Key Financial Figures

Onerous Contracts Provision

  • Provision for onerous contracts recognized during the year: ₹23,257.52 lakhs (₹232.58 crore)
  • Total provision for onerous contracts as of 31.03.2026: ₹25,024.15 lakhs (₹250.24 crore)
  • Previous year provision: ₹2,000.11 lakhs (₹20.00 crore)

Liquidated Damages

  • Liquidated damages expensed during the year: ₹6,788.78 lakhs (₹67.89 crore)
  • Contingent liability for liquidated damages on pending contracts as of 31.03.2026: ₹2,240.20 lakhs (₹22.40 crore)

Capital Expenditure

  • Additions to Property, Plant & Equipment and Intangible Assets during the year: ₹17,964.47 lakhs (₹179.64 crore)
  • Capital Work-in-Progress as of 31.03.2026: ₹27,632.71 lakhs (₹276.33 crore)

Working Capital Limits

  • Funded working capital limits: ₹1,500 crores
  • Non-funded working capital limits: ₹4,000 crores

Subsidiary Transactions

  • Loans provided to subsidiaries during the year: ₹18.63 lakhs (Previous year: ₹122.36 lakhs)
  • Outstanding loans to subsidiaries as of 31.03.2026: ₹624.01 lakhs (Previous year: ₹2,085.88 lakhs)
  • Advance to related party (MAMC Industries Ltd): ₹1,189.85 lakhs outstanding as of 31.03.2026

Regulatory and Compliance Matters

Board Composition Issues

The Board of Directors composition was not compliant with:

  • Regulation 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
  • Section 149 of the Companies Act, 2013

As of March 31, 2026, the board comprised:

  • 1 Government Nominee Director
  • 2 Independent Directors
  • 6 Executive Directors including Chairman & Managing Director

After year-end, following cessation of Independent Directors' tenure, the board comprised:

  • 1 Government Nominee Director
  • 6 Executive Directors including Chairman & Managing Director

The company has intimated the Ministry of Defence, Government of India and awaits suitable orders for appointments.

Statutory Dues Under Dispute

The company has various statutory dues under dispute totaling ₹22,459.77 lakhs (₹224.60 crore), including:

  • Central Excise, Service Tax, GST and Customs: ₹21,391.34 lakhs
  • Commercial Tax (Various states): ₹935.58 lakhs
  • Income Tax (TDS defaults): ₹132.85 lakhs

Amount deposited under protest: ₹2,907.46 lakhs

Legal Proceedings

Pending litigations have been disclosed in the financial statements as per Note No. 39(D)(1)(a)(i) & (ii). The company has made provisions for material foreseeable losses on long-term contracts.

Audit Emphasis Matters

MAMC Consortium Involvement

The auditors drew attention to Note No. 11 regarding the company's outlay on the MAMC Consortium and related advance to MAMC Industries Ltd.

Property Title Issues

Immovable properties with title issues include:

  • Flat at Sarovar Enclave, Ranchi (Gross carrying value: ₹10.12 lakhs) - Under dispute with state authorities
  • Flat at Ashadeep, Delhi (₹2.80 lakhs) - Title deeds obtaining in progress
  • Land at BGML (₹0.00) - Lease not renewed, purchase process ongoing

Subsidiary Information

Consolidated Entities

The consolidated financial statements include:

  • Vignyan Industries Limited: Total assets ₹2,920.52 lakhs, total revenues ₹221.75 lakhs
  • MAMC Industries Limited: Total assets ₹404.03 lakhs, revenue loss ₹9.60 lakhs

Excluded Entities

The following entities were not consolidated:

  • Communication (Defence) Testing Foundation
  • UAS Testing Foundation
  • Systems Testing and Research for Advanced Materials Foundation

(All are Section 8 companies where BEML doesn't exercise control)

Joint Venture

BEML Mid-West Ltd (45% JV) was under liquidation per NCLT order dated 20.10.2023, with a Resolution Professional appointed. BEML ceased to have control or influence.

Dividend Information

  • Final dividend paid during the year for previous year declaration: In accordance with Section 123 of Companies Act 2013
  • Interim dividend declared and paid for FY 2024-25 and 2025-26: In accordance with Section 123
  • Final dividend proposed for FY 2025-26: Subject to member approval at ensuing AGM

Internal Financial Controls

The company has adequate internal financial controls with reference to financial statements operating effectively as of March 31, 2026. The company uses accounting software with audit trail facility that operated throughout the year and was not tampered with.

CAG Directions Compliance

The auditors reported on compliance with CAG directions regarding:

  • Fair valuation of investments: Methodology reasonable and consistent
  • IT system processing: No material discrepancies, no transactions outside IT system
  • Government grants: No such funds received
  • Risk management: Policy formulated considering global best practices
  • Regulatory compliance: Generally compliant except board composition issues

Annexure Details

Annexure A (CARO 2020 Compliance)

  • Property, Plant and Equipment: Proper records maintained, physical verification program in place
  • Inventory: Physically verified, proper records maintained
  • Loans to subsidiaries: Provided, not prejudicial to company interest
  • Statutory dues: Generally regular in depositing undisputed dues
  • Defaults: No defaults in repayment of borrowings from banks
  • Fraud: No fraud noticed or reported during the year
  • CSR: No unspent CSR amount at year-end

Annexure B (Internal Financial Controls)

Adequate internal financial controls established and operating effectively as of March 31, 2026.

Annexure C (CAG Directions)

Compliance reported with all CAG directions with nil impact.