Directors Report of Bharat Dynamics Ltd.

Mar 31, 2025

Your Directors presents the 55^th Annual Report together with the audited financial statements of the company for the year ended

31 March 2025.

1. HIGHLIGHTS ON OPERATIONS:

i) Your company achieved production of 7 3767 crore as against 7 2592 crore of previous financial year and achieved sales
turnover of 7 3345 crore as against 7 2369 crore of previous financial year, registering a growth of 41%.

ii) Highest ever export of 7 1270 crore during FY 2024-25 as against the previous year’s export turnover of 7161 crore
registering a growth of about 689%.

iii) During the year, your company has received new orders worth about 76668 crore for supply of one of the Anti-Tank Guided
Missiles (ATGM), Medium Range Surface to Air Missile (MR-SAM) and other weapon systems to the Indian Armed Forces.

iv) During the year, your company has successfully evaluated trails of new generation ATGMs, upgraded Surface to Air Missiles,
Vertical Launched Short Range Surface to Air Missiles (VL-SRSAM), Long Range Land Attack Cruise Missiles (LR-LACM) and
Underwater Weapons.

2. FINANCIAL RESULTS AND PERFORMANCE HIGHLIGHTS:

2.1 Performance of the company in financial terms is summarized below:

Particulars	'' in Crore		% of Increase/ (Decrease)
	2024-25	2023-24
Sales/Revenue from Operations	3345	2369	41%
Value of Production	3767	2592	45%
i) Import Material Consumed	110	148	(26%)
ii) Indigenous Material Consumed	1990	972	105%
Total Material Consumed	2100	1120	88%
Value Added	1667	1472	13%
Profit Before Tax	749	828	(10%)
Profit After Tax	550	613	(10%)
Earnings per share# (in Rupee)	14.99	16.72	(10%)

# EPS has been calculated based on profits excluding the other comprehensive income and number of shares outstanding
at the end of the year is adjusted for the impact of sub division of 1 fully paid up equity share having a face value of 710
each into 2 fully paid up equity shares having a face value of 75 each.

2.2 Following data reflect the financial position of the company:

Particulars	'' in Crore		% of Increase/ (Decrease)
	2024-25	2023-24
Gross Block (Excl. CWIP)	1601	1497	7%
Accumulated Depreciation	743	673	10%
Net Block	858	824	4%
Working Capital (Net)	6018	6233	(3%)
Capital Employed	3886	3566	11%
Net Worth	4009	3637	10%
*Figures have been reclassified and regrouped, wherever necessary.

2.3 During the year under review, your company has achieved revenue from operations of 1 3345 crore, compared to 12369
crore in the previous financial year, registering a growth of 41%. The growth in turnover is primarily driven by boosted
manufacturing activities and easing out of supply chain constraints.

During FY 2024-25, the company reported a profit before tax of 1749 crore, compared to 1828 crore in FY 2023-24. The
decline is primarily attributed to the absence of a one-time net gain of 1119 crore (after offsetting 146 crore in associated
expenses) that was recorded in the previous financial year. Additionally, the current year’s results were impacted by a
1141 crore provision for a contract identified as onerous and a 190 crore provision for expected credit losses on trade
receivables.

The major products executed during the year are ATGMs, Akash-SAMs. The order book position of the company as on
31 March 2025 is about 1 22814 crore.

2.4 Future Outlook:

In the fiscal year 2024-25, your company recorded a turnover surpassing 13345 crore, a 41% rise from the previous year,
with exports soaring 689% to 11270 crore. The company secured orders worth 16668 crore building an order book of
122814 crore as on 31 March 2025. Your company anticipates further new orders worth 120000 crore over the next 2-3
years as several orders are in the finalization stages, ensuring robust future growth.

Your company is committed to advancing India’s self-reliance in next-generation weapon systems by adopting a
comprehensive and strategic approach. We prioritize the indigenous development of critical defence technologies, including
missile seekers, homing systems, avionics, cruise missile propulsion, specialized warheads, and electronic warfare systems.

To drive innovation and foster cutting-edge research, we actively collaborate with premier Indian institutions such as IITs,
NITs, and domain-specific research centers. These partnerships enable the co-creation of disruptive technologies tailored
to India’s strategic needs.

In parallel, we pursue joint ventures with leading global defence firms, bringing world-class expertise and manufacturing
practices to India. These collaborations support both domestic requirements and export-oriented production, strengthening
India’s position in the global defence market.

We strategically engage in foreign technology transfer programs, not only to bridge existing capability gaps but also to fast-
track the Make-in-India initiative. From the contractual stage, we emphasize maximizing indigenous content, ensuring that
each project contributes to the long-term vision of technological sovereignty.

Through this integrated approach-combining indigenous innovation, global collaboration, and strategic capability-building—
your company is shaping the future of India’s defence ecosystem, making it robust, competitive, and self-reliant.

The Government of India has approved several BDL products for export, BDL has begun penetrating the global defence
market, offering customized solutions and comprehensive lifecycle management for its products. By partnering with local
defence industries in customer countries, BDL ensures robust, localized lifecycle support. To boost efficiency, BDL is
optimizing its production lines by streamlining processes and adopting advanced technologies, ensuring timely deliveries
while maintaining high-quality standards.

In FY 2025-26, we will continue to focus on organizational capacity building, talent development, and fostering a high-
performance culture across the company. With a skilled workforce, solid institutional foundation, and a clear strategic
direction, BDL is confident in its ability to deliver value to stakeholders, contribute meaningfully to national defence
preparedness, and emerge as a global player in the defence manufacturing sector.

3. FIXED DEPOSITS FROM PUBLIC:

Your company did not accept any fixed deposits from public during the year, and there was no outstanding Fixed Deposits at the
beginning/end of the year. Accordingly, there was no default in payment of deposits/interest thereon.

4. DIVIDEND & TRANSFER TO GENERAL RESERVE:

Your company has a consistent track record of Dividend Payment. The Board has recommended a Final Dividend of 1 0.65/- per
equity share of face value of 15/-each amounting to 1 23.83 crore for the year 2024-25. Further, your company has paid interim
dividend of 14 per share (at face value of 15/- each) amounting to 1146.63 crore for the year 2024-25. The total dividend for FY
2024-25 declared by the company is 14.65 per share (at face value of 15 each). An amount of 1 400 crore is being transferred
to General Reserve for the year 2024-25.

BDL paid Interim dividend of F109,86,04,216 for the Financial Year 2024-25 to Government of India. CMD of BDL, Cmde A Madhavarao
(Retd) presented the Dividend Cheque, pertaining to the Govt. of India''s shareholding in BDL to Hon''ble Raksha Mantri Shri Rajnath Singh.
The total dividend paid by BDL to Govt. of India for the year amounts to k 1,27,71,27,401.

5. CAPITAL STRUCTURE:

The paid up capital of the company as on 31 March, 2025 stood at T183.28 crore (36,65,62,500 equity shares of T5/- each).
The Authorized Capital of the company is T200 crore (40,00,00,000 equity shares of T5/- each) as on 31 March 2025.

As on 31 March 2025, the Govt. of India shareholding in the company stands at 74.93% (representing 27,46,51,054 equity
shares of T5/- each).

6. SUBSIDARIES/JOINT VENTURES/ASSOCIATE COMPANIES:

As on 31 March 2025, your company has two section 8 Joint Venture companies viz., M/s Electronic Warfare (Defence) Testing
Foundation and Advanced Materials (Defence) Testing Foundation formed under Defence Testing Infrastructure Scheme
(DTIS) promulgated by Department of Defence Production, Ministry of Defence. Your company holds 10% shareholding in M/s
Electronic Warfare (Defence) Testing Foundation and 20% shareholding in Advanced Materials (Defence) Testing Foundation.
These entities are not considered for preparation of consolidated financial statements as the company does not have right to
variable returns from its involvement, other than equity investment.

7. PERFORMANCE AGAINST MoU:

Your company signs a Memorandum of Understanding (MoU) every year with the Ministry of Defence, Government of India. The
performance of the company for the year 2023-24 was rated as “Very Good” and the performance for the year 2024-25 is under
evaluation.

8. MODERNIZATION & UPGRADATION:

During the year, an amount of T282.75 crore has been spent towards Capital Expenditure (CAPEX) programs for the modernization
of Plant & Machinery and other infrastructure development, including joint development programs. The majority of this amount
was dedicated to establishing the infrastructure work for establishment of propellant plant at Jhansi, infrastructure work for
Phase-II at Ibrahimpatnam. Additionally, your company has planned to spend approximately T200 crore during the current
financial year 2025-26 on various CAPEX programmes, including construction of Jhansi Unit, Phase-II infrastructure development
at Ibrahimpatnam and Ceramic Radome facility at Kanchanbagh.

Your company is making determined efforts to increase the indigenization content in the manufacturing of ATGMs, SAMs, Air to
Air Missiles, and Torpedoes. This objective aims to enhance self-reliance and reduce dependence on imports

9. RESEARCH & DEVELOPMENT:

Your company acknowledges that Research and Development (R&D) plays a pivotal role in the growth of the organization. To
cater to the requirements of the Indian Armed Forces, your company has identified several products for R&D.

The following table shows the recent trend of in-house R&D expenditure:

Particulars	2024-25	2023-24 2022-23
Sales Turnover (Gross) (7 in Crore) R&D expenditure (7 in Crore) R&D expenditure as % of Sales Turnover PBT (7 in Crore) R&D expenditure as % of PBT	3345.05	2369.28 2489.39 75.37 152.03 3.18% 6.11% 828.24 481.80 9.10% 31.55%
	222.92
	6.66%
	748.76
	29.77%

10. PROCUREMENT FROM MSMEs:

In compliance with the Procurement Policy of the Government of India, your company has surpassed the mandated procurement
requirement of 25% from Micro, Small, and Medium Enterprises (MSMEs). During the year 2024-25, your company procured
29.12% of goods and services, amounting to approximately 7460.48 crore, from MSMEs out of its total procurement of 71581.42
crore. By achieving the mandated target of 25% from MSMEs, your company has demonstrated its commitment to supporting
and promoting the growth of these enterprises.

Industry Partners Development:

Your company endeavors to expand its vendor base through special drives and by offering free registration in certain cases and
on specific occasions. Throughout the year, your company conducted 6 vendor meets, resulting in over 500 registered vendors
as of the current date. Furthermore, your company has implemented an updated Integrity Pact in accordance with the directives
of the Central Vigilance Commission’s latest circular and adheres to the Standard Operating Procedure outlined therein. Your
company has procured goods & services to the tune of 3.83% (of total procurement) from Women MSM enterprises, thus
surpassing the 3% target set for such procurement. The procurement from SC/ST owned MSMEs stood at 1.19% (of total
procurement) against the mandated procurement of 4%, about 1174 MSMEs (including SC/ST & women) have been benefitted
in FY 2024-25.

Government e Market Place (GeM):

Your company registered as both a Buyer and Seller with the Government e-Marketplace (GeM). GeM is utilized for procuring
common items and services. Throughout the year, your company has successfully procured common goods and services worth
71501 crore through GeM out of total procurement of 71581.42 crore (Gross Merchandise Value) with staggered deliveries. This
demonstrates your company’s active engagement and utilization of GeM for streamlined procurement processes.

11 EXHIBITIONS:

During the year, your company has showcased its products in various National and International Exhibitions where in the Senior
Executives and Directors of the company took it on themselves to explain to the various stake holders on the developments in
the company and enabled greater collaboration with all stakeholders. The details along with the photographs of such exhibitions
are as follows:

12. EXPORTS:

Your company has placed significant emphasis on the export of Weapon Systems. During the year, your company has registered
highest exports value of about 71270 crore, which is all time high in the history of the company. The products offered by
your company are state-of-the-art, designed indigenously, competitively priced, and not heavily reliant on any foreign Original
Equipment Manufacturers (OEMs). With existing facilities, your company is well prepared to meet both domestic and export
demands. Several leads have been received from various friendly foreign countries for the export of BDL products, these leads
are actively being pursued by the export cell, which is engaged in interactions with overseas customers to achieve export targets.
As a result, your company has secured orders for the export of various Weapon systems, CMDS, ATGMs, SAMs etc. from friendly
foreign countries. Channel Partners/Agents have been appointed in several countries to promote your company’s exportable
products. Your company has also participated in various Foreign Defence Exhibitions to showcase its products and facilitate one-
on-one meetings with participants from the Armed Forces/Ministries of Defence of other countries. To strengthen international
engagement, BDL is working closely with Indian Embassies / Defence Attaches to arrange meetings and visits with stakeholders
from foreign countries. Furthermore, plans are underway to open Representative Offices in foreign countries. As of 31 March,
2025, your company has total export order book of 71167 crore, reflecting the growing success in the international market.

13. ATMANIRBHAR BHARAT & INDEGINISATION:

As part of its commitment to building an Atmanirbhar Bharat (Self-Reliant India), BDL has prioritized indigenization efforts from
the very outset of each contract. The company manufactures missiles through Technology Transfer (ToT) agreements with both
the Defence Research and Development Organisation (DRDO) and foreign Original Equipment Manufacturers (OEMs).

While initial ToT from foreign OEMs covered only around 60% of the technology, BDL has successfully increased indigenization
levels to over 80%-90% in many of these products. For DRDO-designed systems, most of them have already achieved
indigenization levels exceeding 90%. BDL continues to make concerted efforts to further enhance indigenization across its entire
product range, reinforcing its role in strengthening India’s defence manufacturing capabilities.

BDL is utilizing the Srijan Portal, an indigenization initiative by the Ministry of Defence. The primary objective of the Srijan Portal
is to engage the private sector in the indigenization efforts of Defence PSUs. BDL regularly uploads details of imported items
identified for indigenization, enabling Indian industry partners to come forward and participate in their development.

Accordingly, BDL has uploaded 1,198 imported items on the portal. As of this year, 217 items have been indigenized cumulatively.
Necessary technical support is being provided to Micro, Small, and Medium Enterprises (MSMEs) to encourage them to produce
quality components.

BDL is also fostering collaboration with startup companies, identifying problem statements for them to work on and develop
innovative solutions. Memorandums of Understanding (MoUs) are being signed with these companies to support their growth
and create new business opportunities.

Furthermore, as of this year, the Ministry of Defence has issued five Positive Indigenisation Lists (PILs) under the Department of
Defence Production (DDP) as part of ongoing efforts to promote self-reliance in defence manufacturing through the Atmanirbhar
Bharat Abhiyan. These lists include an embargo on imports beyond specified timelines.

Of the five PILs issued, 59 items are associated with BDL. Out of these, BDL has successfully indigenized 49 items, while the
remaining items are at various stages of the indigenization process.

In line with the Government of India’s vision for the Make in India initiative, with a special focus on Atmanirbharta in Defence,
BDL has conducted and participated in several vendor development programs and seminars, showcasing components and sub¬
assemblies proposed for indigenization.

During these events, vendors were briefed on the indigenization procedures, as well as the technical and procedural support that
BDL would provide throughout the indigenization process.

BDL and the Innovation for Defence Excellence (iDEX) programme have forged a strategic partnership, in alignment with the
Government’s vision of Atmanirbhar Bharat. This collaboration has led to the creation of a robust ecosystem where BDL works
closely with aspiring entrepreneurs and MSMEs to enhance its innovation and R&D capabilities.

Through iDEX, BDL has been engaging with startups to develop innovative technologies for its R&D projects and for the
production of missile systems for the Indian Armed Forces. As a result of this partnership, a Miniaturized Visual Imaging Guidance
System was successfully developed during 2024-25.

14. MANPOWER AND RESERVATION OF POSTS FOR SCs/STs:

14.1 The company has been following Presidential Directives of the Government with regard to reservation of posts for SCs/
STs/OBC in recruitments.

14.2 Total manpower strength as on 31 March 2025 is at 2269 (including four functional directors). Out of the total strength,
72 are ex-servicemen, 465 are of Schedule Caste, 200 are of Scheduled Tribes, 792 are of OBC category and 10 are of
EWS category. The percentage of Scheduled Caste and Scheduled Tribes in respect of employees is at 20.49% and 8.81%
respectively.

14.3 The No. of Scheduled Caste, Scheduled Tribes, OBC and EWS in various categories of posts as on 31 March 2025 is given
below:

Category	Number of Employees (excluding CVO)
	Total Strength		Scheduled Castes		Scheduled Tribes		OBC		EWS
	31-03-2025	31-03-2024	31-03-2025	31-03-2024	31-03-2025	31-03-2024	31-03-2025	31-03-2024	31-03-2025	31-03-2024
Group-A	757	768	142	147	80	84	211	201	10	7
Group-B	2	1	0	0	0	0	2	1	0	0
Group-C	1375	1472	284	291	110	111	526	539	0	0
Group-D	135	149	39	41	10	11	53	58	0	0
Temporary	0	11	0	4	0	0	0	2	0	0
Total	2269	2401	465	483	200	206	792	801	10	7

14.4 Recruitment of employees in Scheduled Caste, Scheduled Tribes, OBC, EWS during 2024-25 is given below:

Classification of posts	Total Vacancies Released	Total Recruitment made	Reservation of posts				Recruitment made during the year 2024-25
(1)	(2)	(3)	(4)				(5)
			SCs	STs	OBC	EWS	SCs	STs	OBC EWS
Group-A	50	54	07	04	12	05	06	03	13 04
Group-B	-	2	-	-	-	-	-	-	01 -
Group-C	-	11	-	-	-	-	04	-	03 -
Group-D	-	-	-	-	-	-	-	-	- -
Total	50	67	07	04	12	05	10	03	17 04

14.5 Employment of Women:

As per the recommendation No.51, Para (ii)(a) of the National Commission for Women (NCW) in its Annual Report for the
year 1995-96, the employment position of Women as on 31 March 2025 is given below as directed by the Ministry of
Defence, vide their letter Nos. 39(6)/99/D(B&C), dated 27 August 1999.

14.5.1 Executives

Grade	No. of Employees	Women	Percentage
I	2	2	100
II	170	31	18.24
III	64	7	10.94
IV	218	34	15.60
V	132	20	15.15
VI	116	14	12.07
VII	47	3	6.38
VIII	3	-	-
IX	3	-	-
Functional Directors	3	-	-
CMD	1	-	-
Total	759	111	14.62

14.5.2 Non-executives

Grade	No. of Employees	Women	Percentage
WG-0	-	-	-
WG-1	2	-	-
WG-2	23	4	17.39
WG-3	65	13	20.00
WG-4	97	15	15.46
WG-5	149	14	9.40
WG-6	256	16	6.25
WG-7	164	35	21.34
WG-8	181	27	14.92
WG-9	47	7	14.89
WG-10	38	4	10.53
WG-11	78	2	2.56
WG-12	410	35	8.54
Total	1510	172	11.39

14.6 Persons with Disabilities (PWD) as On 31 March 2025:

The total number of Physically Challenged employees as on 31 March 2025 is 93 and its percentage to total employees
works out to 4.10%.

	VI	HI	LD	MD	Total
Group-A	6	6	12	1	25
Group-B	0	0	0	0	0
Group-C	8	17	35	0	60
Group-D	3	2	3	0	8
Total	17	25	50	1	93

HI- Hearing Impaired, LD-Locomotive Disability, VI-Visually Impaired, MD-Multi Disability

15. HUMAN RESOURCE DEVELOPMENT:

During FY 2024-25, your company has demonstrated a strong commitment to employee development by conducting various
training programs for both Executives and Non-Executives. A total of approximately 1415 employees participated, resulting in
3099 training man-days. These programs, conducted through both in-house and external agencies, were designed to enhance
skills and knowledge while also meeting statutory requirements.

These initiatives aimed to enhance executives’ understanding of internal systems and procedures, get acquainted with latest
technologies, improve interpersonal communication and presentation skills, and ultimately enable them to perform their roles
more effectively, contributing to the company’s success.

15.1 Key Training Programs and Initiatives:

15.1.1 Vigilance Awareness Week Trainings:

i) Conducted during 03 September 2024 to 03 October 2024.

ii) Vigilance Awareness Trainings were conducted as per the directions from Central Vigilance Commission covering the
employees, entry level managers and mid-level managers who have at least 10 years of experience.

iii) Themes: Ethics and Governance, Conduct Rules (CDA Rules), Conduct Rules (Standing Orders), Systems and
Procedures of the Organization (NOC, Higher Education, FR56J, Grievance Procedure, Pension, PSMB etc), Cyber
hygiene and Security, Procurement.

15.1.2 Skill & Knowledge Programmes:

i) Various Skill based programmes viz. NDT Techniques, Comprehensive AI Fundamentals, Leveraging AI to enhance
productivity, Design and Optimization of UAVs, Industry 4.0 / QA 4.0

ii) Knowledge Programmes: SAP Functional Modules (MM & PP), DPR course on Media, Defence Acquisition
Management Course, Mission Design and Avionics at IIST Trivandrum by ISRO etc. were conducted to stay abreast
of the latest technological advances in the industry.

15.1.3 Utilization of iGOT Karmayogi (Integrated Government On-line Training):

This is an online learning and career management platform for Government Employees. Over the years, the idea is to
acclimatize employees with iGOT trainings along with the regular in-house and External trainings, so as to maximize the
learning appetite and to become a learning organization. All the employees were encouraged to complete 5 training
capsules as pilot phase. About 87% employees were registered till FY 2024-25 and about 33% employees have completed
the following courses:

i) Prevention of Sexual Harassment of Women at Workplace

ii) Introduction to Emerging Technologies

iii) Orientation Module on Mission LiFE

iv) Stay Safe in Cyber Space

v) Code of Conduct for Government Employees

15.1.4 Outbound Training (Team Building activities) on Breaking Barriers, Building Futures:

As part of Women’s Day celebrations an outbound training was conducted on 08 March 2025 to empower the women
employees wherein about 300 women across all Units have participated.

15.1.5 Special Workshops and Trainings conducted:

i) On International Day of Disabled Persons, a workshop for Persons with Benchmark Disabilities (PwBDs) was held on
03 December 2024.

ii) Special Training Programmes for SC, ST, OBC, Ex-servicemen & PwD Associations and EC Members of Registered
Union were trained on Reservations and Rosters, Role of Union in CPSEs to promote diversity and inclusion.

15.1.6 Prime Minister Internship Scheme:

i) Phase 1 of PMIS has commenced from 02 December 2024 with target of posting 250 vacancies for FY 2024-25.
On approval of Competent Authority, BDL has published vacancies for 250 nos. of Interns under Prime Minister’s
Internship programme in FY 2024-2025 across all Units of BDL.

ii) These Interns are being provided with Lunch, Transport, Accommodation, Medical facilities and Mentoring apart
from providing the Internship Allowance.

16. PARTICULARS OF EMPLOYEES:

No employee of the company received remuneration in excess of the limits prescribed under Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014. Furthermore, in accordance with Ministry of Corporate
Affairs Notification No. GSR 463(E) dated 05 June 2015, Government Companies are exempt from the provisions of Section 197
of the Companies Act, 2013 and the rules made thereunder.

17. FOREIGN VISITS:

Your company incurred an expenditure of around 7 3.36 crore during the year under report towards foreign travel for business
trips.

18. INDUSTRIAL RELATIONS AND EMPLOYEE WELFARE:

Your company maintains cordial and harmonious industrial relations through the cooperation of all employee sections, including
the Recognized Trade Union and associations for SC, ST, OBC, Ex-Servicemen, and Officers. Statutory and non-statutory
committees like the Works Committee, Safety Committee, Canteen Managing Committee, and Welfare Committee play a key
role in maintaining workplace discipline.

Compliance with statutory welfare provisions is strictly followed. The Post Superannuation Medical Benefit Scheme addresses
the medical needs of retired employees and their families. There is cordial cooperation between the Recognized Trade Union and
all associations and the Management, ensuring smooth functioning of the organization.

19. SECURITY:

The Central Industrial Security Force (CISF) is responsible for providing security and fire services at both the Kanchanbagh
and Bhanur Units, playing a crucial role in ensuring the security and protection of the company’s property. The CISF team has
implemented robust security measures, combining physical measures and advanced technology to maintain the security of highly
sensitive installations

To oversee the security arrangements and the implementation of Intelligence Bureau (IB) guidelines, the Plant Security Council
is in place. Regular security review meetings are conducted by both the management and CISF to enhance security measures.

In addition to computerized photo identity cards, a Biometric Access Control System has been implemented to prevent
unauthorized entry. CCTV cameras are installed throughout the factory premises to expand the coverage of CCTV surveillance.
Door frames, metal detectors, and X-ray baggage machines are also utilized. Barricades, boom barriers, and mochas are provided
to reinforce physical security measures.

Regular security awareness programs are conducted, along with the observation of Security Week and Fire Week. Employees are
sensitized to security threats and educated on the appropriate actions to be taken during emergencies and fire accidents.

20. SAFETY:

BDL stringently follows, applicable norms to maintain Safety, Health and Environment (SHE). The two Safety Committees i.e.
Industrial Safety Committee and Explosive Safety Committee monitor Safety, Health and Environment (SHE) at regular intervals
at BDL, KBU. The Industrial works are carried out in compliance with Factories act 1948, and explosive safety is stringently
adhering to the Storage & Transport of Explosive Committee (STEC-2017) regulations framed by Centre for Fire, Explosive &
Environment Safety, (CFEES) MoD, New Delhi. Safety committee meetings are conducted periodically to monitor the Safety,
Health and Environment as per the statutory norms. The safety related issues are reviewed at regular intervals by General
Manager/Unit Head for compliance.

During the year, Industrial Safety audit was conducted by Deputy Chief Inspector of Factories, Telangana State and observations
made are duly addressed. Annual Explosive safety audit was conducted by Centre for Fire, Explosive & Environment Safety
(CFEES) New Delhi and necessary actions are taken based on their observations. EMS (ISO 14001:2015) surveillance (external)
audit was also successfully completed in Feb-2024 without any NC’s/observations.

4 March 2025 is observed as 54th National safety day Campaign, this event observed for entire week from 4 March-11 March
of 2025. In this campaign various events like Safety pledge was administered at the main gate entrance, different workstations
of concerned departments, safety badges distributed to all, safety day banners displayed, various competitions like safety slogan,
essay & elocution conducted in Hindi/Telugu/English languages, safety quiz and basic first aid firefighting demo conducted
as safety promotional activities. Followed by 54th National Safety Day Campaign valedictory function conducted chaired by
Director (Production) & Executive Director (Unit Head) with special guests Director of Factories & Joint Chief Inspector of
Factories, Telangana State.

In terms of training programs, both in-house and external trainings are regularly conducted for employees on industrial and
explosive safety. During the year, a special program was organized on “Train the Trainer - Explosive Safety” which was delivered
by Retd., Director (CFEES) and followed by a technical session on Static Electricity which was delivered by M/s. 4S Techno
Systems, Hyderabad. Special medical checkups are carried out for employees working in Electroplating and Canteen. Periodical
medical checkups are carried out for employees working in other areas. Fire mock drills are conducted at regular intervals to
ensure firefighting preparedness.

Safety Engineering Department is in continuous interaction with Inspector of Factories, Telangana, State Pollution Control Board
(TSPCB) and Centre for Fire, Explosive & Environment Safety (CFEES) MoD, New Delhi and complying with their guidelines,
issued from time to time.

As per the company’s environmental policy, your company is committed to manufacturing and supplying defence products to the
Indian armed forces in an environmentally friendly manner. The key environmental commitments include:

i) Protecting the environment and preventing all types of pollution.

ii) Fulfilling compliance obligations.

iii) Conserving natural resources.

v) Continually improving to enhance environmental performance.

Your company demonstrates a strong commitment to environmental sustainability and compliance with regulations through
various initiatives and certifications. Here are the key environmental management practices and measures in place across all
three units—Kanchanbagh, Bhanur, and Visakhapatnam:

21.1 Environmental Management Practices:

21.1.1 ISO 14001:2015 Certification:

All units are recertified with ISO 14001:2015 (EMS) to assess pollution levels and ensure compliance with legal
requirements.

21.1.2 Waste Management:

i) Plastic Use Reduction: Issued a circular to discourage the use of plastics.

ii) E-waste and Hazardous Waste: Disposed of through agencies registered with the Pollution Control Board.

iii) Solid Waste: Disposed of through M/s MSTC, a government undertaking, specifically ferrous and non-ferrous
metals.

iv) Biomedical Waste: Disposed of through an agency registered with the Pollution Control Board.

v) Housekeeping: Proper practices are maintained to ensure a clean and safe environment.

21.1.3 Zero Liquid Discharge System:

i) Effluent Treatment: Treated water from the effluent treatment plant undergoes further treatment through reverse
osmosis (RO).

ii) Usage of Treated Water:

- RO treated water is utilized in the Demineralized Water (DM) plant for producing DM Water.

- DM Water is used in the Electroplating Shop, CNC machines, and flow forming machines in the Workshops.

iii) Gardening: Treated water from the sewage treatment plant is used for gardening within the premises.

21.1.4 Audits and Monitoring:

i) Internal and Surveillance Audits: Conducted at regular intervals by certification bodies for all units.

ii) Environmental Parameters Monitoring:

- Ambient air quality, stack quality of DG sets/venturi scrubbers, sewage treatment plants, and effluent treatment
plants.

- Noise levels tested as per specified frequencies.

iii) Resource Monitoring: Water quantity monitored using separate water meters and electricity consumption is tracked
to comply with consent conditions.

On the occasion of World Environment Day, the Prime Minister of India launched a global campaign, “#EkPedMaaKeNaam”
/ “#Plant4Mothers.” In support of this initiative, BDL planted 8,366 saplings of various species, including Mango, Guava,
Lemon, Coconut, Amla, Pomegranate, Neem, Orange, Peepal, Teak, Tamarind, Chilbil, Sababia Roja, Gulmohar, Pagoda, Kala
Jamun, Spanish Cherry, Terminalia, Spathodea, Caesalpinia, Cassia Javanica, Jacaranda, and Tecoma Gaudichaudi, covering
a total area of 15.13 acres.

World Environment Day 2024 was celebrated with great enthusiasm across all BDL units. Banners were displayed at
prominent locations, and saplings were planted on 5 June 2024 to mark the occasion. Slogan writing, essay writing, and
quiz competitions were organized based on the theme “Land Restoration, Desertification, and Drought Resilience.” Prizes
were distributed to the winners during the valedictory function.

The then General Manager and Unit Head (VU) addressed the gathering on the theme "Land Restoration, Desertification, and Drought Resilience.”
Guest speaker Prof. Dr. S. Bala Prasad from the Department of Environmental Engineering, Andhra University, Visakhapatnam, delivered a speech on
the theme and its significance in translating sustainable practices into day-to-day activities aimed at creating a healthier and greener planet. Prizes

were also distributed to the winners during the valedictory function.

22. QUALITY:

All production divisions/units including Akash, CP-IGMP, Design & Engineering, Electronics Division of Kanchanbagh Unit, Bhanur,
and Visakhapatnam Units are certified with AS 9100D, an aerospace quality management system standard. Kanchanbagh, Bhanur,
and Visakhapatnam Units are also certified with ISO 14001:2015 (EMS), which is an environmental management system standard.
The Corporate Office is certified with ISO 9001:2015 (QMS), which focuses on quality management systems. The Material
Testing Lab, Electronics Lab, and Standard Labs are certified with ISO/IEC 17025:2017, which pertains to the competence of
testing and calibration laboratories. The Electronics Division is certified with AFQMS (Air Force Quality Management System).
Furthermore, BDL holds the ISO/IEC 27001:2022 certification for information security management systems (ISMS). Internal
audits for all ISO/AS certified divisions are conducted by the company’s own internal auditors, while surveillance audits are
carried out by certification bodies as per the prescribed frequency.

In addition to these certifications, your company is committed to continuously improving customer satisfaction through customer
meets and interactions with users. Corrective actions are implemented wherever necessary to drive improvement in processes
and meet customer expectations.

23. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

23.1 Implementation of OL Act-1963 (as amended 1967) & Rules thereunder are ensured. Quarterly OLIC Meetings were held
regularly under the Chairmanship of CMD and Directors, besides submission of Quarterly progress reports on use of OL,
which are sent in time to authorities concerned.

23.2 In compliance with the Official Language (OL) Act, 1963 and the Presidential Orders thereon, the papers laid before
Parliament, the Annual Report of the Company, the Memorandum of Understanding (MoU) with the Ministry of Defence
(MoD), and brief presentations for various Parliamentary Committees and delegations are prepared in bilingual format and
submitted accordingly.

23.3 In compliance to the assurances and directives of Parliamentary Committee on OL, ‘A series of Hindi Workshops’ were
organized wherein a total of 512 nos. of officials were covered in 20 Hindi Workshops organized during the year with
an objective to integrate the use of Hindi effectively in day-to-day functioning. During the workshops, fulfilling the
assurances given to the parliamentary Committee on OL and its action plan was discussed and implanted later. Also, the
use of ‘Kanthasth 2.0’ a memory based translation software developed by Department of Official Language, GoI was also
discussed with its hands on training for effective implementation of OL in day-to-day functioning. To promote the original
writing in Hindi in Technical and Non-Technical areas with detail coverage of OL activities of the Organization, a dedicated
Hindi e-Magazine of the Organization titling “BDL BHARATI” (2nd & 3rd issues) was released and issued.

23.4 An “Orientation Program on OL Policy” was organized on 7 March 2025 for newly joined executives. The DGM (HR-OL)
briefed the trainee officers on the Official Language Policy of the Government of India, emphasizing the role of executives
in its implementation and encouraging them to use Hindi in their routine work.

23.5 BDL was awarded the “TOLIC Rajbhasha Trophy” for the best implementation of the Official Language among PSUs in the
twin cities. The trophy and certificate were presented by the CMD of ECIL & Chairman, TOLIC (Undertakings) to the DGM
(HR-OL) at the 59th Half-Yearly Meeting held on 28 May 2024.

23.6 Hindi Fortnight 2024 was celebrated from 10 to 26 September 2024 at the Corporate Office and across all units. Various
competitions were organized, including ‘Vocabulary-Noting-Drafting’, ‘Hindi Dictation’, ‘Hindi Typing on Computers’,
and ‘Multimedia Hindi Quiz’ for officers and employees at the Corporate Office, Kanchanbagh Unit, Bhanur Unit,
and Visakhapatnam Unit. BDL also participated in Hindi Diwas and the 4th All India OL Conference organized by the
Department of Official Language, MHA, GoI, from 14 to 15 September 2024 at Bharat Mandapam, New Delhi. The
valedictory program for the Hindi Fortnight was held on 26 September 2024 under the chairmanship of the CMD, with
Directors, Unit Heads, and senior officials in attendance. Cash awards were presented to the winners of competitions and
to employees recognized for original work in Hindi during the year.

23.7 To mark the golden jubilee of the Constitution of India and the Official Language, a special program was organized on 5
March 2025. A lecture session included a documentary on the Constitution and a presentation covering its key features
and creation. In the second session, the DGM (HR-OL) spoke on the role of the Official Language in national development
and highlighted various Government initiatives to promote and propagate Hindi.

23.8 A ‘Hindi Kavya Goshthi’ was organized on 7 March 2025 to encourage creative writing among executives and non¬
executives. Dr. Surabhi Dutt, a political science academician, and Dr. Rajeev Singh, an eminent writer and academician,
were the chief guests. Besides the guests, BDL executives also presented their poems during the event.

23.9 On occasions such as Republic Day, Independence Day, Vigilance Awareness Week, Swachhata Pakhwada, and Constitution
Day, programs were conducted in both Hindi and English. The company’s Hindi website was regularly updated in line
with Government directives. Officers and employees also participated in Inter-PSU competitions conducted by TOLIC
(Undertakings) and won eight prizes.

23.10 To promote the use of Hindi and encourage reading habits among officers and employees, BDL subscribes to a variety of
Hindi magazines and newspapers, including Hindi Milap, Swatantra Vaartha, Daily Shubha-Labh, Anuvad, Sahitya Amrit,
Avishkar, Yojana, Hindi Rozgar Samachar, Pratiyogita Darpan, Meri Saheli, and Hans. Additionally, popular Hindi books on
various subjects are purchased annually as per the directives of the Department of Official Language.

24. VIGILANCE:

24.1 Preventive/ proactive vigilance has been the primary objective of Vigilance Department of the Company. As a part of its
proactive vigilance measure, the department has issued 11 Systemic Improvement Suggestions in the areas of e-reverse
auction, Recruitment, Departmental Promotion, Reservation, Sensitive Area Rotation, Civil works and Service Contracts
etc. and of which many have been implemented by the Management during the year under report. Brief of all the Systemic
Improvements have been hosted on BDL website https://bdl-india.in.

24.2 In furtherance of its preventive vigilance approach, as directed by Hon’ble CVC as a prelude to observance of Vigilance
Awareness Week-2024, various preventive vigilance measures were undertaken in 3-months campaign made across units
of the Company during 16 August 2024 to 15 November 2024 in the following focus areas:

- Capacity Building Programs

- Identification and implementation of Systemic Improvement measures

- Dynamic Digital Presence

- Updation of Circulars/ Guidelines/ Manuals

- Disposal of complaints received before 30 June 2024

24.3 Being an extended arm of the Central Vigilance Commission (CVC), New Delhi, the department has submitted various
reports i.e., Monthly, Quarterly, Annual & CTE Type to the Commission and also to Department of Vigilance, Ministry of
Defence and to the Board of the Company. The Department has also issued vigilance clearances to employees in cases of
Recruitment, Promotion, Absorption, Confirmation, Foreign visits, for postings in sensitive areas etc. The department has
also accorded priority in handling the complaints as per the complaint handling policy of the CVC.

24.4 As part of the observance of Vigilance Awareness Week during the campaign period, Smt. G Sreedevi Retd, Justice of High
Court of Telangana, visited Kanchanbagh Unit of BDL on 04 November 2024. On her visit to the Company, Smt. G Sreedevi
was briefed about BDL by Commodore A. Madhavarao (Retd.), Chairman & Managing Director, BDL. A presentation was
made by Shri K. Srinivas, AGM & HoD (Vigilance) about the vigilance activities at BDL and the preventive vigilance activities
being undertaken in campaign period. In her keynote address to the gathering of senior management executives, the chief
guest appreciated the vigilance initiatives of BDL. During her address, she has highlighted the significance of Vigilance
Awareness Week and exhorted all to be vigilant about irregularities. She has underlined the need for transparency and
enhancing awareness among the employees about vigilance.

24.5 Observation of Vigilance Awareness Week is an integral part of the Vigilance department. As directed by the Central Vigilance
Commission, Vigilance Awareness Week (VAW)-2024 with the theme “Culture of Integrity for Nations Prosperity” was
observed across units of Bharat Dynamics Limited from 28 October 2024 to 03 November 2024. The observance of VAW-
2024 commenced with Commodore A. Madhavarao (Retd.), Chairman and Managing Director (CMD), BDL administering
‘integrity pledge for citizens’ at 11 AM on 28 October 2024 at BDL-Kanchanbagh Unit. Employees of Corporate Office,
Bhanur Unit, Visakhapatnam Unit and lbrahimpatnam Unit participated in the ceremony through video-conference and took
integrity pledge. This was followed by reading out messages of Hon’ble President of India, Hon’ble Vice-President of India,
Hon’ble Prime Minister of India by Directors and message of CVC by HoD (Vigilance) to the august gathering. The program
was live across units of the company through video conference. A total of 2310 employees of BDL have taken the Integrity
Pledge during observance of vigilance awareness week.

24.6 In order to create awareness on vigilance and the importance of it in day-to-day life, various competitions such as Essay
Writing, Elocution, Slogan Writing, Poster making on issues relating to Anticorruption were conducted for employees,
spouse and children of employees during the Vigilance Awareness Week-2024. ‘Integrity pledge for Citizens’ was
administered to the students. Special emphasis was given to involve youth in various activities and as a part of it, Debates
on topics related to anti-corruption were conducted in colleges in Hyderabad and Visakhapatnam.

24.7 As part of Vigilance Awareness Week - 2024, Sensitization programs for employees on matters relating to the Role of
Inquiry Officer (IO) & Presenting Officer (PO), Ethics and Governance, Public Procurement, Cyber Hygiene and security,
Systems and Procedures of the Organization, Complaint Policy of CVC and Disciplinary Proceedings procedure etc., were
conducted across units of the company.

24.8 To spread awareness on the theme of “Culture of Integrity for Nations Prosperity” and to sensitize employees of BDL and
public at large, banners on the theme were displayed at conspicuous places across units of the company and in public
places too. To promote citizens to take eve ‘e-integrity pledge’, a link of eve website was hosted in the BDL website. Short
telephonic messages were sent to all employees encouraging to be a part of “Vigilance Awareness Week-2024” and to take
integrity pledge clicking by the link http://pledge.cvc.nic.in.

24.9 In order to spread the messages to public about the ill effect of corruption on society and the importance of self¬
reliance & integrity in life, a walkathon was organized by Bhanur Unit at Kyasaram village on 30 October 2024. Students,
youth, personnel from CISF Unit of BDL Bhanur Unit, BDL employees, local leaders and the general public participated
enthusiastically in the Walkathon. ‘Integrity Pledge’ was administered to the participants on the occasion. Shri P V Rajaram,
Director (Production), BDL has flagged-off the walkathon along with representatives of the Municipality Officials. Public
were appraised of the need to ensure integrity in their day-to-day life and commit to the development of the Nation by
saying ‘no’ to corruption. Placards and banners with slogans on ill effects of corruption were displayed.

24.10 Online Vendor Meet was organized by Corporate Commercial Department of BDL on 29 October 2024 at Corporate
Office, 150 vendors of BDL participated. A presentation on the provisions of Integrity Pact (IP) and role of Independent
External Monitor (IEM) was made on this occasion.

The 5th edition of “CHETANA”- annual vigilance newsletter was released during valedictory function of
VAW-2024 by Chief Guest Smt. G Sreedevi Retd., Justice of High Court of Telangana on 04 November 2024.

25. ANTI-BRIBERY AND ANTI-CORRUPTION POLICY:

Your company has zero tolerance approach to bribery and corruption. Your company prohibits all forms of bribery and corruption
whether involving, but not limited to Government Officials or a Private Sector persons or Company and whether directly or
indirectly. The Board of Directors had approved a policy on Anti-Bribery and Anti-Corruption and the same was hosted on
website of the Company https://bdl-india.in/sites/default/files/BDLACABPolicy_0.pdf .

26. BOARD OF DIRECTORS:

26.1 The Board of Directors of the Company comprises Functional Directors, Government Nominee Directors and Independent
Directors (i.e. Non Official Part Time Directors) who are appointed by the Government of India from time to time. Further,
the tenure and remuneration of Functional Directors including Chairman and Managing Director are decided by the
Government of India through Public Enterprises Selection Board/Search Committee. The Government communication also
indicates the detailed terms and conditions of their appointment including a provision for the applicability of the relevant
rules of the Company.

26.2 The Government Nominee Directors are not entitled to any remuneration/sitting fee. The Independent Directors (i.e. Non
Official Part Time Directors) are entitled to sitting fees for attending the Board/Committee meetings as approved by the
Board, considering the government directives, statutory acts, rules and regulations.

26.3 Independent Directors (i.e. Non Official Part Time Directors)

During the year, out of six (6) Independent Directors, the term of office of five (5) Independent Directors namely Shri. Sunil
Chintaman Mone, Shri. Nandakumar Subburaman, Dr. Pawan Sthapak, Prof. (Dr.) Sanghamitra Mishra and Shri Rajendra
Singh Shekhawat was completed in the month of December, 2024. The Board expresses its gratitude for the valuable
contributions made by them during their tenure.

The Ministry of Defence, Government of India vide its letter No. -M0001(11)/3/2018-D(BDL) dated 22.04.2025 appointed
Shri.Chetan Bansilal Kankaria as Part-time Non-Official Independent Director for a period of one year or until further orders,
whichever is the earliest.

Statement on declaration by Independent Directors:

Independent Directors have given declarations u/s 149(7) of the Companies Act, 2013 that they meet the criteria of
independence as laid down u/s 149 (6) of the said Act.

26.4 During the year, the Ministry of Defence, Government of India has appointed Shri. D. V. Srinivas as Director (Technical)
of BDL vide their letter No. DDP-M0001(11)/4/2023-D(BDL) -dated 20 September 2024 and Shri. G. Gayatri Prasad as
Director (Finance) of BDL vide their letter No. DDP-M0001(11)/3/2023-D(BDL)-dated 18 December 2024.

26.5 In accordance with the provisions of Section 152 of the Companies Act, Shri. U. Raja Babu, Govt Director, retires by rotation
at the upcoming Annual General Meeting and, being eligible, offers himself for reappointment.

26.6 Number of Meetings of Board:

During the year 2024-25, six (6) Board Meetings were held on 30 May 2024, 09 August 2024, 25 October 2024,
14 November 2024, 09 December 2024 and 06 February 2025.

26.7 Performance Evaluation:

The provisions of Section 134(3)(p) of the Companies Act, 2013 relating to evaluation of Board of Directors do not apply
to your company since necessary exemptions are provided to all government companies. Further, similar exemptions were
granted to your company by Securities Exchange Board of India (SEBI) under the provisions of SEBI (Listing Obligations and
Disclosure Requirements {LODR}) Regulations, 2015 vide their letter No. SEBI/HO/CFD/DIL1/OW/P/2018/1679/1 dated
17 January 2018.

26.8 Committees of the Board

The following are the statutory Committees constituted by the Board and they function according to their respective roles
and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility and Sustainability Development Committee

• Stakeholders Relationship Committee

• Risk Management Committee

Details of composition, terms of reference and number of meetings held for respective Committees are given in the Report
on Corporate Governance, which forms a part of this Annual Report.

27. DIRECTORS'' RESPONSIBILITY STATEMENT:

As per Section 134(3)(C) and 134(5) of the Companies Act, 2013 as amended, the Directors state that:

(i) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper
explanation relating to material departures.

(ii) Directors have selected such accounting policies and applied them consistently and judgments and estimates made are
reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2025 and
of the profit of the company for the year ended on that date.

(iii) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud
and other irregularities.

(iv) Directors have prepared the annual accounts on a going concern basis.

(v) Directors have laid down internal financial controls which are being followed by the company and that such internal financial
controls were adequate and operating effectively and

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

28. SIGNIFICANT AND MATERIAL ORDERS:

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.

29. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

Material changes and commitments affecting the financial position of the company which have occurred between 31 March
2025 and date of signing of this Report are - Nil.

30. AUDIT COMMITTEE:

During the year 2024-25, four (4) Audit Committee meetings were held to review internal control systems and their adequacy,
including coverage of Audit functions. Details of composition, terms of reference, etc., are covered in Report on Corporate
Governance.

31. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT:

31.1 Pursuant to the provisions of Section 135 of the Companies Act, 2013 and The Companies (Corporate Social Responsibility)
Rules, 2014 read with various clarifications/amendments issued by Ministry of Corporate Affairs & DPE guidelines, the
company has undertaken various activities as per the CSR Policy. The programmes / initiatives / projects are taken up in
line with the Schedule-VII of the Companies Act-2013, which are duly incorporated in CSR policy and forms the guiding
principle for all our programmes. The Board of Directors of your company has Board Level Committee on Corporate Social
Responsibility and Sustainable Development (CSR & SD) (please refer Corporate Governance Report) in line with the
provisions of Section 135 of the Companies Act, 2013. The Committee has formulated and recommended CSR Policy to
the Board indicating the projects/activities to be undertaken by the company as specified in Schedule VII of the Companies
Act, 2013.

31.2 Your company has been very conscious about its responsibilities towards society. Your company has also ventured into
backward/ under developed areas in Andhra Pradesh and Telangana to undertake Corporate Social Responsibility (CSR)
activities by sponsoring various schemes.

31.3 The core areas of focus under CSR are Health Care, Nutrition, Education & Literacy, Skill Development & Sustainable
Livelihoods, Sanitation, Safe Drinking Water etc. Your company also adopted villages in Andhra Pradesh and Telangana
State under Corporate Social Responsibility initiative and the focus is on the necessities of human life-health, water and
other conveniences.

31.4 The CSR and SD activities are monitored periodically by the Committee and a detailed annual report on CSR and SD
activities undertaken during the year 2024-25 is enclosed at Annexure-I.

31.5 During the year 2024-25, the CSR & SD obligation was 1:1288.23 lakh. Against the total CSR obligation, the company
has incurred an expenditure of 11334.13 lakh and achieved 100% CSR target amount required under the provisions of
Companies Act, 2013. CSR activities being undertaken are placed on Company’s website https://bdl-india.in/csr-projects

32. RISK MANAGEMENT:

The company has a Board approved Risk Management Policy. The policy aims at elimination or reduction of risk exposures
through identification and analysis of various types of risks and facilitating timely action for taking risk mitigation measures. The
policy envisages that all programs, project reviews will highlight the progress of risk mitigation plans till the closure and signing
off the mitigation plans.

Pursuant to the Reg. 21 of SEBI (LODR) Regulations, 2015, the company has constituted a Risk Management Committee. The
details of Committee and its terms of reference, Risk Management Policy etc. are set out in the Corporate Governance Report.

