Report.

Other disclosures

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

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

Auditors

The Statutory Auditors of your Company are appointed by the Comptroller and Auditor General of India. Three firms of statutory auditors were appointed as joint statutory auditors and four firms were appointed as branch auditors. The names of audit firms appointed for FY 2022-23 are given separately in the Annual Report.

Auditors' Report on the Accounts

The Auditors' Report on Standalone and Consolidated Financial Statements for FY 2022-23 of the Company are given at Annexure- X to the Board's Report. There is no qualification in the Auditors report on the Financial Statements of the Company. The Supplementary Audit report under section 143(6) read with section 129(4) of the Companies Act,2013 issued by the Comptroller & Auditor General of India also forms part of Annexure-X.

Secretarial Audit

In terms of section 204(1) of the Companies Act, 2013, the Company engaged M/s Agarwal S. & Associates, Company Secretaries in whole-time practice, as Secretarial Auditors for conducting Secretarial Audit for FY 2022-23 and their report forms part of Corporate Governance section.

Secretarial Auditor in their Audit Report have observed non-compliance in composition of the Board of Directors as per Regulation 17 (1) (a) & (b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Section 149 (4) of the Companies Act, 2013 and paras 3.1.2 & 3.1.4. of the DPE Guidelines on Corporate Governance on account of (i) resignation of one independent director on 30.05.2022, resulting in the Company not having requisite number of independent directors on its Board and (ii) completion of tenure of two non-executive directors on 27.01.2023, resulting in the Company not having requisite number of non-executive directors on its Board.

The Management noted the observation and explained that BHEL, being a Government Company, the directors, including the independent directors are appointed by the Government of India. The Company has been in constant communication with the Government for appointment of requisite number of independent directors on its Board so as to ensure compliance with Corporate Governance norms enunciated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies Act, 2013 as well as the DPE Guidelines on Corporate Governance. The matter of filling up of these vacancies is under process at the end of Government.

Cost Auditors

In terms of provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, approved the appointment of seven firms of Cost Accountants as Cost Auditors for auditing the cost accounts of your Company for FY 2022-23. Cost accounts and records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 have been properly maintained and complied with. The detail of cost auditors appointed for FY 2022-23 are given separately in the Annual Report. The Cost Audit Report for FY 2021-22 has been filed under XBRL mode on September 02, 2022, well within the due date of filing and there was no qualification in the cost audit report.

Appreciation and Acknowledgements

Your Directors gratefully acknowledge with deep sense of appreciation, the co-operation and guidance received from the Government of India, particularly the Ministry of Heavy Industries in various spheres of the company's operations and strategic initiatives. We are deeply appreciative of and thankful to various ministries and statutory authorities/ departments of the Government of India for their valuable support and continuous cooperation. The Directors place on record their sincere appreciation towards the Company's valued customers in India and abroad for their co-operation in addressing various issues faced in complex long gestation construction contracts.

The Directors also express their gratitude to the Comptroller and Auditor General of India, professional bodies, Statutory Auditors, Branch Auditors, Secretarial Auditor and Cost Auditors for their constructive suggestions and continuous cooperation. The Directors place on record their sincere appreciation towards the company's esteemed shareholders for the support and confidence reposed by them in the management of the company and look forward to the continuance of in future. The Directors also wish to place on record their appreciation for the continued cooperation received from all the technology collaborators, suppliers and contractors. The support provided by the financial institutions, bankers and stock exchanges are also acknowledged and appreciated.

Last but not the least, your Directors wish to place on record their sincere appreciation for the diligent efforts, hard work and commitment put in by all BHEL employees, who have worked day and night, to meet the company's commitments._