33. ANNUAL RETURN:

In accordance with the provisions of the Companies Act, 2013, Annual Return of the company for the year under report is
available on the company’s website https://bdl-india.in/annual-reports

34. RELATED PARTY TRANSACTIONS:

There are no materially significant related party transactions during the year under review which may have a potential conflict
with the interest of the Company at large. Thus, disclosure in Form AOC-2 is not required. Members may refer to the notes to the
accounts for details of related party transactions. The policy for related party transaction has been uploaded on the Company’s
website https://bdl-india.in/sites/default/files/PolicyonRelatedPartyTransactions_1.pdf

35. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are
given in the notes to the Financial Statement.

36. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your company, being a Defence PSU, the disclosure of information with respect to conservation of energy, technology absorption,
foreign exchange earnings and outgo under the provisions of Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 (as amended) is not required as the Ministry of Corporate Affairs vide Notification GSR No.680 (E) dated 4 September
2015 has granted exemption to Defence Public Sector Undertaking.

During the year, your company as a part of energy conservation measures, procured and installed LED lights (14032 Nos.), BLDC
Fans (744 Nos.), 5 Star Rated ACs (74 Nos.), IE3 Motors (30 Nos.), e-mobility (2 wheelers -3 Nos. & 4 wheelers - 5 Nos.). By
installing the above, your company has adopted energy conservation measures across BDL. BDL had installed two 5 MW solar
power plants of each (Land based) and 200 KW (Rooftop) inside the premises at Kanchanbagh and Bhanur respectively. Further,
planned to install 0.5 MW solar power plant (rooftop) at Visakhapatnam unit.

37. INTERNAL CONTROL SYSTEMS:

Your company had put in place all required internal controls and systems to meet the canons of financial propriety. External
audit firms are appointed to ensure their adequacy and report thereon. Detailed analysis of reports of Internal Audit Firms
as well as reports of Internal Audit Department of your company is placed before the Audit Committee for its review and
advice. The adequacy of internal control procedures is being reviewed and reported by Statutory Auditors in their Audit Report.
The necessary disclosures have been made in Notes to Accounts. Your company being a Government Company is subject to
Government Audit also.

38. AUDITORS:

Statutory Auditor:

M/s. Tej Raj & Pal, Chartered Accountants, Hyderabad were appointed as Statutory Auditors of the company for the financial
Year 2024-25 by the Comptroller & Auditor General of India. The Auditors have audited the Accounts and does not contain any
qualification, reservation or adverse remarks

The Auditors’ Report on the financial statements for the financial year 2024-25 and the Comments of Comptroller and Auditor
General of India (C&AG) under Section 143 (6) of the Companies Act, 2013 are appended to the Annual Report.

Cost Auditor:

Your company appointed M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad as Cost Auditors for the FY 2024-25 for
the audit of the cost records of the Company. The company maintains cost records as specified by the Central Government under
section 148(1) of the Companies Act, 2013 in respect of its manufacturing activities.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 (as amended), M/s. C.V.Reddy K & Associates, Practicing Company Secretaries ( PCS
Registration No.7976) has conducted Secretarial Audit of the company for the financial year 2024-25. The Secretarial Audit
Report is appended to the Annual Report.

In compliance with Regulation 24A of the SEBI Listing Regulations and Section 204 of the Act, the Board at its meeting held
on 27 May, 2025, has approved the appointment of M/s. C.V.Reddy K & Associates, Practicing Company Secretaries, a peer
reviewed firm (Firm Registration No.6517/2025) as Secretarial Auditors of the Company for a term of five consecutive years
commencing from FY 2025-26 till FY 2029-30, subject to approval of the Members at the ensuing AGM.

39. CEO / CFO CERTIFICATION:

As per the requirements of SEBI Listing Regulations and DPE Guidelines, the CEO/CFO certificate has been obtained and placed
before the Audit Committee and the Board.

40. REPORTING OF FRAUDS BY AUDITORS:

During the year, neither the Statutory Auditor nor the Secretarial Auditor have reported to the Audit Committee/Board under
Section 143(2) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees,
the details of which needs to be mentioned in the Board’s Report.

41. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report required under the SEBI (LODR) Regulations, 2015 and also under the DPE
Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs), is attached to this Report as Annexure II.

42. CORPORATE GOVERNANCE:

42.1 Corporate Governance is about application of best management practices, compliance of laws and adherence to ethical
standards to achieve Company’s objective of enhancing stakeholders’ value and discharge of social responsibility. The
Company has a well-established, transparent and fair administrative set up to provide for professionalism and accountability.

42.2 As per the guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8)/2005-GM, dated 14
May 2010 and in terms of the SEBI (LODR) Regulations, 2015, Report on Corporate Governance along with Certificate on
compliance of conditions on Corporate Governance from a Practicing Company Secretary are attached to this report as
Annexure-III.

42.3 Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to Stock Exchanges and MoD in
the prescribed format.

42.4 The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings
of the Board of Directors and General Meetings.

42.5 No proceedings are made or pending under the Insolvency and Bankruptcy Code, 2016 and there is no instance of
onetime settlement with any Bank or Financial Institution.

42.6 There has been no change in the nature of business of the Company.

43. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION &
REDRESSAL) ACT, 2013:

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified in the
company. In line with the Guidelines received from time to time, necessary actions have been taken to prevent Sexual Harassment
of Women at Workplace. The BDL CDA Rules applicable to Officers and the Certified Standing Orders applicable to Workmen
have the required provisions in this regard. The Internal Complaints Committees as per Section 4 of the Act have been put in
place. During the year 2024-25, no sexual harassment complaints were received by your company.

44. COMPLIANCE UNDER THE RIGHT TO INFORMATION ACT, 2005:

The information required to be provided to citizens under Section 4(1)(b) of Right to Information Act, 2005 is placed on
Company’s Website https://bdl-india.in//sites/default/files/Info-on-BDL.pdf. It contains general information of the company,
functions, powers and duties of employees/officers, decisions making process, rules, regulations, manuals and records held by
the company, directory of the Company’s Officers, pay scales of officers/ employees and procedure for seeking information and
inspection of records. The company has nominated a Central Public Information Officer of Senior Manager Level to attend to
queries and appeals.

During the year 2024-25, the CPIO has received 185 applications/queries, out of which 173 applications have been disposed-
off and 9 (Nine) application is transferred to other Public Authority. 3 (Three) RTI queries are under process. Further, out of 19
appeals received, 17 are disposed-off by Final Appellate Authority and 2 (Two) are under process as on 31 March 2025.

45. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Pursuant to the provisions of the Section 177(9) of the Companies Act, 2013 read with Rule (7) of the Companies (Meeting of
the Board & its Power) Rules, 2014 (as amended) and DPE Guidelines for CPSEs, the Board of Directors had approved the policy
on Whistleblower/Vigil Mechanism and the same was hosted on website of the company https://bdl-india.in/sites/default/files/
WBP.pdf. The policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Employees are encouraged to raise any of their concerns by way of whistle blowing and none of the employees have been denied
access to the Audit Committee.

46. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

The Securities and Exchange Board of India (SEBI) has mandated inclusion of Business Responsibility and Sustainability Report
(“BRSR”) as part of the Annual Report based on market capitalization. Your Company has prepared a comprehensive policy
framework for BRSR, after studying the SEBI (LODR) Regulations, 2015 (as amended) requirements and keeping in view the
business and governance environment in which BDL as a Defence PSU operates. The company’s BRSR for the year is available
on the BDL’s website at https://bdl-india.in/sites/default/files/BRSR-24-25.pdf

47. DIVIDEND DISTRIBUTION POLICY:

In terms of SEBI (LODR) Regulations, 2015 (as amended), dividend distribution policy has been adopted by your company to set
out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend
to its shareholders and/or retaining the profit into the business. The policy is available on the BDL’s website https://bdl-india.in/
sites/default/files/DividendDistributionPolicy_1.pdf .

48. ACKNOWLEDGEMENT:

48.1 Your Directors gratefully acknowledge and express their appreciation for the cooperation extended and guidance provided
by various Government Agencies, including the Ministry of Defence, DPSUs, Department of Defence Production, DRDO
Laboratories, Central Government Departments, State Governments of Telangana and Andhra Pradesh, Quality Assurance
Agencies of the Government of India, and other PSUs. Their support has been invaluable to the company, and your
Directors are grateful for the assistance received from them on various occasions.

48.2 The company would like to extend its sincere appreciation to the Comptroller & Auditor General of India, the Principal
Director of Commercial Audit & Ex-officio Member, Audit Board, Statutory Auditors, Bankers, and Suppliers for their
cooperation, support, and guidance. Their contributions have been instrumental in ensuring the smooth functioning and
financial integrity of the company.

48.3 The Directors take this opportunity to express their deep appreciation for the valuable contributions and cooperation
of the employees at all levels. Their dedication, hard work, and commitment have played a crucial role in propelling the
company to greater heights and sustaining its growth trajectory. The Directors recognize and acknowledge the employees’
efforts and extend their gratitude for their continued support in the future.

For and on behalf of the Board
Cmde. A Madhavarao (Retd.)

Place : Hyderabad Chairman & Managing Director

Date : 27 May 2025 DIN: 09808949

---

Mar 31, 2024

Your Directors presents the 54‘h Annual Report together with the audited financial statements of the Company for the year ended 31 March 2024.

1. HIGHLIGHTS ON OPERATIONS:

• Despite facing challenging technical circumstances, your company achieved production of 2 2592 crore as against 2 2508 crore of previous financial year and achieved sales turnover of 2 2369 crore as against 2 2489 crore of previous financial year.

• The first Radio Frequency (RF) Seeker of Akash-Next Generation Weapon System produced at BDL’s newly commissioned State-of-the-art Seeker Facility Centre (SFC) was handed over to Secretary, Department of Defence Research Development and Chairman DRDO on 02^nd August 2023.

• Akash Air Defence System manufactured by your company, has destroyed four unmanned targets simultaneously in operational field trials conducted on 12 December 2023. India has become the first country to demonstrate the capability of engaging four (04) targets simultaneously by a command guided Missile.

• Your company has participated in Vayu Shakti Exercise 2024 held in Pokhran on 17 February 2024 and witnessed the successful firing of Akash Surface to Air Missile.

2. FINANCIAL RESULTS AND PERFORMANCE HIGHLIGHTS:2.1 Performance of the Company in financial terms is summarized below:

Particulars	^ in Crore		% of Increase/
	2023-24	2022-23	(Decrease)
Sales/Revenue from Operations	2369	2489	(5%)
Value of Production	2592	2508	3%
i) Import Material Consumed	148	345	(57%)
ii) Indigenous Material Consumed	972	865	12%
Total Material Consumed	1120	1210	(7%)
Value Added	1472	1298	13%
Profit Before Tax	828	482	72%
Profit After Tax	613	352	74%
Earnings per share# (in Rupee)	16.72	9.61	74%

# EPS has been calculated based on profits excluding the other comprehensive income and number of shares outstanding at the end of the year is adjusted for the impact of sub division of 1 fully paid up equity share having a face value of 7 10 each into 2 fully paid up equity shares having a face value of 7 5 each

2.2 Following data reflect the financial position of the Company:

Particulars	^ in Crore		% of Increase/
	2023-24	2022-23	(Decrease)
Gross Block (Excl. CWIP)	1497	1416	6%
Accumulated Depreciation	673	607	11%
Net Block	824	809	2%
Working Capital (Net)	6233	5394	16%
Capital Employed	3566	3155	13%
Net Worth	3637	3211	13%
*Figures have been reclassified and regrouped, wherever necessary.

2.3 During the year under review, your company has achieved revenue from operations of 7 2369 crore, compared to 7 2489 crore in the previous financial year. The reduction in turnover is primarily due to the current geopolitical situation in Europe and the Middle East, which has affected the company’s supply chain for certain critical input materials.

Despite the decrease in revenue, the profit before tax (PBT) increased significantly to 7 828 crore, a 72% rise compared to 7 482 crore in the previous year. The profit after tax (PAT) amounted to 7 613 crore, marking a 74% increase from the previous year’s 7 352 crore. The EBITDA margin also improved, standing at 22.64% compared to 16.39% in the previous financial year. This increase in margins is mainly attributed to enhanced manufacturing activities, changes in the product mix and realization of certain amounts from the customer.

The major products executed during the year are ATGMs, Akash-SAM, Varunastra and MR-SAM. The order book position of the company as on 31 March 2024 is about 7 19434 crore.

2.4 Future Outlook:

As of March 31, 2024, your company has a robust order book position, reaching an impressive ^ 19434 crore. We anticipate this figure to grow as several orders are in the finalization stages. Additionally, our active promotion in international markets has borne fruit, converting some export leads into confirmed export orders with friendly foreign countries, with execution already in progress.

The current geopolitical climate in Europe and the Middle East has posed significant challenges, particularly in the timely receipt of input materials from Foreign Original Equipment Manufacturers (FOEMs). This has impacted our company’s performance over the year. We are vigorously addressing these supply chain issues by engaging in continuous talks with FOEMs and leveraging all available diplomatic channels to ensure smooth production.

To reduce our dependency on FOEMs, we have placed a strong emphasis on indigenization across all programs. Our efforts have led to the indigenization of 98 critical items previously imported, yielding significant foreign exchange savings. With an average indigenization percentage between 80-90%, we have successfully reduced import costs and enhanced our ability to offer competitively priced products to the Indian Armed Forces.

As part of our diversification strategy, we are venturing into the space technology sector. The Indian space sector, valued at approximately US$ 9.6 billion in 2020, contributes 2-3% to the global space economy. It is expected to grow to $13 billion by 2025, with aims to capture close to 10% of the global space economy by 2030. We believe that this sector holds substantial long-term potential.

The Government of India’s ‘Atmanirbhar Bharat Abhiyan’ continues to promote self-reliance in defense manufacturing, periodically issuing a Positive Indigenization List of components. The fifth such list, focusing on import substitution of critical components, was released after extensive consultations with stakeholders. This initiative is expected to translate into firm orders over the next five to ten years.

With a healthy order book and extensive experience, our company is well-positioned to face upcoming challenges. The future outlook appears promising, bolstered by our indigenization efforts and strategic diversification into the space technology sector.

3. FIXED DEPOSITS FROM PUBLIC:

The Company did not accept any fixed deposits from Public during the year, and there was no outstanding Fixed Deposits at the beginning/end of the year. Accordingly, there was no default in payment of deposits/interest thereon.

4. DIVIDEND & TRANSFER TO GENERAL RESERVE:

Your Company has a consistent track record of Dividend Payment. The Board has recommended a Final Dividend of ^ 0.85/-per equity share of face value of ^ 5/-each amounting to ^ 31.16 crore for the year 2023-24. Further, your Company has paid interim dividend of ^ 8.85 per share (at face value of ^ 10/- each) amounting to ^ 162.20 crore for the financial year 2023-24. An amount of ^ 400 crore is being transferred to General Reserve for the year 2023-24.

5. CAPITAL STRUCTURE:

The paid up capital of the Company as on 31st March, 2024 stood at 7 183.28 crore (18,32,81,250 equity shares of 7 10/-each). The Authorized Capital of the Company is 7 200 crore (20,00,00,000 equity shares of 7 10/- each) as on 31st March 2024. The Company has neither issued equity shares with differential rights nor any sweat equity shares.

As on 31 March 2024, the Govt. of India shareholding in the Company stands at 74.93% (representing 137,325,527 equity shares of 7 10/- each).

Sub-division of shares

During the year, as per the Department of Investment & Public Asset Management (DIPAM), Govt of India Guidelines, the Company pursuant to the resolution passed by the Shareholders of the Company through postal ballot on April 25, 2024, has sub-divided the existing 1 equity share of the Company of face value of 7 10/- each fully paid up into 2 equity shares of face value of 7 5/- each fully paid w.e.f. May 24, 2024 being the record date. Accordingly, new ISIN INE171Z01026 has been activated in place of the INE171Z01018.

The revised authorised and paid-up capital of the Company w.e.f May 24, 2024 is as under:

a) Authorized Share Capital is 7 200,00,00,000/- (Rupees Two Hundred Crore Only) divided into 40,00,00,000 (Forty Crore)

Equity Shares of face value of 7 5/- (Rupees Five Only) each.

b) Issued, paid-up and subscribed Share Capital is 7 1832812500 (Rupees One Hundred Eighty-Three Crore Twenty-eight Lakh Twelve Thousand Five Hundred Only) divided into 366562500 (Thirty-Six Crore Sixty-Five Lakh Sixty-Two Thousand Five Hundred) Equity Shares of face value of 7 5/- (Rupees Five Only) each

Further, consequent upon the aforesaid Split / Sub-division, all the Shareholders of the Company as on May 24, 2024 i.e. Record Date have been issued fully paid up equity shares having face value and paid up value of 7 5/- (Rupees Five) each as per their entitlement on that date.

6. SUBSIDARIES/JOINT VENTURES/ASSOCIATE COMPANIES:

Under Defence Testing Infrastructure Scheme (DTIS) promulgated by Department of Defence Production, Ministry of Defence, ^ the Board has approved to form a joint venture to incorporate a Section 8 Company under Companies Act, 2013 between consortium of five (5) Companies namely Bharat Dynamics Limited, Mishra Dhatu Nigam Limited (MIDHANI), Hindustan Aeronautics Limited, Yantra India Limited and PTC Industries Limited along with Uttar Pradesh Expressways Industrial Development. The consortium is being led by MIDHANI. The purpose of the Joint Venture is for Development, Operation and Management of Defence Testing Infrastructure (DTI) of Mechanical and Material Tests under Defence Testing Infrastructure Scheme (OTIS) promulgated by Ministry of Defence.

Further, the Board of Directors have also approved to incorporate another Joint Venture (i e. Section 8 Company under Companies Act, 2013) along with five other members namely Bharat Dynamics Limited, Bharat Electronics Limited, Hindustan Aeronautics Limited, India Optel Limited and Tamil Nadu Industrial Development Corporation Limited. The consortium is being led by M/s.

Bharat Electronics Limited. The purpose of the Joint Venture is for Development, Operation and Management of Defence Testing Infrastructure for Electronic Warfare under Defence Testing Infrastructure Scheme (OTIS) promulgated by Ministry of Defence.

7. PERFORMANCE AGAINST MoU:

Your Company signs a Memorandum of Understanding (MoU) every year with the Ministry of Defence, Government of India.

The performance of the Company for the year 2022-23 was rated as “Good” and the performance for the year 2023-24 is under evaluation.

8. MODERNIZATION & UPGRADATION:

During the year, an amount of 7 81.93 crore has been spent towards Capital Expenditure (CAPEX) programme for the modernization of Plant & Machinery and other infrastructure development. The majority of this amount was dedicated to establishing the infrastructure work for establishment of propellant plant at Jhansi, infrastructure work for Phase-II at Ibrahimpatnam, integration facility at Vizag and commissioning of warhead facility. Additionally, your company has planned to spend approximately 7 100 crore during the current financial year 2024-25 on various CAPEX programmes, including construction of Jhansi Unit and Phase-II infrastructure development at Ibrahimpatnam.

Your company is making determined efforts to increase the indigenization content in the manufacturing of ATGMs, SAMs, Air to Air Missiles, and Torpedoes. This objective aims to enhance self-reliance and reduce dependence on imports.

9. RESEARCH & DEVELOPMENT:

Your company acknowledges that Research and Development (R&D) plays a pivotal role in the growth of the organization. To cater to the requirements of the Indian Armed Forces, your company has identified several products for R&D.

The following table shows the recent trend of in-house R&D expenditure:

Particulars	2023-24	2022-23	2021-22
Sales Turnover (Gross) (7 in Cr)	2369.28	2489.39	2817.40
R&D expenditure (7 in Cr)	75.37	152.03	48.14
R&D expenditure as % of Sales Turnover	3.18%	6.11%	1.71%
PBT	828.24	481.80	709.91
R&D expenditure as % of PBT	9.10%	31.55%	6.78%

10. PROCUREMENT FROM MSMEs:

In compliance with the Procurement Policy of the Government of India, your company has surpassed the mandated procurement requirement of 25% from Micro, Small, and Medium Enterprises (MSMEs). During the year 2023-24, your company procured 27.70 % of goods and services, amounting to approximately 7 450.38 crore, from MSMEs out of its total procurement of 7 1625.92 crore. By achieving the mandated target of 25% from MSMEs, your company has demonstrated its commitment to supporting and promoting the growth of these enterprises.

Vendor Development:

Your company endeavors to expand its vendor base through special drives and by offering free registration in certain cases and on specific occasions. Throughout the year, your company conducted 9 vendor meets (including 2 SC/STs and 1 Women), resulting in increase in vendor base during the financial year under review. Furthermore, your company has implemented an updated Integrity Pact in accordance with the directives of the Central Vigilance Commission’s latest circular issued on 25^th January 2022, and adheres to the Standard Operating Procedure outlined therein. Your company has procured goods & services to the tune of 3.22% (of total procurement) from Women MSM enterprises, thus surpassing the 3% target set for such procurement. The procurement from SC/ST owned MSE stood at 1.71 % (of total procurement).

Government e Market Place (GeM):

Your company registered as both a Buyer and Seller with the Government e-Marketplace (GeM). GeM is utilized for procuring common items and services. Your company has successfully procured goods and services worth about 7 5841.7 crore (Gross Merchandise Value) with staggered deliveries raised in FY 2023-24. Your company has exceeded the GeM target of 7 1602 crore set in FY 2023-24. This demonstrates your company’s active engagement and utilization of GeM for streamlined procurement processes.

12. EXPORTS:

Your company has placed significant emphasis on the export of Weapon Systems. To explore the export potential of its products, identify potential markets, and pursue export opportunities, an export cell has been established within the Business Development Division of BDL. The products offered by your company are state-of-the-art, designed indigenously, competitively priced, and not heavily reliant on any foreign Original Equipment Manufacturers (OEMs). With existing facilities, your company is well prepared to meet both domestic and export demands. Several leads have been received from various friendly foreign countries for the export of products such as the Akash Weapon System, ATGMs, Air to Air Missile (Astra), Smart Anti-Airfield Weapon, Helina (Air-to-Surface Weapons), Light Weight Torpedo, Heavy Weight Torpedo (Underwater weapons), Counter Measures Dispensing System, and Anti-Submarine Warfare Suite (Counter Measure Systems) etc. These leads are actively being pursued by the export cell, which is engaged in interactions with overseas customers to achieve export targets. As a result, your company has secured orders for the export of Light Weight Torpedoes, Counter Measures Dispensing System, ATGM, and Akash Weapon System from friendly foreign countries. Channel Partners/Agents have been appointed in several countries to promote your company’s exportable products. Your company has also participated in various Foreign Defence Exhibitions to showcase its products and facilitate one-on-one meetings with participants from the Armed Forces/Ministries of Defence of other countries. To strengthen international engagement, BDL is working closely with Indian Embassies/Defence Attaches to arrange meetings and visits with stakeholders from foreign countries. Furthermore, plans are underway to open Representative Offices in foreign countries. As of 31 March, 2024, the total export order book of BDL stands at 7 2420 crore, reflecting the growing success in the international market.

13. ATMA NIRBHAR BHARAT & INDEGINISATION:

Your company is making significant strides towards achieving self-reliance in defense manufacturing as part of the Atmanirbhar Bharat initiative. From the moment a contract is signed, your company’s focus is on indigenizing the technology, particularly in manufacturing of missiles under Technology Transfer (ToT) agreements with DRDO and foreign OEMs. ToT from foreign OEMs is only 60%, however your company has managed to indigenize more than 80% to 90% of many products. For DRDO designed products, the indigenization level exceeds 90%, showcasing your commitment to increasing self-reliance.

To support these efforts, your company utilizes the SRIJAN Portal, an indigenization platform by the Ministry of Defence. Your company has uploaded 1197 items, including all imported items, on this portal. Of these, vendors have shown interest in 440 items, and 98 items have been declared indigenized. By providing necessary technical support, your company encourage MSMEs to produce quality items which is further boosting indigenization efforts. Your company is also fostering collaboration with startup companies, identifying problem definitions for them to work on and develop solutions. MoUs are being signed with these companies to support their growth and create business opportunities.

Furthermore, the Ministry of Defence has issued a 4th Positive Indigenized List (PIL) of DDP Indigenization as part of the continuous effort towards self-reliance in defence manufacturing under the ‘Atmanirbhar Bharat Abhiyan’. From the 4 PILs issued till date, 56 items belong to BDL that will be procured from the Indian industry within specified timelines. Out of the total 56 items, your company has achieved indigenization for 44 items and balance items are under various stages of Indigenisation. Additionally, on October 04, 2023, Hon’ble Raksha Mantri has released a 5th Positive Indigenization list of 98 Defence products of highly complex systems, sensors, weapons and ammunitions for indigenization by Defence Public Sector Undertakings (DPSUs), with an embargo on imports beyond the indicated timelines. Out of these 98 products, 3 products belong to your company, providing an opportunity for your company to scale up its operations.

Your company’s participation in the Innovation for Defence Excellence (IDEX) programme have forged a strategic partnership, aligning with Government’s vision of “Atmanirbhar Bharat”. This partnership resulted in creation of a robust eco-system wherein your company works with aspiring entrepreneurs and MSMEs to advance innovation and R&D capabilities of the Company. Your company has been actively participating in a number of IDEX initiatives, like Open Challenges (OC) and the Defence India Startup Challenges (DISC). Your company is presently hand-holding startups for projects such as ‘Scalable Wireless Communication Network Modules for Autonomous Mobile Platforms’, ‘Visual Image-Based Seeker’ and which are at various stages of completion.

Through these initiatives, your company continues to harness industrial experience and the ingenuity of home-grown startups, driving groundbreaking innovations and contributing significantly to the Atmanirbhar Bharat mission.

14. MANPOWER AND RESERVATION OF POSTS FOR SCs/STs:

14.1 The Company has been following Presidential Directives of the Government with regard to reservation of posts for SCs/ STs/OBC/EWS in recruitments.

14.2 Total manpower strength as on 31 March 2024 is at 2401 (including two functional directors). Out of the total strength, 80 are ex-servicemen, 483 are of Schedule Caste, 206 are of Scheduled Tribes, 801 are of OBC category and 7 are of EWS category. The percentage of Scheduled Caste and Scheduled Tribes in respect of Employees is at 20.12% and 8.58% respectively.

14.3 The No. of Scheduled Caste, Scheduled Tribes, OBC and EWS in various categories of posts below:														as on 31 March 2024 is given
		Number of Employees
	Category	Total Strength			Scheduled Castes			Scheduled Tribes					OBC		EWS
		31-03-2024 31-03-2023			31-03-2024		31-03-2023	31-03-2024 31-03-2023				31-03-2024 31-03-2023			31-03-2024 31-03-2023
Group-A			768	805	147		149		84		86		201	187		7	4
Group-B			1	2		0	0		0		0		1	1		0	0
Group-C		1472		1571	291		304	111			109		539	525		0	0
Group-D			149	171		41	46		11		14		58	66		0	0
Temporary			11	11		4	4		0		0		2	2		0	0
Total		2401		2560	483		503	206			209		801	781		7	4
14.4 Recruitment of employees in Scheduled Caste, Scheduled Tribes, OBC, EWS during 2023-24 is given below:
	Classification of posts		Total Vacancies Released			Total Recruitment made			Reservation of posts					Recruitment made during the year 2023-24
	(1)		(2)			(3)			(4)					(5)
									SCs	ST^| OBC			EWS	SCs	STs	OBC	EWS
Group-A				68			34		10^	6		15	6	6	3	9	3
Group-B				3			0		0	0		1	0	0	0	0	0
Group-C				0			0		0	0		0	0	0	0	0	0
Group-D				0			0		0	0		0	0	0	0	0	0
Total				71			34		10	6		16	6	6	3	9	3

14.5 Employment of Women:

As per the recommendation No.51, Para (ii)(a) of the National Commission for Women (NCW) in its Annual Report for the year 1995-96, the employment position of Women as on 31 March 2024 is given below as directed by the Ministry of Defence, vide their letter Nos. 39(6)/99/D(B&C), dated 27 August 1999.

I. Executives
Grade	No. of Employees	Women	Percentage
I	1	-	-
II	135	29	21.48
III	65	6	9.23
IV	231	36	15.58
V	134	20	14.93
VI	137	15	10.95
VII	53	3	5.66
VIII	8	-	-
IX	3	-	-
Functional Directors	1	-	-
CMD	1	-	-
Total	769	109	14.17

II. Non-Executives
Grade		No. of Employees		Women	Percentage
WG-0			-	-	-
WG-1			3	-	-
WG-2			16	2	12.50
WG-3			90	13	14.44
WG-4			104	18	17.31
WG-5			163	15	9.20
WG-6			280	27	9.64
WG-7			130	27	20.77
WG-8			205	27	13.17
WG-9			31	4	12.90
WG-10			97	5	5.15
WG-11			18	-	-
WG-12			484	44	9.09
Total			1621	182	11.23
14.6 Persons with Disabilities (PWD) as on 31 March 2024:
The total number of Physically Challenged employees as works out to 4.08%.			on 31 March 2024	is 98 and its percentage to total employees
	VI	HI	LD	MD	Total
Group-A	t 7	7	P''''\ ''''"¦''"¦¦12	1	27
Group-B	0	0	0	0	0
Group-C	8	^^™18	37	0	" " " 63
Group-D	3	2	3	0	8
Total	18	27	52	1	98
HI-	Hearing Impaired,	LD-Locomotive Disability, VI-Visually Impaired, MD-Multi Disability

15. HUMAN RESOURCE DEVELOPMENT:

During the FY 2023-24, your company has demonstrated a strong commitment to employee development by conducting various training programs for both Executives and Non-Executives. A total of approximately 1,692 employees participated, resulting in 4,370 training man-days. These programs, conducted both in-house and at external agencies, aimed to enhance skills and knowledge, while also fulfilling statutory requirements.

Key Training Programs and Initiatives:1. Mid-Career Development Programme (MCDP):

• Duration: Two weeks (31.05.2023 to 14.06.2023)

• Target Group: Mid-level executives (managers, senior managers, deputy general managers) with over 15 years of service and more than one year remaining.

• Focus: Transition from operational roles to managerial roles, including Preventive Vigilance as per CVC guidelines

2. Vigilance Awareness Week Trainings:

• Conducted during October and November 2023.

• Structure: Two-phase training. Phase 1 involved training by CVO-BDL and subject matter experts (Train the Trainer). In Phase 2, these trained executives trained others.

• Themes: Role of Inquiry Officer/Presiding Officer in departmental enquiries, Public Procurement, Systems and Procedures, Cyber Hygiene, Ethics and Governance

3. Effective Workplace Communication Workshop:

• Duration: 2-day workshop in 11 batches across all units.

• Participants: Entry to mid-level managers (assistant managers, deputy managers, managers).

• Focus: Communication and presentation skills, with participants making presentations at the end of the workshop.

• Outcome: Increased employee engagement and positive feedback.

4. In-house Workshops on Financial Wellness and Diversity Inclusion:

• Conducted on 11.03.2024 as part of Women’s Day celebrations.

• Special Workshop for Persons with Benchmark Disabilities (PwBDs): Held on 03.12.2023, on International Day of Disabled Persons.

• Focus: Enhancing knowledge on financial wellness, promoting diversity, and inclusion.

These initiatives aimed to enhance executives’ understanding of internal systems and procedures, improve interpersonal communication and presentation skills, and ultimately enable them to perform their roles more effectively, contributing to the company’s success.

16. PARTICULARS OF EMPLOYEES:

There were no employees of the Company who received remuneration in excess of the limits prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further, in accordance with Ministry of Corporate Affairs Notification No. GSR 463(E) dated June 05, 2015, Government Companies are exempt from Section 197 of the Companies Act, 2013 and its rules thereof.

17. FOREIGN VISITS:

Your Company incurred an expenditure of around 7 2.76 crore during the year under report towards foreign travel for business ²¹ trips.

18. INDUSTRIAL RELATIONS AND EMPLOYEE WELFARE:

Your company maintains cordial and harmonious industrial relations through the cooperation of all employee sections, including the Recognized Trade Union and associations for SC, ST, OBC, Ex-Servicemen, and Officers. Statutory and non-statutory committees like the Works Committee, Safety Committee, Canteen Managing Committee, and Welfare Committee play a key role in maintaining workplace discipline.

Compliance with statutory welfare provisions is strictly followed. The Post Superannuation Medical Benefit Scheme addresses the medical needs of retired employees and their families. The Recognized Trade Union and all associations fully support the management, ensuring the smooth functioning of the organization.

19. SECURITY:

The Central Industrial Security Force (CISF) is responsible for providing security and fire services at both the Kanchanbagh and Bhanur Units, playing a crucial role in ensuring the security and protection of the company’s property. The CISF team has implemented robust security measures, combining physical measures and advanced technology to maintain the security of highly sensitive installations

To oversee the security arrangements and the implementation of Intelligence Bureau (IB) guidelines, the Plant Security Council is in place. Regular security review meetings are conducted by both the management and CISF to enhance security measures.

In addition to computerized photo identity cards, a Biometric Access Control System has been implemented to prevent unauthorized entry. CCTV cameras are installed throughout the factory premises to expand the coverage of CCTV surveillance.

Door frames, metal detectors, and X-ray baggage machines are also utilized. Barricades, boom barriers, and mochas are provided to reinforce physical security measures.

Regular security awareness programs are conducted, along with the observation of Security Week and Fire Week. Employees are sensitized to security threats and educated on the appropriate actions to be taken during emergencies and fire accidents.

20. SAFETY:

Your company places a strong emphasis on maintaining Safety, Health, and Environment (SHE) standards. The Industrial Safety Committee and Explosive Safety Committee meet regularly to monitor SHE practices within the company. Industrial work is carried out in compliance with the Factories Act of 1948, while explosive safety strictly adheres to the regulations set by the Storage & Transport of Explosive Committee (STEC-2017) under the Centre for Fire, Explosive & Environment Safety (CFEES), Ministry of Defence, New Delhi.

The safety committee meetings are held periodically to ensure adherence to statutory norms, and any safety-related issues are reviewed by the General Manager/Unit Head for compliance.

Industrial safety audits are conducted by the Joint Chief Inspector of Factories, Telangana State, and any observations made are duly addressed. Annual explosive safety audits are conducted by the Centre for Fire, Explosive & Environment Safety (CFEES) in New Delhi, and necessary actions are taken based on their observations.

The 53rd National Safety Day Campaign was observed from March 4 to March 10, 2024. Various activities were conducted throughout the week, including the administration of safety pledges at workstations, distribution of safety badges, display of safety day banners, and competitions such as safety slogans, essays, and elocutions in Hindi, Telugu, and English. Safety quizzes and demonstrations on basic first aid and firefighting were also organized as part of safety promotional activities.

In terms of training programs, both in-house and external training sessions are regularly conducted for employees on industrial and explosive safety.

21. ENVIRONMENT AND POLLUTION CONTROL:

As per the company’s environmental policy, your company is committed to manufacturing and supplying defence products to the Indian armed forces in an environmentally friendly manner. The key environmental commitments include:

• Protecting the environment and preventing all types of pollution.

• Fulfilling compliance obligations.

• Conserving natural resources.

• Continually improving to enhance environmental performance.

Your company demonstrates a strong commitment to environmental sustainability and compliance with regulations through various initiatives and certifications. Here are the key environmental management practices and measures in place across all three units—Kanchanbagh, Bhanur, and Visakhapatnam:

Environmental Management Practices:1. ISO 14001:2015 Certification:

• All units are recertified with ISO 14001:2015 (EMS) to assess pollution levels and ensure compliance with legal requirements.

2. Waste Management:

• Plastic Use Reduction: Issued a circular to discourage the use of plastics.

• E-waste and Hazardous Waste: Disposed of through agencies registered with the Pollution Control Board.

• Solid Waste: Disposed of through M/s MSTC, a government undertaking, specifically ferrous and non-ferrous metals.

• Biomedical Waste: Disposed of through an agency registered with the Pollution Control Board.

• Housekeeping: Proper practices are maintained to ensure a clean and safe environment.

3. Zero Liquid Discharge System:

• Effluent Treatment: Treated water from the effluent treatment plant undergoes further treatment through reverse osmosis (RO).

• Usage of Treated Water:

- RO treated water is utilized in the Demineralized Water (DM) plant for producing DM Water.

- DM Water is used in the Electroplating Shop, CNC machines, and flow forming machines in the Workshops.

• Gardening: Treated water from the sewage treatment plant is used for gardening within the premises.

4. Audits and Monitoring:

• Internal and Surveillance Audits: Conducted at regular intervals by certification bodies for all units.

• Environmental Parameters Monitoring:

- Ambient air quality, stack quality of DG sets/venturi scrubbers, sewage treatment plants, and effluent treatment plants.

- Noise levels tested as per specified frequencies.

• Resource Monitoring: Water quantity monitored using separate water meters and electricity consumption is tracked to comply with consent conditions.

By implementing these measures, your company demonstrates a robust approach to environmental sustainability, ensuring compliance with environmental regulations and promoting responsible waste management and resource utilization.

Celebration of WORLD ENVIRONMENT DAY - 2023:

Your company celebrated World Environment Day 2023 with great enthusiasm across all units, emphasizing environmental awareness and sustainable practices. Here’s a detailed account of the activities and initiatives undertaken:

World Environment Day 2023 Activities:1. Celebration and Competitions:

• Date: June 6, 2023

• Theme: “Beat Plastic Pollution”

• Activities:

- Banners displayed at prominent locations.

- Sapling plantation.

- Slogan, essay writing, and quiz competitions based on the theme.

- Prizes distributed to winners during the valedictory function.

2. Mission LiFE (Life for Environment) Awareness Program:

• Mass Awareness Program: Organized as per the directions of the Ministry of Defence.

• Activities Performed Across All Units:

- LiFE Center Setup: Collection centers for old clothes, books, and utensils were established, with items distributed to the poor and orphanages.

- Bicycle Rallies: Organized to promote the LiFE mission and encourage eco-friendly transportation.

- Rainwater Harvesting: Construction of rainwater harvesting structures to conserve water.

- Plastic Collection Drive: Initiatives to collect and properly dispose of plastic waste.

- LiFE Awareness Modules: Inclusion of mandatory LiFE awareness modules in training programs to educate employees on environmental sustainability.

By celebrating World Environment Day with these comprehensive activities, your company has shown a strong commitment to environmental sustainability, addressing plastic pollution, and promoting the Mission LiFE initiative. These efforts contribute to raising awareness and encouraging sustainable practices among employees and the broader community.

22. QUALITY:

All production divisions/units including Akash, CP-IGMP, Design & Engineering, Electronics Division of Kanchanbagh Unit, Bhanur, and Visakhapatnam Units are certified with AS 9100D, an aerospace quality management system standard. Kanchanbagh, Bhanur, and Visakhapatnam Units are also certified with ISO 14001:2015 (EMS), which is an environmental management system standard.

The Corporate Office is certified with ISO 9001:2015 (QMS), which focuses on quality management systems. The Material Testing Lab, Electronics Lab, and Standard Labs are certified with ISO/IEC 17025:2017, which pertains to the competence of testing and calibration laboratories. The Electronics Division is certified with AFQMS (Air Force Quality Management System). Furthermore, BDL holds the ISO/IEC 27001:2013 certification for information security management systems (ISMS).

Internal audits for all ISO/AS certified divisions are conducted by the company’s own internal auditors, while surveillance audits are carried out by certification bodies as per the prescribed frequency. Akash Division of the Kanchanbagh unit has recently been re-certified with the Aerospace standard (AS9100:2016) by M/s Novo Star Management Systems Solutions India Pvt. Ltd., Bengaluru.

In addition to these certifications, your company is committed to continuously improving customer satisfaction through customer meets and interactions with users. Corrective actions are implemented wherever necessary to drive improvement in processes and meet customer expectations.

23. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

23.1 Implementation of OL Act-1963 (as amended 1967) & Rules there under are ensured. Quarterly OLIC Meetings are held regularly under the Chairmanship of CMD and Directors besides submission of Quarterly progress reports on use of OL are sent in time to authorities concerned.

23.2 In compliance to OL Act, 1963 and the Presidential Orders thereon, the papers laid before the Parliament, Annual Report of the Company, MoU with MoD and brief of the Company along with presentations for various Parliamentary Committees and delegations are prepared in bilingual form and submitted. First Sub-Committee of Parliamentary Committee on Official Language inspected and reviewed the OL implementation in BDL-Visakhapatnam Unit on 11^th July, 2023. The Committee 2 appreciated the efforts being put in the area of implementation of OL by BDL, Visakhapatnam Unit.

23.3 In compliance to the assurances and directives of Parliamentary Committee on OL, ‘A series of Hindi Workshops’ were organized on 12^th June, 2023, 05th September, 2023, 22^nd November, 2023, 05^th December, 2023, 06^th February, 2024 and 05^th March, 2024 for Higher Officials of the Organization. During these Workshops, fulfilling the assurances given to Parliamentary Committee on OL and its action plan was discussed and implemented later. Also, the use of “Kanthasth 2.0” a memory based translation software developed by Department of Official Language, GoI was also discussed with its hands on training for effective implementation of OL in day-to-day functioning.

23.4 An “Orientation Program on OL Policy” was organized on 01^st November, 2023 for newly joined Management Trainees. DGM (HR-OL) oriented the trainee officers on “Official Language Policy of Govt. of India” and explained the role of executives in implementation of OL Policy. He appealed all the participants to use Hindi in day-to-day functioning.

23.5 To promote the original writing in Hindi in Technical and Non-Technical areas with detail coverage of OL activities of the Organization, a dedicated Hindi e-Magazine of the Organization titling “BDL BHARATI” was released and issued by CMD & Chairman, OLIC on 26^th March, 2024.

23.6 Hindi Fortnight was celebrated from 14^th to 27^th September, 2023 at Corporate Office and also at Units. During the fortnight, various competitions were conducted for the Officers and Employees of Corporate office, Kanchanbagh Unit, Bhanur Unit & Visakhapatnam Unit besides participation in “Hindi Diwas & 3^rd All India OL Conference” organized by DOL, MHA, GoI from 14^th to 15^th September at Pune, Maharashtra. Valedictory Program of Hindi Fortnight in the Organization was conducted on 27^th September, 2023 under the chairmanship of CMD. On this occasion, Directors, Unit Heads of all the Units along with higher officials participated. Cash Awards were presented to the winners of the competitions, Officers and Employees for doing original work in Hindi during the year.

23.7 Town Official Language Implementation Committee of PSUs (TOLIC), Hyderabad consisting of 36 PSUs as its Member Offices, was awarded with “DAKSHIN KSHETRIYA NARAKAS RAJBHASHA SAMMAN” under Region ‘C’ for best implementation of Official Language for the year 2022-23. The award consists of ‘Rajbhasha Shield’ was presented by Shri Ajay Kumar Mishra, Hon’ble Minister of State for Home Affairs received by Shri N Srinivasulu, Retired Director (Finance), BDL in presence of Cmde A Madhavarao, CMD, BDL & Chairman, TOLIC (U). The Shield along with Commendation Certificate to Shri Homnidhi Sharma, Dy. General Manager (HR-OL) and Member Secretary, TOLIC (U) for his outstanding contribution at a glittering function held at HAL, Bangalore. It was a seventh occasion that the committee has been awarded with “Kshetriya Rajbhasha Puraskar” at Regional level for functioning of TOLIC (U) by BDL.

23.8 As coordinating office of TOLIC (U) consisting 36 PSUs as its Member Offices, regular half yearly Meetings of the body are organized in the month of May & October respectively. First Half Yearly Meeting of the Committee was organized on 29^th May, 2023. During the Meeting 20^th Issue of ‘PATHIK’, the House Journal of the Committee was released. The second half yearly Meeting was organized on 27^th October, 2022. During the Meeting, TOLIC Shield / Trophy/ Cup and Best Magazine awards for the year 2022-23 were presented. Both the Meetings were chaired by CMD, BDL & Chairman, TOLIC (U).

23.9 Under the auspice of TOLIC (U), a Joint Hindi Workshop for small Member Offices of Town Official Language Implementation Committee was organized on 23^rd January, 2024. Under the auspice of TOLIC (U) an “Orientation Program on OL” was organized for Office Heads, Administrative Heads, Hindi officers and staff members of Member Offices of TOLIC (U) on 30^th January, 2024.

23.10 On the occasions of Republic Day, Independence Day Celebrations, Vigilance Awareness Week, Swatchata Pakhawada, and Constitution Day Programs were organized in Hindi & English. The Website of the company prepared in Hindi was updated from time to time in compliance to the directives of Govt. of India. Officers and Employees of the organization took part in Inter PSU Competitions conducted by TOLIC (U) and won FOUR prizes.

23.11 With an objective to promote and propagate Hindi and inculcate the reading habit among the Officers & Employees of the Company, various Hindi Magazines and News Papers such as Hindi Milap, Swatrantra Vaartha Daily, Shubha-Labh, Anuvad, Sahitya Amrit, Avishkar, Yojna, Hindi Rozgar, Samachar, Pratiyogita Darpan, Meri Saheli, ‘Hans’ are subscribed regularly. Besides this, popular Hindi books on all subjects are also purchased annually with similar objective as per the directives of DOL.

24 VIGILANCE:

24.1 Preventive/ proactive vigilance has been the primary objective of Vigilance Department of the Company. As a part of its proactive vigilance measure, the department has issued 14 Systemic Improvement Suggestions in the areas of e-reverse auction, Recruitment, Departmental Promotion, Reservation, Sensitive Area Rotation, Civil works and Service Contracts etc. and of which many have been implemented by the Management during the year under report. Brief of all the Systemic Improvements have been hosted on BDL website https://bdl-india.in.

24.2 In furtherance of its preventive vigilance approach, as directed by Hon’ble CVC as a prelude to observance of Vigilance Awareness Week-2023, various preventive vigilance measures were undertaken in 3-month campaign mode across units of the Company during 16.08.2023 to 15.11.2023 in the following focus areas:

- Awareness building about Public Interest Disclosure and Protection of Informers (PIDPI) Resolution

- Capacity Building programs

- Identification and implementation of Systemic Improvement measures

- Leveraging of IT for complaint disposal

- Updation of Circulars/Guidelines/Manuals

- Disposal of complaints received before 30.06.2023

24.3 Being an extended arm of the Central Vigilance Commission (CVC), New Delhi, the department has submitted Various reports (e.g. Monthly, Quarterly, Annual & CTE Type) to the Commission and also to Ministry of Defence and to the Board of the Company. The Department has also issued vigilance clearances to employees in cases of Recruitment, Promotion, Absorption, Confirmation, Foreign visits, for postings in sensitive areas etc. The department has also accorded priority in handling the complaints as per the complaint handling policy of the CVC.

24.4 As part of the observance of Vigilance Awareness Week during the campaign period on invitation from BDL, Shri P Daniel, IDES, Secretary, CVC, visited Kanchanbagh Unit of BDL on 18.10.2023. On his maiden visit to the Company, Shri P Daniel was briefed about BDL by Commodore A. Madhavarao (Retd.), Chairman & Managing Director, BDL. A presentation was made by Dr. Upender Vennam, IPoS, Chief Vigilance Officer about the vigilance activities at BDL and the preventive

. vigilance activities being undertaken in campaign period. In his key note address to the gathering of senior management executives, Secretary, CVC appreciated the vigilance initiatives of BDL. He underlined the need for transparency and enhancing awareness among the employees about vigilance. While highlighting the importance of observation of Vigilance Awareness Week, the Secretary exhorted all to be vigilant about irregularities and blow whistle.

24.5 Observation of Vigilance Awareness Week is an integral part of the Vigilance department. As directed by the Central Vigilance Commission, Vigilance Awareness Week (VAW)-2023 with the theme "WlffiR ^Tf^Tfa ^T; 71^37 yfd dH^d T§", “Say no to corruption; commit to the Nation” was observed across units of Bharat Dynamics Limited from 30.10.2023 to 05.11.2023. The observance of VAW-2023 commenced with Commodore A. Madhavarao (Retd.), Chairman & Managing Director (CMD), BDL administering ‘integrity pledge for citizens’ at 11 AM on 30.10.2022 at BDL-Kanchanbagh Unit. Employees of Corporate Office, Bhanur Unit, Visakhapatnam Unit and Ibrahimpatnam Unit participated in the ceremony through video-conference and took integrity pledge. This was followed by reading out messages of Hon’ble President of India, Hon’ble Vice-President of India, Hon’ble Prime Minister of India by Directors and message of CVC by CVO to the august gathering. The program was live across units of the Company through video conference. A total of 2727 employees of BDL have taken the Integrity Pledge during observance of vigilance awareness week.

24.6 In order to create awareness on vigilance and the importance of it in day-to-day life, various competitions such as Essay Writing, Elocution, Slogan Writing, Poster/Collage making on issues relating to Anti-corruption were conducted in online mode for employees, spouse and children of employees during the Vigilance Awareness Week-2023. ‘Integrity pledge for Citizens’ was administered to the students. Special emphasis was given to involve youth in various activities and as a part of it Debates on topics related to anti-corruption were conducted in colleges in Hyderabad and Visakhapatnam.

24.7 As part of Vigilance Awareness Week - 2023, Sensitization programs for employees on matters relating to the Role of IO & PO, Ethics and Governance, Public Procurement, Cyber Hygiene and security, Systems and Procedures of the Organization, Complaint Policy of CVC and Disciplinary Proceedings procedure etc. were conducted across units of the company.

To spread awareness on the theme of "WMR f^Jly ^T; TT^ yfd dH^d T|f", “Say no to corruption; commit to the Nation” and to sensitize employees of BDL and public at large, banners on the theme were displayed at conspicuous places across units of the Company and in public places too. To promote citizens to take CVC ‘e-integrity pledge, a link of CVC website was hosted in the BDL website. Short telephonic messages were sent to all employees encouraging to be a part of “Vigilance Awareness Week-2023” and to take integrity pledge clicking the link http://pledge.cvc.nic.in

24.8 In order to spread the messages to public about the ill-effect of corruption on society and the importance of self-reliance & integrity in life, a walkathon was organized by Bhanur Unit at Shankarpally Municipality on 31.10.2023. As part of involving students and youth in the vigilance awareness campaign, students of the Scheduled Caste Hostel of the Shankarpally Municipality took part in the walkathon. Shri L Kishan, GM (Unit Head-Bhanur Unit) and Shri S Govinda Rajulu, AGM (Vigilance) flagged-off the walkathon along with representatives of the Municipality. Public were apprised of the need to ensure integrity in their day-to-day life and commit to the development of the Nation by saying ‘no’ to corruption. Placards and banners with slogans on ill-effects of corruption were displayed.

24.9 A Vendor Meet was organized by Corporate Commercial Dept. of BDL on 06.11.2023 at Kanchanbagh Unit, wherein, vendors from across India were invited to be a part of business prospects of BDL and more than 160 vendors participated. Cmde. A. Madhavarao (Retd.), CMD, BDL inaugurated the meet and spoke on the importance of contribution of vendors in the success of BDL. Company’s Independent External Monitors Shri J K Khanna, IPS (Retd.) and Shri.A. Sehshagiri Rao, IRSSE (Retd.) participated in the meet and addressed the gathering. On this occasion, CVO, Dr. Upender Vennam administered ‘integrity pledge for citizens’ to vendors and emphasized on Multiple Vendor Development to reduce dependency, increase competitiveness and to ensure transparency and accountability. Videos and Jingle-2023 on PIDPI shared by Hon’ble CVC were played in the vendor meet.

24.10 The observance of Vigilance Awareness Week-2023 concluded with a valedictory function organized on 07.11.2023 at Kanchanbagh Unit of the Company. Shri Ravi Gupta, IPS, Director General, Anti-Corruption Bureau, Telangana graced the occasion as Chief Guest and delivered a key note address to the employees. Shri Ravi Gupta shared his experience with the audience and emphasized on how saying ‘no’ to corruption in personal life can lead to the development of our Nation. The program was attended by CMD, Directors, CVO and other senior executives. The dignitaries motivated the employees to practice ethical behavior at all times and contribute towards Organization and Nation building.

25 ANTI-BRIBERY AND ANTI-CORRUPTION POLICY:

Your company has zero tolerance approach to bribery and corruption. Your company prohibits all forms of bribery and corruption whether involving, but not limited to Government Officials or a Private Sector persons or Company and whether directly or indirectly. The Board of Directors had approved a policy on Anti-Bribery and Anti-Corruption and the same was hosted on website of the Company https://bdl-india.in/sites/default/files/2024-04/BDL%20ACAB%20Policy.pdf

26 BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

26.1 The Board of Directors of the Company comprises Functional Directors, Government Nominee Directors and Independent Directors (i.e Non Official Part Time Directors) who are appointed by the Government of India from time to time. Further, the tenure and remuneration of Functional Directors including Chairman and Managing Director are decided by the Government of India through Public Enterprises Selection Board/Search Committee. The Government communication also indicates the detailed terms and conditions of their appointment including a provision for the applicability of the relevant rules of the Company.

26.2 The Government Nominee Directors are not entitled to any remuneration/sitting fee. The Independent Directors (i.e. Non Official Part Time Directors) are entitled to sitting fees for attending the Board/Committee meetings as approved by the Board, considering the government directives, statutory acts, rules and regulations.

26.3 Independent Directors (i.e. Non Official Part Time Directors)

The Ministry of Defence, Government of India vide its letter No.DDP-M000l(ll)/1/2018-D(BDL) dated 03 January 2022 and a letter No. No.DDP-M0001(11)/1/2018/D(BDL) dated 24.02.2023 appointed Independent Directors as Part-time Non-Official Directors for a period of three years or until further orders whichever is the earliest.

Statement on declaration by Independent Directors:

Independent Directors have given declarations u/s 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down u/s 149 (6) of the said Act.

26.4 During the year, Shri.P.Radhakrishna, Director (Production) and Shri. N.Srinivasulu, Director (Finance) superannuated on 30 June 2023 and on 31 January 2024 respectively, and their term as Director on the Board of BDL concluded upon their superannuation. The Board expresses its gratitude for their valuable contributions made during their tenures.

26.5 Ministry of Defence, Government of India has assigned the additional charge of the post of Director (Finance) to Cmde. A. Madhavarao, CMD and additional charge of the post of Director (Technical) to Shri.P.V.Raja Ram, Director (Production).

26.6 Consequent to cessation of Shri N. Srinivasulu as Director (Finance) and Chief Financial Officer on 31 January 2024, Shri G. Gayatri Prasad General Manager (Finance) who is heading the Finance Department of the company is appointed as Chief Financial Officer of the company (KMP) w.e.f 21 March 2024.

26.7 In accordance with the provisions of Section 152 of the Companies Act, Shri.P.V.Raja Ram, Director (Production), retires by rotation at the upcoming Annual General Meeting and, being eligible, offers himself for reappointment.

26.8 Number of Meetings of Board:

During the year 2023-24, five (5) Board Meetings were held on 25 May 2023, 04 August 2023, 03 November 2023, 24 January 2024, 21 March 2024.

26.9 Performance Evaluation:

The provisions of Section 134(3)(p) of the Companies Act, 2013 relating to evaluation of Board of Directors do not apply to your Company since necessary exemptions are provided to all government companies. Further, similar exemptions were granted to your Company by Securities Exchange Board of India (SEBI) under the provisions of SEBI (Listing Obligations and Disclosure Requirements {LODR}) Regulations, 2015 vide their letter No. SEBI/HO/CFD/DIL1/OW/P/2018/1679/1 dated January 17, 2018.

26.10 Committees of the Board

The following are the statutory Committees constituted by the Board and they function according to their respective roles and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Risk Management Committee

Details of composition, terms of reference and number of meetings held for respective Committees are given in the Report on Corporate Governance, which forms a part of this Annual Report.

27. DIRECTORS’ RESPONSIBILITY STATEMENT:

As per Section 134(3)(C) and 134(5) of the Companies Act, 2013 as amended, the Directors state that:

(i) In the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

(ii) Directors selected such accounting policies and applied them consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2024 and of the profit of the Company for the year ended on that date.

(iii) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) Directors have prepared the annual accounts on a going concern basis.

(v) Directors have laid down internal financial controls which are being followed by the Company and that such internal financial controls were adequate and operating effectively and

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

28. SIGNIFICANT AND MATERIAL ORDERS:

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.

29. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There are no material changes and commitments affecting the financial position of the company which have occurred between 31 March 2024 and date of signing of this Report.

30. AUDIT COMMITTEE:

During the year 2023-24, four Audit Committee meetings were held to review internal control systems and their adequacy, including coverage of Audit functions. Details of composition, terms of reference, etc., are covered in Report on Corporate Governance. Further, during the year under review, all recommendations made by the Audit Committee have been accepted by the Board.

31. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT:

31.1 Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications/amendments issued by Ministry of Corporate Affairs & DPE guidelines, the Company has undertaken various activities as per the CSR Policy. The programmes/initiatives/projects are taken up in line with the Schedule-VII of the Companies Act-2013, which are duly incorporated in CSR policy and forms the guiding principle for all our programmes. The Board of Directors of your Company has Board Level Committee on Corporate Social Responsibility and Sustainable Development (CSR & SD) (please refer Corporate Governance Report) in line with the provisions of Section 135 of the Companies Act, 2013. The Committee has formulated and recommended CSR Policy to the Board indicating the projects/activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013.

31.2 Your Company has been very conscious about its responsibilities towards society. Your Company has also ventured into backward/ under developed areas in Andhra Pradesh and Telangana to undertake Corporate Social Responsibility (CSR) activities by sponsoring various schemes.

31.3 The core areas of focus under CSR are Health Care, Nutrition, Education & Literacy, Skill Development & Sustainable Livelihoods, Sanitation, Safe Drinking Water etc. Your company also adopted villages in Andhra Pradesh and Telangana State under Corporate Social Responsibility initiative and the focus is on the necessities of human life-health, water and other conveniences.

31.4 The CSR and SD activities are monitored periodically by the Committee and a detailed annual report on CSR and SD activities undertaken during the year 2023-24 is enclosed at Annexure-I.

31.5 During the year 2023-24, the CSR & SD obligation was 7 936.94 lakh. Against the total CSR obligation, the company has incurred an expenditure of 7 1017.73 lakh and achieved 100% CSR target amount required under the provisions of Companies Act, 2013. CSR activities being undertaken are placed on Company’s website https://bdl-india.in/sites/default/ files/2023-07/Board%20approved%20CSR%20Projects%20for%20the%20FY%202023-24.pdf

32. RISK MANAGEMENT:

The Company has a Board approved Risk Management Policy. The policy aims at elimination or reduction of risk exposures through identification and analysis of various types of risks and facilitating timely action for taking risk mitigation measures. The policy envisages that all programs, project reviews will highlight the progress of risk mitigation plans till the closure and signing off the mitigation plans.

Pursuant to the Reg. 21 of SEBI (LODR) Regulations, 2015, the Company has constituted a Risk Management Committee. The details of Committee and its terms of reference, Risk Management Policy etc. are set out in the Corporate Governance Report.

33. ANNUAL RETURN:

In accordance with the provisions of the Companies Act, 2013, Annual Return of the Company for the year under report is available on the Company’s website https://bdl-india.in/annual-reports.

34. RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions during the year under review which may have a potential conflict with the interest of the Company at large. Thus, disclosure in Form AOC-2 is not required. Members may refer to the notes to the accounts for details of related party transactions. The policy for related party transaction has been uploaded on the Company’s website https://bdl-india.in/sites/default/files/2023-06/Policy%20on%20Related%20Party%20Transactions.pdf

35. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement.

36 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company, being a Defence PSU, the disclosure of information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo under the provisions of Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 (as amended) is not required as the Ministry of Corporate Affairs vide Notification GSR No.680 (E) dated 4 September 2015 has granted exemption to Defence Public Sector Undertaking.

37. INTERNAL CONTROL SYSTEMS:

Your Company had put in place all required internal controls and systems to meet the canons of financial propriety. External audit firms are appointed to ensure their adequacy and report thereon. Detailed analysis of reports of Internal Audit Firms as well as reports of Internal Audit Department of your Company is placed before the Audit Committee for its review and advice. The adequacy of internal control procedures is being reviewed and reported by Statutory Auditors in their Audit Report. The necessary disclosures have been made in Notes to Accounts. Your Company being a Government Company is subject to Government Audit also.

38. AUDITORS:Statutory Auditor:

M/s. Tej Raj & Pal, Chartered Accountants, Hyderabad were appointed as Statutory Auditors of the Company for the financial Year 2023-24 by the Comptroller & Auditor General of India. The Auditors have audited the Accounts and does not contain any qualification, reservation or adverse remarks.

The Auditors’ Report on the financial statements for the financial year 2023-24 and the Comments of Comptroller and Auditor General of India (C&AG) under Section 143 (6) of the Companies Act, 2013 are appended to the Annual Report.

Cost Auditor:

Your Company appointed M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad as Cost Auditors for the FY 2023-24 for the audit of the cost records of the Company. The Company maintains cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of its manufacturing activities.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), the Company has appointed M/s.Narender & Associates, Practicing Company Secretaries (PCS Registration No.5024) for the financial year 2023-24 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is appended to the Annual Report.

39. CEO / CFO CERTIFICATION:

As per the requirements of SEBI Listing Regulations and DPE Guidelines, the CEO/CFO certificate has been obtained and placed before the Audit Committee and the Board.

40. REPORTING OF FRAUDS BY AUDITORS:

During the year, neither the Statutory Auditor nor the Secretarial Auditor have reported to the Audit Committee/Board under Section 143(2) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees, the details of which needs to be mentioned in the Board’s Report.

41. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report required under the SEBI (LODR) Regulations, 2015 and also under the DPE Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs), is attached to this Report as Annexure - II.

42. CORPORATE GOVERNANCE:

42.1 Corporate Governance is about application of best management practices, compliance of laws and adherence to ethical standards to achieve Company’s objective of enhancing stakeholders’ value and discharge of social responsibility. The Company has a well-established, transparent and fair administrative set up to provide for professionalism and accountability.

42.2 As per the guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8)/2005-GM, dated 14 May 2010 and in terms of the SEBI (LODR) Regulations, 2015, Report on Corporate Governance along with Certificate on compliance of conditions on Corporate Governance from a Practicing Company Secretary are attached to this report as Annexure-IM.

42.3 Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to Stock Exchanges and MoD in the prescribed format.

42.4 The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

42.5 No proceedings are made or pending under the Insolvency and Bankruptcy Code, 2016 and there is no instance of onetime settlement with any Bank or Financial Institution.

42.6 There has been no change in the nature of business of the Company.

43. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified in the Company. In line with the Guidelines received from time to time, necessary actions have been taken to prevent Sexual Harassment of Women at Workplace. The BDL CDA Rules applicable to Officers and the Certified Standing Orders applicable to Workmen have the required provisions in this regard. The Internal Complaints Committees as per Section 4 of the Act have been put in place. During the year 2023-24, your Company has received 01 (One) Sexual harassment complaint. Accordingly, the Internal Complaints Committee has conducted the inquiry, disposed the same and submitted the report to the Management.

44. COMPLIANCE UNDER THE RIGHT TO INFORMATION ACT, 2005:

The information required to be provided to citizens under Section 4(1)(b)of Right to Information Act, 2005 is placed on Company’s Website https://bdl-india.in/sites/default/files/2023-05/Information%20on%20BDL%20Mandatory%20disclosures%20in%20 Accordance%20with%20RTI%20May%202023.pdf. It contains general information of the Company, functions, powers and duties of employees/officers, decisions making process, rules, regulations, manuals and records held by the Company, directory of the Company’s Officers, pay scales of officers/ employees and procedure for seeking information and inspection of records. The Company has nominated a Central Public Information Officer (CPIO) of Senior Manager Level to attend to queries and appeals.

During the year 2023-24, the CPIO has received 171 applications/queries, out of which 160 applications have been disposed-off and 1 (one) application is transferred to other Public Authority. 10 (Ten) RTI queries are under process. Further, out of 14 appeals received, 13 are disposed-off by Final Appellate Authority and 01 (one) is under process as on 31 March 2024.

45. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Pursuant to the provisions of the Section 177(9) of the Companies Act, 2013 read with Rule (7) of the Companies (Meeting of the Board & its Power) Rules, 2014 (as amended) and DPE Guidelines for CPSEs, the Board of Directors had approved the policy on Whistleblower/Vigil Mechanism and the same was hosted on website of the Company https://bdl-india.in/sites/default/ files/2020-01/Whistle%20blower%20Policy%20%26%20Vigil%20Mechanism_0.pdf. The policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Employees are encouraged to raise any of their concerns by way of whistle blowing and none of the employees have been denied access to the Audit Committee.

46. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

The Securities and Exchange Board of India (SEBI) has mandated inclusion of Business Responsibility and Sustainability Report (“BRSR report”) as part of the Annual Report based on market capitalization. In terms of amendment to regulation 34 (2) (f) of LODR Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021, SEBI has introduce new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR). The BRSR shall be mandatory for top 1000 companies (by Market Capitalization) with effect from financial year 2023-24.

Your Company has prepared a comprehensive policy framework for BRSR report, after studying the SEBI (LODR) Regulations, 2015 requirements and keeping in view the business and governance environment in which BDL as a Defence PSU operates. The Company’s BRSR report for the year is available on the BDL’s website at https://bdl-india.in/site/default/files/BRSR-2023-

24.pdf

47. DIVIDEND DISTRIBUTION POLICY:

In terms of SEBI (LODR) Regulations,2015 (as amended), dividend distribution policy has been adopted by your company to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining the profit into the business. The policy is available on the BDL’s website https://bdl-india.in/ sites/default/files/2020-01/Dividend%20Distribution%20Policy_0.pdf

48. ACKNOWLEDGEMENT:

48.1 Your Directors gratefully acknowledge and express their appreciation for the cooperation extended and guidance provided by various Government Agencies, including the Ministry of Defence, DIPAM, DPSUs, Department of Defence Production, DRDO Laboratories, Central Government Departments, State Governments of Telangana and Andhra Pradesh, Quality Assurance Agencies of the Government of India, and other PSUs. Their support has been invaluable to the Company, and your Directors are grateful for the assistance received from them on various occasions.

48.2 The Company would like to extend its sincere appreciation to the Comptroller & Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Statutory Auditors, Bankers, and Suppliers for their cooperation, support, and guidance. Their contributions have been instrumental in ensuring the smooth functioning and financial integrity of the Company.

48.3 The Directors take this opportunity to express their deep appreciation for the valuable contributions and cooperation of the employees at all levels. Their dedication, hard work, and commitment have played a crucial role in propelling the Company to greater heights and sustaining its growth trajectory. The Directors recognize and acknowledge the employees’ efforts and extend their gratitude for their continued support in the future.

---

Mar 31, 2023

Your Directors presents the 53^rd Annual Report together with the audited financial statements of the Company for the year ended 31 March 2023.

1. HIGHLIGHTS ON OPERATIONS:

• Despite facing challenging circumstances and technical challenges, your Company achieved a sales turnover of T2489 Crore during the fiscal year. This is a slight decrease compared to the sales turnover of T2817 Crore in the previous year.

• On 2^nd July 2022, the Hon’ble Raksha Mantri Shri Rajnath Singh visited BDL along with Vice Chief of Air Staff Air Marshal.

• The Hon’ble Raksha Mantri inaugurated the Warhead facility and virtually inaugurated the RF (Radio Frequency) Seeker facility and Central Storage facility. These facilities are essential for realizing Atmanirbharta in Defence manufacturing by the Company.

• During the Bandhan Ceremony at DefExpo-2022 and Aero India-2023 new products were launched.

• A contract was received for the supply of an upgraded version of the Akash Weapon System to the Indian Army, worth about 78161 Crore.

• The Company received its highest-ever export order of USD 255.4 million for SAMs (Surface-to-Air Missiles) and USD 27 million for ATGMs (Anti-Tank Guided Missiles) from friendly foreign countries.

• Contracts were received for the supply of Counter Measures Dispensing System (CMDS) from Bharat Electronics Limited, valued at 7261 Crore, and from Hindustan Aeronautics Limited, Bangalore, valued at 777.18 Crore.

2. FINANCIAL RESULTS AND PERFORMANCE HIGHLIGHTS:2.1 Performance of the Company in financial terms is summarized below:

Particulars	^. in Crore		% of Increase/
	2022-23 2021-22		(Decrease)
Sales/Revenue from Operations	2489	2817	(11.64)
Value of Production	2508	2902	(13.58)
i) Import Material Consumed	345	271	27.31
ii) Indigenous Material Consumed	865	992	(12.80)
Total Material Consumed	1210	1263	(4.20)
Value Added	1298	1639	(20.81)
Profit Before Tax	482	710	(32.11)
Profit After Tax	352	500	(29.60)
Earnings per share# (in Rupee) 19.22 # EPS has been calculated based on profits excluding the other comprehensive income.		27.28	(29.55)

2.2 Following data reflect the financial position of the Company:
Particulars	^.in Crore		% of Increase/
	2022-23 2021-22		(Decrease)
Gross Block (Excl. CWIP)	1416	1451	(2.41)
Accumulated Depreciation	607	577	5.20%
Net Block	809	874	(7.44)
Working Capital (Net)	5394	2942	83.34%
Capital Employed	3155	2973	6.12%
Net Worth	3211	3031	5.94%
* Figures have been reclassified and regrouped, wherever necessary.

2.3 During the year under review, your company achieved revenue from operations of 72489 Crore despite facing very challenging circumstances and technical issues, compared to the revenues of 72817 Crore in the previous year. The main reasons for the revenue shortfall were, delays in receiving imported electronic items and critical explosive materials from Foreign Original Equipment Manufacturer (OEM), design changes in the production of naval products and delays in receiving MR-SAM kits from OEM, which resulted in non-completion of production. Your company is expected to recover from this shortfall in the current financial year 2023-24.

Despite the aforementioned technical issues, your company performed well and achieved a turnover of 72489 Crore and a production value of 72508 Crore. The profit before tax (PBT) was 7482 Crore, a decrease from the previous year’s 7710 Crore. The profit after tax amounted to 7352 Crore, down from 7500 Crore in the previous year. The EBITDA margin was 16.40%, a decrease from 25.77%. This decrease in margin is mainly attributed to a decline in manufacturing activities and changes in the product mix.

2.4 The major products executed during the year are ATGMs, Akash-SAM, Varunastra and MR-SAM. The order book position of the company as on 01 April 2023 is about 7 20054 Crore (Net).

2.5 Future Outlook:

Your company expects significant growth in the coming years, considering its consolidated order book position, which has reached a staggering figure of 720054 Crore as of April 1, 2023. The order book position is expected to further increase as several orders are in various stages of finalization. Your company is also actively promoting its products in the international market and has successfully converted some export leads into orders with friendly foreign countries.

In recent years, your company has forged alliances with various foreign and Indian companies through Memorandums of Understanding (MoUs) across a range of business interests. These alliances include Thales, Naval Group, MBDA Missile Systems Ltd, Rafael Advanced Defence System Ltd (Naval Division), Dassault Aviation Pvt Ltd, Defence Research and Development Organisation (DRDO), Larsen and Toubro (L&T), Ashok Leyland Defence Systems Ltd, Newspace Technologies Pvt Ltd, IIT-Madras, and Tamilnadu Industrial Development Corporation Ltd (TIDCO). These partnerships will create new opportunities for manufacturing state-of-the-art weapon systems by your company in India, catering to both domestic and international markets. Your company is confident that these alliances will elevate its standing in the coming years.

Your company will continue its efforts to make the Indian Armed Forces Atmanirbhar (self-reliant) by reducing dependency on imported arms in the future. In this direction, your company has placed a strong emphasis on the concept of indigenization across all its programmes. It has commenced the indigenization of components and subassemblies that were previously imported and successfully achieved indigenization of 47 critical items over the past four years, resulting in significant foreign exchange savings. With an average indigenization percentage ranging between 80-90%, your company’s philosophy has led to reduced import costs and increased the ability to offer competitively priced products to the Indian Armed Forces.

The Government of India, in its continuous pursuit of self-reliance in defence manufacturing under the ‘Aatmanirbhar Bharat Abhiyan’, has periodically issued a Positive Indigenization list of sub-systems/assemblies/sub-assemblies/components. As a result, the future outlook for your company appears promising buoyed by a robust order book position. With decades of experience, your company is well-prepared to face upcoming challenges.

3. FIXED DEPOSITS FROM PUBLIC:

The Company did not accept any fixed deposits from Public during the year, and there was no outstanding Fixed Deposits at the beginning/end of the year. Accordingly, there was no default in payment of deposits/interest thereon.

4. DIVIDEND & TRANSFER TO GENERAL RESERVE:

Your Company has a consistent track record of Dividend Payment. The Board has recommended a Final Dividend of 71.20/- per equity share of 710/-each amounting to 721.99 Crore for the year 2022-23. Further, your Company has paid interim dividend of 78.15 per share amounting to 7149.37 Crore in February, 2023. An amount of 7150 Crore is being transferred to General Reserve for the year 2022-23.

Commodore Siddharth Mishra (Retd), the then Chairman & Managing Director, BDL presented the cheque for 7 111.9203 Crore, being the interim dividend pertaining to the Government of India shareholding in BDL, to Shri. Rajnath Singh, Hon’ble Raksha Mantri at New Delhi. Shri. Giridhar Aramane, Secretary (Defence Production), Shri. T. Natarajan, Additional Secretary (Defence Production), Ministry of Defence and Shri. Nuka Srinivasulu, Director (Finance) from BDL were present on the occasion.

5. CAPITAL STRUCTURE:

The paid up capital of the Company as on 31^st March, 2023 stood at 7183.28 Crore (18,32,81,250 equity shares of 710/- each). The Authorized Capital of the Company is 7200 Crore (20,00,00,000 equity shares of 710/- each) as on 31^st March 2023.

As on 31 March 2023, the Govt. of India shareholding in the Company stands at 74.93% (representing 137,325,527 equity shares of 710/- each).

6. performance against MoU:

Your Company signs a Memorandum of Understanding (MoU) every year with the Ministry of Defence, Government of India. The performance of the Company for the year 2021-22 was rated as “Very Good” and the performance for the year 2022-23 is under evaluation.

7. MODERNIZATION & UPGRADATION:

During the year, an amount of 7113.91 Crore has been spent towards Capital Expenditure (CAPEX) programme for the modernization of Plant & Machinery and other infrastructure development. The majority of this amount was dedicated to establishing the Warhead building, RF Seeker facility, Storage facility, and firefighting systems. Additionally, your company has planned to spend approximately 7100 Crore during the current financial year 2023-24 on various CAPEX programmes, including Phase-II infrastructure development at Ibrahimpatnam and for enhancing the integration facility at Vizag.

Your company is making determined efforts to increase the indigenization content in the manufacturing of ATGMs, SAMs, Air to Air Missiles, and Torpedoes. This objective aims to enhance self-reliance and reduce dependence on imports.

8. RESEARCH & DEVELOPMENT:

Your company acknowledges that Research and Development (R&D) plays a pivotal role in the growth of the organization. To cater to the requirements of the Indian Armed Forces, your company has identified several products for R&D.

The following table shows the recent trend of in-house R&D expenditure:

Particulars	2022-23	2021-22	2020-21
Sales Turnover (Gross) (7 in Cr)	2489.39	2817.40	1913.76
R&D expenditure (7 in Cr)	152.03	48.14	42.95
R&D expenditure as % of Sales Turnover	6.11%	1.71%	2.24%
PBT	481.80	709.91	340.88
R&D expenditure as % of PBT	31.55%	6.78%	12.60%

9. procurement FROM MSMEs:

In compliance with the Procurement Policy of the Government of India, your company has surpassed the mandated procurement requirement of 25% from Micro, Small, and Medium Enterprises (MSMEs). During the year 2022-23, your company procured 29.82% of goods and services, amounting to approximately 7487.98 crore, from MSMEs out of its total procurement of 71636.61 crore. By achieving the mandated target of 25% from MSMEs, your company has demonstrated its commitment in supporting and promoting the growth of these enterprises.

Vendor Development:

Your company endeavors to expand its vendor base through special drives and by offering free registration in certain cases and on specific occasions. Throughout the year, your company conducted 7 vendor meets, resulting in over 1000 registered vendors as of the current date. Furthermore, your company has implemented an updated Integrity Pact in accordance with the directives of the Central Vigilance Commission’s latest circular issued on 25th January 2022, and adheres to the Standard Operating Procedure outlined therein.

Government e Market Place (GeM):

Your company registered as both a Buyer and Seller with the Government e-Marketplace (GeM). GeM is utilized for procuring common items and services. Throughout the year, your company has successfully procured common goods and services worth approximately 7125 crore through GeM. This demonstrates your company’s active engagement and utilization of GeM for streamlined procurement processes.

11. EXPORTS:

Your company has placed significant emphasis on the export of Weapon Systems. To explore the export potential of its products, identify potential markets, and pursue export opportunities, an export cell has been established within the Business Development Division of BDL. The products offered by your company are state-of-the-art, designed indigenously, competitively priced, and not heavily reliant on any foreign Original Equipment Manufacturers (OEMs). With existing facilities, your company is well-prepared to meet both domestic and export demands.

Several leads have been received from various friendly foreign countries for the export of products such as the Akash Weapon System, ATGMs, Air to Air Missile (Astra), Smart Anti-Airfield Weapon, Helina (Air-to-Surface Weapons), Light Weight Torpedo, Heavy Weight Torpedo (Underwater weapons), Counter Measures Dispensing System, and Anti-Submarine Warfare Suite (Counter Measure Systems) etc.. These leads are actively being pursued by the export cell, which is engaged in interactions with overseas customers to achieve export targets. As a result, your company has secured orders for the export of Light Weight Torpedoes, Counter Measures Dispensing System, ATGM, and Akash Weapon System from friendly foreign countries. Channel Partners/Agents have been appointed in several countries to promote your company’s exportable products. Your company has also participated in various Foreign Defence Exhibitions to showcase its products and facilitate one-on-one meetings with participants from the Armed Forces/Ministries of Defence of other countries.

To strengthen international engagement, BDL is working closely with Indian Embassies/Defence Attaches to arrange meetings and visits with stakeholders from foreign countries. Furthermore, plans are underway to open Representative Offices in three foreign countries.

During the year, your company received its highest-ever export order of USD 255.4 million for SAMs and USD 27 million for ATGMs from friendly foreign countries. As of April 1, 2023, the total export order book of BDL stands at 72586 Crore, reflecting the growing success in the international market

12. ATMA NIRBHAR BHARAT & INDEGINISATION:

As part of its contribution to the creation of an Atmanirbhar Bharat (Self-Reliant India), your company has been focused on indigenizing technology from the moment a contract is signed. Your company manufactures missiles under Technology Transfer (ToT) agreements with DRDO and with Foreign Original Equipment Manufacturers (OEMs). The ToT for foreign OEM designed products is only 60%, however your company has achieved indigenization levels of more than 80% to 90% in many of its products through its indigenization initiatives. In the case of DRDO-designed products, most of them have achieved indigenization levels of more than 90%. Your company is putting forth maximum efforts to achieve higher levels of indigenization for all its products.

The “Make in India” initiative is an ongoing process, and under this scheme a number of initiatives were taken by Gol/MoD. Your company’s new product under development falls under the Make-II project category of the Indian Indigenously Designed Developed and Manufactured (Indian IDDM) classification in the Defence Procurement Procedure. Successful completion of this project will establish India as self-reliant in manufacturing 3rd generation ATGMs.

Your company is utilizing the Srijan Portal, a Ministry of Defence indigenization portal, which serves as a one-stop-shop for vendors to engage in indigenization efforts. BDL has uploaded 1187 items on the portal, including all the items imported by the company. Out of these items, vendors have shown interest in 413 items, and 36 sanction orders have been placed. Necessary technical support is being provided to Micro and Small Enterprises (MSEs) to encourage them to produce quality items. Your company is also fostering collaboration with startup companies, identifying problem definitions for them to work on and develop solutions. MoUs are being signed with these companies to support their growth and create business opportunities.

An Indigenization Plan has been formulated by your company for a five-year period (2020-21 to 2024-25). The plan and its achievements for the last three years are as follows:

Year	No.of items targeted for Indigenisation	No.of items Indigenized
2020-21	72 items	79 items
2021-22	53 items	53 items
2022-23	14 items	16 items

Furthermore, the Ministry of Defence has issued a Positive List of Indigenization on December 27, 2021, as part of the continuous effort towards self-reliance in defence manufacturing under the ‘Aatmanirbhar Bharat Abhiyan’. This list includes 2500 items that have already been indigenized, along with 351 items that will be procured from the Indian industry within specified timelines.

Out of the total 2851 items, 50 items belong to BDL, and as of now, your company has achieved indigenization for 37 of these items.

Additionally, on March 28, 2022, the Ministry of Defence issued a 2nd Positive Indigenization list of 107 Line Replacement Units (LRUs)/sub-systems for indigenization by Defence Public Sector Undertakings (DPSUs), with an embargo on imports beyond the indicated timelines. Out of these 107 items, 4 items belong to BDL, providing an opportunity for your company to scale up its operations.

Furthermore, on August 28, 2022, the Ministry of Defence issued a 3rd Positive Indigenization list of 780 Line Replacement Units (LRUs)/sub-systems for indigenization by DPSUs, with an embargo on imports beyond the specified timelines. Out of these 780 items, 2 items belong to BDL, presenting another opportunity for your company to expand its operations.

13. MANPOWER AND RESERVATION OF POSTS FOR SCs/STs:

13.1 The Company has been following Presidential Directives of the Government with regard to reservation of posts for SCs/ STs/OBC/EWS in recruitments.

13.2 Total manpower strength as on 31 March 2023 is at 2560 (including four functional directors). Of the total strength, 85 are ex-servicemen, 503 are of Schedule Caste, 209 are of Scheduled Tribes and 781 are of OBC category. The percentage of Scheduled Caste and Scheduled Tribes in respect of Employees is at 19.65% and 8.16% respectively.

13.3 The No. of Scheduled Caste, Scheduled Tribes, OBC and EWS in various categories of posts as on 31 March 2023 is given below:

		Number of employees
	Category	total Strength Scheduled Castes Scheduled tribes									OBC			EWS
		31-03-2023 31-03-2022 31-03-2023				31-03-2022 31-03-2023 31-03-2022				31-03-2023 31-03-2022			31-03-2023 31-03-2022
Group-A			801	755 149		145	86		81		187	158		4	-
Group-B			2	65	0	16	0		4		1	22		-	-
Group-C		1571		1649 304		316 109			109		525	527		-	-
Group-D			171	189	46	48	14		14		66	72		-	-
Temporary			11	12	4	4					2	2		-	-
Total		2556*		2670* 503		529 209			208		781	781		4	-
*excluding four functional directors & CVO.
13.4 Recruitment of employees in Scheduled Caste, Scheduled Tribes, OBC, EWS during 2022-23 is given below:
	Classification of posts		Total Vacancies Released		total Recruitment made		Reservation of posts					Recruitment made during the year 2022-23
	(1)		(2)		(3)		(4)					(5)
							SCs	Sts OBC			EWS	SCs	STs	OBC	EWS
Group-A				55		45	9	3		11	6	2	3	13	4
Group-B				1		0	0	0		0	0	0	0	0	0
Group-C				0		0	0	0		0	0	0	0	0	0
Group-D				0		0	0	0		0	0	0	0	0	0
Total				56		45	9	3		11	6	2	3	13	4

13.5 Employment of Women: As per the recommendation No.51, Para (ii)(a) of the National Commission for Women (NCW) in its Annual Report for the year 1995-96, the employment position of Women as on 31 March 2023 is given below as directed by the Ministry of Defence, vide their letter Nos. 39(6)/99/D(B&C), dated 27 August 1999. i. Executives
	Grade		No. of employees			Women	Percentage
	I			2		-	-
	II			135		23	17.04
	III			127		19	14.96
	IV			241		34	14.11
	V			93		10	10.75
	VI			164		14	8.54
	VII			33		2	6.06
	VIII			7		1	14.29
	IX			1		-	-
	Functional Directors			3		-	-
	CMD			1		-	-
	total			807		103	12.76
	* CVO is not included in this report.
ii.	Non-executives
	Grade		No. of employees			Women	Percentage
	WG-0			-		-	-
	WG-1			3		-	-
	WG-2			60		11	18.33
	WG-3			64		6	9.38
	WG-4			125		23	18.40
	WG-5			293		18	6.14
	WG-6			159		30	18.87
	WG-7			200		30	15.00
	WG-8			131		16	12.21
	WG-9			32		3	9.38
	WG-10			101		4	3.96
	WG-11			15		-	-
	WG-12			559		45	8.05
	total			1742		186	10.68
13.6 Persons with Disabilities (PWD) as on 31 March 2023:
The total number of Physically Challenged employees as				on 31 March 2023	is 98 and its percentage to total employees
works out to 3.83%.
		HI	LD		VI		total
Group-A		5	6		12		23
Group-B		0	0		0		0
Group-C		8	19		39		66
Group-D		3	2		4		9
Total		16	27		55		98
Hi- Hearing impaired, LD-Locomotive Disability, Vi-Visually impaired.

14. HUMAN RESOURCE DEVELOPMENT:

During the year under review, your company conducted training programmes to enhance the knowledge, skills, and development of its employees. A total of 839 executives and 393 non-executives participated in these training programmes, covering topics that were knowledge-based, development-oriented, and tailored to meet the company’s specific needs. The training programs were conducted both in-house and at external agencies’ premises to address both present and future requirements. In total, 6,063 man-days were devoted to training during the financial year 2022-23.

In addition to the regular training programs, your company organized several special training initiatives during the year:

1) Mid-Career Development Programme (MCDP): A two-week programme named “Abhyudaya” was launched for mid-level executives who have completed 15 years of service in the company. The programme aimed to transform operational managers into tactical managers. The training content incorporated a Preventive Vigilance Module in line with CVC guidelines. Sessions on missile technology and Industry 4.0 were conducted to align with the company’s adoption of Industry 4.0 practices. Furthermore, sessions on “Healthy lifestyle to reduce stress” and “Yoga” were organized to encourage executives to adopt a balanced approach for overall well-being. A total of 81 mid-level executives were trained in the MCDP in two batches during the year 2022-23.

2) Induction-cum-Orientation Programme for Management Trainees (MTs): A four-month programme named “Parichay” was organized for the batch of 2022, consisting of 34 MTs. The programme aimed to introduce MTs to the organization and equip them with the necessary knowledge and skills to excel as executives and contribute towards achieving organizational goals. The programme covered various aspects of operations and included interactions with internal and external stakeholders. This comprehensive training nurtured the MTs to become key contributors to the company’s success.

Additionally, 25 Technical MTs underwent specialized training at the Defence Institute of Advanced Technology (DIAT), Pune, focusing on missile technology, underwater weapons, sonars, rocket launchers, and related areas.

3) On the International Day of Disabled Persons in 2022, an in-house workshop with the theme “UDAAN-Unleashing the power within” was organized for all Persons with Disabilities (PwBDs) at BDL. The workshop featured guest speakers who were specially-abled achievers in their respective fields. It aimed to motivate and inspire PwBDs to excel in their duties.

4) A total of 53 women employees received training on “Women Empowerment and Awareness Programme on POSH Act” during the year 2022-23, focusing on promoting gender equality and creating awareness about the Prevention of Sexual Harassment (POSH) Act.

5) The Department of Defence Production (DDP), Ministry of Defence (MoD), initiated MISSION RAKSHA GYAN SHAKTI with the primary objective of promoting an intellectual property (IP) culture and encouraging the creation of IP in the defence production sector. In alignment with this initiative, BDL trained 150 employees through a customized online training (COLT) module during 2022-23. The programme, with a duration of approximately 16 hours, concluded with a final assessment consisting of 30 questions to assess understanding and award a course completion certificate. A minimum score of 60% was required to obtain the certificate.

These training initiatives highlight your company’s commitment to continuous learning, development, and fostering a conducive work environment that empowers employees to excel in their roles.

15. PARTICULARS OF EMPLOYEES:

There were no employees of the Company who received remuneration in excess of the limits prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further, in accordance with Ministry of Corporate Affairs Notification No. GSR 463(E) dated June 05, 2015, Government Companies are exempt from Section 197 of the Companies Act, 2013 and its rules thereof.

16. FOREIGN VISITS:

Your Company incurred an expenditure of around 72.44 Crore during the year under report towards foreign travel for business trips.

17. industrial relations and employee welfare:

Your company maintains cordial and harmonious industrial relations, thanks to the cooperation and support of all employee sections, including the Recognized Trade Union, associations representing SC, ST, OBC, Ex-Servicemen, and Officers. Statutory and non-statutory committees such as the Works Committee, Safety Committee, Canteen Managing Committee, and Welfare Committee contribute to maintaining discipline in the workplace.

Secret Ballot Elections were conducted simultaneously in all units of Bharat Dynamics Limited on May 6, 2022, by the Labour Department (Central) in Hyderabad to verify the membership of Trade Unions. In the elections, Bharat Dynamics Employees Trade Union Congress (BDETUC) Regd. No. A-4511 secured the majority of votes. Following the recommendations of the Ministry of Labour & Employment, the management has recognized Bharat Dynamics Employees Trade Union Congress (BDETUC) as the representative Union for the workers of the company for a period of two years starting from June 24, 2022.

Your company meticulously follows compliance with statutory welfare provisions. A Post Superannuation Medical Benefit Scheme is in place to address the medical needs of retired employees and their family members. The Recognized Trade Union, along with all the associations, extends full support to the management for the smooth functioning of the organization.

18. SECURITY:

The Central Industrial Security Force (CISF) is responsible for providing security and fire services at both the Kanchanbagh and Bhanur Units. Throughout the year, CISF has played a crucial role in ensuring the security and protection of the company’s property. The CISF team has implemented robust security measures, combining physical measures and advanced technology to maintain the security of highly sensitive installations.

To oversee the security arrangements and the implementation of Intelligence Bureau (IB) guidelines, the Plant Security Council is in place. Regular security review meetings are conducted by both the management and CISF to enhance security measures.

In addition to computerized photo identity cards, a Biometric Access Control System has been implemented to prevent unauthorized entry. CCTV cameras are installed throughout the factory premises to expand the coverage of CCTV surveillance. Door frames, metal detectors, and X-ray baggage machines are also utilized. Barricades, boom barriers, and mochas are provided to reinforce physical security measures.

Regular security awareness programs are conducted, along with the observation of Security Week and Fire Week. Employees are sensitized to security threats and educated on the appropriate actions to be taken during emergencies and fire accidents.

19. SAFETY:

Your company places a strong emphasis on maintaining Safety, Health, and Environment (SHE) standards. The Industrial Safety Committee and Explosive Safety Committee meet regularly to monitor SHE practices within the company. Industrial work is carried out in compliance with the Factories Act of 1948, while explosive safety strictly adheres to the regulations set by the Storage & Transport of Explosive Committee (STEC-2017) under the Centre for Fire, Explosive & Environment Safety (CFEES), Ministry of Defence, New Delhi.

The safety committee meetings are held periodically to ensure adherence to statutory norms, and any safety-related issues are reviewed by the General Manager/Unit Head for compliance.

Industrial safety audits are conducted by the Joint Chief Inspector of Factories, Telangana State, and any observations made are duly addressed. Annual explosive safety audits are conducted by the Centre for Fire, Explosive & Environment Safety (CFEES) in New Delhi, and necessary actions are taken based on their observations. The company successfully completed the external Environmental Management System (EMS) certification audit in March 2023, without any non-conformities or observations.

The 52nd National Safety Day Campaign was observed from March 4 to March 11, 2023. Various activities were conducted throughout the week, including the administration of safety pledges at workstations, distribution of safety badges, display of safety day banners, and competitions such as safety slogans, essays, and elocutions in Hindi, Telugu, and English. Safety quizzes and demonstrations on basic first aid and firefighting were also organized as part of safety promotional activities.

In terms of training programs, both in-house and external training sessions are regularly conducted for employees on industrial and explosive safety. Special medical check-ups are carried out for employees working in Electroplating and Canteen areas, while periodic medical check-ups are conducted for employees in other departments. Fire mock drills are performed at regular intervals to ensure preparedness for firefighting situations.

The Safety Engineering Department maintains regular communication with the Inspector of Factories, the Telangana State Pollution Control Board (TSPCB), and the Centre for Fire, Explosive & Environment Safety (CFEES) at the Ministry of Defence, New Delhi, to stay updated on any guidelines or updates for necessary compliance.

20. ENVIRONMENT AND POLLUTION CONTROL:

As per the company’s environmental policy, your company is committed to manufacturing and supplying defence products to the Indian armed forces in an environmentally friendly manner. The key environmental commitments include:

• Protecting the environment and preventing all types of pollution.

• Fulfilling compliance obligations.

• Conserving natural resources.

• Continually improving to enhance environmental performance.

All three units of BDL, namely Kanchanbagh, Bhanur, and Visakhapatnam, have been recommended for ISO 14001:2015 (EMS) certification. External auditors conducted an audit from March 6th to March 11th, 2023, to assess pollution levels and compliance with legal requirements as part of the re-certification process. The company has issued a circular to discourage the use of plastics, and e-waste and hazardous waste are disposed of through agencies registered with the Pollution Control Board. Solid waste, such as ferrous and non-ferrous metals, is disposed of through M/s MSTC, a government undertaking. Biomedical waste is also appropriately disposed of through an agency registered with the Pollution Control Board, and proper housekeeping practices are maintained on the premises.

Your company has implemented a Zero Liquid Discharge system, wherein treated water from the effluent treatment plant undergoes additional treatment through reverse osmosis (RO). The RO treated water is then utilized in the Demineralized Water (DM) plant for producing DM Water, which is used in the Electroplating Shop, CNC machines, and flow forming machines in the Workshops. Treated water from the sewage treatment plant is also utilized for gardening purposes within the premises.

Internal audits and surveillance audits are conducted at regular intervals by certification bodies for all units. The disposal of solid and hazardous waste is carried out through certified agencies, and environmental parameters, including ambient air quality, stack quality of DG sets/venturi scrubbers, sewage treatment plants, effluent treatment plants, and noise levels, are tested as per specified frequencies. Additionally, water quantity is monitored using separate water meters, and also electricity consumption is monitored to comply with consent conditions.

By implementing these measures, your company demonstrates its commitment to environmental sustainability and compliance with environmental regulations.

Celebration of WORLD ENVIRONMENT DAY - 2022:

World Environment Day 2022 was celebrated with great enthusiasm at all the units of BDL. To mark the occasion, banners highlighting the importance of environmental conservation were displayed at prominent locations, and saplings were planted on June 6, 2022. Slogan, essay writing, and quiz competitions were organized, focusing on the theme “Only One Earth - Care and Conserve," which emphasizes the need to live sustainably in harmony with nature. Prizes were awarded to the winners during the valedictory function.

As part of the celebrations, Dr. G.V Ramanjaneyulu, Executive Director from the Centre for Sustainable Agriculture, delivered a guest lecture. The lecture covered various topics related to environmental awareness, such as environment and sustainable agriculture, organic and natural farming practices, building community marketing systems that connect farmer cooperatives directly with consumers, the relationship between food and the environment, climate change emergencies, and managing productive resources.

The celebration of World Environment Day served as a platform to raise awareness about environmental issues and promote sustainable practices, with a focus on preserving and protecting our planet for future generations

21. QUALITY:

All production divisions/units including Akash, CP-IGMP, Design & Engineering, Electronics Division of Kanchanbagh Unit, Bhanur, and Visakhapatnam Units are certified with AS 9100D, an aerospace quality management system standard. Kanchanbagh, Bhanur, and Visakhapatnam Units are also certified with ISO 14001:2015 (EMS), which is an environmental management system standard. The Corporate Office is certified with ISO 9001:2015 (QMS), which focuses on quality management systems. The Material Testing Lab, Electronics Lab, and Standard Labs are certified with ISO/IEC 17025:2017, which pertains to the competence of testing and calibration laboratories. The Electronics Division is certified with AFQMS (Air Force Quality Management System). Furthermore, BDL holds the ISO/IEC 27001:2013 certification for information security management systems (ISMS).

Internal audits for all ISO/AS certified divisions are conducted by the company’s own internal auditors, while surveillance audits are carried out by certification bodies as per the prescribed frequency. Akash Division of the Kanchanbagh unit has recently been re-certified with the Aerospace standard (AS9100:2016) by M/s Novo Star Management Systems Solutions India Pvt. Ltd., Bengaluru.

In addition to these certifications, your company is committed to continuously improving customer satisfaction through customer meets and interactions with users. Corrective actions are implemented wherever necessary to drive improvement in processes and meet customer expectations.

22. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

Implementation of the Official Language (OL) Act-1963 (as amended 1967) and its rules are strictly followed by the company. Quarterly OLIC (Official Language Implementation Committee) meetings are regularly held under the Chairmanship of the CMD and Directors, and quarterly progress reports on the use of the official language are submitted to the relevant authorities.

In compliance with the OL Act and Presidential Orders, all papers presented before the Parliament, the Annual Report of the Company, MoU with MoD, and briefs for various Parliamentary Committees and delegations are prepared in bilingual form and submitted.

The First Sub-Committee of the Parliamentary Committee on Official Language inspected and reviewed the OL implementation in BDL-Bhanur Unit on 12th November 2022. The committee, headed by Ramchandra Jangada, appreciated BDL’s efforts in implementing the OL.

Inspections on OL implementation in the Bhanur Unit were conducted by the Assistant Director (OL) and Senior Translation Officer from the DDP, MoD on 19th October 2022. The reports received acknowledged the efforts made by BDL.

Hindi Fortnight was celebrated from 14th to 27th September 2022 at the Corporate Office and its units. Various competitions were conducted during the fortnight for the officers and employees of the Corporate Office, Kanchanbagh Unit, Bhanur Unit, and Visakhapatnam Unit. The valedictory program of the Hindi Fortnight was conducted on 27th September 2022 under the chairmanship of the CMD, BDL. Cash awards were presented to the competition winners, as well as to officers and employees who made significant contributions in Hindi throughout the year

The Town Official Language Implementation Committee of PSUs (TOLIC), Hyderabad, which consists of 48 member offices, was honored with the “Kshetriya Rajbhasha Puraskar” under Region ‘C’ for best implementation of the official language for the years 2020-21 and 2021-22. The award, which includes the “Rajbhasha Shield,” was received by Shri P Radhakrishna, Director (Production), BDL, on behalf of the CMD, BDL and Chairman of TOLIC (U). Shri Homnidhi Sharma, Dy. General Manager (HR-OL) and Member Secretary of TOLIC (U), also received a certificate of merit for his outstanding contribution.

KSHETRIYA RAJBHASHA PURASKAR

BDL is assigned with the functioning of TOLIC (U) with 48 member offices. Regular half-yearly meetings are organized in May and October. During these meetings, the 19th issue of ‘PATHIK,¹ the house journal of the committee, was released, and TOLIC Shield/Trophy/Cup and Best Magazine awards for the year 2021-22 were presented. The meetings were chaired by the CMD of BDL and Chairman of TOLIC (U).

Under the auspices of TOLIC (U), an orientation program on OL was organized for office heads, administrative heads, Hindi officers, and staff members of member offices on 24th December 2022. A joint Hindi workshop for small member offices of the Town Official Language Implementation Committee was organized on 20th January 2023. Additionally, a special online lecture on “^qis ^ W IR

Dr. Shrinarayana Singh, a retired director.

On the occasion of the visit of the Hon''ble Raksha Mantri to BDL-Bhanur Unit on 2nd July 2022, all product literature, promotional material, and banners were prepared and made available in bilingual form. Shri Homnidhi Sharma, DGM (HR-OL), served as the master of ceremonies for the programme. During Republic Day, Independence Day celebrations, Vigilance Awareness Week, Swachhata Pakhawada, and Constitution Day, the CMD of the organization addressed the audience in both Hindi and English, and the pledge was taken in both languages.

The company''s website in Hindi is regularly updated in compliance with the directives of the Government of India. Officers and employees of the organization participate in Inter PSU Competitions conducted by TOLIC (U) and have won six prizes.

To promote and propagate Hindi and encourage reading habits among the officers and employees, various Hindi magazines and newspapers are regularly subscribed to, and popular Hindi books on all subjects are purchased annually, as per the directives of the Department of Official Language (DOL).

23 VIGILANCE:

23.1 Preventive/ proactive vigilance has been the primary objective of Vigilance Department of the Company. As a part of its proactive vigilance measure, the department has issued 25 Systemic Improvement Suggestions in the areas of e-reverse auction, Recruitment, Departmental Promotion, Reservation, Sensitive Area Rotation, Civil works and Service Contracts, Township Administration etc. and of which many have been implemented by the Management during the year under report. Brief of all the Systemic Improvements have been hosted on BDL website https://bdl-india.in.

23.2 In furtherance of its preventive vigilance approach, as directed by Hon’ble CVC for institutionalization of preventive vigilance module in PSUs, a 15 days ‘mid-career training program’ for executives spanning three weeks in the mid-management level has been incorporated into the training calendar of the company for the year under report. A part of this, two batches of executives (each batch consisting 40) have been trained in areas of Preventive Vigilance, Financial Management, Strategic Management, Human Resources, Negotiation Skills, Data Analysis, Preventive Vigilance and Outbound Model Village visit among others.

23.3 Being an extended arm of the Central Vigilance Commission (CVC), New Delhi, the department has submitted Various reports (e.g. Monthly, Quarterly, Annual & CTE Type) to the Commission and also to Ministry of Defence and to the Board of the Company. The Department has also issued vigilance clearances to employees in cases of Recruitment, Promotion, Absorption, Confirmation, Foreign visits, for postings in sensitive areas etc. The department has also accorded priority in handling the complaints as per the complaint handling policy of the CVC.

23.4 Observation of Vigilance Awareness Week is an integral part of the Vigilance department. As directed by the Central

Vigilance Commission, Vigilance Awareness Week (VAW)-2022 with the theme “^T^iMk ^TTffi;

Corruption-free India for a Developed Nation” was observed across units of Bharat Dynamics Limited from 31.10.2022 to 06.11.2022. The observance of VAW-2022 commenced with Director(Production) Shri.P.Radhakrishna administering ‘integrity pledge for citizens’ at 11 AM on 31.10.2022 at Corporate Office. Employees of Kanchanbagh Unit, Bhanur Unit, Visakhapatnam Unit and Ibrahimpatnam Unit participated in the ceremony through video-conference and took integrity pledge. This was followed by reading out messages of Hon’ble President of India, Hon’ble Vice-President of India, Hon’ble Prime Minister of India by Directors and message of CVC by CVO to the august gathering. The program was live across units of the Company through video conference. A total of 2725 employees of BDL have taken the Integrity Pledge during observance of vigilance awareness week.

23.5 In order to create awareness on vigilance and the importance of it in day-to-day life, various competitions such as Essay Writing, Elocution, Slogan Writing, Poster/Collage making on issues relating to Anti-corruption were conducted in online mode for employees, spouse and children of employees during the Vigilance Awareness Week-2022.

23.6 As a part of Vigilance Awareness Week - 2022, Sensitization programs for employees on matters relating to the Role of

CVC, CVO and Vigilance, Complaint Policy of CVC, Disciplinary Proceedings procedure and procurement procedure etc. were conducted across units of the company during the Vigilance Awareness Week-2022. To spread awareness on the theme of “W^T^TT Corruption-free India for a Developed Nation” and to sensitize employees

of BDL and public at large, banners on the theme were displayed at conspicuous places across units of the Company and in public places too. To promote citizens to take CVC ‘e-integrity pledge, a link of CVC website was hosted in the BDL website. Short telephonic messages were sent to all employees encouraging to be a part of “Vigilance Awareness Week-2022” and to take integrity pledge clicking the link http://pledge.cvc.nic.in

23.7 In order to spread awareness about the ill-effect of corruption on society and the importance of self-reliance & integrity in life, a Gram Sabha was conducted on 02.11.2022 at Yadgarpally Village, Keesara Mandal, Telangana wherein 300 citizens including farmers, workers of MGNREGA, women, school students were present. Dr. Upender Vennam, CVO administered ‘integrity pledge for citizens’ to the gathering in Telugu language and spoke about the importance of observance of Vigilance Awareness Week. Village Sarpanch, Shri P. Raju spoke on this occasion and emphasized on the responsibility of citizens towards nation building. Other Gram Panchayat members present in the Gram Sabha also addressed the gathering. A Skit with anti-corruption message was organized during the event.

23.8 A Vendor Meet was organized by Corporate Commercial Dept. of BDL on 01.11.2022 at Bhanur Unit, wherein, vendors from across India were invited to be a part of business prospects of BDL and more than 175 vendors were participated. Shri P Radhakrishna, Director (Production) inaugurated the meet and spoke on the importance of contribution of vendors in the success of BDL. Company’s Independent External Monitors Shri J K Khanna, IPS (Retd.) and Shri A Seshagiri Rao, IRSSE (Retd.) participated in the meet through video-conferencing and addressed the gathering. On this occasion, CVO, Dr. Upender Vennam administered ‘integrity pledge for citizens’ to vendors and emphasized on Multiple Vendor Development to reduce dependency, increase competitiveness and to ensure transparency and accountability. ED (Head-Bhanur Unit), GM (VU), GM (Head-KBU), GM (TSD & REF) were present in the meet and addressed the gathering. An online vendor payment module was also launched by Director (Production) during the meet.

23.9 A Walkathon was organized by Bhanur Unit at Bulkapur village on 01.11.2022 to spread the messages to public on anticorruption. CVO, Dr. Upender Vennam and Cmde G R Pradhan (Retd.), ED (Bhanur Unit) flagged off the walkathon at Bulkapur along with village representatives and participated in the walkathon. A Grama sabha was organized in the village and public were apprised of the need to ensure integrity in their day-to-day life. Placards and banners with slogans on ill-effects of corruption were displayed.

23.10 The observance of Vigilance Awareness Week-2022 concluded with a valedictory function organized on 07.11.2022 at Kanchanbagh Unit of the Company. Shri Mahesh Bhagwat, IPS, Commissioner of Police, Rachakonda Police Commissionerate, Telangana graced the occasion as Chief Guest and delivered a key note address to the employees. Shri Mahesh Bhagwat shared his experience with the audience and emphasized on how un-checked corrupt activities ruin entire country. The program was attended by Directors, CVO and other senior executives. The dignitaries motivated the employees to practice ethical behavior at all times and contribute towards Organization and Nation building.

24. ANTI-BRIBERY AND ANTI-CORRUPTION POLICY:

Your company has zero tolerance approach to bribery and corruption. Your company prohibits all forms of bribery and corruption whether involving, but not limited to Government Officials or a Private Sector persons or Company and whether directly or indirectly. The Board of Directors had approved a policy on Anti-Bribery and Anti-Corruption and the same was hosted on website of the Company https://bdl-india.in/sites/default/files/2023-01/2023-02/ACAB%20Policy.pdf

25. BOARD OF DIRECTORS:

25.1 The Board of Directors of the Company comprises Functional Directors, Government Nominee Directors and Independent Directors (i.e Non Official Part Time Directors) who are appointed by the Government of India from time to time. Further, the tenure and remuneration of Functional Directors including Chairman and Managing Director are decided by the Government of India through Public Enterprises Selection Board/Search Committee. The Government communication also indicates the detailed terms and conditions of their appointment including a provision for the applicability of the relevant rules of the Company.

25.2 The Government Nominee Directors are not entitled to any remuneration/sitting fee. The Independent Directors (i.e. Non Official Part Time Directors) are entitled to sitting fees for attending the Board/Committee meetings as approved by the Board, in line with the government directives, statutory acts, rules and regulations.

25.3 Independent Directors (i.e. Non Official Part Time Directors)

The Ministry of Defence, Government of India vide its letter No. No.DDP-M0001(11)/1/2018/D(BDL) dated 24.02.2023 appointed one new Independent Director viz., Shri. Jashwant Lal as Part-time Non-Official Directors w.e.f 24 February 2023 for a period of three years or until further orders whichever is the earliest.

Statement on declaration by independent Directors:

Independent Directors have given declarations u/s 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down u/s 149 (6) of the said Act.

25.4 During the year, the Ministry of Defence, Department of Defence Production, Government of India, through its Office Memorandum No.8 (32)/2019-D (Coord/DDP) dated 14.09.2022, appointed Shri. Anurag Bajpai, JS (DIP), as the PartTime Official Director (Government Director) on the Board of the Company, replacing Shri. Chandraker Bharti. The Board acknowledges and appreciates the valuable contributions made by Shri. Chandraker Bharti during his tenure.

25.5 During the year, Shri. N.P Diwakar, Director (Technical), superannuated on 31 August 2022, and his term as Director on the Board of BDL concluded upon his superannuation. The Board expresses its gratitude for the valuable contributions made by him during his tenure. The Ministry of Defence, Department of Defence Production, Government of India, through its Office Memorandum No.DDP-M0001(11)/04/2021-D(BDL) Pt.1 dated 29.12.2022, appointed Cmde A. Madhavarao as Director (Technical) in place of Shri. N.P. Diwakar. Cmde. A. Madhavarao assumed the position of Director (Technical) with effect from 02 January 2023.

25.6 Cmde.Siddharth Mishra, Chairman & Managing Director, superannuated on 31 March 2023, and his term as Director on the Board of BDL concluded upon his superannuation. The Ministry of Defence, Department of Defence Production, Government of India, through its Office Memorandum No.M0001(24)/1/2022-D(BDL) dated 31.03.2023, assigned the additional charge of CMD, BDL to Shri. P. Radhakrishna, Director (Production) w.e.f 01 April 2023 to 30 June 2023. The Board expresses its appreciation for the valuable contributions made by Cmde. Siddharth Mishra during his tenure.

25.7 In accordance with the provisions of Section 152 of the Companies Act, Shri. N. Srinivasulu, Director (Finance), retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment.

25.8 Number of Meetings of Board:

During the year 2022-23, Six (6) Board Meetings were held on 26 May 2022, 12 August 2022, 26 September 2022, 11 November 2022, 07 February 2023 and 31 March 2023.

25.7 Performance evaluation:

The provisions of Section 134(3)(p) of the Companies Act, 2013 relating to evaluation of Board of Directors do not apply to your Company since necessary exemptions are provided to all government companies. Further, similar exemptions were granted to your Company by Securities Exchange Board of India (SEBI) under the provisions of SEBI (Listing Obligations and Disclosure Requirements {LODR}) Regulations, 2015 vide their letter No. SEBI/HO/CFD/DIL1/OW/P/2018/1679/1 dated January 17, 2018.

26. directors’ responsibility statement:

As per Section 134(3)(C) and 134(5) of the Companies Act, 2013 as amended, the Directors state that:

(i) In the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

(ii) The Directors had selected such accounting policies and applied them consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2023 and of the profit of the Company for the year ended on that date.

(iii) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) Directors have prepared the annual accounts on a going concern basis.

(v) Directors have laid down internal financial controls which are being followed by the Company and that such internal financial controls were adequate and operating effectively and

(vi) 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.

27. SIGNIFICANT AND MATERIAL ORDERS:

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.

28. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

Material changes and commitments affecting the financial position of the company which have occurred between 31 March 2023 and date of signing of this Report are - Nil.

29. AUDIT COMMITTEE:

During the year 2022-23, Four Audit Committee meetings were held to review internal control systems and their adequacy, including coverage of Audit functions. Details of composition, terms of reference, etc., are covered in Report on Corporate Governance.

30. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT:

30.1 Pursuant to the provisions of Section 135 of the Companies Act, 2013 and The Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications/amendments issued by Ministry of Corporate Affairs & DPE guidelines, the Company has undertaken various activities as per the CSR Policy. The programmes/initiatives/projects are taken up in line with the Schedule-VII of the Companies Act-2013, which are duly incorporated in CSR policy and forms the guiding principle for all our programmes. The Board of Directors of your Company has Board Level Committee on Corporate Social Responsibility and Sustainable Development (CSR & SD) (please refer Corporate Governance Report) in line with the provisions of Section 135 of the Companies Act, 2013. The Committee has formulated and recommended CSR Policy to the Board indicating the projects/activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013.

30.2 Your Company has been very conscious about its responsibilities towards society. Your Company has also ventured into backward/ under developed areas in Andhra Pradesh and Telangana to undertake Corporate Social Responsibility (CSR) activities by sponsoring various schemes.

30.3 The core areas of focus under CSR are Health Care, Nutrition, Education & Literacy, Skill Development & Sustainable Livelihoods, Sanitation, Safe Drinking Water etc. Your company also adopted villages in Andhra Pradesh and Telangana State under Corporate Social Responsibility initiative and the focus is on the necessities of human life-health, water and other conveniences.

30.4 The CSR and SD activities are monitored periodically by the Committee and a detailed annual report on CSR and SD activities undertaken during the year 2022-23 is enclosed as Annexure-I.

30.5 During the year 2022-23, the CSR & SD obligation was ^1212.14 lakh. Against the target, the company has incurred an expenditure of 1:1319.32 lakh and achieved 100% CSR target amount required under the provisions of Companies Act, 2013. CSR activities being undertaken are placed on Company’s website https://bdl-india.in/sites/default/files/2022-09/ CSR.pdf

31. RISK MANAGEMENT:

The Company has a Board approved Risk Management Policy. The policy aims at elimination or reduction of risk exposures through identification and analysis of various types of risks and facilitating timely action for taking risk mitigation measures. The policy envisages that all programs, project reviews will highlight the progress of risk mitigation plans till the closure and signing off the mitigation plans.

Pursuant to the Reg. 21 of SEBI (LODR) Regulations, 2015, the Company has constituted a Risk Management Committee. The details of Committee and its terms of reference, Risk Management Policy etc. are set out in the Corporate Governance Report.

32. ANNUAL RETURN:

In accordance with the provisions of the Companies Act, 2013, Annual Return of the Company for the year under report is available on the Company’s website https://bdl-india.in/annual-reports

33. RELATED PARTY TRANSACTIONS:

There are no materially significant related party transactions during the year under review which may have a potential conflict with the interest of the Company at large. Thus, disclosure in Form AOC-2 is not required. Members may refer to the notes to the accounts for details of related party transactions.

The policy for related party transaction has been uploaded on the Company’s website https://bdl-india.in/sites/default/ files/2023-06/Policy%20on%20Related%20Party%20Transactions.pdf

34. PARTiCULARS OF LOANS, GUARANTEES OR iNVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement

35. iNTERNAL CONTROL SYSTEMS:

Your Company had put in place all required internal controls and systems to meet the canons of financial propriety. External audit firms are appointed to ensure their adequacy and report thereon. Detailed analysis of reports of Internal Audit Firms as well as reports of Internal Audit Department of your Company is placed before the Audit Committee for its review and advice. The adequacy of internal control procedures are reviewed and reported by Statutory Auditors in their Audit Report. The necessary disclosures have been made in Notes to Accounts. Your Company being a Government Company is subject to Government Audit also.

36. AUDITORS:Statutory Auditor:

M/s.G.Natesan & Co., Chartered Accountants, Hyderabad were appointed as Statutory Auditors of the Company for the financial Year 2022-23 by the Comptroller & Auditor General of India. The Auditors have audited the Accounts and does not contain any qualification, reservation or adverse remarks

The Auditors’ Report on the financial statements for the financial year 2022-23 and the Comments of Comptroller and Auditor General of India (C&AG) under Section 143 (6) of the Companies Act, 2013 are appended to the Annual Report.

Cost Auditor:

Your Company appointed M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad as Cost Auditors for the FY 2022-23 for the audit of the cost records of the Company. The Company maintains cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of its manufacturing activities.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), the Company has appointed M/s.Narender & Associates, Practicing Company Secretaries (PCS Registration No.5024) for the financial year 2022-23 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is enclosed as Annexure-ii.

37. CEO / CFO CERTIFICATION:

As per the requirements of SEBI Listing Regulations and DPE Guidelines, the CEO/CFO certificate has been obtained and placed before the Audit Committee and the Board.

38. REPORTING OF FRAUDS BY AUDITORS:

During the year, neither the Statutory Auditor nor the Secretarial Auditor have reported to the Audit Committee/Board under Section 143(2) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees, the details of which needs to be mentioned in the Board’s Report.

39. Management DISCUSSION AND ANALYSIS Report:

Management Discussion and Analysis Report required under the SEBI (LODR) Regulations, 2015 and also under the DPE Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs), is attached to this Report as Annexure III.

40. CORPORATE GOVERNANCE:

40.1 Corporate Governance is about application of best management practices, compliance of laws and adherence to ethical standards to achieve Company’s objective of enhancing stakeholders’ value and discharge of social responsibility.

40.2 The Company has a well-established, transparent and fair administrative set up to provide for professionalism and accountability.

40.3 As per the guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8)/2005-GM, dated 14 May 2010 and in terms of the SEBI (LODR) Regulations, 2015, Report on Corporate Governance along with Certificate on compliance of conditions on Corporate Governance from a Practicing Company Secretary are attached to this report as Annexure-IV.

40.4 Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to Stock Exchanges and MoD in the prescribed format. Your Company received “Excellent” rating from MoD for compliance of Corporate Governance under DPE Guidelines for the year 2022-23.

41. DISCLOSURE UNDER THE SEXUAL HARASSMENT Of WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified in the Company. In line with the Guidelines received from time to time, necessary actions have been taken to prevent Sexual Harassment of Women at Workplace. The BDL CDA Rules applicable to Officers and the Certified Standing Orders applicable to Workmen have the required provisions in this regard. The Internal Complaints Committees as per Section 4 of the Act have been put in place. During the year 2022-23, your Company has not received any Sexual harassment complaints.

42. COMPLIANCE UNDER The Right TO INFORMATION ACT, 2005:

The information required to be provided to citizens under Section 4(1)(b)of Right to Information Act, 2005 is placed on Company’s Website https://bdl-india.in/sites/default/files/2023-05/Information%20on%20BDL%20Mandatory%20disclosures%20in%20 Accordance%20with%20RTI%20May%202023.pdf. It contains general information of the Company, functions, powers and duties of employees/officers, decisions making process, rules, regulations, manuals and records held by the Company, directory of the Company’s Officers, pay scales of officers/ employees and procedure for seeking information and inspection of records. The Company has nominated a Central Public Information Officer of Senior Manager Level to attend to queries and appeals. Further, during the year 2022-23 Company received 190 applications/queries, out of which 188 applications are disposed-off expect for 2 (Two) RTI queries which are under process. Further 18 appeals are received and disposed-off by Final Appellate Authority.

43. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Pursuant to the provisions of the Section 177(9) of the Companies Act, 2013 read with Rule (7) of the Companies (Meeting of the Board & its Power) Rules, 2014 (as amended) and DPE Guidelines for CPSEs, the Board of Directors had approved the policy on Whistleblower/Vigil Mechanism and the same was hosted on website of the Company https://bdl-india.in/sites/default/ files/2020-01/Whistle%20blower%20Policy%20%26%20Vigil%20Mechanism_0.pdf. The policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Employees are encouraged to raise any of their concerns by way of whistle blowing and none of the employees have been denied access to the Audit Committee.

44. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

The Securities and Exchange Board of India (SEBI) has mandated inclusion of Business Responsibility and Sustainability Report (“BRSR report”) as part of the Annual Report based on market capitalization. In terms of amendment to regulation 34 (2) (f) of LODR Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021, SEBI has introduce new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR).

Your Company has prepared a comprehensive policy framework for BRSR report, after studying the SEBI (LODR) Regulations, 2015 requirements and keeping in view the business and governance environment in which BDL as a Defence PSU operates. The Company’s BRSR report for the financial year 2022-23 is appended to the Annual Report.

45. DIVIDEND DISTRIBUTION POLICY:

In terms of SEBI (LODR) Regulations,2015 (as amended), dividend distribution policy has been adopted by your company to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining the profit into the business. The policy is available on the BDL’s website https://bdl-india.in/ sites/default/files/2020-01/Dividend%20Distribution%20Policy_0.pdf

46. ACKNOWLEDGEMENT:

46.1 Your Directors gratefully acknowledge and express their appreciation for the cooperation extended and guidance provided by various Government Agencies, including the Ministry of Defence, DPSUs, Department of Defence Production, DRDO Laboratories, Central Government Departments, State Governments of Telangana and Andhra Pradesh, Quality Assurance Agencies of the Government of India, and other PSUs. Their support has been invaluable to the Company, and your Directors are grateful for the assistance received from them on various occasions.

46.2 The Company would like to extend its sincere appreciation to the Comptroller & Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Statutory Auditors, Bankers, and Suppliers for their cooperation, support, and guidance. Their contributions have been instrumental in ensuring the smooth functioning and financial integrity of the Company.

46.3 The Directors take this opportunity to express their deep appreciation for the valuable contributions and cooperation of the employees at all levels. Their dedication, hard work, and commitment have played a crucial role in propelling the Company to greater heights and sustaining its growth trajectory. The Directors recognize and acknowledge the employees’ efforts and extend their gratitude for their continued support in the future.

For and on behalf of the BoardP Radhakrishna Director (Production) &

Place : Hyderabad Chairman & Managing Director (Addl. Charge)

Date : 25 May 2023 DIN: 08437975

---

Mar 31, 2022

Your Directors present the 52^nd Annual Report together with the audited financial statements of the Company forthe year ended 31 March 2022.

1. HIGHLIGHTS OF OPERATIONS:

• Your Company has achieved sales turnover of ?2817 Crore during the fiscal year and registered a strong recovery of about 47.18% jump in turnover over that of previous year.

• Your Company has proposed to establish its new Production Unit at Jhansi, UP Defence Corridor and its foundation plaque was digitally unveiled by Hon''ble Prime Minister of India on 19 November 2021. The new Unit will be used for manufacturing of Propulsion Systems for all Anti-Tank Guided Missiles (ATGMs) and futuristic missiles manufactured by the Company.

• During the year, Konkurs - M, Anti-Tank Guided Missiles Order has been executed completely. Further, your Company has signed a new contract with Indian Army for manufacture and supply of Konkurs-M Missile worth about ?3131.82 Crore. The order has to be executed in next three years.

• Your Company has received first refurbishment order worth about ?471.41 Crore from Indian Army. After the refurbishment, a fresh lease of life will be given to the missile for a period often years.

• A new version of Akash Missile has been successfully test fired. The missile intercepted and destroyed an unmanned aerial target mimicking enemy aircrafts. Your Company is involved in integrating and testing the missiles.

• DGQA, Govt, of India has accorded "Green Channel Certification" to your Company for Konkur-M Launcher spares, providing more thrustto self-certification under "Make in India".

2. FINANCIAL RESULTS AND PERFORMANCE HIGHLIGHTS :

2.1 Performance of the Company in financial terms is summarized below:

	Particulars	?in Crore 2021-22 2020-21		% of lncrease/(Decrease)
	Sales/Revenue from Operations	2817	1914	47.18
	Value of Production	2902	2043	42.00
	i) Import Material Consumed	271	277	(2.16)
	ii) Indigenous Material Consumed	992	693	43.19
	Total Material Consumed	1263	970	30.23
	Value Added	1639	1073	52.66
	Profit Before Tax	710	341	108.21
	Profit After Tax	500	258	93.80
	Earnings per share# (in Rupee)	27.28	14.06	94.03
	# EPS has been calculated based on profits excluding the other comprehensive income. * Figures have been reclassified and regrouped.
2.2	Following data reflect the financial position of the Company:
	Particulars	? in Crore 2021-22 2020-21		% of Increase/ (Decrease)
	Gross Block (Excl. CWIP)	1451	1369	5.99
	Accumulated Depreciation	577	454	27.09
	Net Block	874	915	(4.49)
	Working Capital (Net)	2942	2378	23.72
	Capital Employed	2973	2637	12.76
	Net Worth	3031	2685	12.89

2.3 COVID-19: The supply chain disruptions due to COVID-19 pandemic had adversely impacted the production and sales during the first two quarters of the financial year 2021-22 and preceding financial year. Your Company''s manufacturing activities have come to normalcy post easing of restrictions and improved mobility and with the vaccination drive picking up the momentum. The supplies are back in track and required input materials are also being received in time. The FY 2021-2022, being the second year of the COIVID-19 pandemic, the Company has considered internal and external sources of information up to the date of approval of these financial statements in evaluating possible effects that may result from the pandemic on the carrying amounts of trade and unbilled receivables, investments, goodwill and intangible assets. The Company is confident about the recoverability of these assets.

2.4 During the year under review, your Company has achieved revenue from operations of ?2817 Crore as against the revenues of ?1914 Crore of previous year. Your Company has recovered very well post Covid pandemic and registered a growth of 47.18% over the previous year. Though there are some technical issues, your Company has come up well by resolving one by one and achieved turnover of ?2817 Crore and production of ?2902 Crore. This is a good jump as compared to last year and we expect that this growth momentum to continue for the current financial year also. Your Company has achieved the profit before tax (PBT) of ?710 Crore as against ?341 Crore of previous, marking a remarkable comeback post Covid. The profit after tax stood at ?500 Crore as against ?258 Crore of previous year. The profit margins are also improved significantly due to increase in operational efficiency, manufacturing activities and changes in product-mix.

Impact of Russia-Ukraine War:

During the year, your Company did not have any impact on account of Russia-Ukraine war and further do not envisage any major impact in the financial year 2022-23.

Impairment Loss- Exceptional item:

Your Company has acquired 553 Acres 34 Guntas at Amravati on lease basis for one of its projects. One of the main condition is, if the factory building and works are not completed within 60 months from the date of allotment, unless the time is extended, the lease agreement may be cancelled and the lessor may take possession of the leasehold land together with all the erections, if any, on the said land, without paying compensation to the company. The period of extension was last extended upto 5th April 2019. As the project for which land was acquired is yet to be received from Gol, your company could not commence / complete the activities envisaged in the lease agreement. Explaining the force majeure condition your company represented to the state government for condonation of delay and extension of time. Pending receipt of extension of time period, your company has provided for impairment amounting to ?3358.57 lakh during 2021-22.

2.5 The major products executed during the year are ATGMs, Akash-SAM, Varunastra and MR-SAM. The order book position of the Company as on 01 April 2022 is about ?10170 Crore comprising mainly of various defence products.

3. FIXED DEPOSITS FROM PUBLIC:

The Company did not accept any fixed deposits from Public during the year, and there was no outstanding Fixed Deposits at the beginning/end of the year. Accordingly, there was no default in payment of deposits/interest thereon.

4. DIVIDEND&TRANSFERTO GENERAL RESERVE:

Your Company has a consistent track record of Dividend Payment. The Board has recommended a Final Dividend of ?1 /-per equity share of ?10/-each amounting to ?18.33 Crore for the year 2021-22. Further, your Company has paid interim dividend of ?7.30 per share amounting to ?133.80 Crore in February, 2022. An amount of ?400 Crore is being transferred to General Reserve for the year 2021-22.

5. CAPITALSTRUCTURE:

The paid up capital of the Company as on 31st March, 2022 stood at ?183.28 Crore (18,32,81,250 equity shares of ?10/- each). The Authorized Capital of the Company is ?200 Crore (20,00,00,000 equity shares of ?10/- each) as on 31st March 2022.

As on 31 March 2022, the Govt, of India shareholding in the Company stands at 74.93% (representing 137,325,527 equity shares of?10/-each).

6. PERFORMANCE AGAINST MoU:

Your Company signs a Memorandum of Understanding (MoU) every year with the Ministry of Defence, Government of India. The performance of the Company for the year 2020-21 was rated as "Good" and the performance for the year 2021-22 is under evaluation.

7. MODERNIZATION, UPGRADATION AND INDIGENIZATION:

7.1 During the year, an amount of ?103 Crore has been spent on Capital Expenditure (CAPEX) programme towards modernization of Plant & Machinery and other infrastructure development. During the year under review, your Company has taken initiative to establish war head manufacturing facility, RF seeker facility, High Temperature Carbon Composite Manufacturing facility and implementation of Industry 4.0. New facilities like SMD line and High Computing facilities have also been set up.

7.2 Your Company is putting up determined efforts towards increasing Indigenisation contents in the manufacture of ATGMs, SAMs and Torpedoes with the objective of the increasing self-reliance, reduction of imports. Indigenisation of products like Konkurs-M, Invar, Milan-2T, Akash, TAL-XP and Varunastra has been achieved up to 96.3%, 87.9%, 71%, 96%, 91% and 86% respectively.

8. RESEARCH & DEVELOPMENT:

8.1 Your Company recognizes that Research and Development (R&D) is a thrust area for the growth of the organization. Your Company has identified various products to meet the requirements of Indian Armed Forces. The major R&D achievements of your Company during the year are as given below:

Counter Measures Dispensing System (CM DS) for C-295 Aircraft:

Your Company has signed a contract with M/s Airbus Defence and Space, Spain on 17th Nov, 2021 for development and supply of CMDS for C-295 Aircraft. CMDS is an airborne defensive system to provide selfprotection to the aircraft by dispensing chaffs and/or flares to defeat radar-guided or heat-seeking missiles. CMDS for first two ship sets will be developed and delivered by December 2022.

8.2 The following table shows the recent trend in in-house R&D expenditure:

(?in Crore)
Particulars	2021-22	2020-21	2019-20
Sales Turnover (Gross)	2817.40	1913.76	3104.87
R&D expenditure	48.14	42.95	73.87
R&D expenditure as % of Sales Turnover	1.71%	2.24%	2.38%
PBT	709.91	340.88	742.45
R&D expenditure as % of PBT	6.78%	12.60%	9.95%

9. PROCUREMENT FROM MSMEs

9.1 In line with the Procurement Policy of Government of India, Your Company has achieved more than mandated procurement of 25% from MSMEs. During the year 2021-22, your Company has procured 29.72% of goods & services worth about? 522.99 Crore from MSMEs out of its total procurement of? 1759.52 Crore and achieved mandated target of 25% from MSMEs.

9.2 Vendor Development:

Your Company strives to increase vendor base through conducting special drives and also by providing free registration in certain cases. The vendor registration process has also been simplified to facilitate new vendors registration. A total of 8 vendor meets have been conducted in the year 2021-22. Your Company has over 1000 registered vendors on its rolls as on date. Further, your Company also put in place updated Integrity Pact as per the directives of Central Vigilance Commission latest circular issued on 25 January 2022 and follows the Standard Operating Procedure contained therein.

9.3 Government e Market Place (GeM):

Your Company is registered with Government e-Market Place (GeM) as a Buyer and Seller. All common items/services are being procured through GeM. During the year, your Company has procured Common goods/services worth about ?92 Crore through GeM.

Senior Executives and Directors participated in National and International Exhibitions during the Year 2021-22.

11.1 Your Company has given thrust on export of Weapon Systems. Ministry has created lot of opportunities for export market and accordingly your Company has bagged five export orders till date towards export of Light Weight Torpedoes to a friendly foreign Country through a private channel partner. Out of five, four export orders were already supplied and fifth order is under execution and will be completed as per the contract terms. Your Company also bagged another export order for supply of CM DS to Airbus, Spain. Currently, the total export orders under execution is about ?349 Crore. The Company is looking at capacity enhancement by modernization to help further exports.

11.2 Your Company has been in regular interaction with overseas customers for achieving its export targets. Offset implementation also offers a major opportunity to achieve export targets. Your company is regularly interacting with aero-space and defence majors in Europe and Russia to seize opportunities arising out of offsets. Recently Cabinet Committee on Security (CCS) also accorded clearance for export of Akash Weapon Systems to nine countries. Your Company has received leads for export of Akash Weapon Systems to friendly foreign countries, which is expected to be materialized in next one or two years. Your Company is also executing projects like Heavy Weight Torpedo, CMDS, ATGMs, Air to Air Missiles, Air to Surface weapons under the MAKE IN INDIA category, which will cater to the export market in addition to the requirements of Indian Armed Forces.

12. ATMA NIRBHAR BHARAT & INDEGINISATION:

12.1 Your Company has been focusing on indigenizing the technology for self-reliance from the day contract is signed. Your Company manufactures missiles under Technology of Transfer (ToT) from DRDO and from Foreign OEMs (Original Equipment Manufacturers). In the case of Foreign OEMs designed products, the Technology Transfer was only 63%, but yourCompany through its Indigenization initiatives, has achieved Indigenization levels of more than 80% to 90% in most of the products. In the case of DRDO designed products, Indigenization level of more than 90% was achieved in most of the products. Your Company is putting all out efforts to achieve higher levels of indigenization for all the products. In the recent years, your Company has been outsourcing to the extent of 60% across its projects barring critical items and weapon system integration.

12.2 As a part of Atma Nirbhar Bharat, your Company has made an Indigenization Plan for the next five years and set a target of indigenization of 166 items. During the year 2021-22 all 53 items as per the target were indigenized and the value of imports was reduced to a greater extent.

12.3 AzadikaAmrutMahotsav:

Your Company has organized a Product Exhibition at Kanchanbagh unit, Hyderabad and Visakhapatnam Unit, Andhra Pradesh from 13 December to 19 December 2021 to commemorate 75 years of India''s independence as a part of "Azadi ka Am rit Mahotsav" being celebrated by the Nation.

13. MANPOWER AND RESERVATION OF POSTS FOR SCs/STs:

13.1 The Company has been following Presidential Directives of the Government with regard to reservation of posts forSCs/STs/OBCin recruitments.

13.2 Total manpower strength as on 31 March 2022 is at 2674 (including four functional directors). Of the total strength, 87 are ex-servicemen, 529 are of Schedule Caste, 208 are of Scheduled Tribes and 781 are of OBC category. The percentage of Scheduled Caste and Scheduled Tribes in respect of Employees is at 19.78% and 7.78% respectively.

13.3 The No. of Scheduled Caste, Scheduled Tribes and OBC in various categories of posts as on 31 March 2022 is given below:
Category	Number of Employees Total Strength Scheduled Castes Scheduled Tribes 31-03-2022 31-03-2021 31-03-2022 31-03-2021 31-03-2022 31-03-2021								OBI 31-03-2022			1 31-03-2021
Group-A	755 794 145			151 81			82		158			160
Group-B	65 71 16			16 4			4		22			22
Group-C	1649 1682 316			316 1 109			107		527			514
Group-D	189 225 48			61 | 14			16		72			84
Temporary	12 36 4			6 1 0			2		2			9
Total	2670* 2808* 529			550 | 208			211		781			789
•excluding four functional directors. 13.4 Recruitment of employees in Scheduled Caste, Scheduled Tribes, OBC, EWS during 2021-22 is given below:
Classification of posts		Total Vacancies Released	Total Recruitment	Reservation of posts (out of Col.2)			Recruitment made during the year 2021-22						k
(1)		(2)	(3)	(4)				(5)
				SCs	STs	OBC	EWS	SCs		STs	OBC		EWS
Group-A		4		1	0	1	0	0		0	0		0
Group-B		0		0	0	0	0	0		0	0		0
Group-C		0		0	0	0	0	0		0	0		0
Group-D		0		0	0	0	0	0		0	0		0
Total		4		1	0	1	0	0		0	0		0

14. EMPLOYMENT OF WOMEN:

14.1 As perthe recommendation No.51, Para (ii)(a) of the National Commission for Women (NCW) in its Annual Report for the year 1995-96, the employment position of Women as on 31 March 2022 is given below as directed by the Ministry of Defence, vide their letter Nos. 39(6)/99/D(B&C), dated 27 August 1999.

1. EXECUTIVES
Grade	No. of Employees	Women	Percentage
1	65	10	15.38
II	84	9	10.71
III	146	24	16.44
IV	223	34	15.25
V	91	7	7.69
VI	165	14	8.48
VII	35	1	2.86
VIII	8	1	12.50
IX	3	-	-
Functional Directors	3	-	-
CMD	1	-	-
Total	824*	100	12.14
* CVO is not included in this report.

II. NON-EXECUTIVES
Grade	No. of Employees			Women		Percentage
WG-0		-		-		-
WG-1		3		-		-
WG-2		68		13		19.12
WG-3		91		13		14.29
WG-4		210		23		10.95
WG-5		274		18		6.57
WG-6		177		37		20.90
WG-7		189		28		14.81
WG-8		55		7		12.73
WG-9		47		4		8.51
WG-10		84		2		2.38
WG-11		23		-		-
WG-12		617		46		7.46
Total		1838		191		10.39
14.2 PERSONS WITH DISABILITIES (PWD) AS ON 31 MARCH 2022: The total number of Physically Challenged employees as on 31 March 2022 is 99 and its percentage to total employees works out to 3.70.%.
HI			LD	VI		Total
Group-A	6		13		5		24
Group-B	0		0		0		0
Group-C	18		40		8		66
Group-D	2		4		3		9
Total	26		57		16		99

HI- Hearing Impaired, LD-Locomotive Disability, Vl-Visually Impaired.

15. HUMAN RESOURCE DEVELOPMENT:

During the year under review, your Company has conducted training programmes for 416 Executives and 273 Non Executives to impart training on knowledge based, development oriented and on need based topics. Such training programmes were organized in-house and at premises of external agencies to cover the present and future requirements of the Company.

Apart from regular training programmes, your Company has organized the following special training programmes during the year:

i) Mid-Career Development Programme (MCDP) - A two-week Mid-Career Development Program was launched with the theme of "Abhyudaya" for Mid-Level Executives consisting of Managers, Senior Managers and Deputy General Managers, who have completed 15 years of service in the Company and has left over service more than a year.

ii) The programme focuses on overall transformation of the Executives from Operational Managers to Tactical Managers.

iii) Inline with CVC guidelines. Preventive Vigilance Module was incorporated in the Training content for two days.

iv) Sessions on Missile technology, Industry 4.0 were conducted along with Industry visit to Tata Aerospace Ltd. which is also in the process of implementing Industry 4.0.

v) Sessions on "Healthy life-style to reduce stress" and "Yoga" are conducted to encourage them to practice Yoga as part of their daily life-style to maintain a balanced body and mind for a healthy living.

vi) A total of 70 Mid-Level Executives have been trained in MCDP in two batches during the year 2021-22.

vii) On International Day of Disabled Persons, 2021, a one-day In-house Workshop with the theme of "UDAAN -Unleashing the power within" was conducted on 03 December 2021 for all PwBDs of BDL, with the Guest Speakers who are specially-abled and achievers in their own field of interest. The Workshop has helped the PwBDs to get motivation and perform even better in their duties.

viii) A total of 88 Employees (53 Women and 35 Men) have been imparted training on "Awareness Programme in POSH Act" during the year 2021-22.

16. PARTICULARS OF EMPLOYEES:

There were no employees of the Company who received remuneration in excess of the limits prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further, in accordance with Ministry of Corporate Affairs Notification No. GSR 463(E) dated June 05,2015, Government Companies are exempt from Section 197 of the Companies Act, 2013 and its rules thereof.

17. FOREIGN VISITS:

Your Company incurred an expenditure of around ? 1.72 Crore during the year under report towards foreign travel for business trips and also for on the Job-Training of personnel.

18. INDUSTRIAL RELATIONS AND EMPLOYEE WELFARE:

18.1 Your Company continues to enjoy cordial and harmonious Industrial relations with the cooperation and support of all sections of employees viz. Recognized Trade Union, Associations such as SC, ST, OBC, Ex-serviceman and Officers Association. All Statutory and Non-Statutory Committees such as Works Committee, Safety Committee, Canteen Management Committee, Welfare Committee and other participative forums have extended their co-operation to maintain discipline at all levels.

18.2 Compliance on statutory welfare provisions are followed meticulously. The Company has been taking care of medical needs of employees and their family members as per BDL Medical Rules. Further, in line with DPE guidelines, Company has framed Pension Scheme and Post-Superannuation Medical Benefit Scheme for the Executive and Non- Executive employees of the Company.

18.3 In the ongoing pandemic situation, the recognized union as well as associations are extending full support to Management in maintaining the production activities by scrupulously following all Covid protocols.

19. SECURITY:

19.1 Central Industrial Security Force (CISF) is providing Security and Fire Services in both Kanchanbagh and Bhanur Units. During the year under report, CISF has played a vital role in the Security and safeguarded the Company Property. CISF team adopted robust security measures combining physical measures with technology to keep the highly sensitive installations secure even in the pandemic covid-19 situations.

19.2 The Plant Security Council is in place to review the security arrangements and implementation of IB guidelines. Regular security review meetings are being conducted both by Management and CISF to beef up security.

19.3 As a part of security measures and to comply with the statutory governing bodies guidelines, your Company is in process of upgradation of existing Access Biometric control systems with contactless Face Recognition system suitable to thwart the ongoing pandemic Covid -19 situation, in addition to the computerized photo identity cards, to prevent any unauthorized entry. CCTV cameras have been installed all over the factory premises to cover more areas under CCTV surveillance. Door frames, metal detectors, X-Ray Baggage machines are in place. Barricades, Boom Barriers and Morchas are provided to strengthen physical security measures.

19.4 Your Company conducts regular programmes on security and safety awareness besides observing Security Week/Fire Week. Employees are sensitized on the security threat and action to be taken in case of emergency and fire accidents.

20. SAFETY:

20.1 Your Company is strictly following applicable norms to maintain Safety, Health and Environment (SHE) at BDL.The two Safety Committees i.e. Industrial Safety Committee and Explosive Safety Committee are monitoring at regular intervals to maintain Safety, Health and Environment (SHE) at BDL. The Industrial works are carried out in compliance with the Factories Act 1948, and Explosive Safety is strictly adhering to the Storage & Transport of Explosive Committee (STEC) regulations framed by Centre for Fire, Explosive & Environment Safety, (CFEES) MoD, New Delhi. The safety related issues are reviewed at regular intervals by Executive Director & Unit Head. Annual explosive safety audit is being conducted by Centre for Fire, Explosive & Environment Safety (CFEES) New Delhi and the observations made by the audit team have been complied with. Fire mock drills are conducted at regular intervals to ensure fire-fighting preparedness.

20.2 51st National Safety day was observed on 4 March 2022. On this occasion banners were displayed and Safety pledge was administered by all employees in the workplaces of concerned departments. National Safety Council also conducted a webinar on 51st National Safety Day.

20.3 As a part of induction programme to new Project Engineers & Project Officers, Safety Department has conducted a class on both Industrial & Explosive safeties. Special medical checkups are carried out for employees working in Electroplating and Canteen departments. Periodical medical checkups are also carried out for employees working in other areas by qualified medical team.

20.4 Safety Engineering Department is in continuous interaction with Inspector of Factories, Telangana, State Pollution Control Board (TSPCB) and Centre for Fire, Explosive & Environment Safety (CFEES) MoD, New Delhi to update theirguidelines for compliance.

21. ENVIRONMENT AND POLLUTION CONTROL:

21.1 All three Units of BDL i.e. Kanchanbagh, Bhanur and Visakhapatnam have been re-certified with ISO 14001:2015 (EMS). Asa part of ISO 14001_2015 (EMS) noise levels were recorded and the same was submitted to EMS- Core team and also to external auditors on 3rd to 5th March (EMS-Surveillance Audit-2022). Your Company has issued circular to curb / discourage the use of plastics. E-waste and Hazardous waste is being disposed through agency registered with Pollution Control Board. Solid Waste such as ferrous and non-ferrous metal is being disposed through M/s MSTC (A Govt, of India Undertaking), proper housekeeping is being maintained in the premises. Biomedical waste is also being disposed through agency registered with Pollution Control Board.

21.2 Your Company has implemented Zero Liquid Discharge system. Total treated water through effluent treatment plant is again treated in RO.The RO treated water is also fed to DM (Demineralized Water) plant for producing DM Water. DM Water is utilized in Electroplating Shop, CNC machines and flow forming machines in Work Shops of your Company. Total treated water from sewage treatment plant is also utilized for gardening purpose inside the premises.

21.3 For all the units, internal audits and surveillance audits are conducted by certification bodies as per frequency. The solid and hazardous waste are being disposed through certified agencies and testing of environmental parameters of Ambient Air Quality, Stack Quality of DG sets/venturi scrubbers, Sewage Treatment Plants and Effluent Treatment Plants and noise levels are done as per the specified frequency. Waste water quantity is being monitored by installing separate water meters and electricity consumption is also being monitored as per the requirement of consent conditions.

21.4 Celebration of World Environment Day 2021:

The World Environment Day - 2021 was celebrated with great zeal in all the units of BDL. On this occassion, various types of sapling were planted on 4 June 2021 in all the units by adhering to COVID Protocol.

This year theme was emphasizing on restoration which is to renew and restore ecosystem and habitats damaged or destroyed in the environment due to human interaction with the environment. In order to balance the ecosystem, it is important to protect the flora and fauna and to save our mother earth. On this occasion, Ashoka trees, 130 nos. of Angiosperms species were planted at Kanchanbagh Unit. Angiosperms are the plants that produce flowers and bear their seeds to attract peacocks and butterflies. Few Lemon grass saplings were also

planted which acts as main feeder for rabbits. By this initiative, BDL Kanchanbagh is protecting fauna inside the premises. Based on theme, unit has also organized re-introduction of native species that attracts birds and animals, removal of non-native species like weeds, cutting wild weed vegetation from open drains.

Director (Production) has addressed the gathering on "Ecosystem Restoration" and importance of the ecosystem. Bhanur Unit has taken many initiatives to restore the ecosystem. Around 500 nos. of various types of saplings such as teakwood, fruit-bearing and oxygen rich plants etc., have been planted at township and plant area. In view of the theme, Unit is also organizing plantation on superannuation day of every employee. The rainwater harvesting pits have already been constructed at various places of plant and township. The awareness programmes have also been organized on environment protection such as adverse effect of usage of plastics, ill effects of deforestation, usage of renewable energies etc.

General Manager (VU), also planted the saplings along with AGM, DGMsand Core Team Members at Vizag Unit, in his address he also emphasized that every citizen should plant a sapling on any occasion in the interest of the society which will help to prevent pollution and protect the environment for future generations.

22. QUALITY:

22.1 All production divisions / units such as Akash, CP-IGMP, Design & Engineering, Electronics Division of Kanchanbagh Unit, Bhanur and Visakhapatnam Units are certified with AS 9100D. All units such as Kanchanbagh, Bhanur and Visakhapatnam are certified with ISO 14001:2015 (EMS). Corporate Office is certified with ISO 9001:2015 (QMS). Material Testing Lab, Electronics Lab and Standard Labs are certified with ISO/I EC 17025:2017. Electronics Division is certified with AFQMS. Organizational unit has been appraised with PCMM / 2. BDL is certified with ISO/I EC 27001:2013(ISMS).

For ail the ISO/AS certified divisions, internal audits are conducted by our own internal auditors and surveillance audits are conducted by certification bodies as per frequency.

22.2 Customer satisfaction is being measured for all major products manufactured in those divisions. BDL is continuously striving to improve customer satisfaction through customer meets, interaction with users and by conducting Quality Review Meetings. Corrective actions are also taken wherever necessary for improvement.

23. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

23.1 Implementation of OL Act-1963 (as amended 1967) & Rules there under are ensured. Quarterly OLIC Meetings are held regularly under the Chairmanship of CMD and Directors besides submission of Quarterly progress reports on use of OL are sent in time to authorities concerned.

23.2 Under OL Act, 1963 and the Presidential Orders thereon, the papers laid before the Parliament, Annual Report of the Company, MoU with MoD and brief of the Company along with presentations for various delegations and Parliamentary Committees are prepared in bilingual form and submitted.

23.3 Hindi fortnight was celebrated from 1st to 14th September, 2021 at Corporate Office and at all the Units of the Organization. During the fortnight, various competitions were conducted for the Officers and Employees of Corporate office, Kanchanbagh Unit, Bhanur Unit & Visakhapatnam Unit. ''Rajbhasha Kirti Puraskar'' (First Place) was conferred for TOLIC functioning carried out by BDL. This award was presented on 14th September, 2021 on the occasion of Hindi Diwas organized by Department of Official Language, Gol at Vigyan Bhavan New Delhi. Hence, the Hindi Day in the Organization was celebrated on 17th September, 2021 through Video Conference in a centralized manner under the chairmanship of CMD. On this occasion, Directors, Unit Heads of all the Units and Head of Liaison office, New Delhi along with higher officials were present. Cash Awards were transferred to the winners of the competitions and Officers and Employees for doing original work in Hindi during the year.

23.4 Town Official Language Implementation Committee of PSUs (TOLIC), Hyderabad consisting of 48 PSUs as its Member Offices, was awarded with RAJBHASHA KIRTI PURASKAR (First Place) under Region ''C'' for best implementation of Official Language for the year 2019-20. The award consists of ''Rajbhasha Kirti Shield¹ was presented by Minister of Home, Government of India ShriAmit Shah to CmdeSiddharth Mishra (Retd.), CMD, BDL & Chairman, TOLIC (U) and a certificate of Merit to Shri Homnidhi Sharma, Dy.General Manager (HR-OL) and Member Secretary, TOLIC (U) for his outstanding contribution at a glittering function held at Vigyan Bhavan, New Delhi on the occasion of Hindi Diwas on 14th September, 2021. It was a fourth occasion that the committee has been adjudged and bestowed with Rajbhasha Award at National level for implementation of Official Language among PSUs of twin cities. The program was also graced by Minister of State for Home Shri Nityanand Rai, Shri Ajay Kumar Mishra, Shri Nititsh Pramanik, Dr. Sumeet Jerath, IAS, Secretary and Dr. Meenakshi Jauli, Joint Secretary along with higher officials of Government of India.

23.5 TOLIC (U) was also awarded "Dakshin kshetriya Rajbhasha Puaskar" for the year 2018-19 in Region ''C'' for best implementation of OL on 04th December, 2021. The award in form of Shield was received by Shri N Srinivasulu, Director (Finance) on behalf of CMD & Chairman, TOLIC (U) whereas a commendation Certification was presented to Shri Homnidhi Sharma, DGM (HR-OL) & Member Secretary, TOLIC (U) for outstanding performance.

23.6 Your Comapny is assigned with functioning of TOLIC (U) consisting 48 PSUs as its Member Offices. Regular half yearly Meetings of the body are organized in the month of May & October respectively. First Half Yearly Meeting of the Committee was organized on 25th May, 2021 through Online. During the Meeting 18th Issue of ''PATHIK'' the House Journal of the Committee was released. The second half yearly Meeting was organized on 25th October, 2021 in physical form. Duringthe Meeting, TOLIC Shield/Trophy/ Cup and Best Magazine awardsfor the years 2019-20 & 2020-21 were presented. Both the Meetings were chaired by CMD, BDL81 Chairman, TOLIC (U).

23.7 As a part of "Azadi Ka Amrit Mahotsav" celebrations, "BDL Product Exhibition" was organized from 13th to 19th December, 2021. Hon''ble Raksha Mantri, Gol inaugurated the exhibition through Online. Banners and other promotional material was prepared in bilingual form and made available.

23.8 A total of 21 Executives and Non-Executives appeared for "Parangat" examination conducted by Hindi Teaching Scheme, DOL, Gol on 18th November, 2021 and successfully completed the course.

23.9 During the year, as a part of "Abhyuday" a "Mid-Career Development Program", a special session on "Constitutional Provisions of Official Language Hindi" was organized. On this occasion Shri Homnidhi Sharma, Dy. General Manager (H R-OL) delivered a lecture on the subject. ATotal of 72 Executives participated in the program.

23.10 An Online Joint Hindi Workshop for small Member Offices of Town Official Language Implementation Committee was organized on 21st January, 2022.

23.11 Under the auspice of TOLIC (U) an ONLINE "Orientation Program on OL" was organized for newly joined Office Heads/ Hindi Officers/Translators/ Nodal Officers/Staff of Member Offices of TOLIC (U) on 04th February, 2022.

23.12 On the occasions of Republic Day, Independence Day Celebrations CMD of the Organization addressed in Hindi. Further, conversations of CMD held in Hindi on various TV channels. Similarly, Vigilance Awareness Week, Swatchata Pakhawada, and Constitution Day, the pledge was taken in Hindi & English.

23.13 The Website of the company prepared in Hindi was updated from time to time in compliance to the directives of Govt, of India. Officers and Employees of the organization took active participation in the Inter PSU Competition conducted by TOLIC (U) and won FIVE prizes. Officers and Employees of the organization took active participation in the Inter PSU Competition conducted by TOLIC (U) and won FIVE prizes.

23.14 With an objective to promote and propagate Hindi and inculcate the reading habit among the Officers & Employees of the Company, various Hindi Magazines and News Papers such as Hindi Milap, Swatrantra Vaartha, Daily Shubha-Labh, Anuvad, Sahitya Amrit, Avishkar, Yojna, Hindi Rozgar Samachar, Pratiyogita Darpan, Meri Saheli, Golconda Darpan, ''Hans'' are subscribed regularly. Besides this, popular Hindi books on all subjects are also purchased annually with the same objective as perthe directives of DOL.

24 VIGILANCE:

24.1 Preventive/ proactive vigilance has been the primary objective of Vigilance Department of the Company. As a part of its proactive vigilance measure the department has issued 15 Systemic Improvement Suggestions in the areas of e-reverse auction. Recruitment, Departmental Promotion, Reservation, Sensitive Area Rotation, Civil works and Service Contracts, Township Administration etc. and of which many have been implemented by the Management during the year under report. Brief of all the Systemic Improvements have been hosted on BDL website https://bdl-india.in.

24.2 In furtherance of its preventive vigilance approach, as directed by Hon''ble CVC for institutionalization of preventive vigilance module in PSUs, a 15 days ''mid-career training program'' for executives spanningthree weeks in the mid-management level has been incorporated into the training calendar of the company forthe year under report. A part of this, two batches of executives (each batch consisting 40) have been trained in areas of Preventive Vigilance, Financial Management, Strategic Management, Human Resources, Negotiation Skills, Data Analysis, Preventive Vigilance and Outbound Model Village visit among others.

24.3 Being an extended arm of the Central Vigilance Commission (CVC), New Delhi, the department has submitted Various reports (e.g. Monthly, Quarterly, Annual & CTE Type) to the Commission and also to Ministry of Defence and to the Board of the Company. The Department has also issued vigilance clearances to employees in cases of Recruitment, Promotion, Absorption, Confirmation, Foreign visits, for postings in sensitive areas etc. The department has also accorded priority in handling the complaints as perthe complaint handling policy of the CVC.

24.4 Observation of Vigilance Awareness Week is an integral part of the Vigilance department. As directed by the Central Vigilance Commission, Vigilance Awareness Week (VAW)-2021 with the theme "Independent India @75: Self Reliance with Integrity; WfisWW @ 75: TTcorfasrT^ 3TTrsrf^W’ was observed across units of the Company from 26 October 2021 to 01 November 2021. The observance of VAW-2021 commenced with Chairman & Managing Director, Cmde Siddharth Mishra (Retd.) administering ''integrity pledge for citizens'' on 26 October 2021 at Kanchanbagh Unit. This was followed by reading out messages of Hon''ble President of India, Hon''ble Vice-President of India, Hon''ble Prime Minister of India and Hon''ble CVC by CVO and other Directors. The program was live across units of the Company through video conference. A total of 2725 employees of BDL have taken the Integrity Pledge during observance of vigilance awareness week.

24.5 In order to create awareness on vigilance and the importance of it in day-to-day life, various competitions such as Essay Writing, Elocution, Slogan Writing, Poster/Collage making on issues relating to Anti-corruption were conducted in online mode for employees, spouse and children of employees during the Vigilance Awareness Week-2021.

24.6 As part of Vigilance Awareness Week - 2021, Sensitization programs for employees across units of the company was conducted on 26th and 29th October, 2021 on matters relating to PI DPI resolution, Complaint Policy of CVC, Disciplinary Proceedings procedure etc. To spread the message of ''Independent India @75 : Self Reliance with Integrity'', banners on the theme were displayed at conspicuous places across units of the company. To promote citizens to take CVC ''e-integrity pledge'', a link of CVC website was hosted in the BDL website. Short telephonic messages were sent to all employees encouraging to be a part of "Vigilance Awareness Week-2021" and to take integrity pledge clicking the link http://pledge.cvc.nic.in. Two Posters on ''Complaints under PI DPI (Public Interest Disclosure and Protection of Informers)'' were displayed across units of the Organization in English, Hindi and Telugu. A short video was made on the provisions under PI DPI and hosted in BDL website and intranet of the company.

24.7 As an effort to spread awareness about the ill-effect of corruption on society and the importance of self-reliance & integrity in life, a Gram Sabha was conducted on 28 October, 2021 at Bhanur Village, Sangareddy District, Telangana wherein 200 citizens including worker of MGNREGA, Women, farmers & High School students were present. Dr. Upender Vennam, IPoS, CVO/BDL administered ''integrity pledge for citizens'' to the audience in Telugu language and spoke about the initiatives of CVC to create awareness amongst citizens. Speaking on the occasion, Dr. P Srinivas Yadav, Bhanur Village Sarpanch, Shri Ch Ramesh Babu, Unit Head-BDL (Bhanur), Shri L Kishan, GM (BU) and other Gram Panchayat members motivated the villagers to lead a life of integrity. Posters on PIDPI in Telugu were distributed among the citizens. A Skit with anti-corruption message was organized during the event.

24.8 A virtual Vendors Meet was organized on 29 October, 2021, wherein, more than 60 vendors from across the country participated. The meeting was inaugurated by Shri P Radha Krishna, Director (Production). Speaking on the occasion, after administering ''integrity pledge'' to vendors, CVO, Dr. Upender Vennam expressed that the business should be done in a transparent manner & with highest integrity. He also stressed on Multiple Vendor Development to reduce dependency and increase competitiveness. Shri GN Sudharshan Reddy, AGM (Corporate Commercial) welcomed the gathering and briefed on the Vendor Development initiatives of BDL and online session on ''Integrity Pact'' and ''Role of Independent External Monitors (lEMs) was conducted. Vigilance Officials made a presentation to vendors on the provisions of PIDPI resolution.

24.9 Coinciding with observance of National Unity Day (Rastriya Ekta Diwas) on the occasion of the birth anniversary of Sardar Vallabhbhai Patel, as part of Vigilance Awareness Week 2021, walkathons were conducted at Bhanur Unit, Sangareddy District, Vizag Unit, Andhra Pradesh and at Kanchanbagh Unit, Hyderabad on 30 October 2021 wherein processions were taken out by forming Human Chains on the streets and public were apprised of the need to ensure integrity in their day-to-day life and to say ''no'' to any kind of illegal gratification.

24.10 The observance of Vigilance Awarness Week-2021was concluded with a valedictory function on 01 November, 2021 at Kanchanbagh Unit of the Company. Prof(Dr.) S. Ramachandram, Vice-Chancellor, AN U RAG University and Ex-VC of Osmania University, Hyderabad was invited to grace the occasion as Chief Guest and to deliver a key note address. The Chief Guest addressed the gathering on ''Emerging Technologies & Data Security''. The program was attended by CMD, Directors and CVO. The dignitaries motivated the employees on displaying ethical behavior at all times and emphasized on the importance of Integrity in becoming Self-Reliant. A booklet on ''Awareness on PIDPI Resolution, 2004'' was inaugurated by CMD and 2nd edition of Annual Vigilance Newsletter "CHETANA" was released by the Chief Guest. The newsletter and the booklet have been hosted on BDL intranet for employees and also in BDL website for the benefit of citizens.

25. ANTI-BRIBERY AND ANTI-CORRUPTION POLICY

25.1 Your Company has zero tolerance approach to bribery and corruption. Your Company prohibits all forms of bribery and corruption whether involving, but not limited to Government Officials or a Private Sector persons or Company and whether directly or indirectly.

25.2 Your Company conducts business with the highest ethical standards and prohibits all forms of bribery and corruption across all units of the Organisation. During the year under review, no such instances of bribery and corruption were reported.

25.3 Your Company being a Government Company, the Government of India appoints a Chief Vigilance Officer (CVO) from outside the Organisation, who is generally from Civil Services. CVO holds the rank of Functional Director level in the Company. CVO is head of the Vigilance Department of the Company and he is responsible for detection of corrupt practices and other malpractices as per the Code of Conduct of the Company. He is also responsible for preventive measures to stop corruption, bribery and other such malpractices in the Company. He ensures proper implementation of Central Vigilance Commission guidelines in the Organisation. The CVO may be contacted for any complaints and suggestions in the given below address:

Dr.Upendra Vennam, IPoS Chief Vigilance Officer Bharat Dynamics Limited Corporate Office: Plot No.38-39, TSFC Building Financial District, Gachibowli, Hyderabad-500032 Phone No.: 040-23456106 Email: [email protected] Toll free No.:1800-42552259

25.4 The Audit Committee of the Board and Risk Management Committee of the Board periodically reviews the internal financial controls, functioning of the whistle blower mechanism and risk Management systems which includes frauds, irregularities, anti-bribery and anti-corruption programmes. On quarterly basis, the Chief Vigilance Officer also submits a detailed report to the Board on review of vigilance activities in its entirety, which includes preventive measures undertaken, malpractices detected, number of complaints received and action taken thereon and progress of vigilance related cases etc.

25.5 Your Company keeps accurate books and records to maintain internal controls and to prevent and detect potential violations of our policies or of applicable laws. Your Company has appropriate controls to ensure that diligence is conducted, transactions properly approved, documentation received to support expenses, and interactions handled as required by our policies. Your Company shall also use proactive reviews, audits and internal investigations to further monitor compliance and to identify any potential areas to enhance. When engaging in a cross-border transaction, your Company also ensures compliance with the local laws of the Government Official''s Home Country.

25.6 The Vigilance Department periodically conducts various training programmes and awareness programmes on Anti-Bribery and Anti-Corruption to all the employees of the Company at all units. This policy is applicable to all employees of the Company.

26. BOARD OF DIRECTORS:

26.1 The Board of Directors of the Company comprises Functional Directors, Government Nominee Directors and Independent Directors (i.e Non Official Part Time Directors) who are appointed by the Government of India from time to time. Further, the tenure and remuneration of Functional Directors including Chairman and Managing Director are decided by the Government of India through Public Enterprises Selection Board/Search Committee. The Government communication also indicates the detailed terms and conditions of their appointment including a provision forthe applicability of the relevant rules of the Company.

26.2 The Government Nominee Directors are not entitled to any remuneration/ sitting fee. The Independent Directors (i.e. Non Official Part Time Directors) are entitled to sitting fees for attending the Board/Committee meetings as approved by the Board, considering the government directives, statutory acts, rules and regulations.

26.3 Independent Directors ti.e. Non Official PartTime Directors)

The Ministry of Defence, Government of India vide its letter No.DDP-M0001(ll)/l/2018-D(BDL) dated 03 January 2022 appointed five new Independent Directors viz., Shri Sunil Chintaman Mone, Prof.(Dr) Sanghamitra Mishra, Shri.Rajendra Singh Shekhawat, Shri.Nandakumar Subburaman and Dr. Pawan Sthapak as Part-time Non-Official Directors w.e.f December 2021 for a period of three years or until further orders whichever is the earliest.

Statement on declaration by Independent Directors:

Independent Directors have given declarations u/s 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down u/s 149 (6) of the said Act.

26.4 During the year. Ministry of Defence, Department of Defence Production, Government of India vide its Office Memorandum No.DDP.M-0001(ll)/3/2018- D(BDL) dated 25 August 2021 has appointed Dr. BHVS Narayana Murthy, DS&DG(MSS)/DRDO in place of Shri. MSR Prasad as Part-Time Official Director (i.e. Government Director) on the Board of your Company. The Board places on record its appreciation for the valuable contributions ofShri.MSR Prasad extended to the Company during his tenure.

In terms of provisions of section 152 of the Act, Shri. P. Radhakrishna, Director (Production) retires by rotation at the ensuing Annual General Meetingand being eligible, offers himselves for reappointment.

26.5 Number of Meetings of Board:

During the year 2020-21, Five (5) Board Meetings were held on 21 June 2021,13 August 2021,11 November 2021, 21 December 2021,14 February 2022.

26.6 Performance Evaluation:

The provisions of Section 134(3)(p) of the Companies Act, 2013 relating to evaluation of Board of Directors do not apply to your Company since necessary exemptions are provided to all government companies. Further, similar exemptions were granted to your Company by Securities Exchange Board of India (SEBI) under the provisions of SEBI (Listing Obligations and Disclosure Requirements {LODR}) Regulations, 2015 vide their letter No. SEBI/HO/CFD/DIL1/OW/P/2018/1679/1 dated January 17,2018.

27. DIRECTORS''RESPONSIBILITYSTATEMENT:

As per Section 134(3)(C) and 134(5) of the Companies Act, 2013 as amended, the Directors state that:

(i) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relatingto material departures.

(li) The Directors had selected such accounting policies and applied them consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2022 and of the profit of the Company for the year ended on that date.

(iii) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventinganddetectingfraud and other irregularities.

(iv) Directors have prepared the annual accounts on a going concern basis.

(v) Directors have laid down internal financial controls which are being followed by the Company and that such internal financial controls were adequate and operating effectively and

(vi) 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.

28. SIGNIFICANT AND MATERIAL ORDERS:

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.

29. EVENTSSUBSEQUENTTOTHE DATE OF FINANCIAL STATEMENTS:

Material changes and commitments affecting the financial position of the company which have occurred between 31 March 2022 and date of signing of this Report are - Nil.

30. AUDITCOMMITTEE:

During the year, the Audit Committee was in place only for a part of the year due to no representation of Independent Directors on the Board. The Ministry of Defence, Government of India vide its letter No.DDP-M0001(ll)/l/2018-D(BDL) dated 03 January 2022 has appointed five new Independent Directors on the Board of your Company with effect from December 2021. Consequent to their appointment, the Audit Committee has been reconstituted with new Independent Directors and had held two meetings during the year 2021-22 to review internal control systems and their adequacy, including coverage of Audit Functions. Details of composition, terms of reference, etc., are covered in Report on Corporate Governance.

31. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT:

31.1 Pursuant to the provisions of Section 135 of the Companies Act, 2013 and The Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications/amendments issued by Ministry of Corporate Affairs & DPE guidelines, the Company has undertaken various activities as per the CSR Policy. The programmes/initiatives/projects are taken up in line with the Schedule-VI I of the Companies Act-2013, which are duly incorporated in CSR policy and forms the guiding principle for all our programmes. During the year, consequent to the appointment of new independent directors on the Board, the company has reconstituted Board Level Committee on Corporate Social Responsibility and Sustainable Development (CSR & SD) in line with the provisions of Section 135 of the Companies Act, 2013 (please refer Corporate Governance Report). The Committee has formulated and recommended CSR Policy to the Board indicating the projects/activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013.

31.2 The CSR and SD activities are monitored periodically by the Committee and an annual report on CSR and SD activities undertaken duringthe year 2021-22 is enclosed atAnnexure-l.

31.3 Your Company has been very conscious about its responsibilities towards society. Your Company has also ventured into backward/ underdeveloped areas in Andhra Pradesh and Telangana to undertake Corporate Social Responsibility (CSR) activities by sponsoring various schemes. Your Company do not use the CSR activities including any charitable donations and sponorships as vehicle for bribery and corruption.

31.4 The core areas of focus under CSR are Health Care, Nutrition, Education & Literacy, Skill Development & Sustainable Livelihoods, Sanitation, Safe Drinking Water etc. Your company also adopted villages in Andhra Pradesh and Telangana State under Corporate Social Responsibility initiative and the focus is on the necessities of human life-health, water and other conveniences.

31.5 During the year 2021-22, the CSR & SD expenditure target was ? 1169.80 lakh. Against the target, the company has incurred an expenditure of ? 1812.61 lakh and achieved 100% CSR target amount required under the provisions of Companies Act, 2013. CSR activities being undertaken are placed on Company''s website hhtp://bdl-india.in.

32. RISK MANAGEMENT:

The Company has a Board approved Risk Management Policy. The policy aims at elimination or reduction of risk exposures through identification and analysis of various types of risks and facilitating timely action for taking risk mitigation measures. The policy envisages that all programs, project reviews will highlight the progress of risk mitigation plans till the closure and signing off the mitigation plans.

Pursuant to the Reg. 21 of SEBI (LODR) Regulations, 2015, the Company has reconstituted a Risk Management Committee consequent to the appointment of new independent directors on the Board. The details of Committee and its terms of reference, Risk Management Policy etc. are set out in the Corporate Governance Report.

33. ANNUAL RETURN:

In accordance with the provisions of the Companies Act, 2013, Annual Return of the Company for the year under report is available on the Company''s website hhtp://bdl-india.in.

34. RELATED PARTYTRANSACTIONS

There are no materially significant related party transactions during the year under review which may have a potential conflict with the interest ofthe Company at large. Thus, disclosure in Form AOC-2 is not required. Members may refer to the notes to the accounts for details of related party transactions. The policy for related party transaction has been uploaded on the Company''s website hhtp://bdl-india.in.

35. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 ofthe Companies Act, 2013 are given in the notes to the Financial Statement.

36. CONTRIBUTIONS TO POLITICAL PARTIES:

During the year under review your Company do not made contributions to any political parties and the same is prohibited under section 182 ofthe Companies Act, 2013.

37. INTERNALCONTROLSYSTEMS:

Your Company had put in place all required internal controls and systems to meet the canons of financial propriety. External audit firms are appointed to ensure their adequacy and report thereon. Detailed analysis of reports of Internal Audit Firms as well as reports of Internal Audit Department of your Company is placed before the Audit Committee for its review and advice. The adequacy of internal control procedures are reviewed and reported by Statutory Auditors in their Audit Report. The necessary disclosures have been made in Notes to Accounts. Your Company being a Government Company is subject to Government Audit also.

38. AUDITORS:

Statutory Auditor:

M/s.G.Natesan & Co., Chartered Accountants, Hyderabad were appointed as Statutory Auditors ofthe Company for the financial Year 2021-22 by the Comptroller & Auditor General of India. The Auditors'' Report on the financial statements for the financial year 2021-22 and the Comments of Comptroller and Auditor General of India (C&AG) under Section 143 (6) ofthe Companies Act, 2013 are appended to this Annual Report.

Cost Auditor:

Your Company appointed M/s. Narasimha Murthy&Co., Cost Accountants, Hyderabad as Cost Auditors for the FY 202122 for the audit of the cost records of the Company. The Company maintains cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of its manufacturing.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), the Company has appointed M/s.Narender & Associates, Practicing Company Secretaries (PCS Registration No.5024) for the financial year 2021-22 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed to this report as Annexure-ll.

39. CEO/CFO CERTIFICATION:

As perthe requirements of SEBI Listing Regulations and DPE Guidelines, the CEO/CFO certificate has been obtained and placed before the Audit Committee and the Board.

40. REPORTING OF FRAUDS BY AUDITORS:

During the year, neither the Statutory Auditor nor the Secretarial Auditor have reported to the Audit Committee/Board under Section 143(2) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees, the details of which needs to be mentioned in the Board''s Report.

41. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report required under the SEBI (LODR) Regulations, 2015 and also underthe DPE Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs), is attached to this Report as Annexure-lll.

42. CORPORATE GOVERNANCE:

42.1 Corporate Governance is about application of best management practices, compliance of laws and adherence to ethical standards to achieve Company''s objective of enhancing stakeholders'' value and discharge of social responsibility.

42.2 Company has a well-established, transparent and fair administrative set up to provide for professionalism and accountability.

42.3 As perthe guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8)/2005-GM, dated 14 May 2010 and in terms of the SEBI (LODR) Regulations, 2015, Report on Corporate Governance along with Certificate on compliance of conditions on Corporate Governance from a Practicing Company Secretary are attached to this report as Annexure-IV.

42.4 Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to Stock Exchanges and MoD in the prescribed format. Your Company received "Excellent" rating from MoD for compliance of Corporate Governance under DPE Guidelines for the year 2021-22.

43. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

In line with the provisions contained under "The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013 your Company has put in place "Anti Sexual Harassment Policy" in line with the requirements of the above Act. During the year 2021-22, your Company has not received any Sexual harassment complaints.

44. COMPLIANCE UNDERTHE RIGHTTO INFORMATION ACT, 2005:

The information required to be provided to citizens under Section 4(l)(b)of Right to Information Act, 2005 is placed on Company''s Website www.bdl-india.in. It contains general information of the Company, functions, powers and duties of employees/officers, decisions making process, rules, regulations, manuals and records held by the Company, directory of the Company''s Officers, pay scales of officers/ employees and procedure for seeking information and inspection of records. The Company has nominated a Central Public Information Officer of Senior Manager Level to attend to queries and appeals. Further, during the year 2021-22 Company received 175 applications/queries, out of which 172 applications are disposed-off and 3 (Three) RTI queries are under process. Further 17 appeals have been received and disposed-off by Final Appellate Authority.

45. VIGIL MECHANISM/Whistle Blower Policy:

Pursuant to the provisions of the Section 177(9) of the Companies Act, 2013 read with Rule (7) of the Companies (Meeting of the Board & its Power) Rules, 2014 (as amended) and DPE Guidelines for CPSEs, the Board of Directors had approved the policy on Whistleblower/Vigil Mechanism and the same was hosted on website of the Company. The policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Employees are encouraged to raise any of their concerns by way of whistle blowing and none of the employees have been denied access to the Audit Committee. During the year under review, no whistle blower cases were reported.

46. BUSINESS RESPONSIBILITY REPORT:

The Securities and Exchange Board of India (SEBI) has mandated inclusion of Business Responsibility Report ("BR report") as part of the Annual Report based on market capitalization.

Your Company has prepared a comprehensive policy framework for BR report, after studying the SEBI (LODR) Regulations, 2015 requirements and keeping in view the business and governance environment in which BDL as a Defence PSU operates. The Company''s BR report for the year is attached to this Report as Annexure-V.

Further, in terms of amendment to regulation 34 (2) (f) of LODR Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021, SEBI has introduce new reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR). The BRSR shall be mandatory for top 1000 companies (by Market Capitalization) with effect from financial year 2022-23. Your Company shall adhere to this compliance from the financial year 2022-23 onwards.

47. DIVIDEND DISTRIBUTION POLICY:

In terms of SEBI (LODR) Regulations,2015 (as amended), dividend distribution policy has been adopted by your company to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining the profit into the business. The Policy is placed on the Company''s website athttps://bdl-india.in/sites/default/files/2020-01/Dividend%20Distribution%20Policy 0.pdf

48. ACKNOWLEDGEMENT:

48.1 Your Directors gratefully acknowledge the valuable support and assistance received from all Government Agencies, particularly Ministry of Defence, DPSUs, Department of Defence Production, DRDO Laboratories, Central Government Departments, State Governments of Telangana and Andhra Pradesh, Quality Assurance Agencies of Government of India and other PSUs forthe help extended by them from time to time.

48.2 The Company wishes to place on record its appreciation for the cooperation extended and guidance provided by the Comptroller & Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Statutory Auditors, Bankers and Suppliers.

48.3 The Directors take this opportunity to place on record their deep appreciation for the valuable contribution made and co-operation extended by the employees at all levels to propel the Company to greater heights and to sustain its growth path in the years to come.

For and on behalf of the Board

Cmde Siddharth Mishra (Retd) Chairman and Managing Director DIN:08367035

Place : Hyderabad Date : 26 May 2022

---

Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting the 48^th Annual Report together with the audited financial statements of the Company for the year ended 31 March 2018.

1. HIGHLIGHTS OF OPERATIONS

- Your Company has achieved highest sales turnover of Rs.4576 Crore (exclusive of taxes) during the fiscal year under report registering marginal increase of around 1% over that of previous year

- Your Company successfully completed its Initial Public Offer and became a listed company with effect from 23 March 2018 by listing its equity shares on National Stock Exchange of India Ltd and BSE Ltd.

- 5 MW Solar Photo Voltaic Power Project commissioned at BDL, Bhanur

2. FINANCIAL RESULTS AND PERFORMANCE HIGHLIGHTS

2.1 Performance of the Company in financial terms is summarized below:

	Rs in Crore		% of
Particulars	2016-17*	2017-18	Increase/ (Decrease)
Revenue from Operations (Gross)	4887	4588	(6)%
Less:
Duties & taxes	351	11	-
Revenue from Operations (Net)	4536	4576	0.89%
Value of Production	4660	4630	(0.65)%
Profit Before Tax	803	774	(3.61)%
Profit After Tax	524	528	0.78%
Value Added	1528	1715	12.23%
Earnings per share#	24.51	26.65	-

* Regrouped figures as per IND-AS;

# EPS has been calculated based on profits excluding the other comprehensive income. EPS for previous year is adjusted for Bonus issue made during the year. Since there is a splitting of shares during the year from face value of Rs.1000/- to Rs.10/- each, the previous year figures are revised accordingly.

2.2 Following data reflect the financial position of the Company:

	Rs in Crore		% of
Particulars	2016-17*	2017-18	Increase/ (Decrease)
Gross Block	681	856	25.69%
Depreciation	84	136	61.90%
Net Block	596	720	20.63%
Working Capital	1570	1086	(30.83)%
Capital Employed	2327	1954	(16.02)%
Net Worth	2195	1956	(10.87)%

*Regrouped figures as per IND-AS

2.3 During the year under review your Company has achieved profit before tax of Rs.774 Crore as compared to Rs.803 Crore achieved in the previous year. Profit after tax is at Rs.528 Crore as against Rs.524 Crore in the previous year. The reduction in profits is due to reduction in interest income, however compensated by increase in operating profit by Rs.81 Crore. The interest income in 2016-17 was Rs.189 Crore whereas in 2017-18 it is Rs.82 Crore.

2.4 There has been improvement in value of sales (net) and decrease in value of production during the year compared to the previous year by around 1% and 1% respectively. This year your Company made an operating profit of Rs.682 Crore as against Rs.601 Crore in the previous year indicating a significant improvement in operational performance. Major orders executed during the year for the Armed forces include Akash Weapon system, ATGMs and other products including refurbishments.

2.5 The working capital of the Company has come down to Rs.1086 Crore as compared to previous year of Rs.1570 Crore due to operational efficiency.

2.6 The Networth of the Company was reduced to Rs.1956 Crore due to buyback of 30546875 equity shares held by Government of India (representing 25% of paid-up capital of the Company) at a price of Rs.147.49 per share for an aggregate amount of Rs.547.34 crore (including taxes).

2.7 The order book position of the Company as on 01 April 2018 is around Rs.8889 Crore comprising mainly of Akash, MR-SAM, ATGMs, Export of LWT and other products.

3. FIXED DEPOSITS FROM PUBLIC:

The Company did not accept any fixed deposits from Public during the year, and there was no outstanding Fixed Deposits at the beginning/end of the year. Accordingly, there was no default in payment of deposits/interest thereon.

4. DIVIDEND & TRANSFER TO GENERAL RESERVE:

4.1 Your Company has a consistent track record of Dividend Payment. The Board has recommended a Final Dividend of Rs.7.29/- per equity share of Rs.10/each amounting to Rs.133.61 Crore for the year 2017-18. Further your Company has paid interim dividend of Rs.25 Crore in March 2018 before listing of Company’s equity shares.

4.2 An amount of Rs. 230 Crore is being transferred to General Reserve for the year 2017-18

5. CAPITAL STRUCTURE:

5.1 During the year 2017-18, your Company, in compliance with the Guidelines on Capital Restructuring of CPSEs issued vide Office Memorandum No.F.No.5/2/2016 of Ministry of Finance, Government of India dated 27 May, 2016, completed the Buyback of shares and Issue of Bonus Shares. The Company purchased 25% of issued and paid-up share capital amounting to Rs.547.34 Crore (including taxes) from the Government of India in September 2017. Further, the Company issued bonus shares in the ratio of 1:1 (one fully paid up equity share of Rs.10 each for every one equity share held) to the Shareholders on 15^th February, 2018.

5.2 As a consequence, the paid up capital of the Company as on 31^st March, 2018 at the end of financial year stood at Rs.183.28 Crore (18,32,81,250 equity shares of Rs.10/- each). The Authorized Capital of the Company has been increased from Rs.125 Crore to Rs.200 Crore during the year 2017-18.

5.3 Initial Public Offer

During the year, Government of India (GOI) decided to disinvest 12.25% of GOI’s shareholding out of their 100% shareholding in the Company through an offer for sale to the public and employees of the Company. Consequently, your Company converted from private limited to public limited with effect from 27 October, 2017 and successfully completed its Initial Public Offer of 22,451,953 equity shares of face value of Rs.10/- each (representing 12.25% of the 100% paid-up capital held by Govt. of India) through offer for sale by Government of India and listed its equity shares on the stock exchanges (i.e. BSE Limited and National Stock Exchange of India Limited) on 23 March, 2018. The issue received good response from the public and it was oversubscribed by 1.3 times as a whole.

6. PERFORMANCE AGAINST MoU:

Your Company signs a Memorandum of Understanding (MoU) every year with the Ministry of Defence, Government of India. The performance of the Company for the year 2016-17 has been rated “Very Good”. The MoU rating for the year 2017-18 is under evaluation. The MoU for the financial year 2018-19 was finalized with the Ministry, with a Net Sales target fixed at Rs.4600 Crore. Your Company is well poised to achieve the targets fixed in the MoU.

7. modernization AND UPGRADATION:

Manufacturing Capacities of ATGMs and other products are being ramped up. Civil infrastructure is being created and modernization/upgradation of plant and machinery are under process. During the year, an amount of Rs.140 Crore has been earmarked for Capital Expenditure (CAPEX) towards modernization of Plant & Machinery and other Infrastructure development programme.

The following Key Technology Upgradation projects were taken up for implementation during the financial year 2017-18:

a) 320 KV X-Ray machine

b) High temperature pit furnace

c) Infrastructure facilities at Ibrahimpatnam

d) 2D-vision Measuring System

e) 5 MW solar power systems

Your Company is putting up determined efforts towards increasing indigenization contents in the manufacture of ATGMs with the objective of increasing self-reliance, reduction of Foreign Exchange out flow and achieving cost reduction. Indigenization of products like Konkurs-M, Invar, Milan-2T has been achieved upto 90%, 78.6% and 71% respectively.

8. RESEARCH & DEVELOPMENT

Your Company recognizes that Research & Development is a thrust area for design and development of various products for Indian Armed Forces. R&D facilities like Computational Fluid Dynamics, Spectro-Radiometer, Advanced Structural and Thermal Analysis software, 3D Scanner, Rapid Prototyping and Reliability software and other development tools have been established. Your Company has already developed a launcher for Anti-Tank Guided Missile and Test Equipment, Outdoor Simulator, Infrared Interference Indicator (IRII), Counter Measures Dispensing System (CMDS) etc. as import substitutes.

Your Company has identified various products to meet the requirement of Indian Armed Forces and currently its research and development is focusing in the following missions:

Amogha-I:- It is a Semi-Automatic Command to line of Sight (SACLOS) Anti-Tank Guided Missile (ATGM) for infantry. Missile design has been validated by conducting test firings. Missiles are being manufactured for further trails and qualification. Your Company has received Hon’ble Raksha Mantri’s Award for Excellence for Amogha-I AntiTank Guided Missiles in Innovation category on 30 May 2017.

Amogha-II:- It is a Radio Frequency guidance, SemiAutomatic Command to line of Sight (SACLOS) ATGM for mechanized infantry. The development of the missile is under progress. Test firing of Amogha-II from Ground launcher was successful on 14^th October, 2017.

Amogha-III:- It is a 3^rd generation fire and forget, IIR seeker based ATGM. System configuration has been finalized. Design of sub-systems is under progress.

The Company is also working on the design and development of avionics systems such as Counter Measures Dispensing System (CMDS) for Indian Air Force. CMDS and its Test Equipment for various platforms are being developed as import substitutions. There is a substantial export market for CMDS.

The following table shows the recent trend in in-house R&D expenditure:

(Rs. in Crore)

	2014-15		2015-16	2016-17	2017-18
Sales Turnover (Gross)	2800	4160		4887	4588
R&D expenditure	22.72	29.43		34.71	40.22

In addition to the in-house R&D activities, your Company has entered into MoUs with DRDO labs for co-development of various missiles with a substantial financial commitment and manpower support from the Company. This will further enhance the R&D efforts of BDL to strengthen Government of India’s Make in India programme.

9. PROCUREMENT FROM MSMEs

Your Company has been providing increased thrust on procurement from Micro, Small & Medium Enterprises (MSMEs) as per the guidelines/notifications issued by the Ministry of MSMEs.

Your Company being a weapons manufacturing Company has been granted exemptions vide MSME Notification No.F.No.21(1)/201 I-MA Dated 23 March 2012. However, your Company would endeavor to procure general items from SMEs. A list of 358 items was reserved in the Company’s IMM manual for procurement from SMEs.

As per Government of India guidelines issued from time to time your Company extends various facilities/concessions to vendors registered with NSIC under its Single Point Registration Scheme such as

a) Issue of Tender documents free of cost.

b) Exemption from payment of EMD.

c) Price Preference of 15% over the quotation of large-scale units. In case the SME happens to be within 15% range above the L1 price who is not an SME, SME unit shall be provided with a counter price to reduce to L1 price. A quantity of up to 20% shall be ordered on SME on acceptance of L1 price.

d) Pre-qualification experience is relaxed for Start-ups (whether MSMEs or otherwise), as per guidelines of Govt. of India subject to the meeting of quality and technical specifications as per clarification given by Ministry of Finance, Department of Expenditure (DoE).

e) Interest free advance is also being paid to MSMEs and startups against Bank Guarantee for 110% of order value.

f) Vendors registered in other Defence PSUs will be considered as Deemed Registered. This Deemed registration will enable the vendors to participate in all future tenders of DPSUs for similar category of goods/services subject to fulfillment of other eligibility criteria indicated in the RFQ.

g) Providing Test facilities to MSMEs/Start-Up vendors.

10. EXHIBITIONS:

Senior Executives and Directors participated in National and International Exhibitions during the year 2017-18. Such platforms are used to gain awareness in advanced technologies, interact with experts and share knowledge. Visiting the pavilions of other countries and understanding the systems available with them enables your Company to draw up its own future business plans effectively.

Your Company participated in the DEFEXPO-2018 exhibition held on April 11, 2018 to April 14, 2018 at Chennai.

11. EXPORTS

With the recent changes in the Export policy of the Department of Defence Production, Ministry of Defence, Government of India, your Company is now focused more into export markets. Your Company is exploring the markets for potential exports and try every possible course of action to succeed in this strategy leaving no stone unturned. In this process your Company has signed a contract for its first export order worth USD 21.5 Million for the supply of Light Weight Torpedoes to a friendly country. During the year, your company started executing the said export order contract. Further, your Company also secured order worth USD.14.33 million during the current financial year 2018-19 towards supply of light weight torpedoes

Your Company envisages lot of potential for exporting its products to friendly foreign countries. This assessment is based on the MoU target for export order during 2018-19, which is Rs.250 Crore.

12. BOARD OF DIRECTORS:

The Board of Directors of the Company comprises Functional Directors, Government Nominee Directors and Independent Directors who are appointed by the Government of India from time to time. Further, the tenure and remuneration of Functional Directors including Chairman and Managing Director are decided by the Government of India through Public Enterprises Selection Board / Search Committee. The Government communication also indicates the detailed terms and conditions of their appointment including a provision for the applicability of the relevant rules of the Company.

The Government Nominee Directors are not entitled to any remuneration/ sitting fee. The Independent Directors are entitled to sitting fees for attending the Board/Committee meetings as duly approved by the Board considering the government directives, statutory acts, rules and regulations Appointment of Independent Directors In order to fulfil the requirement of SEBI (LODR) Regulations, 2015, Government of India vide its letter No.H-62011/2/2016-D(BDL) dated 13 September, 2017 appointed three new Independent Directors viz., Shri Ajay Nath, Shri KS Sampath and Smt. Latha Narasimha Murthy as Part-time Non-Official Directors w.e.f 13 September 2017 for a period of three years or until further orders whichever is the earliest. With the induction of above three Independent Directors, your Company is complying with the SEBI Regulations as well as Companies Act, 2013 for the year ended 31 March, 2018.

(i) Statement on declaration by Independent Directors:

Independent Directors have given declarations u/s 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down u/s 149 (6) of the said Act.

(ii) Change of Directors:

During the financial year, your Board has nominated Shri.S. Piramanayagam, Director (Finance) as Director (Finance) & CFO of the Company in compliance with the provisions of Companies Act, 2013 and also Listing Regulations.

Further, Government of India vide its Office Memorandum No.62011/6/2016-D(BDL)Pt.1 dated 01st May 2018 conveyed the appointment of Dr.G. Satheesh Reddy, DG(MSS)/DRDO as Part-Time Official Director (i.e. Government Nominee Director) on the Board of your Company.

In terms of provisions of section 152 of the Act, Shri.S. Piramanayagam, Director (Finance) & CFO retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

(iii) Number of Meetings of Board:

During the year 2017-18, Eleven (11) Board Meetings were held on 08 May, 2017, 03 August 2017, 18 September 2017, 20 November 2017, 26 December 2017, 15 February 2018, 28 February 2018, 01 March 2018, 05 March 2018, 16 March 2018 and 21 March 2018.

(iv) Performance Evaluation

The provisions of Section 134(3)(p) of the Companies Act, 2013 relating to evaluation of Board/ Directors do not apply to your Company since necessary exemptions are provided to all government companies.

Further, similar exemptions were granted to your Company by Securities Exchange Board of India (SEBI) under the provisions of SEBI (Listing Obligations and Disclosure Requirements {LODR}) Regulations, 2015 vide their letter No.SEBI/HO/CFD/DIL1/ OW/P/2018/1679/1 dated January 17, 2018. The Company initiated correspondence with SEBI for further clarity in this regard.

13. DIRECTORS’ RESPONSIBILITY STATEMENT:

As per Section 134(5) of the Companies Act, 2013 as amended, the Directors state:

(i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures

(ii) that the selected accounting policies have been applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2018 and of the profit of the Company for the year ended on that date.

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) that the annual accounts have been prepared on a going concern basis.

(v) that the Company has devised proper internal financial controls and that such internal financial controls were adequate and operating effectively.

14. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

Material changes and commitments affecting the financial position of the company which have occurred between 31 March 2018 and date of signing of this Report are - Nil.

15. MANPOWER AND RESERVATION OF POSTS FOR SCs/STs:

The Company has been following Presidential Directives of the Government with regard to reservation of posts for SCs/STs in recruitments.

Total manpower strength as on 31 March 2018 is at 3095 (including four functional directors) out of which the number of persons on temporary rolls was 60. Of the total strength, 79 are ex-servicemen, 586 are of Schedule Caste and 217 are of Scheduled Tribes. The percentage of Scheduled Caste and Scheduled Tribes in respect of Employees was at 18.93% and 7.01% respectively.

Number of persons on temporary rolls as on 31 March 2018 is 60, out of which 18 belong to Scheduled Caste and 01 belong to the Scheduled Tribes category.

The No. of Scheduled Caste and Scheduled Tribes in various categories of posts as on 31 March 2018 is given below:

	Number of Employees
Category	Total Strength		Scheduled Castes		Scheduled Tribes
	31-03-2017	31-03-2018	31-03-2017	31-03-2018	31-03-2017	31-03-2018
Group-A	829	856	138	153	84	86
Group-B	60	17	14	2	04	01
Group-C	1940	1892	348	342	110	111
Group-D	277	266	74	71	19	18
Temporary	72	60	18	18	2	1
Total	3178*	3091*	592	586	219	217

* excluding four functional directors.

Recruitment of employees of Scheduled Caste and Scheduled Tribes during 2017-18 is given below:

Classification of posts	Total Vacancies Released	Total Recruitment	Reservation of posts (out of Col.3)		Recruitment made during the year 2017-18
(1)	(2)	(3)	(4)		(5)
			SCs	STs	SCs	STs
Group-A	15	15	6	0	6	0
Group-B	0	0	0	0	0	0
Group-C	14	14	0	1	0	1
Group-D	1	1	0	0	0	0
Total	30	30	6	1	6	1

16. employment OF WOMEN:

As per the recommendation No.51, Para (ii)(a) of the National Commission for Women (NCW) in its Annual Report for the year 1995-96, the employment position of Women as on 31 March 2018 is given below as directed by the Ministry of Defence, vide their letter Nos. 39(6)/99/D(B&C), dated 27 August 1999.

I. Executives

Grade	No. of Employees	Women	Percentage
I	17	3	17.65%
II	214	30	14.02%
III	209	33	15.79%
IV	126	14	11.11%
V	88	11	12.50%
VI	167	7	4.19%
VII	40	0	0.00%
VIII	11	1	9.09%
IX	1	0	0%
Functional Directors	3	-	0%
CMD	1	-	0%
Total	877	99	11.29%

II. Non-Executives

Grade	No. of Employees	Women	Percentage
WG-0	2	0	0.00%
WG-1	13	2	15.38%
WG-2	132	15	11.36%
WG-3	207	24	11.59%
WG-4	347	42	12.10%
WG-5	147	30	20.41%
WG-6	261	34	13.03%
WG-7	29	4	13.79%
WG-8	130	7	5.38%
WG-9	17	0	0.00%
WG-10	59	3	5.08%
WG-11	184	9	4.89%
WG-12	630	51	8.10%
Total	2158	221	10.24%

17. PERSONS WITH DISABILITIES (PWD) AS ON 31 MARCH 2018:

The total number of Physically Challenged employees as on 31 March 2018 was 103 and its percentage to total employees works out to 3.33%.

	HI	LD	VI	Total
Group-A	0	12	5	17
Group-B	0	1	0	1
Group-C	18	46	8	72
Group-D	4	5	4	13
Total	22	64	17	103

HI- Hearing Impaired, LD-Locomotive Disability, VI-Visually Impaired.

18. HUMAN RESOURCE DEVELOPMENT:

During the year under review the Company has conducted training programmes for 658 Executives and 530 Non Executives to impart training on knowledge based, development oriented and need based topics. Such training programmes were organized in-house and at premises of external agencies to cover the present and future requirements of the Company.

Apart from regular training programmes, your Company organized the following activities/ programmes during the year:

(a) Management Development Programmes (MDPs):

Your Company sponsored 49 Senior Executives (in Grade V & above) for Management Development Programmes (MDPs) conducted by premier Institutes in India like IIM-Ahmedabad, IIM-Calcutta and XLRI Jamshedpur during the year 2017-18.

(b) Advanced Management Programmes (AMP):

Your Company sponsored 03 principal Executives at General Manager level for the Advanced Management Programme (AMP) conducted by ASCI Hyderabad in collaboration with SDA Bocconi School of Management, Milano.

(c) Project Management Professional (PMP) Programme:

As a part of institutionalizing the Project Management principle in the Company, Projects were assigned to the PMP/IPMA Level-D Certified Executives in the Company so that they can apply their learning to live projects in progress.

As on date 65 Executives have registered themselves with PMI USA and 19 Executives have successfully cleared the PMP certification exam.

05 PMP Certified Executives were sent for national conference on Project Management in Hyderabad (PMIC).

19. PARTICULARS OF EMPLOYEES

There were no employees of the Company who received remuneration in excess of the limits prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further, in accordance with Ministry of Corporate Affairs notification no. GSR 463(E) dated June 05, 2015, Government Companies are exempt from Section 197 of the Companies Act, 2013 and its rules thereof

20. FOREIGN VISITS:

Your Company incurred an expenditure of around Rs.68.52 lakh during the year under report towards foreign travel for business trips and also for on the Job-Training of personnel.

21. INDUSTRIAL RELATIONS AND EMPLOYEE WELFARE:

Your Company continues to enjoy cordial and harmonious Industrial relations throughout the year with recognized Trade Union, other Unions and Associations. All Statutory Committees such as Works Committee, Safety Committee, Canteen Management Committee and other participative forums have extended their Co-operation to maintain discipline at all levels.

Compliance on statutory welfare provisions are followed meticulously. The Company has been taking care of medical needs of employees and their family members as per BDL Medical Rules. Further, in line with DPE guidelines, Company has framed Pension Scheme and Post-Retirement Medical Benefit Scheme for the Executive and Non- Executives of the Company.

During the year your Company successfully implemented 3rd Pay Revision for the Executives as per the DPE guidelines. Further both the Management and the recognized Union i.e. (BDEU) with the support of Conciliations Officer cum Asst. Labour Commissioner (Central) Hyderabad arrived at a settlement of Wage Revision for Non-Executives on 28 March 2018.

22. SECURITY:

Central Industrial Security Force (CISF) is providing Security and Fire Services in both Kanchanbagh and Bhanur Units. During the year under report, CISF has played a vital role in the Security and safeguarding of property of the Company. CISF team adopted robust security measures combining physical measures with technology to keep the highly sensitive installations secure.

The Plant Security Council is in place to review the security arrangements and implementation of IB guidelines. Regular Security review meetings are being conducted both by Management and CISF to beef up security.

Biometric Access Control System has been installed in addition to Computerized Photo Identity Cards to prevent unauthorized entry and CCTV Cameras have been installed all over the factory premises to cover more area under CCTV surveillance. Door Frames, Metal Detectors, X-ray baggage machines are also in use. Barricades, Boom Barriers and Mochas are provided to strengthen physical security measures.

Regular programmes on Security awareness were conducted besides observing Security Week/Fire Week. Employees are sensitized on the security threat and action to be taken in case of emergency and fire accidents.

23. Safety:

Safety, Health and Environment (SHE) is strictly followed in your Company. The two Corporate Committees I.e. Industrial Safety Committee, which is statutory and Explosive Safety Committee are functioning to meet the needs of the Company. Safety committee meetings are held at regular interval for monitoring Safety, Health and Environment as per the statutory requirement. The works are carried out in compliance with the Factories Act 1948, and Explosive safety strictly adhering to the Storage & Transport of Explosive Committee (STEC) regulations. Annual explosive safety audit is conducted by Centre for Fire, Explosive & Environment safety (CFEES) New Delhi and the observations made by the audit team have been complied with. Regular medical check-ups are carried out for employees working in hazardous areas.

Training programmes are arranged by HRD Department through National Safety Council (NSC), Central Labour Institute (CLI), Regional Labour Institute (RLI) and Centre for Fire, Explosive & Environment Safety (CFEES) to inculcate safety consciousness and to establish a safe working environment among the employees.

During the year Safety officers of the BDL Safety Engineering Department conducted classes on both Industrial Safety and Explosive Safety as a part of an induction programme for new entrants in coordination with ISTM-HRD. Safety Engineering Department has organized guest lectures by experienced persons with expertise in the field on Explosive safety and Industrial Safety to educate the employees of the Company.

Fire mock drills are conducted at regular intervals to ensure firefighting preparedness.

Safety Day/Week was celebrated during the Month of March, 2018. On this occasion, Safety pledge was administered to all the employees and various competitions and programmes were conducted by Safety Engineering Department to bring awareness and employees were awarded to boost their interest towards safety.

24. ANNUAL RETURN:

In accordance with the provisions of the Companies Act, 2013, Company is required to attach an extract of Annual Return for the year under report and the same is placed as Annexure-1.

25. ENVIRONMENT AND POLLUTION CONTROL:

Your company contributes in all aspects for clean and green environment by systematically integrating best practices to bring in cleaner technologies and greening the environment through recycle, reuse and reduce approach. Effluent treatment plant, Sewage treatment plant are being operated. Various environmental activities such as water conservation, tree plantation, disposal of hazardous waste and metal scrap, planting of flower bearing trees and landscaping, utilizing treated effluent water, have been carried out. Company has been reviewing status of various types of pollutions through core team meeting, internal audits and management review meetings at regular intervals.

The following steps have been taken for controlling and preventing pollution in all respects:

I) Consent for operation:

Bhanur and Vizag units are having valid consent for operation. Renewal of the consent for Kanchanbagh Unit was applied in the month of Feb 2018 before expiry of the current validity and it is under process at (Telengana state polustion control board (TSPCB).

ii) Waste management:

All food waste generated from canteen is being given for animal feeding and composting. The hazardous waste, e-waste and biomedical waste is being given to the agency registered with the pollution control board. The lead acid batteries are being given to the authorized recyclers/dealers on buy back. Metal scrap is disposed through M/s MSTC Ltd (A Govt. of India Undertaking).

iii) Testing of environmental parameters:

The environment parameters like ambient air quality, wastewater from sewage treatment plant and effluent treatment plant, air quality of diesel generator set and Venturi scrubber are tested at all the three units through certified agency at regular intervals and results are within the prescribed limits of Pollution Control Board.

iv) Celebration of world environment day 2017

World Environment Day 2017 was celebrated in all the three units of BDL. On this occasion, with the theme “Connecting people to nature”, banners were put up in prominent locations. On this occasion, tree plantation was carried out. Competitions like multi-lingual essay, slogan writing and quiz etc. were conducted and the winners have been presented with prizes. Guest lecturers were arranged on the above theme.

Sri. Udaya Bhaskar, Chairman & Managing Director inaugurated tree sapling plantation followed by Sri. S. Piramanayagam, Director (Finance), Sri. K. Divakar, Director (Technical) and GMs at Kanchanbagh Complex on 05 June 2017. Senior executives and employees also participated in the plantation programme. A variety of about 40 saplings were planted.

26. QUALITY:

Your Company manufactures products which are single shot in nature. These products require stringent Quality standards and high degree of reliability. In pursuit of this objective, BDL has adopted International Quality Management system practices by way of obtaining ISO certification for the last 22 years. Presently CP-IGMP, Electronics Division and D&E divisions have been certified to ISO 9001:2008 Quality Management System standard. MILAN, Akash Division & Bhanur Unit have been certified to AS 9100D Aerospace standard. Remaining ISO certificated divisions are also planning to upgrade to AS 9100D during FY 2018-19.

Electrical measured values have traceability to National or International standards which are achieved through calibrating the Electronics equipment in ISO/IEC 17025:2005 (NABL) accredited Labs of Milan Division and Bhanur Unit.

All the three units of BDL at Kanchanbagh, Bhanur and Vizag have been certified with ISO 14001:2004 Environmental Management System (EMS).

Your Company has been certified with ISO 27001:2013 (Information Security Management System) Standard. Material Testing Lab of Bhanur Unit has been accredited with ISO / IEC 17025: 2005 (NABL) Certification in the field of testing.

During the year, regular audits by external agencies were conducted for all the ISO/AS certified divisions. Customer satisfaction is being measured for all major products manufactured in those divisions.

Your Company is continuously striving to improve customer satisfaction through customer meets and interaction with users. Corrective actions are taken wherever necessary for improvement.

27. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

Implementation of OL Act-1963 (as amended in 1967) & Rules thereunder are being ensured in your Company. Quarterly OLIC Meetings are held regularly under the Chairmanship of CMD and Directors besides submission of Quarterly progress reports on use of OL sent to authorities concerned.

Under OL Act, 1963 and the Presidential Orders thereon, the papers laid before the Parliament, Annual Report of the Company, MoU with MoD and brief of the Company along with presentation for various delegations and Parliamentary Committees were prepared in bilingual form and submitted.

Hindi fortnight was celebrated from 01 to 19 September. On the eve of this, various competitions were organized at Kanchanbagh, Bhanur Unit and Vishakhapatnam Unit. Cash Awards were given to the winners of the competitions. Complying with the assurances given to the Parliamentary Committee on OL, Hindi film Ghazi Attack at Kanchanbagh and HOLYDAY at Bhanur Unit were shown on 10^th September during the Hindi Fortnight Celebrations.

Town Official Language Implementation Committee (U) functioning is carried out by BDL Hindi Department for PSUs of twin cities consisting of 45 Organizations was awarded RAJBHASHA KIRTI PURSKAR (first place) by Govt. of India in region ‘C’ for the year 2016-17.

The award was presented by Hon’ble President of India Sri Ramnath Kovid at a function held at Vigyan Bhavan on 14 September, 2017 on the eve of HINDI DIWAS. CMD & Chairman of the Committee received the “RAJBHASHA KIRTI PURASKAR” in the form of a Shield and DGM (OL) and Member Secretary of the Committee was awarded with Commendation Certificate for outstanding contribution.

On the eve of Vigilance Awareness Week, National Safety Week, Fire Safety Week, Environment Day and observance of Quami Ekata Diwas in the Company, various competitions were conducted in Hindi, English and Telugu to involve more and more employees of the Organization and bring awareness on these subjects. On the occasions of Republic Day and Independence Day Celebrations, CMD of the organisation addressed the gathering in Hindi.

With an objective to promote, propagate Hindi and inculcate the reading habit among the Officers and Employees of the Company, various Hindi Magazines and News Papers such as (1) Hindi Milap (2) Swatrantra Vaartha (3) Anuvad (4) Sahitya Amruth (5) Avishkar (6) Yojna (7) Hindi Rozgar Samachar (8) Pratiyogita Darpan (9) Meri Saheli (10) Dakshin Samachar (11) Golconda Darpan (12) Vaak (13) Milind Patrika (14) Naya Gyanoday (15) Hans are subscribed regularly. Besides this, popular Hindi books on all subjects are also purchased annually with the same objective as per the directives of DOL.

The Website of the company prepared in Hindi is being updated from time to time in compliance with the directives from Govt. of India.

28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company being a Defence PSU, the disclosure of information with respect to conservation of energy, technology absorption, foreign exchange earning and outgo under the provisions of Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is not required as the Ministry of Corporate Affairs vide Notification GSR No.680 (E) dated 4th September, 2015 has granted exemption to Defence Public Sector Undertakings.

Renewable Energy

Under Green Energy commitment to Hon’ble Prime Minister of India, BDL has revised the commitment to set up 10 MW Grid connected Solar PV power plants in their units. Your Company has installed 5 MW Grid connected Solar Power plant at BDL-Bhanur unit through M/s. Solar Energy Corporation of India which has become operational since September 2017. The generated solar power is being connected to Telangana state electrical power grid at Nandigama sub-station. The generated power is being used for captive consumption for BDL-Bhanur unit, which has resulted in increased savings by virtue of reduction in electricity cost.

Installation of 5MW Grid connected Solar Power plant at Ibrahimpatnam unit through M/s. Solar Energy Corporation of India is in progress which will be operational during FY 2018-19. The generated solar power would be connected to Telangana state electrical power grid at Mangalpally sub-station. The generated power will be used for captive consumption for BDL-Kanchanbagh unit.

Solar PV power system is environmental friendly producing non-polluting renewable energy. Grid connected Solar Photo Voltaic (PV) Roof Top Power Plants have been established during the year 2015-16 at the following locations

a) 100KWp Grid connected Solar PV Power Plant commissioned on the Roof Top of the Main Canteen building and it is in operation from December 2015.

b) Another 100KWp Grid connected Solar PV Power Plant commissioned on the Roof Top of the D&E building and it is in operation from February 2016.

29. VIGILANCE:

Vigilance Awareness Week-2017 was organized from 30 October 2017 to 04 November 2017.

On 30 October 2017, Shri K. Divakar, Director (Technical)/ BDL administered the Pledge and other Senior Officers read the messages of the Government authorities. Live video conference of administering the Pledge and reading of the messages took place by covering all the divisions of BDL viz., i) Kanchanbagh- Hyderabad-Telangana ii) Bhanur-Sangareddy Dist.-Telangana iii) Visakhapatnam-Andhra Pradesh and declared commencement of the Vigilance awareness week Celebrations with the Theme of “My Vision - Corruption Free India”.

On 31 October 2017 CVO, BDL inaugurated the Vigilance Awareness Week-2017 celebrations at BDL-Bhanur, Sangareddy Dist. Shri P.V.K. Ramana Prasad, Principal Chief Legal Advisor, Anti-Corruption Bureau, Telangana State delivered a guest lecture at Auditorium, BDL-Township, Bhanur.

On 01 November 2017, Ms. Anupama Jha, Ex-Executive Director, Transparency International India delivered a Guest Lecture and participated in an interactive session with the Senior Executives at “Midhani” Conference Hall, Kanchanbagh, Hyderabad as part of Vigilance Awareness Week Celebrations of 2017.

Essay writing Competitions were organized during Vigilance Awareness week. On 03 November 2017 Valedictory Function was organized wherein Justice G.V. Seethapathy, Former Judge of Andhra Pradesh High Court delivered a guest lecture on “My Vision-Corruption Free India” as part of Vigilance Awareness Week-2017 celebrations. Further, Justice G.V. Seethapathy, Former Judge of Andhra Pradesh High Court released the “Vigilance Manual”, which is compiled by the CVC consisting of vigilance circulars etc., Prizes were distributed to winners in Various Competitions “Integrity Pledge for Citizens” was administered on 30 October 2017 to all the employees of BDL-Kanchanbagh, Bhanur, Badamafi and Visakhapatnam and also to college students.

The main focus of the Vigilance department has been preventive/pro-active vigilance. System improvement suggestions were given to the Management on areas like e-tendering, recruitment and absorption of Management Trainees, Resignation, e-payment, e-procurement departmental promotions, foreign visits, merit awards to employees, civil works etc during the year under report. Online submission of Annual Property Returns through computerized system was also implemented during the year.

30. CORPORATE SOCIAL Responsibility AND sustainability DEVELOPMENT:

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and The Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications / amendments issued by Ministry of Corporate Affairs and DPE guidelines, the Company has undertaken various activities as per the CSR Policy. The programmes/initiatives/projects are taken up in line with the Schedule-VII of the Companies Act-2013, which are duly incorporated in CSR policy and forms the guiding principle for all our programmes.

The Board of Directors of your Company has constituted Board Level Committee on Corporate Social Responsibility and Sustainable Development (CSR & SD) (please refer Corporate Governance Report) in line with the provisions of Section 135 of the Companies Act, 2013. The Committee has formulated and recommended CSR Policy to the Board indicating the projects/activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013.

The CSR and SD activities are monitored periodically by the Committee and an annual report on CSR and SD activities undertaken during the year 2017-18 is enclosed at Annexure-2.

Your Company has been very conscious about its responsibilities towards society. Your Company has also ventured into backward/ under-developed areas in Andhra Pradesh and Telangana to undertake Corporate Social Responsibility (CSR) activities by sponsoring various schemes.

The core areas of focus under CSR are Health Care, Nutrition, Education & Literacy, Skill Development & Sustainable Livelihoods, Sanitation, Safe Drinking Water etc. Your Company also adopted villages in Andhra Pradesh and Telangana States under Corporate Social Responsibility initiative and the focus is on the necessities of human life-health, water and other conveniences.

During the year 2017-18, your Company spent an amount of Rs.1839.40 lakh on CSR activities and achieved 100% CSR target amount required under the provisions of Companies Act, 2013.

CSR activities being undertaken are placed on Company’s website hhtp://www.bdl-india.in

31. AUDIT COMMITTEE:

An Audit Committee is in place as a part of good Corporate Governance. Six meetings have been held during the year 2017-18 to review internal control systems and their adequacy, including coverage of Audit Functions. Details of composition, terms of reference, etc., are covered in Report on Corporate Governance.

32. RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions during the year under review which may have a potential conflict with the interest of the Company at large. Thus, disclosure in Form AOC-2 is not required. Members may refer to the notes to the accounts for details of related party transactions. The policy for related party transaction has been uploaded on the Company’s website www.bdl-india.in.

33. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement

34. INTERNAL CONTROL SYSTEMS

Your Company had put in place all required internal controls and systems to meet the canons of financial propriety. External audit firms are appointed to ensure their adequacy and report thereon. A detailed analysis of reports of Internal Audit Firms as well as reports of Internal Audit Department of your Company are placed before the Audit Committee for its review and advice. The adequacy of internal control procedures are reviewed and reported by Statutory Auditors in their Audit Report. The necessary disclosures have been made in Notes to Accounts. Your Company being a Government Company is subject to Government Audit also.

35. AUDITORS:

M/s.S.R.Mohan & Co., Chartered Accountants, Hyderabad were appointed as Statutory Auditors of the Company for the financial Year 2017-18 by the Comptroller & Auditor General of India. The Auditors have audited the Accounts and their Report is placed as a part of the Annual Report.

36. COMMENTS OF THE COMPTROLLER & AUDITOR GENERAL OF INDIA

The Comments of Comptroller and Auditor General of India (C&AG) under Section 143 (5) of the Companies Act, 2013 on the accounts of the Company for the year ended 31 March 2018 are placed next to the Statutory Auditors Report.

37. COST AUDITORS

Your Company appointed M/s DZR & Co., Cost Accountants, Hyderabad as Cost Auditors for the FY 2017-18 in terms of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules 2014.

38. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Shri.Y.Ramesh, a Practicing Company Secretary (PCS Registration No. 7929) for the financial year 2017-18 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed to this report as Annexure 3.

The Secretarial Auditor in his Report observed that as per Regulation 31(2) of the SEBI (LODR) Regulations, 2015, hundred percent of shareholding of promoter and promoter group shall be in dematerialized form. However, as on 31 March 2018, twelve equity shares held by six nominee shareholders of President of India, the promoter of the Company are in physical mode.

It is informed that Company has been listed on the stock exchanges recently on 23 March, 2018 and as disclosed in the IPO offer document the said nominee shares have been transferred back to the President of India after listing vide approval of the Board in its meeting held on 30 May 2018, for the purpose of dematerialisation.

39. CEO / CFO CERTIFICATION:

As per the requirements of SEBI Listing Regulations and DPE Guidelines, the CEO/CFO certificate has been obtained and placed before the Audit Committee and the Board.

40. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report required under the SEBI (LODR) Regulations, 2015 and also under DPE Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs), is attached to this Report as Annexure 4.

41. CORPORATE GOVERNANCE:

Corporate Governance is about application of best management practices, compliance of laws and adherence to ethical standards to achieve Company’s objective of enhancing stakeholders’ value and discharge of social responsibility.

The Company has a well-established, transparent and fair administrative set up to provide for professionalism and accountability.

As per the guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8)/2005-GM, dated 14 May 2010 and in terms of the SEBI (LODR) Regulations, 2015, Report on Corporate Governance along with Certificate on compliance of conditions on Corporate Governance from a Practicing Company Secretary are attached to this report as Annexure-5.

Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to Stock Exchanges and MoD in the prescribed format. Your Company received “Excellent” rating from MoD for compliance of Corporate Governance under DPE Guidelines for the year 2016-17 and compliance of Corporate Governance for the year 2017-18 is under evaluation.

42. RISK MANAGEMENT:

DPE guidelines on Corporate Governance for CPSEs - 2010 require that the Board of the Company should ensure integration and alignment of Risk Management Systems with Corporate and operational objectives and also that risk management is undertaken as a part of normal business practice and not as a separate task set at times.

In line with the above guidelines, your Company has framed Risk Management Policy of the Company which is applicable to all levels and all Units of the Company. One of the objectives of Risk Management Policy is to ensure that all current and future risk exposures of the Company are identified, assessed, quantified, appropriately mitigated and managed.

Divisional Level Committees have been formed to assess current status of Risk and identify measures to mitigate risks and also to evaluate mitigation measures so identified. Periodical Review meetings are taking place and a report being placed before the Board atleast once in a year.

In terms of SEBI (LODR) Regulations, 2015, constitution of Risk Management Committee is not applicable to your Company based on the Market Capitalization for the financial year ended 31 March, 2018.

43. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

In line with the provisions contained under “The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013 your Company has put in place “Anti Sexual Harassment Policy” in line with the requirements of the above Act. During the year 2017-18, your Company has not received any Sexual harassment complaints.

44. COMPLIANCE UNDER THE RIGHT TO INFORMATION ACT, 2005.

The information required to be provided to citizens under Section 4(1)(b) of Right to Information Act, 2005 is placed on Company’s Website www.bdl-india.in. It contains general information of the Company, functions, powers and duties of employees/officers, decision making process, rules, regulations, manuals and records held by the Company, directory of the Company’s Officers, pay scales of officers/ employees and procedure for seeking information and inspection of records. The Company has nominated a Central Public Information Officer of Senior Manager level to attend to queries and appeals. Further, during the year 2017-18 the Company received 105 applications/queries and the same were disposed off.

45. VIGIL MECHANISM

Pursuant to the provisions of the Section 177(9) of the Companies Act, 2013 read with Rule (7) of the Companies (Meeting of the Board & its Power) Rules, 2014 and DPE Guidelines for CPSEs, the Board of Directors had approved the policy on Whistle Blower/Vigil Mechanism and the same was hosted on website of the Company. The policy, inter-alia, provides a direct access to the Chairman of the Audit Committee

46. BUSINESS RESPONSIBILITY REPORT

The Securities and Exchange Board of India (SEBI) has mandated inclusion of Business Responsibility Report (“BR report”) as part of the Annual Report for 500 listed entities based on market capitalization. Your Company has prepared a comprehensive policy framework for BR report after studying the SEBI (LODR) Regulations, 2015 requirements and keeping in view the business and governance environment in which BDL as a Defence PSU operates. The Company’s BR report for the year is attached to this report as Annexure-6.

47. DIVIDEND DISTRIBUTION POLICY

In terms of SEBI (LODR) Regulations,2015, the top 500 listed Companies, based on market capitalization shall formulate a Dividend Distribution Policy. As per the Market Capitalization data released by stock exchanges, the Company ranks in the list of top 500 listed Companies. Hence the said policy would be applicable to the Company from the current financial year 2018-19.

Accordingly, dividend distribution policy has been adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining the profit in the business. The policy is available on the BDL’s website www.bdl-india.in

48. ACKNOWLEDGEMENT

Your Directors gratefully acknowledge the valuable support and assistance received from all Government Agencies, particularly Ministry of Defence, Ordnance Factories, Department of Defence Production, DRDO Laboratories, Central Government Departments, State Governments of Telangana and Andhra Pradesh, Quality Assurance Agencies of Government of India and other PSUs for the help extended by them from time to time. The Company wishes to place on record its appreciation for the cooperation extended and guidance provided by the Comptroller & Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Statutory Auditors, Bankers and Suppliers.

The Directors take this opportunity to place on record their deep appreciation for the valuable contribution made and co-operation extended by the employees at all levels to propel the Company to greater heights and to sustain its growth path in the years to come.

For and on behalf of the Board

V Udaya Bhaskar

Chairman and Managing Director

DIN: 06669311

Place : Visakhapatnam

Date : 20 Jul 2018

---

Mar 31, 2017

Dear Members,

The Directors have pleasure in presenting the 47th Annual Report together with the audited financial statements of the Company for the year ended 31 March 2017.

2. HIGHLIGHTS OF OPERATIONS:

2.1 Your Company has achieved highest Sales Turnover of Rs.4,886.62 Crore (which includes deferred revenue of Rs.7.05 Crore) during the fiscal year under report surpassing the Moll target and registering an increase of 17.47% over that of Previous Year.

2.2 Your Company had successfully implemented IND-AS during the financial year and transformed into IND-AS compliant Company.

2.3 Implementation of ERP/SAP in all the Units has been completed and your Company is reaping the full benefits of the same.

3. FINANCIAL RESULTS AND PERFORMANCE HIGHLIGHTS

3.1 Performance of the Company in financial terms is summarized below:

Particulars	Rupees in Crore		% of Increase/ (Decrease)
	2015-16*	2016-17
Value of Sales	4,159.97	4,886.62	17.47
Value of Production	4,297.83	5,011.00	16.59
Profit Before Tax	847.31	802.81	(5.25)
Profit After Tax	564.88	524.06	(7.23)
Value Added	1,677.53	1,885.77	12.41

3.2 Following data reflect the financial position of the Company:

Particulars	Rupees in Crore		% of Increase/ (Decrease)
	2015-16*	2016-17
Net Block	553.76	596.99	7.81
Working Capital	2,052.30	1,569.75	(23.52)
Capital Employed	2,746.15	2,327.85	(15.23)
Net Worth	1,800.02	2,194.98	21.94

*Regrouped figures as per IND-AS

3.3 During the year under report, Akash weapon and its support systems form part of the major chunk of orders that have been executed by the Company. Your Company has achieved a profit before tax of Rs.802.81 Crore as compared to Rs.847.31 Crore achieved in the previous year. Profit after tax is at Rs.524.06 Crore as against Rs.564.88 Crore in the previous year, the reduction is due to reduction in interest income.

3.4 Your Company has bagged its first major Export Order contract worth USD 21.5 Million for supply of Light Weight Torpedoes. Further a fresh order worth Rs. 1650 Crore for the supply of Anti-Tank Guided Missile(ATGM) has been received. Your Company has geared up for execution and timely delivery of goods against the said orders.

4. DIVIDEND & TRANSFER TO GENERAL RESERVE:

Your Company has a consistent track record of Dividend Payment. Your Board has recommended a sum of Rs. 157.22 Crore as final Dividend for the financial year 2016-17. Further, an amount of Rs 353 Crore is being transferred to General Reserve.

5. CAPITAL STRUCTURE:

During the year 2016-17, your Company had issued bonus shares in the ratio of 1:4 (one fully paid up equity share of Rs. 1000 each for every four equity shares held) to the Shareholder. As a consequence the paid up capital of the Company was increased from Rs.97.75 Crore to Rs. 122.19 Crore. The Authorized Capital of the Company stands at Rs. 125 Crore.

During the current financial year 2017-1 8, the Cabinet Committee on Economic Affairs in its meeting held on 12 April 2017, has conveyed its approval for listing of Shares of your Company in the stock exchanges by way of an offer for sale of a part of the Government holding through Initial Public Offer (IPO). ‘

In this process, the Ministry of Defence (MoD) had approved sub-division of the face value of shares from Rs. 1000/- per share to Rs. 10/- per share and also for conversion of the Company from Private Limited to Public Limited and consequent amendments to the Articles of Association of the Company. Accordingly, your Company in the 6th Extraordinary General Meeting held on 8 May, 2017 subdivided the face value of equity shares of the Company from Rs. 1000 per share to Rs. 10 per share and further the Board in its 238th Meeting held on 3 August 2017 approved the conversion of Company from Private Limited to Public Limited.

Apart from the above, your Board in its 238^th Meeting also approved the buyback of 30546875 equity shares (representing 25% of paid up capital) of face value Rs. 10/- each in compliance with Clause 6 of the Guidelines on Capital Restructuring of CPSEs issued vide Office Memorandum No.F.No.5/2/2016 of Ministry of Finance, Govt of India dated 27 May, 2016.

6. PERFORMANCE AGAINST MoUs:

Your Company signs a Memorandum of Understanding (MoU) every year with the Ministry of Defence, Government of India.

The performance of the Company for the year 2015-16 has been rated “Excellent”. The MoU rating for the year 2016-17 is under evaluation.

The MoU for the financial year 2017-18 was finalized with the Ministry, with a Net Sales target fixed at Rs.5300 Crore. Your Company is well poised to achieve the targets fixed in the MoU.

7. MODERNIZATION AND UPGRADATION:

Capacities of ATGMs and other products are being ramped up. Civil infrastructure is being created and modernization/upgradation of plant and machinery is under process. During the year an amount of Rs.49.45 Crore was spent towards the modernization/upgradation programme.

The following Key Technology Upgradation projects were taken up for implementation during the financialyear2016-17:

i. Automation of material handling of Surface to Air Missile (SAM) subsystem

ii. Establishment of automatic grain loading for Akash SAM

iii. Missile Simulation mode in R&D

iv. Spectro- Radiometer for R&D

8. RESEARCH & DEVELOPMENT

Your Company recognizes that Research & Development is a thrust area for design and development of various products for Indian Armed Forces. Your Company has developed Anti-Tank Guided Missile Launcher, Test Equipment, Outdoor Simulator, Infrared Interference Indicator (IRII), Counter Measures Dispensing System (CMDS) etc. as import substitutes.

Your Company has identified various products for the requirement of Indian Armed Forces and currently its research and development is in process. The Company is also working on the design and development of avionics systems such as Counter Measures Dispensing System (CMDS) for Indian Air Force. CMDS and its Test Equipment for various platforms are being developed as import substitutions. There is a substantial export market for CMDS.

The following table shows the recent trend in in-house R&D expenditure:

(Rs.in Crore)

	2013-14	2014-15	2015-16	2016-17
Sales Turnover (Gross)	1779.89	2799.68	4159.97	4886.62
R&D expenditure	19.89	22.72	29.43	34.71

In addition to the in-house R&D activities, your Company has entered into Molls with DRDO labs for co-development of various missiles with a substantial financial commitment and manpower support from the Company. This will further enhance the R&D expenditure to be incurred in the coming years.

9. PROCUREMENT FROM MSMEs

Your Company has been providing increased thrust on enhancing procurement from Micro, Small & Medium Enterprises (MSMEs) as per the guidelines/notifications issued by the Ministry of MSMEs.

Your Company being a weapons manufacturing Company has been granted certain exemptions under the policy. However, your Company would endeavour to procure general items from SMEs. A list of 358 items was reserved in the Company’s IMM manual for procurement from SMEs.

As per Government of India guidelines issued from time to time your Company extends various facilities/concessions to vendors registered with NSIC under its Single Point Registration Scheme such as

a) Issue of Tender documents free of cost.

b) Exemption from payment of EMD.

c) Price Preference of 15% over the price quoted by large-scale units. In case the SME happens to be within 15% range above the LI price who is notan SME, SME unit shall be provided with a counter price to reduce to LI price. A quantity of up to 20% shall be ordered on SME on acceptance of LI price.

d) The condition of turnover and experience is relaxed for Startups (whether MSMEs or otherwise), as per guidelines of Govt, of India subject to the meeting of quality and technical specifications as per clarification given by Ministry of Finance, Department of Expenditure (DoE).

e) Interest free advance is also being paid to MSMEs and startups against Bank Guarantee for 110% of order value.

10. EXHIBITIONS:

Senior Executives and Directors participated in National and International Exhibitions during the year 2016-17. Such platforms are used to gain awareness in advanced technologies, interact with experts and share knowledge. Visiting the pavilions of other countries and understanding the systems available with them enables your Company to draw up its own future business plans effectively.

Your Company participated in the following exhibitions during the year 2016-17:

With the recent changes in the Export policy of the Department of Defence Production, Ministry of Defence, Government of India, your Company is now focused more on tapping the export markets. Your Company is exploring the markets for potential exports. In this process your Company has bagged its first export order worth USD 21.5 Million for the supply of Torpedoes.

Your Company is having regular interaction with the overseas customers. Offset implementation also offers a major opportunity to achieve our export targets. Your Company is interacting with aerospace majors in Europe and Russia to exploit opportunities arising out of offsets.

12. BOARD OF DIRECTORS:

Appointment of Independent Directors

Smt. Sushama.V.Dabak and Prof.Ajay Pandey were appointed as Independent Directors w.e.f 01 December 2015 for a period of three years. At present there is a requirement of three more independent directors (including filling up one vacant position), as the Company is in the process of listing of its shares on the stock exchanges. The appointments are in the process at our Administrative Ministry.

(i) Statement on declaration by Independent Directors:

Independent Directors have given declarations u/s 149 (7) of the Companies Act, 2013 that they meet the criteria of independence as laid down u/s 149 (6) of the said Act.

(ii) Change of Directors:

In terms of the Articles of Association of the Company, the President of India is vested with powers to appoint the Directors of the Company from time to time and also shall determine the terms of office of such Directors.

During the year, Shri.K.Divakar assumed the charge as Director (Technical) in place ofAVMN B Singh, w.e.f 01 July 2016.

AVM NB Singh ceased as Director (Technical) on 30 June 2016 upon his superannuation. Pursuant to MoD Lr.No.H-62011/7/2014-D(BDL) Dt.09 August, 2016, Lt.Gen.(Retd) Anil Chait, independent director of the Company ceased to be Director on the Board w.e.f 01 June 2016 on account of his resignation.

The Directors would like to place on record their appreciation for the services rendered by them during their tenure.

(iii) Number of Meetings of Board:

During the year 2016-17, Seven (7) Board Meetings were held on 16 May 2016, 30 June 2016, 10 August 2016, 27 September 2016, 25 November 2016, 24 January 2017 and 07 March 2017. Requirement on number and frequency of meetings, in terms of the provisions of the Companies Act and DPE Guidelines were complied with in full.

13. DIRECTORS’ RESPONSIBILITY STATEMENT:

As per Section 134(5) of the Companies Act, 2013 as amended, the Directors state:

(i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures therefrom.

(ii) that the selected accounting policies have been applied consistently and judgements and estimates made are reasonable and prudent as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit and loss of the Company for the year ended 31 March 2017.

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) that the annual accounts have been prepared on a going concern basis.

(v) that the Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. MANPOWER AND RESERVATION OF POSTS FOR SCs/STs:

The Company has been following Presidential Directives of the Government with regard to reservation of posts for SCs/STs in recruitments.

Total manpower strength as on 31 March 2017 is at 3182 (including four functional directors) out of which the number of persons on temporary rolls is 72. Of the total strength, 96 are ex-servicemen, 592 are of Schedule Caste and 219 are of Scheduled Tribes. The percentage of Scheduled Caste and Scheduled Tribes in respect of Employees is at 1 8.60% and 6.88% respectively.

Number of persons on temporary rolls as on 31 March 2017 is 72, out of which 18 belong to Scheduled Caste and 02 belong to the Scheduled Tribes category.

The No. of Scheduled Caste and Scheduled Tribes in various categories of posts as on 31 March 2017 is given below:

Category	Number of Employees
	Total Strength		Scheduled Castes		Scheduled Tribes
	31-03-2016	31-03-2017	31-03-2016	31-03-2017	31-03-2016	31-03-2017
Group-A	770	829	126	138	76	84
Group-B	89	60	20	14	07	04
Group-C	1972	1940	356	348	110	110
Group-D	280	277	74	74	18	19
Temporary	17	72	2	18	1	2
Total	3128*	3178*	578	592	212	219

*excluding four functional directors.

Recruitment of employees in Scheduled Caste and Scheduled Tribes during 2016-17 is given below:

Classification of posts	Total Vacancies Released	Total Recruitment	Reservation of posts (out of Col.3)		Recruitment made during the year 2016-17
(1)	(2)	(3)	(4)		(5)
			SC s	STs	SCs	STs
Group-A	69	69	11	6	11	6
Group-B	-	-	-	-	-	-
Group-C	56	56	16	1	16	1
Group-D	1	1	-	1	-	1
Total	126	126	27	8	27	8

15. EMPLOYMENT OF WOMEN:

As per the recommendation No.51, Para (ii) (a) of the National Commission for Women (NCW) in its Annual Report for the year 1995-96, the employment position of Women as on 31 March 2017 is given below as directed by the Ministry of Defence, vide their letter Nos.39(6)/99/D(B&C), dated 27Augustl999.

Grade	No. of Employees	Women	Percentage
1	60	07	11.67%
II	208	35	16.83%
III	221	33	14.93%
IV	87	09	10.34%
V	98	11	11.22%
VI	163	6	3.68%
VII	37	0	0%
VIII	13	1	7.69%
IX	2	0	0%
Functional Directors	3	0	0%
CMD	1	0	0%
Total	893	102	11.42%

II. NON-EXECUTIVES

Grade	No. of Employees	Women	Percentage
WG-0	2	0	0%
WG-1	71	13	18.30%
WG-2	250	30	12%
WG-3	245	28	11.42%
WG-4	316	54	17.09%
WG-5	146	22	15.07%
WG-6	168	22	13.10%
WG-7	35	3	8.57%
WG-8	130	7	5.38%
WG-9	15	0	0%
WG-10	169	6	3.55%
WG-11	113	15	13.27%
WG-12	629	47	7.47%
Total	2289	247	10.79%

16 PERSONS WITH DISABILITIES (PWD) AS ON 31 MARCH 2017:

The total number of Physically Challenged employees as on 31 March 2017 was 114 and its percentage to total employees works out to 3.21 %.

	HI	LD	VI	Total
Group-A	06	13	04	23
Group-B	0	02	01	03
Group-C	19	48	08	75
Group-D	04	05	04	13
Total	29	68	17	114

HI- Hearing Impaired, LD-Locomotive Disability, Vl-Visually Impaired.

17. HUMAN RESOURCE DEVELOPMENT:

During the year under report the Company has conducted training programmes for 1302 Executives and 1011 Non Executives to impart training on knowledge based, development oriented and need based topics. Such training programmes were organized in-house and at premises of external agencies to cover the present and future requirements of the Company.

Apart from regular training programmes, your Company organized the following activities/ programmes during the year:

(a) Management Development Programmes (MDPs):

26 senior Executives (DGM & above grade) were sponsored for the Management Development Programmes (MDPs) conducted by premier Institutes in India like IIM-Bangalore, IIM-Kozhikode, IIM- Lucknow, XLRI Jamshedpur and MDI Gurgaon during the financial year 2016-17.

(b) Advanced Management Programmes (AMP):

Three Principal Executives were sponsored for the Advance Management Programme conducted by ASCI, and one Board Member was sponsored for the AMP programme conducted by SCOPE.

(c) Project Management Professional (PMP) Programme:

To create awareness about Project Management concepts and transform your Company into a Project driven organization by institutionalizing the Project Management principle in the Company, Management has identified 31 Executives to undergo PMP Certification program conducted by PMI USA. Accordingly 35 Hrs mandatory Contact Programme for all the 31 Executives was conducted at the Institute of Systems, Technology and Management in 2 Batches.

59 Executives have registered themselves with PMI USA and 19 Executives have successfully cleared the PMP certification exam. 10 PMP Certified Executives were sent for a conference on Project Management in Hyderabad (PMIC).

18. PARTICULARS OF EMPLOYEES

There were no employees of the Company who received remuneration in excess of the limits prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

19. FOREIGN VISITS:

Your Company incurred an expenditure of Rs.30.99 lakh during the year under report towards foreign travel for business trips and also for On the Job-Training of personnel.

20. INDUSTRIAL RELATIONS AND EMPLOYEE WELFARE:

Your Company continues to enjoy a cordial and harmonious Industrial relation with the cooperation and support of all sections of employees viz., registered Trade Unions and Associations such as SC,ST,OBC and officers Association. Statutory and non-statutory committees such as works, safety and welfare committees are contributing to work place discipline at all levels.

Statutory provisions on welfare are followed meticulously by Management and continues to extend non-statutory facilities such as school fee subsidy, uniform and shoes.

During the year, Union elections were held peacefully. In this regard election verification was conducted on 24 Dec 2016 by the Deputy Chief Labour Commissioner (C), Hyderabad to determine majority Union to represent the employees. Bharat Dynamics Employees Union emerged as majority union.

21. SECURITY:

Central Industrial Security Force (CISF) is providing Security and Fire Services in both Kanchanbagh and Bhanur Units. During the year under report, CISF has played a vital role in the Security and safeguarding the property of the Company. CISF team adopted robust security measures combining physical measures with technology to keep the highly sensitive installations secure.

The Plant Security Council is in place to review the security arrangements and implementation of IB guidelines. Regular Security review meetings are being conducted both by Management and CISF to beef up security.

Biometric Access Control System has been installed in addition to Computerized Photo Identity Cards to prevent unauthorized entry and CCTV Cameras have been installed all over the factory premises to cover more area under CCTV surveillance. Door Frames, Metal Detectors, X-ray baggage machines are also in use. Barricades, Boom Barriers and Morchas are provided to strengthen physical security measures.

Regular programmes on Security awareness were conducted besides observing Security Week/Fire Week. Employees are sensitized on the security threat and action to be taken in case of emergency and fire accidents.

On 9 September 2016 a joint mock drill exercise of Anti Terrorist Operation was conducted. A team of fifty members of OCTOPUS and fifty four members of CISF and eight officials of the Company have participated in the said programme.

On 22 October 2016 and 23 October 2016, counter terrorist exercise was conducted inside BDL, Kanchanbagh Campus by NSG Regional Hub, Hyderabad. In the exercise, One hundred and eighteen NSG personnel, including one Deputy Commandant, fifty two CISF personnel and eight officials of the Company have participated in the said programme.

In addition to the above, internal mock drill exercise was conducted twice in a month for effective security.

22. SAFETY:

Safety, Health and Environment (SHE) is strictly followed in your Company. The two Corporate Committees i.e. Industrial Safety Committee, which is statutory and Explosive Safety Committee are functioning to meet the needs of the Company. Safety committee meetings are held at regular intervals for monitoring Safety, Health and Environment as per the statutory requirement. The works are carried out in compliance with the Factories Act 1948 and Explosive safety strictly adhering to the Storage & Transport of Explosive Committee(STEC) regulations.

Annual explosive safety audit is conducted by Centre for Fire, Explosive & Environment safety (CFEES), New Delhi and the observations made by the audit team have been complied with. Regular medical check-ups are carried out for employees working in hazardous areas.

Training programmes are arranged by HRD through National Safety Council (NSC), Central Labour Institute (CLI), Regional Labour Institute(RLI) and Centre for Fire, Explosive & Environment Safety (CFEES), New Delhi to inculcate safety consciousness and to establish a safe working environment among the employees.

During the year, Safety officers of the BDL Safety Engineering Department conducted classes on both Industrial Safety and Explosive Safety as a part of an induction programme for new entrants in coordination with ISTM-HRD. Safety Engineering Department has organized guest lecture by persons with experience and expertise in the field of Explosive safety and Industrial Safety to educate the employees of the Company.

Fire mock drills were conducted at regular intervals to ensure firefighting Preparedness. 40 employees have undergone a certificate course on industrial safety through HRD and examination conducted by the State Board of Technical Education & Training (T.S). Successful candidates were awarded certificates.

Safety Day/Week was celebrated during the month of March, 2017. On this occasion Safety pledge was administered to all the employees and various competitions and programmes were conducted by Safety Engineering Department and employees were awarded to boost their interest towards safety.

23. ANNUAL RETURN:

In accordance with the provisions of the Companies Act, 2013, Company is required to attach an extract of Annual Return for the year under report and the same is placed as Annexure-I.

24. ENVIRONMENT AND POLLUTION CONTROL:

The Company contributes in all respects for the environment by maintaining a clean and green environment. Effluent Treatment Plant, Sewage Treatment Plant, Water Conservation, Tree Plantation, Disposal of hazardous waste and scrap, planting of flower bearing trees and landscaping, utilizing treated effluent water have been carried out. Your Company is regularly reviewing the status of various types of pollutions. All the three Units are having valid consent for operation, which is obtained from the Pollution Control Boards.

The following steps have been taken for controlling and preventing of pollution in all respects:

i) WASTE MANAGEMENT:

All food waste generated from the canteen is being given for animal feeding and composting. The hazardous waste, e-waste and biomedical waste is being given to the agency registered with the pollution control board. The lead acid batteries are being given to the authorized recyclers/ dealers with buy back option. Metal scrap is being disposed through M/sMSTC (A Govt, of India Undertaking).

ii) TESTING OF ENVIRONMENTAL PARAMETERS:

The environment parameters like ambient air quality, wastewater from sewage treatment plant and effluent treatment plant, air quality of diesel generator set and Venturi scrubber are tested at all the three units through certified agency and results are within the prescribed limits of Pollution Control Board.

iii) CELEBRATION OF WORLD ENVIRONMENT DAY 2016

World Environment Day 2016 was celebrated at all the three units of the Company. On this occasion, with the theme “Fight against Illegal Trade in Wildlife” banners were put up in prominent locations complying with the United Nations Environment Programme (UNEP) recommendations.

Competitions like multi-lingual essay, slogan writing, quiz etc. were conducted and the winners have been awarded. Guest lectures were arranged on ecological, environmental issues being faced by the population. Plantation of Tree saplings has been organized in all the units.

25. QUALITY:

Your Company manufactures products which are single shot in nature. These products require stringent Quality standards and a high degree of reliability. In pursuit of this objective, your Company has been adopting International Quality Management practices by way of obtaining ISO certification for the past 21 years.

At present CP-IGMP, ITD, Electronics Division and D & E divisions have been certified with ISO 9001:2008 Quality Management System standard. Akash Division has been certified with AS 9001C; with this, all major divisions such as Milan, Bhanur Unit and Akash are certified with AS 9100C Aerospace Standards. Your Company is taking initiative to upgrade to AS 9100D (revised) standard and planning to complete upgradation by March 2018 for MILAN Division, AKASH Division and Bhanur unit. Remaining ISO certificated divisions are also planning to upgrade to AS 9100D during financial year 2018-19.

Electrical measured values have traceability to National or International standards which are achieved through calibrating the Electronics equipment in ISO/IEC 17025:2005 (NABL) accredited Labs of Milan Division and Bhanur Unit.

All the three units of BDL at Kanchanbagh, Bhanur and Vizag have been certified with ISO 14001:2004 Environmental Management System (EMS). For all the Units periodical internal audits by internal auditors, surveillance audits by external agencies and Management Review meetings are being held.

Customer satisfaction is being measured for all major products manufactured in all the divisions. Your Company is continuously striving to improve customer satisfaction through customer meets and interaction with users. Corrective actions are being taken wherever necessary for improvement.

26. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

The provisions of OL Act-1963 (as amended in 1967) & Rules thereunder are implemented properly. Quarterly OLIC Meetings are held regularly under the Chairmanship of CMD and Directors. Similarly, the Quarterly progress reports on the use of OL are sent in time to the authorities concerned.

Under OL Act, 1963 and the Presidential Orders thereon, Annual Report of the Company, MoU with MoD and brief of the Company along with presentation for various delegations and Parliamentary Committees were prepared in bilingual form and submitted.

Hindi fortnight was celebrated from 01 to 16 September, 2016. On this occasion various competitions were organized at Kanchanbagh, Bhanur Unit and Vishakhapatnam Unit. Cash Awards were given to the winners of the competitions. On the occasion of Hindi Diwas, a Hasya Kavi Sammelan was also organized wherein the eminent poets from the twin cities were invited.

Town Official Language Implementation Committee (U) functioning is carried out by your Company Hindi Department for PSUs of twin cities consisting of 45 Organizations and was awarded NATIONAL RAJBHASHA KIRTI PURSKAR (first place) by Govt, of India in region ‘C’ for the year 2015

16. The award consists of a Shield and a Certificate for outstanding contribution.

The award was presented by Hon’ble President of India Sri Pranab Mukherjee at a function held at Rashtrapati Bhavan on 14 September, 2016 on the occasion of HINDI DIWAS. CMD and Chairman of the Committee received the “RAJBHASHA KIRTI PURASKAR” in the form of a Shield and Senior Manager (OL) and Member Secretary of the Committee was awarded with the Commendation Certificate for outstanding contribution.

TOLIC (U) was also awarded “Dakshin Kshetriya Rajbhasha Puraskar” (First Place) on 21 December, 2016 in a glittering function of southern level OL conference held in IICT, Hyderabad. The award consists of a Shield and a certificate for outstanding contribution. The award was presented by the Hon’ble Governor of Telangana & Andhra Pradesh Shri G.S.L.Narsimhan. Shri V Udaya Bhaskar, CMD and Chairman of the Committee received the RAJBHASHA PURASKAR in the form of a Shield and Senior Manager (OL) & Member Secretary of the Committee was awarded with commendation certificate for outstanding contribution.

“Rajbhasha Sangoshti evam Samman Samaroh” was organized on 03 March, 2017 by TOLIC (U). In this Seminar, Prof. Arun Tiwari, Chairman of Care Foundation and Co-Author of ‘Wings of Fire’ was felicitated by TOLIC (U) for delivering a lecture on Dr. A.PJ. Abdul Kalam’s Life & Karma in Hindi and Dr. Shrinarayan Singh, Director, Central Translation Bureau has delivered a Guest lecture on Technical Translation.

On the occasion of Vigilance Awareness Week, National Safety Week, Fire Safety Week, Environment Day and observance of Quami Ekata Diwas in the Company, various competitions were conducted in Hindi, English and Telugu to involve more and more employees of the Organization and bring awareness on these subjects among them.

The Website of the company prepared in Hindi was updated from time to time in compliance of the directives from Govt, of India in this regard.

As headquarters of TOLIC, the regular half yearly meetings consisting of 45 PSUs of twin cities were organized under the Chairmanship of CMD, BDL and the decisions taken therein are implemented at the twin cities level.

Employees and Officers of the organization took active participation in the Inter PSUs Competition conducted by TOLIC (U) and six participants won prizes.

With an objective to promote, propagate Hindi and inculcate Hindi reading habit among the officers and employees of the Company, various Hindi Magazines and News Papers such as (1) Hindi Milap (2) Anuvad (3) Sahitya Amruth (4) Avishkar (5) Yojna (6) Hindi Rozgar Samachar (7) Pratiyogita Darpan (8) Meri Saheli (9) Dakshin Samachar (10) Golconda Darpan (11) Vaak (12) Milind Patrika (13) Naya Gyanoday (14) Swatantra Vaartha are subscribed regularly. Besides this, popular Hindi books on all subjects are also purchased annually with the same objective as per the directives of DOL.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company being a Defence PSU, the disclosure of information with respect to conservation of energy, technology absorption, foreign exchange earning and outgo under the provisions of Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is not required as the Ministry of Corporate Affairs vide Notification GSR No.680 (E) dated 4th September, 2015 has granted exemption to Defence Public Sector Undertakings.

Technology Conservation

Your Company has taken up indigenization which encompasses various nascent technologies like Thin Film Hybrid Technologies, manufacturing of HMX-based explosive compositions and optical devices like Photo Diodes, Lens, Filters, etc.,

The indigenization programme covers uncommon components which are not part of Technology transfer from Original Equipment Manufacturer (OEM). The equivalent indigenous materials were indentified and processed indigenously. The evaluation process was concluded successfully validating all the sub-systems. One of the ATGMs is made from these Indigenous parts. This has helped the Company to reduce the dependence on OEM and also bringing down production costs of missiles.

Renewable Energy Development

Sustainable development has become the national priority to channelize the development process in an environment friendly way with the optimum utilization of available natural resources. In its relentless pursuit of implementing sustainable development practices, your Company has unleashed various programmes to conserve energy thus promoting energy efficiency.

Solar energy is one of the most important renewable energy sources, which has been gaining increased attention in the recent past. Solar energy is clean and free of emissions, which is good for the environment, as it does not produce pollutants or byproducts harmful to the Nature.

Your Company under Green Energy commitment to the Hon’ble Prime Minister of India committed to set up 25 MW Grid connected Solar PV power plants in the units. Currently installation of 5 MW Grid connected Solar Power plant at Bhanur unit is in progress and which would be operational during financial year 2017-18. The generated solar power would be connected toTelangana state electrical power grid at Nandigama sub-station.

During the current year, your Board has also approved installation of 5 MW grid connected plant at Ibrahimpatnam Unit and its installation process would commence shortly.

CMD of BDL inaugurated the Vigilance Awareness Week on 31 October 2016 at 14.30 hrs, at ISTM Auditorium, BDL-Kanchanbagh by lighting lamp along with the Chief Guest Shri K. Padmanabhaiah, IAS (Retd.), Chairman of ASCI, Hyderabad. & Ex-Home Secretary, Govt, of India and other Senior Executives. Chief Guest delivered a guest lecture on the theme of “Public participation in promoting integrity and eradicating Corruption”

28. VIGILANCE:

Shri A.V.Y. Krishna, IPS, Joint Director, CBI-Hyderabad delivered a Guest Lecture and participated in an interactive session with Senior Executives of BDL on 01 November 2016 at “Godavari” Conference Hall, D&E Building, BDL- Kanchanbagh, Hyderabad.

Shri Krishna Sastry Pendyala, Head-Fraud Mgt. & Digital Forensics of TCS delivered a guest lecture on 02 November 2016 at 10.00 hrs. at Auditorium, BDL- Bhanur, Telangana as part of Vigilance Awareness Week Celebrations of 2016. Vigilance Department conducted Interactive Session with Vendors and General Public on 02 November 2016 at 14.00 hrs. at Auditorium, BDL-Bhanur, wherein Vendors and General public participated and interacted with the CVO, BDL and Senior officials of BDL.

On 04 November 2016, Valedictory Function was organized wherein Justice L. Narasimha Reddy, Former Chief Justice of Patna High Court delivered a guest lecture on the theme of “Public participation in promoting integrity and eradicating Corruption”. Further, Chief Guest released the Vigilance Newsletter “AWAKE”, which is compiled by BDL-Vigilance Department. The News letter consists of “Ethics code as Tools of Vigilance, Seven Principles of Public Life, Checklists for Procurement cases along with Quotations, messages of the CMD and CVO”.

“Integrity Pledge for Citizens” was administered on 04 November 2016 to all the employees of BDL-Kanchanbagh, Bhanur, Badamafi and Visakhapatnam and also to college students. “Pamphlets” were distributed in Visakhapatnam town on “Citizens Integrity Pledge” as per the directions of the CVC, as part of the sensitization programme during Vigilance Awareness Week-2016.

The main focus of the Vigilance department has been preventive/pro-active vigilance. System improvement suggestions were given to the Management on areas like e-tendering, recruitment and absorption of Management Trainees, Resignation, e-payment, e-procurement, departmental promotions, foreign visits, merit awards to employees, civil works, etc during the year under report. Online submission of Annual Property Returns was also implemented during the year.

29. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT:

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and The Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications / amendments issued by Ministry of Corporate Affairs & DPE guidelines, the Company has undertaken various activities as per the CSR Policy. The programmes/initiatives/projects are taken up in line with the Schedule-VII of the Companies Act, 2013, which are duly incorporated in CSR policy and forms the guiding principle for all our programmes.

The Board of Directors of your Company has constituted Committee on Corporate Social Responsibility and Sustainable Development (CSR & SD) (please refer Corporate Governance Report) in line with the provisions of Section 135 of the Companies Act, 2013. The Committee has formulated and recommended CSR Policy to the Board indicating the projects /activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013.

The CSR and SD activities are monitored periodically by the Committee and the annual report on CSR and SD activities undertaken during the year 2016-17 is enclosed at Annexure-ll.

During the year 2016-17, your Company spent an amount of Rs.13.18 Crore on CSR activities and achieved 100% CSR target amount required under the provisions of Companies Act, 2013.

CSR activities being undertaken are placed on Company’s Web-link http://www.bdl-india.com.

30. AUDIT COMMITTEE:

An Audit Committee is in place as a part of good Corporate Governance. Six meetings have been held during the year 2016-17 to review internal control systems and their adequacy, including coverage of Audit Functions. Details of composition, terms of reference, etc. are covered in Report on Corporate Governance.

31. INTERNAL CONTROL SYSTEMS

Your Company had put in place all required internal controls and systems to meet the canons of financial propriety. External audit firms are appointed to ensure their adequacy and report thereon. A detailed analysis of reports of Internal Audit Firms as well as reports of Internal Audit Department of your Company are placed before the Audit Committee for its review and advice. The adequacy of internal control procedures are reviewed and reported by Statutory Auditors in their Audit Report. The necessary disclosures have been made in Notes to Accounts. Your Company being a Government Company is subject to C&AG Audit also.

32. AUDITORS:

M/s.S.R.Mohan &Co., Chartered Accountants, Hyderabad were appointed as Statutory Auditors of the Company for the financial Year 2016-17 by the Comptroller & Auditor General of India. The Auditors have audited the Accounts and their Report is placed as a part of the Annual Report.

33. COMMENTS OF THE COMPTROLLER & AUDITOR GENERAL OF INDIA

The Comments of Comptroller and Auditor General of India (C&AG) under Section 143 (5) of the Companies Act, 2013 on the accounts of the Company for the year ended 31 March 2017 are placed next to the Statutory Auditors Report.

34. COST AUDITORS

Your Company appointed M/s DZR & Co., Cost Accounts, Hyderabad as Cost Auditors for the FY 2016-17 in terms of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules 2014.

35. CEO/CFO CERTIFICATION:

As per the requirements of DPE Guidelines, the CEO/CFO certificate has been obtained and placed before the Audit Committee and the Board.

36. CORPORATE GOVERNANCE:

Corporate Governance is about application of best management practices, compliance of laws and adherence to ethical standards to achieve Company’s objective of enhancing stakeholders’ value and discharge of social responsibility.

The Company has a well established, transparent and fair administrative set up to provide for professionalism and accountability.

As per the guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8J/2005-GM, dated 14 May 2010, the Management Discussion and Analysis Report (Annexure-lll), Report on Corporate Governance (Annexure-IV) along with Certificate on compliance of conditions on Corporate Governance from a Practicing Company Secretary (Annexure-V) as required under the said guidelines are attached to this report.

Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to MoD in the prescribed format. During the year 2016-17 your Company received “Excellent” rating from MoD for compliance of Corporate Governance under DPE Guidelines.

37. RISK MANAGEMENT:

DPE guidelines on Corporate Governance for CPSEs - 2010 require that the Board of the Company should ensure integration and alignment of Risk Management Systems with Corporate and operational objectives and also that risk management is undertaken as a part of normal business practice and not as a separate task set at times.

In line with the above guidelines, your Company has framed Risk Management Policy of the Company which is applicable to all levels and all Units of the Company. One of the objectives of Risk Management Policy is to ensure that all current and future risk exposures of the Company are identified, assessed, quantified, appropriately mitigated and managed.

Divisional Level Committees have been formed to assess current status of Risk and identify measures to mitigate risks and also to evaluate mitigation measures so identified. Periodical Review meetings are taking place and a report being placed before the Board once in Six months.

38. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

In line with the provisions contained under “The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013 your Company has put in place “Anti Sexual Harassment Policy” in line with the requirements of the above Act. During the year 2016-17, your Company has not received any Sexual harassment complaints.

39. COMPLIANCE UNDER THE RIGHT TO INFORMATION ACT, 2005.

The information required to be provided to citizens under Section 4(1 )(b) of Right to Information Act, 2005 is placed on Company’s Website www.bdl-india.com. It contains general information of the Company, functions, powers and duties of employees/officers, decision making process, rules, regulations, manuals and records held by the Company, directory of the Company’s Officers, pay scales of officers/ employees and procedure for seeking information and inspection of records. The Company has nominated a Central Public Information Officer of Senior Manager level to attend to queries and appeals. Further, during the year 2016-17 the Company received 122 applications/queries and the same were disposed off.

40. VIGIL MECHANISM

Pursuant to the provisions of the Section 177(9) of the Companies Act, 2013 read with Rule (7) of the Companies (Meeting of the Board & its Power) Rules, 2014 and DPE Guidelines for CPSEs, the Board of Directors had approved the policy on Whistle Blower/Vigil Mechanism and the same was hosted on website of the Company. The policy inter-alia provides a direct access to the Chairman of the Audit Committee.

41. ACKNOWLEDGEMENT

Your Directors gratefully acknowledge the valuable support and assistance received from all Government Agencies, particularly Ministry of Defence, Ordnance Factories, Department of Defence Production, DRDO Laboratories, Central Government Departments, State Governments of Telangana and Andhra Pradesh, Quality Assurance Agencies of Government of India and other PSUs.

The Company wishes to place on record its appreciation for the cooperation extended and guidance provided by the Comptroller & Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Statutory Auditors, Bankers and Suppliers.

The Directors take this opportunity to place on record their deep appreciation for the valuable contribution made and co-operation extended by the employees at all levels to propel the Company to greater heights and to sustain its growth path in the years to come.

For and on behalf of the Board

V UDAYA BHASKAR

Place: New Delhi Chairman and Managing Director

Date : 03/08/2017 DIN : 06669311

---

Mar 31, 2016

DIRECTORS'' REPORT

Dear Members,

The Directors have pleasure in presenting the 46^th Annual Report together with the Audited Accounts of the Company for the year ended 31 March 2016.

2. HIGHLIGHTS OF OPERATIONS:

2.1 Your Company has achieved highest Sales Turnover of Rs, 4163.58 Crore during the fiscal year under report surpassing the Moll target and registering an increase of 48.72% over that of Previous Year.

2.2 Supply of one of the ATGMs against the Indent of Indian Army was completed successfully and a fresh Indent is expected for a bulk quantity during the financial year 2016-17.

2.3 Implementation of ERP/SAP in all the Units was completed.

SAP ERP goes "live" at BDL

BDL has joined the elite group of companies who have implemented Enterprise Level SAP ERP software. The software was launched for implementation throughout the organization by CMD, Shri V. Udaya Bhaskaron 14 March 2016.

3. PERFORMANCE:

3.1 Performance of the Company in financial terms is summarized below:

Particulars	Rs, in Crore			% of Increase/
	2014-15	2015-16		(Decrease)
Value of Sales	2799.68		4163.58	48.72%
Value of Production	2770.05		4299.84	55.23%
Profit Before Tax	614.19		850.26	38.44%
Profit After Tax	418.57		563.24	34.56%
Value Added	914.95		1679.54	83.57%

3.2 Following data reflects the financial position of the Company:

Particulars	Rs, in Crore		% of Increase/ (Decrease)
	2014-15	2015-16
Gross Block	940.04	1175.55	25.05%
Depreciation Reserve	546.18	592.25	8.43%
Net Block	393.86	583.30	48.09%
Working Capital	2740.34*	1996.94	(27.13)%
Capital Employed	3134.20*	2580.24	(17.67)%
Net Worth	1533.37	1652.23	7.76%

4. DIVIDEND & TRANSFER TO GENERAL RESERVE:

Your Company has a consistent track record of Dividend Payment. During the year, your Company paid an Interim Dividend of Rs, 67.62 Crore in Feb 2016 and further your Board recommended a sum of Rs,101.35 Crore as Final Dividend for the financial year 2015-16. Further an amount of Rs, 318 Crore is being transferred to General Reserve.

5. CAPITAL STRUCTURE:

5.1 During the year, your Company in Compliance with the letter No.H-62012/2/2016-D (BDL), Dated 28 Jan 2016 received from the Ministry of Defence, successfully completed the buyback of 172500 fully paid equity shares of Rs,1000/-each at a price of Rs,11528 per share.

5.2 The buyback of shares was completed before the scheduled date and an amount of Rs,198.86 Crore was remitted to the Govt, of India on 29 Mar 2016. All the provisions have been complied with in this regard as per the provisions of Companies Act.

5.3 Total Paid Up Capital after buyback stands at Rs, 97.75 Crore comprising of 977500 Equity shares of 000 each and the Authorized Capital stands at 25 Crore comprising of 1250000 Equity Shares of Rs,1000/- each. Gross Block of fixed assets of the Company (including special tools and equipment) stands at Rs,1175.55 Crore representing an increase of Rs,235.51 Crore over 2014-15.

6. PERFORMANCE AGAINST MoUs:

6.1 During the previous year 2014-15, the Company achieved a rating of "Excellent". The MoU rating for the year 2015-16 is also likely to be "Excellent".

6.2 MoU for the financial year 2016-17 was finalized at Ministry, with sales target fixed at Rs, 4400 Crore (excluding duties and taxes). Your Company is well poised to achieve the targets fixed in the MoU.

7. COST REDUCTION:

7.1 In line with MoD guidelines, cost reduction has been identified as a thrust area and various cost reduction measures have been initiated. Apex Committee on Cost reduction has been constituted under the Chairmanship of a Functional Director. Review meetings are being held at regular intervals to monitor progress in achieving yearly targets. During the year under report, an amount of Rs, 76 Crore has been achieved under Cost review/reduction programme.

7.2 e-reverse auction is being implemented under e-Procurement wherever possible which resulted in more competitive prices and reduction in material cost. Further, continuous efforts are being made for increasing Vendor base for various projects resulting in considerable savings in material cost. Further, energy saving devices are being installed as part of energy Audit.

7.3 Salary slips and e-meal card (food coupons) are generated in electronic form at Kanchanbagh, Bhanur and Vizag Units. By this your Company has reduced paper consumption.

8. ECONOMY MEASURES:

8.1 Company has observed fiscal prudence and economy in areas like travelling expenses, advertisement and publicity expenses, purchase of new vehicles, conducting seminars and conferences, courtesy and entertainment, etc during theyear2015-16.

8.2 Inventory of raw-materials, work-in progress and spare parts is maintained at optimal levels. Energy consumption and fixed and variable overheads and Contingency expenditure are being reviewed and pruned to bare minimum.

9. MODERNIZATION AND UPGRADATION:

Automation of production systems at Kanchanbagh complex has been planned to increase the production of Surface to Air Missiles. Storage facilities are being augmented to meet increased production targets

10. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Earnings of foreign exchange for the year wasRs, 1.65 Crore and the outgo wasRs, 604.08 Crore.

11. EXHIBITIONS:

11.1 Senior Executives and Directors participated in National and International Exhibitions during the year 2015-16. Such platforms are used to gain awareness in advanced technologies, interact with experts and share knowledge. Visiting the pavilions of other countries and understand the systems available with them enables your Company to draw up its own future business plans effectively.

YourCompany participated in the following exhibitions during the year 2015-16:

12. BOARD OF DIRECTORS:

(i) Appointment of Independent Directors:

Smt.Sushama VDabakand Prof. Ajay Pandey were appointed as Independent Directors on the Board of BDL w.e.f 1 Dec 2015 and Lt Gen (Retd.) Anil Chait was appointed as Independent Director on the Board of BDLw.e.f. 7 Jan 2016. With that the vacancies of Independent Directors have been filled up.

(ii) Statement on declaration by Independent Directors:

Independent Directors have given declarations u/s 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down u/s 149 (6) of the said Act.

(iii) Change of Directors:

In terms of Articles of Association of the Company, the President of India is vested with powers to appoint the Directors of the Company from time to time and also shall determine terms of office of such Directors.

Accordingly ShriJ.Rama Krishna Rao, IAS, Joint Secretary (ES), Government Nominee Director was on the Board of BDL till 6 Aug 2015 and after that Smt.Kusum Singh, Joint Secretary (P&C) was on the Board of BDL till 3 March 2016.

Shri.R.G.Vishwanathan, Addl. FA&JS (DRDO) was on the Board of BDL till 3 March 2016.

Shri Ashwani Kumar Mahajan, Addl. FA &JS was appointed on the Board of BDL w.e.f.9 March 2016 in place of Smt. Kusum Singh, JS (P&C) and Shri R.G.Vishwanathan, Addl FA&JS (DRDO).

The Board places on record its deep appreciation for the valuable services rendered by Shri J Rama Krishna Rao,IAS, Joint Secretary (ES), Smt.Kusum Singh, Joint Secretary (P&C) and Shri R.G.Vishwanathan, Addl (FA) &JS (DRDO) during their tenure on the Board.

Shri V Gurudatta Prasad was appointed as Director (Production) by President of India w.e.f 10 Sep 2015. Further the tenure of AVM NB Singh, AVSM, VSM (Retd.), Director (Technical) was completed on 30Jun 2016 on attaining age of Superannuation. Shri K Divakar was appointed as Director (Technical) w.e.f. 1 Jul 2016 by the President of India.

The Board places on record its deep appreciation for the valuable services rendered by AVM NB Singh, AVSM, VSM (Retd.) during his tenure as Director (Technical).

(iv) Number of Meetings of Board:

During the year 2015-16, Eight (8) Board Meetings were held on 9 May 2015, 5 Jun 2015, 27Jul 2015,28 Sep 2015,30 Nov2015,29 Jan 2016,5 Feb 2016 and 11 Mar 2016. Requirements on number and frequency of meetings, in terms of provisions of Companies Act and DPE Guidelines were complied with in.

13. DIRECTORS'' RESPONSIBILITY STATEMENT:

As per Section 134(5) of Companies Act, 2013 as amended, the Directors state:

(i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures therefrom

(ii) that the selected accounting policies have been applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the financial statement of the Company for the year ended 31 March 2016

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

(iv) that the annual accounts have been prepared on a going concern basis and

(v) that the Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

14. HUMAN RESOURCE DEVELOPMENT:

14.1 During the year under report the Company has conducted training programmes for 1383 Executives and 927 Non Executives to impart training on knowledge based, development oriented and need based topics. Such training programmes were organized in-house and at premises of external agencies to cover the present and future requirements of the Company.

14.2 Apart from regular training programmes, your Company organized the following activities/ programmes during the year:

(a) Management Development Programmes (MDPs):

26 Senior Executives (DGM & above grade) were sponsored for the Management Development Programmes conducted by premier institutes in India like IIM-A, IIM-B, IIM-C, IIM-K, and XLRI Jamshedpur during FY 2015-16.

(b) Executive Development Programmes (EDP):

Executive Development Programmes were conducted, exclusively designed for Executives who have got promoted from Non Executive Cadre since 2007 onwards.

The programmes were conducted in 5 batches and a total 170 Executives were trained in these programmes.

(C) Advanced Management Programmes (AMP):

An Advanced Management Programme was conducted and two Principal Executives were sponsored for the Droaramme.

(d) IPMA Level ''D'' Certification Programmes:

HRD successfully organized IPMA Level ''D'' Certification Programme for the Executives of the Company. In this certification course, a total 60 Executives appeared, out of which 54 Executives have successfully cleared the certification programme and became Certified Project Management Associate (IPMA ''D'' Certified).

(e) Project Management Professional (PMP) Programmes:

To create awareness about Project Management concepts and transform your Company into a Project driven organization by institutionalizing the Project Management principle in the Company, Management has identified 66 Executives to undergo PMP Certification programme conducted by PMI USA. Accordingly 35 Hrs. mandatory Contact Programme for all the 66 Executives was conducted at Institute of Systems, Technology and Management in 2 Batches.

30 Executives have registered themselves with PMI USA and 3 Executives have successfully cleared the PMP certification exam.

15. PARTICULARS OF EMPLOYEES

There were no employees of the Company who received remuneration in excess of the limits prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

16. INDUSTRIAL RELATIONS AND EMPLOYEE WELFARE:

16.1 Your Company has continued to maintain cordial and harmonious relations with recognized and other registered trade unions and Associations during the year under report. All the Statutory Committees such as Welfare Committee, Works Committee, Safety Committee, Canteen Committee and Plant Level Committee have extended their cooperation to maintain discipline at all levels. Management is also receiving maximum support and cooperation from the employees as in the past in achieving the set targets.

16.2 Compliance of Statutory Welfare Provisions is followed meticulously. Your Company also continued to extend non statutory facilities such as school, canteen allowance, uniforms, shoes etc. Company has been taking care of medical needs of employees and their family members as per Company''s Medical Rules. In line with DPE guidelines, Company has framed a Pension Scheme for Executives and Post Retirement Medical Benefit Scheme for Executives and Non-Executives of the Company and obtained approval of the Board.

16.3 The Management also took initiatives to provide proactive and compassionate human relations by creating an atmosphere of mutual trust.

17. FOREIGN VISITS:

Your Company incurred an expenditure of Rs, 79.1 8 Lakh during the year under report towards foreign travel for business trips and for on the Job Training of personnel.

18. SECURITY:

1 8.1 Central Industrial Security Force (CISF) is providing Security and Fire Services in both Kanchanbagh and Bhanur Units. Efforts are being made to induct CISF in Vizag Unit also. During the year under report, CISF has played a vital role in the Security and safeguarding the property of the Company. CISF team adopted robust security measures combining physical measures with technology to keep the highly sensitive installations secure.

1 8.2 Plant Security Council is in place to review the security arrangements and implementation of IB guidelines. Regular Security review meetings are being conducted both by Management and CISF to beef up security.

18.3 Biometric Access Control System has been installed in addition to Computerized Photo Identity Cards to prevent unauthorized entry and CCTV Cameras have been installed all over the factory premises to cover more area under CCTV surveillance. Door Frames Metal Detectors, X-ray baggage machines are also in use. Barricades, Boom Barriers and Morchas are provided to strengthen physical security measures.

1 8.4 Regular programmes on Security awareness were conducted besides observing Security Week/Fire Week. Employees are sensitized on the security threat and action to be taken in case of emergency and fire accidents.

19. SAFETY:

19.1 Safety, Health and Environment norms (SHE) are stringently followed in the Company. Industrial Safety Committee and Explosive Safety Committee at corporate level are functioning to meet the requirements. Safety committee meetings are held at regular intervals for monitoring Safety, Health and Environment as per the statutory requirement. The works are carried out in compliance with the Factories Act 1948, and strictly adhering to the Storage & Transport of Explosive Committee (STEC) regulations.

19.2 Annual explosive safety audit cycle-2015 was conducted by Centre for Fire, Explosive & Environment Safety (CFEES) MoD, New Delhi and the record of discussions made by the audit team was brought to the notice of concerned for compliance. Regular medical checkups are carried out for employees working in hazardous areas by qualified medical team.

19.3 Safety training programmes were arranged through HRD conducted by National Safety Council (NSC), Central Labour Institute (CLI), Regional Labour Institute (RLI) and Centre for Fire, Explosive & Environment Safety (CFEES) MoD, New Delhi to inculcate Safety consciousness and to establish safe working environment.

19.4 The revised safety manual in printed form was distributed to all Divisional Heads and Directors and is made available on intranet.

19.5 BDL-Safety Policy and Objectives boards are displayed at all divisions/departments of Kanchanbagh, Bhanur and Vizag Units.

19.6 As core team member of Environment Management System (EMS) and ISO 14001-2004, Safety Engineering Department is playing a key role for continual improvement by conducting internal audits. Safety Engineering Department is in continuous interaction with Inspector of Factories, Pollution Control Board and Centre for Fire, Explosive & Environment Safety (CFEES), Ministry of Defence and ensuring compliance of various guidelines issued from time to time. Mock drills are also conducted at regular intervals to ensure fire fighting preparedness.

20. RESERVATION OF POSTS FOR SGs/STs AND TOTAL MANPOWER:

20.1 The Company has been following Presidential Directives of the Government with regard to reservation of posts for SCs/STs in recruitments.

20.2 Total manpower strength (including Functional Directors) as on 31 March 2016 was at 3132 out of which number of persons on temporary rolls was 17. Of the total strength, 72 are ex-servicemen, 578 are of Schedule Castes and 212 are of Scheduled Tribes. The percentage of Schedule Castes and Scheduled Tribes in respect of Employees was at 18.39% and 6.77% respectively.

20.3 Number of persons on temporary rolls as on 31 March 2016 was 17, out of which two belong to Schedule Castes and one belongs to Schedule Tribes category. The No. of Schedule Castes and Scheduled Tribes in various categories of posts as on 31 March 2016 is given below:

	Number of Employees
Category	Total Strength		Scheduled Castes		Scheduled Tribes
	31-03-2015	31-03-2016	31-03-2015	31-03-2016	31-03-2015	31-03-2016
Group-A	745	770	120	126	74	76
Group-B	132	89	28	20	9	7
Group-C	1975	1972	357	356	107	110
Group-D	325	280	84	74	21	18
Temporary	3	17	2	2	1	1
Total	3180*	3128*	591	578	212	212

* excluding Functional Directors

20.4 Recruitment of employees in Schedule Castes and Schedule Tribes during 2015-16 is given below:

Classification of posts	Total Vacancies released	Total Recruitment	Reservation of posts (Out of Col.2)		Recruitment made during the year 2015-16
1	2	3	4		5
			SCs	STs	SCs	STs
Group-A	6	6	2	-	2	-
Group-B	-	-	-	-	-	-
Group-C	15	15	-	1	-	1
Group-D	1	1	-	-	-	-
Total	22	22	2	1	2	1

21. EMPLOYMENT OF WOMEN:

As per the recommendation No.51, Para (ii)(a) of the National Commission for Women (NCW) in its Annual Report for the year 1995-96, the employment position of Women is given below as directed by Ministry of Defence vide their letter No. 39(6)/99/D(B&C), dated 27 Aug 1999.

I. EXECUTIVES

Grade	No. of Employees	Women	Percentage
1	89	11	12.36%
II	218	38	17.43%
III	169	22	13.01%
IV	65	9	13.85%
V	111	12	10.81%
VI	152	4	2.63%
VII	40	0	0%
VIII	11	1	9.09%
IX	4	0	0%
CVO on deputation	-	-	-
Functional Directors	3	0	0%
CMD	1	0	0%
Total	863	97	11.24%

II. NON-EXECUTIVES

Grade	No. of Employees	Women	Percentage
WG-1	71	13	18.30%
WG-2	348	27	7.75%
WG-3	207	29	14.01%
WG-4	322	63	19.56%
WG-5	130	17	13.07%
WG-6	66	8	12.12%
WG-7	50	5	10.00%
WG-8	111	5	4.50%
WG-9	21	0	0%
WG-10	212	7	3.30%
WG-11	83	19	22.89%
WG-12	631	45	7.13%
Temporary Employees	17	-	0%
Total	2269	238	10.49%

22. PERSONS WITH DISABILITIES (PWD) as on 31 Mar 2016:

The total number of Physically Challenged Employees as on 31 Mar 2016 was 102 and its percentage to total employees works out to 3.26%.

	HI	LD	VI	Total
Group-A	3	9	2	14
Group-B	1	4	3	8
Group-C	17	46	6	69
Group-D	3	5	3	11
Total	24	64	14	102

HI- Hearing Impaired, LD-Locomotive Disability, Vl-Visually Impaired.

23. ANNUAL RETURN:

In accordance with the provisions of Companies Act, 2013, Company is required to attach extract of Annual Return for the year under report and the same is placed as Annexure-I.

24. ENVIRONMENT AND POLLUTION CONTROL:

Your Company contributes in all respects to the environment by maintaining a clean and green environment. Effluent treatment plant, Sewage treatment plant, water conservation, tree plantation, planting of flower bearing trees and landscaping, utilizing treated effluent water etc; have been carried out. The Internal Committees periodically review status on various types of pollutions and take appropriate steps to reduce the pollution. All Units are having valid consent for operation obtained from Pollution Control Boards.

Your Company has implemented green initiatives such as zero liquid discharge system, hazardous waste disposal system and further following initiatives were taken during the year for environmental protection.

i) Tree Plantation:

20 nos. of teak wood trees have been planted by Kanchanbagh unit and 1075 nos. of other different types of saplings were planted by Bhanur uniton the occasion of World Environment Day-2015.

ii) Testing Of Environmental Parameters:

The environment parameters like ambient air quality, wastewater from sewage treatment plant and effluent treatment plant, air quality of diesel generator set and Venturi scrubber are tested at Kanchanbagh, Bhanur and Vizag Units through certified agency and results are within the prescribed limits of laid down by Pollution Control Board.

25. QUALITY:

Your Company manufactures products which are single shot in nature. These products require stringent Quality standards and high degree of reliability. In pursuit of this objective, your Company has been adopting International Quality Management system practices by way of obtaining ISO certification for the last 20 years. Currently CP-IGMP, ITD, Electronics Division and D & E divisions have been certified to ISO 9001:2008 Quality Management System standard. MILAN Division has been certified to Aerospace standard i.e. AS 9100 C, released by International Aerospace Quality Group (IAQG).

Electrical measured values have traceability to National or International standards which were achieved through calibrating the Electronics equipment in ISO/IEC 17025:2005 (NABL) accredited Labs of Milan Division and Bhanur Unit (BU).

Your Company is planning to upgrade to AS 9100C standard for AKASH division in the next financial year.

During the year under report, your Company has introduced IAQG requirements in Bhanur Unit by implementing AS 9100 C Aerospace Quality Management system and got certified in the month of Dec 2015 by NVT Quality Certification, Bengaluru. The Certificate is valid from 10 Dec 2015 to 9 Dec 2018.

In case of all ISO/AS certified divisions, regular audits by external agencies are conducted. Customer satisfaction is being measured for all major products manufactured in the respective divisions.

Your Company is continuously striving to improve customer satisfaction through customer meets and interaction with users. Corrective actions are taken wherever necessary for improvement.

26 EXPORTS:

Your Company has not executed any appreciable Export Orders during the year 2015-16. For achieving exports, your Company is having regular interaction with the overseas customers. Offset implementation also offers a major opportunity to achieve our export targets. Your Company is interacting with aero-space majors in Europe and Russia to exploit opportunities arising out of offsets.

27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company had put in place all required internal controls and systems to meet the canons of financial propriety. External audit firms are appointed to ensure their adequacy and report thereon. A detailed analysis of reports of Internal Audit Firms as well as reports of Internal Audit Department of your Company are placed before the Audit Committee for its review and advice. The adequacy of internal control procedures are reviewed and reported by Statutory Auditors in their Audit Report. Your Company being a Government Company is subject to Government Audit also.

28. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

28.1 The provision of OL Act-1963 (as amended in 1967) & Rules thereunder are implemented properly. OLIC Meetings are held quarterly under the Chairmanship of CMD and similarly the Quarterly progress reports on use of OL are sent in time to authorities concerned.

28.2 Under the OL Act, 1963 and the Presidential Orders thereon, the papers laid before the Parliament, Annual Report of the Company, MoU with MoD and brief of the Company along with presentations for various delegations and Parliamentary Committees were prepared in bilingual form and submitted accordingly.

28.3 Department of Official Language organized Southern Region Rajbhasha Conference of twin cites at Kochi onl9 February, 2016. On this occasion theTOLIC (U) was awarded Rajbhasha Kirthi Puraskar for best Implementation ofOLin ''C" region (Third Place).

28.4 On the eve of Vigilance Awareness Week, National Safety Week, Fire Safety Week, Environment Day and observance of Quami Ekata Diwas in the Company, various competitions were conducted in Hindi, English and Telugu to involve more and more employees of the organization and bring awareness on these subjects among them.

28.5 The Website of the Company prepared in Hindi was updated from time to time in compliance with the directives from Govt, of India.

28.6 Hyderabad being the headquarters of TOLIC, the regular half yearly meetings consisting 49 PSUs of twin cities were organized under the Chairmanship of CMD, BDL and the decision taken therein were implemented at twin cities level.

28.7 With an objective to promote and propagate Hindi and inculcate the habit of reading Hindi among the Officers and Employees of the Company, various Hindi Magazines and News Papers are subscribed regularly. Besides this, popular Hindi books on all subjects are also purchased annually with the same objective as per the directives of DOL.

29. TECHNOLOGICAL CONSERVATION & RENEWABLE ENERGY DEVELOPMENT:

Technology Conservation

29.1 Your Company has taken up indigenization which encompasses various nascent technologies like Thin Film Hybrid Technologies, manufacturing of HMX-based explosive compositions and optical devices like Photo Diodes, Lens and Filters etc.,

29.2 The indigenization programme covered uncommon components which are not part of Technology transfer from OEM. The equivalent indigenous materials were indentified and processed indigenously. The evaluation process was concluded successfully validating all the sub-systems of one of the ATGMs made from these Indigenous parts. This reduces the dependence on OEM and also brings down production cost of missiles.

Renewable Energy Development

29.3 Sustainable development has become the national priority to channelize the development process in an environment friendly way with the optimum utilization of available natural resources. In its relentless pursuit of implementing sustainable development practices, your Company has unleashed various programmes to conserve energy thus promoting energy efficiency.

29.4 Solar energy is one of the most important renewable energy sources, which has been gaining increased attention in the recent past. Solar energy is clean and free of emissions, which is great for environment, as it does not produce pollutants or byproducts harmful to the Nature.

29.5 In view of its importance, during the year 2015-16, your Company established Grid connected Solar Photo Voltaic (PV) Roof Top Power Plants with an estimated Payback period of around 6-7 years at the following locations:

1 OOKWp Grid connected Solar PV Power Plant commissioned on the Roof Top of Main Canteen building at Kanchanbagh unit and it is in operation from December 2015.

• Another 1 OOKWp Grid connected Solar PV Power Plant commissioned on the Roof Top of D&E building at Kanchanbagh Unit and it is in operation from Feb 2016.

Over a period of 25 years, each 1 OOKWp Solar system will offset the carbon footprint by 80 tons of C02 which is effectively equivalent to planting 105 acres of forest.

29.6 Further, your Company under Green Energy commitment to Hon''ble Prime Minister of India committed to set up 25 MW Grid connected Solar PV power plants in the units. Initially installation of 5 MW Grid connected Solar Power plant at Bhanur unit is in progress which will be operational from March 2017. The generated solar power will be connected to Telangana state electrical power grid at Nandigama sub-station.

30. VIGILANCE:

30.1 On 26 Oct 2015, AVM NB Singh, AVSM, VSM (Retd.), Director (Technical) of BDL administrated Vigilance Pledge in Corporate Office and the same was telecast live to other Units of the Company. Shri K.R.Nandan, IPS (Retd.), Vigilance Commissioner, Telangana State inaugurated Vigilance Awareness Week Celebrations 2015 as Chief Guest. The theme of the year was "Preventive Vigilance as a tool of Good Governance".

30.2 On 31 Oct 2015, Chairman and Managing Director released a booklet of ''Dos'' and ''Don''ts'' prepared by Vigilance Department. The booklet consists of various important points viewed from Vigilance angle.

30.3 The main focus of the Vigilance Department has been preventive/ proactive vigilance. Keeping this in view, the activities of this Department clearly indicate progressive change in focus of activities taken up/reported upon to the Management.

30.4 System improvement suggestions were given by Vigilance Department to the Management on areas like Recruitment and Absorption of Management Trainees, Resignation, Constitution of Technical Audit Committee, Departmental Promotions, Absorption of Foreign visits, Merit Awards to Employees, during the year under report. Systemic improvement suggestions were given while according vigilance clearance to Executives who are deputed abroad on official visits. Accordingly Management issued guidelines on deputing employees for foreign visits for strict compliance.

31. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY DEVELOPMENT:

31.1 In terms of DPE Guidelines on MoU and Section 135 of Companies Act, 2013, the Corporate Social Responsibility & Sustainability Committee (CSR & SD) has been constituted to examine proposals for approval of CSR & SD plan and review implementation/execution of plan and steering CSR & SD agenda of the Company.

As on 31 Mar, 2016 the CSR &SD Committee consists of the following Members:

a) LtGen. (Retd.) Anil Chait : Chairman Independent Director

b) AVM NB Singh : Member Director (Technical)

c) Shri S Piramanayagam : Member Director (Finance)

31.2 Board of Directors of your Company has approved a "Policy on Corporate Social Responsibility and Sustainability" to ensure commitment at all levels in the organization to operate Company''s business in an economically, socially and environmentally responsible and sustainable manner, while recognizing interests of all stakeholders. The CSR and SD activities are monitored periodically by the Committee and an annual report on CSR and SD activities undertaken during the year 2015-16 is enclosed at Annexure-ll.

31.3 In accordance with provisions of the Companies Act, 2013 the Company needs to spend in every financial year, at least 2% of average net profits of the Company made during the three

immediate preceding financial years towards CSR activities. The below Board Level Committee at Company level under the Chairmanship of Executive Director (P&A) closely monitors the progress of these activities taken up by the Company and review meetings were conducted periodically. During the year 2015-16, your Company spent an amount of Rs,11.27 Crore on CSR activities as against the requirement of Rs,10.28 Crore as per the Companies Act, 2013.

31.4 CSR activities being undertaken are placed on Company''s Web-link http:// www.bdl-india.com

32. AUDIT COMMITTEE:

An Audit Committee is in place as a part of good Corporate Governance. Six meetings have been held during the year 2015-16 to review internal control systems and their adequacy, including coverage of Audit Functions. Details of composition, terms of reference etc., are covered in Report on Corporate Governance attached to this report (Annexure-IV).

33. AUDITORS:

M/s.S.R.Mohan & Co., Chartered Accountants, Hyderabad were appointed as Statutory Auditors of the Company for the financial Year 2015-16 by the Comptroller & Auditor General of India. The Auditors have audited the Accounts and their Report is placed as a part of Annual Report.

34. COMMENTS OF THE COMPTROLLER & AUDITOR GENERAL OF INDIA

The Comments of Comptroller and Auditor General of India (C&AG) under Section 143 (5) of the Companies Act, 2013 on the accounts of the Company for the year ended 31 Mar 2016 are placed next to Statutory Auditors¹ Report.

35. COST AUDITORS

Your Company appointed M/s DZR & Co., Cost Accounts, Hyderabad as Cost Auditors for the financial year 2015-16 in terms of Section 148 of Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules 2014.

36. CEO/CFO CERTIFICATION:

As per the requirements of DPE Guidelines, the CEO/CFO certificate has been obtained and placed before the Audit Committee and the Board.

37. CORPORATE GOVERNANCE:

37.1 Corporate Governance is about application of best management practices, compliance of laws and adherence to ethical standards to achieve Company''s objective of enhancing stakeholders'' value and discharge of social responsibility.

37.2 The Company has a well established, transparent and fair administrative set up to provide for professionalism and accountability.

37.3 As per the guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8)/2005-GM, dated 14 May 2010, the Management Discussion and Analysis Report (Annexure-lll), Report on Corporate Governance (Annexure-IV) along with Certificate on compliance of conditions on Corporate Governance from a Practising Company Secretary (Annexure-V) as required under the said guidelines are attached to this report.

37.4 Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to MoD in the prescribed format.

38. RISK MANAGEMENT:

38.1 DPE guidelines on Corporate Governance for CPSEs - 2010 require that the Board of the Company should ensure integration and alignment of Risk Management Systems with Corporate and operational objectives and also that risk management is undertaken as a part of normal business practice and not as a separate task set at times.

38.2 In line with the above guidelines, your Company has framed Risk Management Policy of the Company which is applicable to all levels and all Units of the Company. One of the objectives of Risk Management Policy is to ensure that all current and future risk exposures of the Company are identified, assessed, quantified, appropriately mitigated and managed.

38.3 Divisional Level Committees have been formed to assess current status of Risk and identify measures to mitigate risks and also to evaluate mitigation measures so identified. Periodical Review meetings are taking place and a report being placed before the Board once in every Six months.

39. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

In line with the provisions contained under "The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013 your Company has put in place "Anti Sexual Harassment Policy" in line with the requirements of the above Act. During the year 2015-16, your Company has not received any Sexual harassment complaints.

40. COMPLIANCE UNDER THE RIGHT TO INFORMATION ACT, 2005

The information required to be provided to citizens under Section 4(1 )(b) of Right to Information Act, 2005 is placed on Company''s Website www.bdl-india.com. It contains general information of the Company, functions, powers and duties of employees/officers, decision making process, rules, regulations, manuals and records held by the Company, directory of the Company''s Officers, pay scales of officers/ employees and procedure for seeking information and inspection of records. The Company has nominated a Central Public Information Officer at DGM level to attend to queries and appeals. Further, during the year 2015-16 the Company received 102 applications/queries and the same were disposed off.

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the valuable support and assistance received from all Government Agencies particularly Ministry of Defence, Department of Defence Production, DRDO Laboratories, Central Government Departments, State Governments of Telangana and Andhra Pradesh, Quality Assurance Agencies of Government of India and other PSUs for the help extended from time to time.

The Company wishes to place on record its appreciation for the co-operation extended and guidance provided by the Comptroller & Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Statutory Auditors, Bankers and Suppliers.

The Directors take this opportunity to place on record their deep appreciation for the valuable contribution made and co-operation extended by the employees at all levels to propel the Company to greater heights and to sustain its growth path in the years to come.

For and on behalf of the Board

Place: New Delhi V UDAYA BHASKAR

Chairman and Managing Director

Date: 10 Aug 2016 DIN : 06669311

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 45th Annual Report together with the Audited Accounts of the Company for the year ended 31 Mar 2015.

2. HIGHLIGHTS OF OPERATIONS:

2.1 Your Company has achieved highest Sales Turnover of '' 2799.68 Crore during the year under report by registering an increase of 57% over that of Previous year.

2.2 Sale of Konkurs-M ATGM has surpassed all the earlier years by utilizing the enhanced capacity fully.

3. PERFORMANCE:

3.1 Performance of the Company in financial terms is summarized below:

Particulars	Rs, Crore		% of Increase/
	2013-14	2014-15	(Decrease)
Value of Sales	1779.89	2799.68	57.29%
Value of Production	1804.49	2770.05	53.51%
Profit Before Tax	508.59	614.19	20.76%
Profit After Tax	345.51	418.57	21.15%
Value Added	578.48	914.95	58.16%

3.2 Following data reflects the financial position of the Company:

Particulars	Rs, Crore		% of Increase/
	2013-14	2014-15	(Decrease)
Gross Block	834.56	940.04	12.64%
Depreciation Reserve	474.95	546.18	15.00%
Net Block	359.61	393.86	9.52%
Working Capital	812.68*	908.28	11.76%
Capital Employed	1172.29*	1302.14	11.08%
Net Worth	1217.75	1533.37	25.92%

* Readjusted due to regrouping of Current Assets and Current Liabilities in the year 2013-14.

4. DIVIDEND & TRANSFER TO GENERAL RESERVE:

4.1 Your Company has a consistent track record of Dividend Payment. The Company has surpassed its previous record of highest payment of Dividend by paying a Dividend of Rs, 83.71 Crore for the year 2014-15 which includes Interim Dividend of Rs, 48.90 Crore paid during Feb 2015. The Directors also recommended a sum of Rs, 318.00 Crore for transfer to General Reserve.

5. FINANCE:

5.1 Total Paid up Capital remained at Rs, 115.00 Crore. Gross Block of fixed assets of the Company (including special tools and equipment) stood at Rs, 940.04 Crore representing an increase of Rs, 105.48 Crore over 2013-14.

6. PERFORMANCE AGAINST MoUs:

6.1 During the year 2013-14, the Company achieved a rating of "Excellent”. The MoU rating for the year 2014-15 is also likely to be "Excellent”.

7. COST REDUCTION:

7.1 In line with MoD guidelines, cost reduction has been identified as a thrust area and initiated cost reduction measures. Apex Committee on Cost reduction has been constituted under the Chairmanship of a Functional Director. Review meetings are being held at regular intervals to monitor the progress in achieving the yearly targets. During the year under report an amount of Rs, 64.12 Crore has been achieved under the cost reduction programme as against the target of Rs, 62.29 Crore.

7.2 E-reverse auction is being implemented under E-Procurement wherever possible which resulted in more competitive price and reduction in material cost. Also energy saving devices are being installed as a part of Energy Audit. Continuous efforts are being made for increase in Vendor base for various Projects which resulted in considerable savings in material cost.

8. ECONOMY MEASURES:

8.1 In line with Ministry of Finance Office Memorandum on Expenditure Management, Economy Measures and Rationalization of expenditure, Company has observed fiscal prudence and economy on areas like travelling expenses, advertisement and publicity expenses, purchase of new vehicles, conducting seminars and conferences, courtesy and entertainment etc during the year 2014-15.

8.2 Energy consumption, fixed and variable overheads are being constantly reviewed and pruned to bare minimum.

9. MODERNIZATION AND UPGRADATION:

9.1 Under Modernization and Upgradation, production capacities of ATGMs and other products are being ramped up. Technologies like introduction of Robotic Welding Machines, Automatic Loading and Progress of Jobs in electroplating production line, unification Automation of cold and hot conditioning of Missiles/Subsystem, introduction of Flow Forming in place of deep drawing process are being ushered in which result in enhancing the existing capacity to meet the future demands of the Armed Forces.

10. FOREIGN EXCHANGE EARNINGS AND OUTGO:

10.1 Earnings of foreign exchange for the year was Rs, 1.55 Crore and the outgo was Rs, 616.93 Crore.

11. EXHIBITIONS:

11.1 Senior Executives and Directors have participated in the National and International Exhibitions during the year 2014-15. Such platforms were used to gain awareness in advanced technologies, interact with experts and share knowledge with others. Visiting the pavilions of other countries and understand the systems available with them, enables BDL to draw up effectively its own future business plans. BDL has participated in the following exhibitions during the year 2014-15:

- Vibrant Gujarat Global Trade Show - 2015 at Ahmedabad during 07-13 Jan 2015.

- Aero India - 2015 held during 18-22 Feb 2015 at Bengalure,

- LAAD-2015 Exhibition held in Brazil during 14-17 Apr 2015.

12. BOARD OF DIRECTORS:

12.1 During the year under report, seven (7) meetings of the Board of Directors were held and the Annual General Meeting of the Company for the year 2013 - 14 was held on 26 Sep 2014.

12.2 Shri J Rama Krishna Rao, IAS, Joint Secretary (ES) is appointed as Government Nominee Director in place of Smt Kusum Singh, Joint Secretary, Department of Defence Production w.e.f 19 Nov 2014.

12.3 Shri S Piramanayagam is appointed as Director (Finance) w.e.f. 01 Jan 2015.

12.4 Shri V Udaya Bhaskar is appointed as Chairman and Managing Director on the Board of BDL w.e.f. 30 Jan 2015. Prior to this appointment, Shri V Udaya Bhaskar was Director (Production) on the Board of BDL since 01 Aug 2013.

12.5 The Tenure of Shri AK Kapoor, Part Time Non Official Director ended on 15 Feb 2015 and prior to this, the tenure of Prof RK Mishra, Part Time Non Official Director and Shri KL Mehrotra, Part Time Non Official Director ended on 07 Mar 2014. Resultant vacancies of the three Part Time Non Official Directors as on 31 Mar 2015 are vacant.

13. HUMAN RESOURCE DEVELOPMENT:

13.1 During the year under report, the Company has conducted various training programmes to impart training on knowledge based, development oriented and need based programmes covering 1048 Executives and 625 Non Executives of the Company. Such training programmes were organized in-house and at external agencies premises to cover the present and future requirements of the Company.

13.2 Your Company has also organized training programmes to 41 Nos. of Senior Executives under Management Development Programmes through Premier Institutions.

13.3 Recognizing the necessity to have Joint Venture with foreign OEMs and Indian Parties as a business strategy of the Company, Director (Fin) along with Sr. Executives have attended a training programme during 16-18 Feb 2015 on Joint Ventures at IIM, Bangalore.

13.4 Your Company is continuously sponsoring Executives to DIAT, Pune to undergo training on Missile Technology and also organized Revalidation and Skill upgradation training programmes to Non Executives.

13.5 Your Company has initiated an ambitious Programme to create a pool of trained Project Management Professionals in the Company. BDL has successfully organized Paper Based Test (PBT) of PMP in India by establishing itself a Test Centre during Oct 2014. Out of 30 Nos. of Executives 12 Nos. of Executives have successfully passed PMP examination during 2014-15.

14. INDUSTRIAL RELATIONS AND EMPLOYEE WELFARE:

14.1 Your Company has continued to maintain cordial and harmonious relation with recognized and other registered trade unions and associations during the year under report. All the Statutory Committees such as Works Committee, Safety Committee, Canteen Committee and Plant Level Committee have extended their cooperation to maintain discipline at all levels.

14.2 Compliance on Statutory Welfare Provisions is followed meticulously. Company has also continued to extend non statutory facilities such as school, canteen allowance, uniforms, shoes etc. The Company has been taking care of medical needs of employees and their family members as per BDL Medical Rules. In line with DPE guidelines, Company has framed Pension Scheme for the Executives and Post Retirement Medical Benefit Scheme for the Executives and Non-Executives of the Company and obtained approval of the Board.

15. DIRECTORS’ RESPONSIBILITY STATEMENT:

15.1 As per Section 134 (5) of the Companies Act, 2013 as amended, the Directors state:

(i) that in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures therefrom.

(ii) that the selected Accounting Policies have been applied consistently and judgments and estimates made 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 the Financial Year and of the Financial Statement of the Company for the year ended 31 Mar 2015.

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 as amended for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) that the Annual Accounts have been prepared on a going concern basis.

(v) that the Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. FOREIGN VISITS:

16.1 The Company incurred an expenditure of '' 116.59 Lakh during the year under report towards foreign travel for business trips and for on Job Training of personnel.

1 7. SECURITY:

17.1 Central Industrial Security Force (CISF) is providing Security and Fire Services both at places Kanchanbagh and Bhanur Units. Efforts are being made to induct CISF, in Vizag Unit also. During the year under report, CISF has played a vital role in the Security and to safeguard the property of BDL. CISF team adopted robust security measures combining physical measures with technology to keep the highly sensitive installation secure.

17.2 Plant Security council is in place to review the security arrangements and implementation of IB guidelines. Regular Security review meetings are being conducted both by Management and CISF to beef up security.

17.3 During the year under report, officers from IB, Ministry of Home Affairs, NSG team along with octopus team visited BDL and conducted Reconnaissance in Kanchanbagh, BDL in connection with threat perception assessment.

17.4 Biometric Access Control System is installed in addition to Swiping of Cards to prevent unauthorized entries at the Security Gate.

18. SAFETY:

18.1 Company is strictly following applicable norms to maintain good health and safety of the employees. The two Committees i.e. Industrial Safety Committee which is statutory and Explosive Safety Committee are functioning to meet the needs of BDL. Safety committee meetings are held at regular intervals for monitoring Safety, Health and Environment as per the statutory requirement. The works are carried out in Compliance with the Factories Act 1948, and Explosive Safety strictly adhering to the Storage & Transport of Explosive Committee (STEC) regulations.

18.2 During the year under report, Safety Engineering Department under the Chairmanship of a General Manager reviewed the Safety Manual to meet the requirements of new projects. Also Safety Policy and Safety Objectives boards are displayed in all Divisions/Departments.

18.3 Annual explosive safety Audit is conducted by CFEES, New Delhi and sugestions made by the Audit team have been complied with. Also regular medical checkups are being carried out to employees working in Hazardous areas by qualified medical team.

19. RESERVATION OF POSTS FOR SCs/STs AND TOTAL MANPOWER:

19.1 The Company has been following Presidential Directives of the Government with regard to reservation of posts for SCs / STs in recruitments.

19.2 Total manpower strength (including Functional Directors) as on 31 Mar 2015 is 3180 and number of persons on temporary rolls as on the same date is 3. Of the total strength 79 are ex-servicemen, 591 are Scheduled Caste and 212 are Scheduled Tribes. The existing percentage of Scheduled Caste and Scheduled Tribes in respect of Non Executive is 19.23% and 5.60% and in respect of Executives, it is 16.82% and 9.43% respectively.

19.3 Number of persons on temporary rolls as on 31 Mar 2015 is three, out of which two belong to Scheduled Caste and one belong to Scheduled Tribes category. The strength of Scheduled Caste and Scheduled Tribes in various categories of posts as on 31 Mar 2015 is as given below:

			Number of Employees
Category	Total strength		Scheduled Castes		Scheduled Tribes
	31-03-2014	31-03-2015	31-03-2014	31-03-2015	31-03-2014	31-03-2015
Group-A	753	748	125	1 20	75	74
Group-B	93	1 32	14	28	7	9
Group-C	1901	1975	348	357	98	107
	184*	3*	37*	2*	14*	1*
Group-D	335	325	87	84	21	21
Total	3266	3183	611	591	215	212
‘Temporary Employees

19.4 Recruitment of employees in Scheduled Caste and Scheduled Tribes during 2014-15 is as follows:

Classification of posts	Total vacancies released	Total Recruit ment	Reservation of posts (out of Col.2)		Recruitment made during the year 2014-15
(1)	(2)	(3)	(4)		(5)
			SCs	STs	SCs	STs
Group-A	2	22	-	-	02	-
Group-B	-	-	-	-	-	-
Group-C	13	1 83	03	02	36	13
Group-D	-	01	-	-	-	01
Total	15	206	3	2	38	14

20. EMPLOYMENT OF WOMEN:

20.1 As per the recommendation No.51, Para (ii) (a) of the National Commission for Women (NCW) in its Annual Report for the year 1995-96, the employment situation of Women (percentage) is given below as directed by Ministry of Defence vide their letter No. 39(6)/99/D(B&C), dated 27 Aug 1999.

I. EXECUTIVES

Grade	Total	Women	Percentage
I	1 32	21	15.90%
II	226	38	16.81%
III	1 47	18	12.24%
IV	57	8	14.03%
V	1 27	13	10.23%
VI	1 42	1	0.70%
VII	32	1	3.12%
VIII	12	0	0
IX	2	0	0
CVO on deputation	-	-	0
Directors	2	-	0
CMD	1	-	0
Total	880	100	11.36%

II. NON-EXECUTIVES

Grade	Total	Women	Percentage
WG-1	111	13	11.71%
WG-2	309	26	8.41%
WG-3	266	43	16.16%
WG-4	278	52	18.70%
WG-5	168	21	12.50%
WG-6	38	6	15.78%
WG-7	139	8	5.75%
WG-8	19	1	5.26%
WG-9	62	3	4.83%
WG-10	189	10	5.29%
WG-11	139	21	15.10%
WG-12	582	38	6.52%
Temp	3	-	0
Total	2303	242	10.50%

21. PERSONS WITH DISABILITIES (PWD) EMPLOYEES (Executives & Non-Executives) as on 31 Mar 2015:

21.1 The total employees of Persons with Disabilities as on 31 Mar 2015 is 107 and its percentage to total employees works out to 3.36%.

22. ANNUAL RETURN:

22.1 In accordance with the provisions of the Companies Act, 2013 Company is required to attach extract of Annual Return for the year under report and the same is placed as Annexure-I.

23. ENVIRONMENT AND POLLUTION CONTROL:

23.1 The Company contributes in all aspects to the environment by maintaining a clean and green environment. Effluent water treatment, water conservation, tree plantation, planting of flower bearing trees, and landscaping utilizing treated effluent water, was carried out. Company has formed Committees like Working Level Committee and Steering Committee for handling various types of pollutions in BDL and are periodically reviewing the status on Pollutions. Steps are being taken to replace old DG sets with new Acoustic DG sets to control noise pollution within the prescribed limits.

24. QUALITY:

24.1 BDL manufactures products which are single shot in nature. These products require stringent quality standards and high degree of reliability. In pursuit of this objective, BDL has adopted International Quality Management System practices by way of obtaining ISO Certification for the past 19 years. During the year under report, Bhanur Unit, CP-IGMP, ITD, Electronics Division and D& E Division have been certified to ISO 9001:2008 Quality Management System Standard. Akash Division has also obtained ISO 9001:2008 Quality Management System Certificate which has enhanced the confidence of its customers. Further, Company has introduced IAQG requirements in Milan Division by implementing AS 9100C Aerospace Quality Management System. Electronic Lab of Bhanur Unit got accredited to ISO/ IEC 17025:2005 (NABL) Standard.

25. EXPORTS:

25.1 BDL has not executed any Export order during the year 2014 - 15.

26. FUTURE OUTLOOK:

26.1 Consequent to the modernization Programme launched by the Indian Armed Forces, the future outlook of the Company is encouraging. BDL has already been identified as Lead Integrator for the acquisition programme like VISHORAD, SRSAM. BDL is also the Lead Integrator for Advanced 3rd Generation ATGM. These Projects are at various stages of consideration for approval of Government of India. Considering the above, future outlook for the Company’s growth is satisfactory. However, keeping in view the Government Policy to encourage competition from all sectors in Defence acquisition Programmes, BDL is aware that its Nominated Production Agency Status is being slowly transformed to that of a Competitive Bidder. Hence the Company needs to get ready to face new challenges in future.

27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :

27.1 The Company had put in place all required internal controls and systems to meet the canons of Financial Propriety. External audit firms have been appointed to ensure their adequacy and report thereon. A detailed analysis of the reports of Internal Audit Firms as well as reports of Internal Audit Department of BDL are being placed before the Audit Committee for review and advice. The adequacy of internal control procedures are reviewed and reported by the Statutory Auditors in their Audit Report. BDL being a Government Company is subject to CAG Audit also.

28. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

28.1 The Provisions of the OL Act, 1963 (as amended in 1967) & Rules thereunder are implemented properly. Quarterly OLIC Meetings are held under the Chairmanship of CMD and quarterly Progress Reports on use of OL are sent in time. On the eve of Vigilance Awareness Week, National Safety Week, Fire Safety Week, Environment Day & observance of Swachh Bharat Mission, various competitions were conducted in Hindi, English & Telugu to involve more and more employees of the Organization and bring awareness on these subjects.

28.2 The Website of the Company prepared in Hindi is updated from time to time in compliance to the directives from Govt. of India. Shri S N Mantha, Ex-CMD & Chairman, TOLIC (U) received Smt Indira Gandhi Rajyabhasha Shield for third place for implementation of OL during the year under report. Shri Homnidhi Sharma, Sr. Manager (OL) and Secretary, TOLIC (U) has been presented with a Commendation letter as Member Secretary for excellent implementation of OL during the year 2014-15.

28.3 Under OL Act, 1963 and the Presidential Orders thereon, the papers laid before the Parliament, Annual Report of the Company, MoU with MoD were prepared in bilingual form and submitted.

29. TECHNOLOGICAL CONSERVATION & RENEWABLE ENERGY DEVELOPMENT:

29.1 Sustainable development has become the National priority to channelize the development process in an environment-friendly way with the optimum utilization of available natural resources. In its relentless pursuit of implementing sustainable development practices, BDL has unleashed various programmes to conserve energy thus promoting energy efficiency.

29.2 Solar energy is one of the most important renewable energy sources that has been gaining increased attention in the recent past. Solar energy is clean and free of emissions which is great for the environment, as it does not produce pollutants or byproducts harmful to the Nature. Keeping its importance in view, Company proposed to install 200 KW grid tide Solar PV Power Plant at Kanchanbagh Complex during the years 2014-15 to 2015-16.

29.3 The water purification system installed for the cooling and make up water circuit for A/C systems has enhanced the efficiency of the A/C plants.

29.4 As the environmental sustainability is one of the millennium development goals, for which our Nation is committed to, in compliance to the national commitment, BDL is taking the measures like tree plantations and rain water harvesting on continuous basis with perceptible improvement in the ground water table, and striving for reduction in the carbon emission levels by adopting energy systems in terms of solar street lights. As the implementation of Sustainable Development program is a continuous activity to attain the environmental sustainability, BDL will adopt sustainability as a way of life.

30. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT:

30.1 During the year under report, Company has spent an amount of '' 416.65 Lakh for undertaking regular activities like Health Care, Mid day Meal, Safe drinking water, and new activities like Bio Toilets, e-sagu, construction of Toilets under Swachh Bharat Kosh, Clean Ganga Fund etc. In line with Prime Minister’s programme, Company has contributed to Swachh Bharat Kosh and Clean Ganga Fund under CSR activities of the Company.

30.2 During the year under report, Company has incurred expenditure under Sustainable Development and on solar lighting, implementation of activities based on Energy Audit recommendations.

30.3 Company has also identified villages in both Telangana and Andhra Pradesh States for taking up village adoption. Similarly, construction of 175 Nos. of toilets in the Govt. Schools of Telangana and Andhra Pradesh States under Swachh Bharat Kosh, has also been taken up.

30.4 In accordance with the provisions of the Companies Act, 2013 the Company needs to spend in every financial year at least 2% of the average net profits of the Company made during the three immediately preceding financial years towards CSR activities. The below Board Level Committee at Company level under the Chairmanship of Executive Director (P&A) closely monitors the progress of the activities taken up by the Company and review meetings were conducted periodically. However as against the earmarked amount of '' 8.51 Crore, Company could spend an amount of '' 4.17 Crore during the year under report. The Company has planned to spend the total allocated CSR budget amount of '' 8.51 Crore by undertaking major projects like (i) Installation of RO Plant, (ii) 100 KW Solar Power Plant, (iii) Bio Toilets, and

(iv) Construction of Toilets in Govt. Schools etc. Since the identified projects are not matured within the financial year 2014-15, the Company could not spend the amount fully.

31. VIGILANCE:

31.1 On 27 Oct 2014, Chairman & Managing Director administered the Pledge in Corporate Office and the same was telecast live to other Units of the Company. Hon’ble Justice KC Bhanu, High Court of Andhra Pradesh and Telangana inaugurated vigilance awareness week as Chief Guest. The theme of the year was "Combating Corruption - Technology as an enabler”. Vigilance Awareness Week Celebration at Bhanur Unit was inaugurated by Shri CSR Prabhu, DG (Retd.) of National Informatic Centre on 29 Oct 2014 and delivered guest lecture on the theme of the year.

31.2 Dr.Jayaprakash Narayana, IAS (Retd.) was the Chief Guest for Valedictory function held on 31 Oct 2014. He had delivered guest lecture on the theme of the year.

31.3 The main focus of the Vigilance Department has been preventive/ proactive vigilance. Keeping this in view the activities of the Department clearly indicated progressive change in the focus of activities taken up/report submitted to the Management.

31.4 System improvement suggestions were given to the Management on the areas like Attendance System, absorption of Temporary Employees, Foreign Visits, Merit Awards to Employees, Departmental Promotions during the year under report. Systemic improvement suggestions were given while according vigilance clearance to Executives who are being deputed on official visit abroad. Accordingly Management issued guidelines for strict compliance on deputing employees for foreign visits.

32. AUDIT COMMITTEE:

32.1 An Audit Committee had been constituted for better Corporate Governance. Six meetings have been held during the year to review the internal control systems and their adequacy, including coverage of Audit Functions. Details of composition, terms of reference etc., are covered in Report on Corporate Governance attached to this report (Annexure-III).

33. CEO / CFO CERTIFICATION:

33.1 As per the requirements of DPE Guidelines, the CEO / CFO certificate for the year 2014-15 has been obtained and placed before the Audit Committee and the Board.

34. CORPORATE GOVERNANCE:

34.1 Corporate Governance is about the application of best management practices, compliance of laws and adherence to ethical standards to achieve the Company’s objective of enhancing stakeholders’ value and discharge of social responsibility.

34.2 The Company has a well established, transparent and fair administrative set up to provide for professionalism and accountability.

34.3 As per the guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8)/2005-GM, dated 14 May 2010, the Management Discussion and Analysis Report (Annexure-II), Report on Corporate Governance (Annexure-III) along with Certificate on compliance of conditions on Corporate Governance from a Practising Company Secretary (Annexure-IV) as required under the said guidelines are attached to this report.

34.4 Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to MoD in the prescribed format.

35. AUDITORS:

35.1 M/s.Laxminivas Neeth & Co., Chartered Accountants, Hyderabad were appointed as Auditors of the Company for the financial Year 2014-15 by the Comptroller & Auditor General of India. Thereafter the name of the firm has been changed to M/s Garre & Co.

36. DECLARATION GIVEN BY INDEPENDENT DIRECTOR:

36.1 Department of Public Enterprise has issued guidelines on Corporate Governance -2010 which includes Composition of Board of Directors of the CPSEs as per which the Board of Directors of the company shall have an optimum combination of Functional, Nominee and Independent Directors. Board of Bharat Dynamics Limited consists of three Functional Directors, two Government Directors and no Part Time Non Official Director (Independent Director) as on 31 Mar 2015. The tenure of two Part Time Non Official Directors ended on 07 Mar 2014 and the tenure of one more Part Time Non Official Director ended on 15 Feb 2015. Company is yet to receive intimation regarding the appointment of new Part Time Non Official Directors, though the matter has been taken up by the Company well in advance. Hence Company is unable to obtain Declaration given by Independent Director in accordance with the provisions of the Companies Act, 2013 for the year under report.

37. IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:

37.1 As per the DPE guidelines on Corporate Governance for CPSEs - 2010 the Board of the Company should ensure the integration and alignment of the Risk Management Systems with the Corporate and operational objectives and risk management is undertaken as a part of normal business practice and not as a separate task set at times.

37.2 In line with the above guidelines, your company has framed Risk Management Policy of the Company which is applicable to all levels and all the units of the Company. One of the objectives of the Risk Management Policy is to ensure that all the current and future risk exposures of the Company are identified, assessed, quantified, appropriately mitigated and managed.

37.3 During the year under report on obtaining approval of the Board, Company has given wide publicity about the Risk Management Policy. Divisional Level Committees have been formed by all the Divisions to assess the current status of Risk and identify measures to mitigate the risks and also to evaluate the mitigation measures so identified. Periodical Review meetings are being held and a report being placed before the Board once in every Six months.

38. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

38.1 In line with the provisions contained under "The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013 your Company has put in place "Anti Sexual Harassment Policy” in line with the requirements of above Act. During the year under report the Company has not received any Sexual harassment complaints.

39. COMMENTS OF THE COMPTROLLER & AUDITOR GENERAL OF INDIA :

39.1 Comments of Comptroller and Auditor General of India (C&AG) under Section 143 (6)

(b) of the Companies Act, 2013 on the accounts of the Company for the period ending 31 Mar 2015 are placed next to Statutory Auditors’ Report.

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the valuable support and assistance received from all Government Agencies particularly from Ministry of Defence, Department of Defence Production, DRDO Laboratories, Central Government Departments, State Governments of Telangana and Andhra Pradesh, Quality Assurance Agencies of Government of India and other PSUs for the help extended from time to time.

The Directors take this opportunity to place on record their deep appreciation for the valuable contribution made and co-operation extended by the employees at all levels to propel the Company to greater heights and in sustaining its growth path in years to come.

The Directors wish to thank Smt Kusum Singh, JS, DDP, MoD for her valuable guidance during her association with the Company. The Directors place on record their appreciation for the support and invaluable advice given to the Company during the tenure of Shir AK Kapoor, Part Time Non Official Director whose tenure was completed on 15 Feb 2015.

for and on behalf of the Board of Directors

Place: Hyderabad V UDAYA BHASKAR

Date: 27 Jul 2015 CHAIRMAN AND MANAGING DIRECTOR

---

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 44^th Annual Report together with the Audited Accounts of the Company for the year ended 31 Mar2014.

2. HIGHLIGHTS OF OPERATIONS:

2.1 Company has successfully executed Milan 2T Contract during the year 2013-14 and submitted proposals to get fresh Indent from Indian Army. It is expected that new Indent is likely to be received during the current Financial Year.

2.2 Company has signed a contract for supply of Invar ATG Ms for a value of Rs. 3000 Crore and order is to be executed over the next five years.

2.3 Third manufacturing unit of the Company was inaugurated by Shri GC Pati, IAS, Secretary (Defence Production) on 30 OcRs.2013 at Visakhapatnam.

2.4 Company has started First of Production Model (FoPM) Validation trials of Akash Weapon Systems during 21-26 Feb 2014 and were successfully completed during first quarter of 2014-15.

3. PERFORMANCE:

3.1 Performance of the Company in financial terms is summarized below:

Particulars	Rs. Crore		%of Increase/ (Decrease)
	2012-13	2013-14
Gross Block	711.55	834.56	17%
Depreciation Reserve	433.55	474.95	10%
Net Block	278.00	359.61	29%
Working Capital	614.58	811.68	32%
Capital Employed	892.59	1171.28	31%
Net Worth	953.08	1217.75	28%

3.2 Following data reflects the financial position of the company:

Particulars	Rs. Crore		%of Increase/ (Decrease)
	2012-13	2013-14
Value of Sales	1074.71	1779.89	66%
Value of Production	1175.52	1804.49	54%
Profit Before Tax	419.06	508.59	21%
Profit After Tax	288.40	345.51	20%
Value Added	395.95	578.48	46%

4. DIVIDEND & TRANSFER TO GENERAL RESERVE:

Your Company has a consistent track record of Dividend Payment. The Company has surpassed its previous record of highest payment of Dividend by paying a Dividend of Rs. 69.10 Crore for the year 2013-14 which includes Interim Dividend of Rs. 58 Crore paid during Feb 2014. The Directors also recommend a sum of Rs. 265 Crore be transferred to General Reserve.

5. FINANCE:

Total paid up capital remained at Rs.115.00 Crore. Gross Block of fixed assets of the Company (including special tools and equipment) stood at Rs. 834.56 Crore representing an increase of Rs. 123.01 Crore over 2012-13.

6. PERFORMANCE AGAINST Molls:

During the year 2012-13, the Company achieved a rating of “Very Good”. The Moll performance for the year 2013-14 is likely to be “Excellent”.

7. COST REDUCTION:

7.1 e-Reverse auction is implemented wherever possible which resulted in more competitive prices and reduction in material cost.

7.2 Continuous efforts are being made for increase in vendor base for various projects thereby considerable reduction in material cost is expected.

7.3 As a part of energy audit power saving devices are introduced which resulted in less electricity consumption.

7.4 A Committee under the Chairmanship of Director (Prod) continuously review the areas for Cost Reduction and suggestions given by the Committee are being implemented by all the concerned Division/Department(s).

8. ECONOMY MEASURES:

8.1 Inline with Ministry of Finance Office Memorandum on Expenditure Management, Economy Measures and Rationalization of expenditure, Company has observed fiscal prudence and economy on areas like travelling expenses, advertisement and publicity expenses, purchase of new vehicles, conducting seminars and conferences, courtesy and entertainment etc during the year 2013-14.

8.2 Energy consumption, fixed and variable overheads are being constantly reviewed and pruned to bare minimum.

9. MODERNIZATION AND UPGRADATION:

Under Modernization Programme technologies like the following are being ushered which result in enhancing the existing capacity to meet the future requirements of our customers:-

- Introduction of Robotic Welding of machines.

- Automatic loading and progression of jobs in electroplating productions line.

- Unification/Automations of cold and hot conditioning of Missiles/Subsystems including thermal shock capability.

- Introduction of Flow Forming in place of deep drawing process.

- Introduction of Hybrid Micro Circuits.

- Automated Tension Controls in winding process of Wire spool.

- Epoxy flooring in place of conventional flooring for shock proofing.

- Automated Pressure Testing in place of manual process.

- Safety Shield for soldering of Ignition.

10.FOREIGN EXCHANGE EARNINGS AND OUTGO:

Earnings of foreign exchange for the year was Rs. 2.00 Crore and the outgo was Rs. 411.12 Crore.

11.EXHIBITIONS:

Senior Executives and Directors have participated in the National and International Exhibitions during the year 2013-14. Such platforms were used to gain awareness in advance of technologies, interact with experts and share knowledge with others. To visit the pavilions of other countries and understand the systems available with them, which enables BDL to draw up its own future business plans.

BDL has participated in the following exhibitions during the year 2013-14:

- LAAD-2013 exhibition held at Rio-Jenerio, Brazil during April 2013.

- International Maritime exhibition held at Singapore during May 2013.

- Desi-2013 exhibition held at London, U K during Sep 2013.

- ADEX-2013 exhibition held at Seoul, South Korea during Nov 2013.

- Eurosatory 2014 exhibition held in Paris, France during Jun 2014

- International Airshow 2014 held at London, U K during Jul 2014

-Defexpo-2014 exhibition held at New Delhi during Feb 2014.

12.B0ARD OF DIRECTORS:

12.1 During the year under report, seven meetings of the Board of Directors were held and the Annual General Meeting of the Company for the year 2012-13 was held on 30 Sep 2013.

12.2 Shri V Udaya Bhaskar appointed as Director (Production) on the Board of BDL w.e.f 01 Aug

2013. Shri PK Mishra, Joint Secretary (ES) Department of Defence Production is appointed as Government Director in place of Shri Ravikanth, Joint Secretary (MS) w.e.f 11 Sep 2013.

12.3 Shri G.Raghavendra Rao, Director (Technical) resigned and relieved on 26 Jun 2013. AVM (Retd) N B Singh appointed as Director (Technical) on the Board of Bharat Dynamics Limited w.e.f 01 Apr 2014.

12.4 Tenure of Prof. RK Mishra, Part Time Non Official Director and Shri KL Mehrotra, Part Time Non Official Director was completed on 07 Mar 2014.

13. HUMAN RESOURCE DEVELOPMENT:

13.1 During the year under report the Company has conducted training programmes to impart training on knowledge based; development oriented and need based programmes covering 1522 Executives and 753 Non Executives of the Company. Such training programmes were organized through In-house and at external agencies premises to cover the present and future requirements of the Company.

13.2 Your Company has also organized training programmes to 15 Nos of Senior Executives under Management Development Programmes through Premier Institutions like Indian Institute Management at Ahmadabad, Bangalore, XLRI at Jamshedpur.

13.3 Chairman & Managing Director has participated in training programme on Leading Change for Organizational Renewal organized by world renowned Harvard Business School, USA during Mar 2014.

13.4 Your Company is continuously sponsoring Executives to DIAT, Pune to undergo training on Missile Technology and also organized Revalidation and Skill upgradation training programmes to Non Executives.

13.5 Your Company has initiated an ambitious Project to create a pool of 30 Nos. of Project Management Professionals in the Company. As a way forward, Company has identified 30 Nos of Executives and sponsored them to attend Contract Programmes. These Executives are in the process of obtaining membership from PMI, USA and later on to pass the Certification Examination.

13.6 Assessment Development Center (ADC) has been established in BDL which assess Competency and Behavioral traits of Executives in Grade VI and VII. The assessment went through a series of activities and simulations comprising Case Study Analysis, Role Plays, In Box Simulation, Management Interview, Group Discussion, Group Business Simulation.

All AG Ms and DG Ms of BDL have undergone the Assessment. The whole Assessment process was carried out by the Experts from M/s. Thomas Assessment Pvt.Ltd., (TAPL), Bangalore.

13.7 In an effort to make BDL a great place to work, ‘Employees Satisfaction Survey - 2013’ was conducted across all units of BDL with an objective to understand the feedback from employees on how they experience with the organization in its various facets and dimensions. M/s. Randstand India, a HR Consulting firm conducted the survery.

14. INDUSTRIAL RELATIONS AND EMPLOYEE WELFARE:

14.1 Your Company has continued to maintain cordial and harmonious relation with recognized and other registered trade unions and Associations during the year under report. All the Statutory Committees such as Works Committee, Safety Committee, Canteen Committee and Plant Level Committee have extended their cooperation to maintain discipline at all levels.

14.2 Compliance on Statutory Welfare Provisions is followed meticulously. Company has also continued to extend non statutory facilities such as school, canteen allowance, uniforms, shoes etc. The Company has been taking care of medical needs of employees and their family members as per BDL Medical Rules. In line with DPE guidelines Company has framed Pension Scheme for the Executives and Post Retirement Medical Benefit Scheme for the Executives and Non-Executives of the Company and obtained approval of the Board.

14.3 Process of verification Election under code of discipline has been initiated by Dy. Chief Labour Commissioner (Central) Hyderabad to determine majority union to represent Employees of the Company for the next two years.

15.DIRECTORS’ RESPONSIBILITY STATEMENT:

As per Section 217(2AA) of Companies Act, 1956 as amended, the Directors state:

(i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures there from.

(ii) that the selected accounting policies have been applied consistently and judgments and estimates made 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 the financial year and of the Profit or Loss of the company for the year ended 31 Mar 2014.

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 as amended for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the Annual Accounts have been prepared on a going concern basis.

(v) In line with DPE guidelines on Corporate Governance for CPSEs-2010, Certificate on compliance with all Laws applicable to the Company upto the end of a particular period are being placed before every Board Meeting for its review.

16.FOREIGN VISITS:

The Company incurred an expenditure of Rs. 36.63 Lakh during the year towards foreign travel for training of personnel and on business trips.

17. SECURITY:

17.1 Central Industrial Security Force (CISF) is providing security and Fire services coverage both at Kanchanbagh and Bhanur. Management is planning to induct CISF in Vizag Unit also for Security and Fire services requirement. Plant Security Council is in place to review the security arrangements and implementation of IB guidelines. Regular security reviews are being conducted both by the Management and CISF to beef up security. Periodical security coordination meetings are being held with local police and civil authorities to update on security measures. The Company was crime free during the year 2013-14.

17.2 Security awareness programmes were conducted during Security Week/Fire Week and employees are sensitized on the security threats and actions to be taken in case of fire.

17.3 Biometric Access Control System is installed in addition to swiping of Cards to avert unauthorized entries at the Security Gate. Computerized Photo passes and various other security measures are being followed to strengthen more the security systems in the Company.

18. SAFETY:

18.1 Company is strictly following applicable norms to maintain good health and safety of the employees. The two Committees i.e. Industrial Safety Committee which is statutory and Explosive Safety Committee are functioning to meet the needs of BDL. Safety Committee meetings are held at regular intervals for monitoring Safety, Health and Environment as per the statutory requisite. The works are carried out in Compliance with the Factories AcRs.1948, and Explosive Safety strictly adhering to the Storage & Transport of Explosive Committee (STEC) regulations.

18.2 Annual explosive safety audit is conducted by Centre for Fire, Explosive & Environment Safety (CFEES) New Delhi and the observations made by the audit team have been complied with.

18.3 Regular medical checkups are carried out for employees working in hazardous areas by qualified medical team.

18.4 Training programmes are arranged by HRD through National Safety Council (NSC), Central Labour Institute (CLI), Regional Labour Institute (RLI) and Centre for Fire, Explosive & Environment Safety (CFEES) New Delhi to inculcate Safety consciousness and to establish safe working environment among the employees

18.5 Safety Engineering Department has organized guest lectures with experienced & expert persons in the field on Explosive Safety and Industrial Safety to educate the employees of the Company.

18.6 During the year 2013-14 all the three units of BDL have been certified with ISO 14001-2004. Environment Management System (EMS) certified by Indian Register Quality System (IRQS) having 3 years validity. While obtaining such certificate for BDL-KBC, Safety Engineering Department has also played a key role.

18.7 Safety Day/Week is celebrated during the month of Mar 2014 with enthusiasm. Fire mock drills are conducted at regular intervals to ensure fire fighting preparedness.

19. RESERVATION OF POSTS FOR SCs/STs AND TOTAL MANPOWER:

19.1 The Company has been following Presidential Directives of the Government with regard to reservation of posts for SCs / STs.

19.2 Employees strength as on 31 Mar 2014 is 3081 and No. of persons on temporary rolls as on the same date is 184. Of the total 3081 permanent employees, 79 are Ex-servicemen, 574 are Schedule Caste and 200 are Scheduled Tribes. The existing Percentage of Scheduled Caste and Scheduled Tribes in respect of Non Executives is 19.45% and 5.32% and in respect of Executives, it is 16.45% and 9.70% respectively.

19.3 No. of persons on temporary rolls as on 31 Mar 2014 are 184, out of which 37 belong to Schedule Cast and 14 belong to Schedule Tribe Categories.

The representation of Scheduled Caste and Schedule Tribes in various categories of Posts as on 31 Mar 2014 are as follows:

	Number of Employees
Category	Total Strength		Schedule Caste		Schedule Tribes
	31-03-2013	31-03-2014	31-03-2013	31-03-2014	31-03-2013	31-03-2014
Group A	625	753	101	125	61	75
Group B	201	93	34	14	18	7
Group C	1917	1901	351	348	100	98
	215*	184*	45*	37*	15*	14*
Group D	342	335	91	87	21	21
Total	3300	3266	622	611	215	215
‘Temporary Employees

19.4 Recruitment of employees in Scheduled Caste and Scheduled Tribes during 2013-14 is as follows:

Classification of posts	Total vacancies released	Total Recruitment	Reservation of posts (out of Col.2)	Recruitment made during the year 2013-14
(1)	(2)	(3)	(4)	(5)
			SCs	STs	SCs	STs
Group-A	87	51	15	7	10	5
Group-B	2	2	0	1	0	1
Group-C	6	6	1	0	1	0
	28*	28*	7*	1*	7*	1*
Group-D	0	0	0	0	0	0
Total	123	87	23	9	18	7
*Temporary Employees absorption

20. EMPLOYMENT OF WOMEN:

As per the recommendation No.51, para (ii) (a) of the National Commission for Women (NCW) in its Annual Report for the year 1995-96, the employment situation of Women (percentage) is given below as directed by Ministry of Defence vide their letter No. 39(6)/99/D(B&C), dated 27 Aug 1999.

I. EXECUTIVES

Grade	Total	No of Women	Percentage
1	93	17	18.28%
II	238	39	16.39%
III	135	15	11.11%
IV	62	11	17.74%
V	135	9	6.67%t
VI	139	0	0
VII	31	1	3.23%
VIII	8	0	0
IX	1	0	0
CVO on deputation	1	0	0
Schedule-C	2	0	0
Schedule-B	1	0	0
Total	846	92	10.87%

II. NON-EXECUTIVES

Grade	Total	Women	Percentage
WG-1	121	15	12.40%
WG-2	220	23	10.45%
WG-3	295	50	16.95%
WG-4	169	33	19.53
WG-5	176	25	14.20%
WG-6	38	5	13.16%
WG-7	143	8	5.59%
WG-8	14	0	0
WG-9	193	6	3.11%
WG-10	124	17	13.71%
WG-11	259	17	6.56%
WG-12	484	40	8.26%
Temp	184*	16*	8.70%*
Total	2420	255	10.54%

21. PHYSICALLY CHALLENGED (PC) EMPLOYEES (Executives & Non-Executives) as on 31 Mar 2014:

The total employees of Physically Challenged as on 31 Mar 2014 is 108 which includes 2 persons recruited during the year 2013-14. The percentage of total Physically Challenged employees workout to 3.50% as on 31 Mar 2014.

22. PARTICULARS OF EMPLOYEES:

The list of particulars of employees to be furnished as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 is attached to this report (Annexure-I):

23. ENVIRONMENT AND POLLUTION CONTROL:

The Company contributes in all aspects of the environment by maintaining a clean and green environment. Effluent water treatment, water conservation, tree plantation, planting of flower bearing trees, and land scaping utilizing treated effluent water, was carried out. Company has formed Committees like Working Level Committee and Steering Committee for handling various types of pollutions in BDL and are periodically reviewing the status on Pollutions. Steps are being taken to replace old DG sets with new Acoustic DG sets to control noise pollution within the prescribed limits. During the last five years Company incurred approx an amount ofRs. 2.38 Crore towards Pollution Control.

24. QUALITY:

24.1 Quality and Customer Satisfaction:

24.1.1 BDL manufactures products which are single shot in nature. These products require stringent Quality standards and high degree of reliability. In pursuit of this objective, BDL has adopted International Quality Management system practices by way of obtaining ISO certification since 18 years. All the Manufacturing Divisions have been certified to the latest ISO 9001:2008 Quality Management System Standard.

24.1.2 For all the ISO certified Divisions, regular audits by external agencies are being conducted. Customer satisfaction is being measured for all major products manufactured in those Divisions. BDL is continuously striving to improve customer satisfaction through customer meets, interaction with users. Corrective actions are taken wherever necessary for improvement.

24.2 AS 9100C (Aerospace Quality Management System):

BDL has crossed important mile stones (Stage-1 Pre-Audit) in getting AS 9100C Quality Management System certification for MI LAN Division and likely to go for stage-2 audit in the financial year 2014-15.

24.3 ISO 14001:2004 (Environment Management System) Certification for BDL Units: All the three units of BDL at Kanchanbagh, Bhanur and Vizag have been certified with ISO

14001:2004 Environment Management System (EMS) certification by Indian Register QuaIity System (IRQS)on 17 Feb 2014 having three years validity.

24.4 “YEAR OF QUALITY 2013-14” Activities:

Hon’ble Minister for Defence, Government of India directed all DPSUs & OFB to observe the year 2013-14 as a “Year of Quality 2013-14”, taking necessary measures for realization of the desired quality of performance of the products. Accordingly, BDL has drawn an action plan to realize the objectives like need for Quality improvements, enhancement of quality standards to match with Global standards and to address quality issues comprehensively and steps for improving customer satisfaction. In line with the above objectives, Production Divisions have organized Customer meets, Interaction with Users, Vendor meets, Workshops and Lectures on Quality and various Quality improvement activities. Customer meet organized by Divisions have created Synergy and strong bond between BDL & the Customers to accomplish common objectives with mutual respect and honor.

25. EXPORTS:

BDL has executed Export orders for Rs. 118.31 Lakh during the year 2013-14.

26. FUTURE OUTLOOK:

26.1 Consequent to the modernization Programme launched by the Indian Armed Forces the future outlook of the Company is encouraging. BDL has already been identified as Lead Integrator for the acquisition programme like VISHORAD, SR SAM, MR SAM. BDL is also the Lead Integrator for Advanced 3rd Generation ATGM. These Projects are at various stages of consideration for approval of Government of India. Considering the above future outlook for the Company’s growth is satisfactory. However, keeping in view the Government Policy to encourage competition from all sectors in Defence acquisition Programmes, BDL is aware that its Nominated Production Agency Status is being slowly transformed to Competitive Bidder. Hence the Company needs to get ready to face new challenges in future.

26.2 BDL has an healthy order book position of around Rs. 19000 Crore as on 31 Mar 2014. However the Company has challenging times ahead with delivery commitments with respect of major ATGMs and SAMs.

27. INTERNAL CONTROL SYSTEMS ANDTHEIR ADEQUACY:

The Company had put in place all required internal controls and systems to meet the canons of financial propriety. External audit firms have been appointed to ensure their adequacy and report thereon. A detailed analysis of the reports of Internal Audit Firms as well as reports of Internal Audit Department of BDL are being placed before the Audit Committee for review and advice. The adequacy of internal control procedures are reviewed and reported by the Statutory Auditors in their Audit Report. BDL being a Government Company is subject to Government Audit also.

28. OFFICIAL LANGUAGE (OL) IMPLEMENTATION:

28.1 The Provisions of OL Act-1963 (as amended 1967) & Rules there under, are implemented properly. Quarterly OLIC Meetings are held regularly under the Chairmanship of CMD & Directors and quarterly Progress Reports on use of OL are being sent on time. SM (OL) and CMD have attended the 12th Meeting of Hindi Salahkar Samithi of Department of Defence Production, MoD held under the Chairmanship of Honorable Raksha Mantri in the month of Jul 2013. During the visit of Parliamentary Consultative Committee for the Ministry of Defence visited on 17 Jan 2014, presentation and other documentary arrangements were made in Hindi and English in compliance to the OL policy of Govt, of India.

28.2 First Sub-committee of Parliamentary Committee on Official Language inspected and reviewed the implementation activities of BDL on 25 Sep 2013. The committee was headed by Shri PradeepTamta and appreciated the efforts put in by the Company in this regard.

28.3 On the eve of Vigilance Awareness Week and National Safety week celebrations in the company, various completions were conducted in Hindi, English & Telugu to involve more and more employees of the organization on these subjects.

28.4 Under OL AcRs.1963 and the Presidential Orders thereon, the papers laid before the parliament, Annual Report of the Company, Moll with MoD were prepared in bilingual form and submitted. The Website of the Company prepared in Hindi was updated from time to time in compliance with the directives received from Govt, of India.

29. TECHNOLOGICAL CONSERVATION & RENEWABLE ENERGY DEVELOPMENT:

29.1 Sustainable development has become the national priority to channelize the development process in an environment friendly way with the optimum utilization of available natural resources. In its relentless pursuit of implementing sustainable development practices BDL has unleashed various programme to conserve energy thus promoting energy efficiency.

29.2 As a part of this, voltage optimizer was installed to maintain the set value of 220V irrespective of the incoming voltage, which results in energy savings upto 10-15 % while maintaining the same illumination level. The energy efficient lamps which contain little mercury and have long life were installed by replacing the existing 400 Watts high bay MVHP with 250 Watt high bay MVHP. More energy efficient BEE star rated fans of 330 No’s, were installed by replacing the existing ceiling and pedestal fans, with the saving of approximately 32687 kwh.

29.3 By installing occupancy sensor systems with group controlling the energy saving of approximately 20340 kwh is expected. The replacement of energy inefficient condenser & pumps with new energy efficient ones, the daily savings accrual is around 72 kwh /per day.

29.4 The water purification system installed for the cooling and make up water circuit for A/C systems has enhanced the efficiency of the A/C plants.

29.5 As the environmental sustainability is one of the millennium development goals, for which our Nation is committed to, in compliance to the national commitment, BDL is taking the measures like tree plantations and rain water harvesting on continuous basis with perceptible improvement in the ground water table, and striving for reduction in the carbon emission levels by adopting energy systems in terms of solar street lights.

29.6 As the implementation of sustainable development program is a continuous activity to attain the environmental sustainability, BDL will adopt sustainability as a way of life.

30. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT:

30.1 Corporate Social Responsibility is considered as an embedded programme of the Company. The Company being a good Corporate citizen has been playing an exemplary role by fulfilling social and welfare obligations with clear transparency and commitment. Keeping this in view, Company has contributed an amount of Rs. 29 Lakhs to Uttarkhand Chief Minister’s relief fund to help the flood effected victims in the State.

30.2 Company has continued to spend the amount towards (i) Mid day meals to school children, (ii) health care programmes, (iii) Providing safe drinking water, (iv) laying of Road in the remote hill area and (v) distribution of slates, books etc to school children so to improve quality education under CSR activities during the year 2013-14.

30.3 During the year under report, DPE has revised the guidelines and as per the revised guidelines Corporate Social Responsibility and Sustainability Development are covered under one set of guidelines w.e.f 01 Apr 2013. Also Companies Act,2013 contains new provisions regarding (i) Constitution of CSR Committee of the Board, (ii) Committee to ensure that the Company shall spend in every financial year at least two percent of the 3 years average net profits of the Company etc. (iii) The Board’s Report shall disclose the composition of CSR Committee and also if the Company fails to spend such amount, the Board shall specify the reasons for not spending the amount.

30.4 Company has also taken up activities like (i) installation of voltage optimizer (ii) replacement of energy efficient lamps in place of 250/400 Watt MVHP lamps, (iii) installation of water purifiers systems, (iv) study on carbon foot print, (v) construction of rain water harvesting pits etc under Sustainable Development during the year under report.

30.5 Company has also conducted in house programmes to all the employees to create awareness and knowing the importance of CSR and SD activities undertaken by the Company.

30.6 The company has incurred an amount of Rs. 2.88 Crore towards CSR & SD activities during the year 2013-14.

31. VIGILANCE:

31.1 On 28 OcRs.2013, Chairman & Managing Director administered the pledge in Corporate Conference Hall and Shri K. Satyanarayana, Former Senior General Manager of Nizam Sugar factory Limited inaugurated Vigilance Awareness Week as Chief Guest. The theme of the year was “Promoting Good Governance - Positive contribution of Vigilance”. He spoke about importance of Good Governance as a concept of public life.

31.2 During the Vigilance Awareness Week, interactive sessions were held by CVO with all the Divisions and Departments in Kanchanbagh and Bhanur. CVO highlighted the role of Vigilance in BDL, especially Preventive vigilance and pointed out the importance of leveraging technology. He expressed happiness on implementation of e-procurement and amendment of Recruitment Rules.

31.3 Vigilance Awareness Week celebrations at Bhanur Group was inaugurated by Shri KV Natarajan, IAS, Ex-Chief Vigilance Commissioner of AP State on 31 Oct 2013 followed by guest lecture. He spoke about importance of good governance in the society.

31.4 Shri RK Shekhawat, Director (Vigilance/DDP), MoD was the Chief Guest for valedictory function held on 01 Nov 2013. He had delivered a guest lecture on Promoting good governance -Positive contribution of Vigilance by giving examples narrating the importance of good governance in the society.

31.5 During the year a report on unauthorized foreign visits to other countries with recommendations for systems improvement was submitted to CMD, wherein it is suggested that Management may issue a circular emphasizing the need to obtain a No Objection Certificate (NOC) before proceeding abroad for official or personal grounds, failing which will attract disciplinary action against the concerned Executive/ Non Executive as per the Rules of the Company.

31.6 System improvement suggestions were provided to the management in respect of engagement of retired employees on contract basis, merit awards, foreign visit, security aspects, department promotions, transfers, etc., and vigilance clearance procedures in respect of confirmation on first appointment, retirement on superannuation, resignation, etc.

31.7 Steps were initiated to increase transparency for overall benefit of the Organisation by Leveraging of Technology which include, providing details of vendor’s payment, details and status of tenders, list of approved vendors list, details of single tenders and high value orders, etc., on website of the Company. IMM Manual and Personnel manual are also made available on the website of the Company. Implementation of online submission of applications for recruitment of executives and vendor registration. Implementation of e-procurement and e-reverse auctions, computerization of Annual Property Returns of employees. For locating the movement of various proposals/files for approval, a new software package ‘File Tracking System (FTS)’ is developed.

32. AUDIT COMMITTEE:

An Audit Committee had been constituted for better Corporate Governance. Seven meetings have been held during the year to review the internal control systems and their adequacy, including coverage of Audit Functions. Details of composition, terms of reference etc., are covered in Report on Corporate Governance attached to this report (Annexure-I II).

33. CEO/CFO CERTIFICATION:

As per the requirements of DPE Guidelines, the CEO / CFO certificate has been obtained and placed before the Audit Committee and the Board.

34. CORPORATE GOVERNANCE:

34.1 Corporate Governance is about the application of best management practices, compliance of laws and adherence to ethical standards to achieve the Company’s objective of enhancing shareholders’ value and discharge of social responsibility.

34.2 The Company has a well established, transparent and fair administrative set up to provide for professionalism and accountability.

34.3 As per the guidelines on Corporate Governance for CPSEs issued by DPE vide its OM No. 18 (8)/2005-GM, dated 14 May 2010, the Management Discussion and Analysis Report (Annexure-ll), Report on Corporate Governance (Annexure-llI) along with Certificate on compliance of conditions on Corporate Governance from a Practicing Company Secretary (Annexure-IV) as required under the said guidelines are attached to this report.

34.4 Quarterly and Yearly compliance reports on Corporate Governance are being forwarded to MoD in the prescribed format.

35. AUDITORS:

35.1 M/s. Laxminiwas Neeth & Co., Chartered Accountants, Hyderabad were appointed as Auditors of the Company for the financial Year 2013-14 by the Comptroller & Auditor General of India.

36. DECLARATION GIVEN BY INDEPENDENT DIRECTOR:

36.1 Department of Public Enterprises has issued guidelines on Corporate Governance-2010 during May 2010 which includes composition of Board of Directors of CPSEs says that the members of the Board of PSEs consist of Functional Directors, Government Directors and Non Official Directors. Board of Bharat Dynamics Limited consists of three Functional Directors, two Government Directors and one Part Time Non Official Director as on 31 Mar 2014. However one more Functional Director has joined on 01 Apr 2014 and vacancies arising on the completion of tenure of two Part Time Non Official Directors on 07 Mar 2014 is to be filled up as on 31 Mar 2014.

36.2 Company has obtained a declaration from Shri AK Kapoor, Part Time Non Official Director as on 31 Mar 2014 that he meets the criteria of independence as provided in Sub Section (6) of Section 149 of the Companies Act, 2013.

37. IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:

37.1 DPE guidelines on Corporate Governance for CPSEs - 2010 says that the Board of the Company should ensure the integration and alignment of the Risk Management Systems with the Corporate and operational objectives and also that risk management is undertaken as a part of normal business practice and not as a separate task set at times.

37.2 In line with the above guidelines, your company has framed Risk Management Policy of the Company which is applicable to all levels and all the units of the Company. One of the objectives of the Risk Management Policy is to ensure that all the current and future risk exposures of the Company are identified, assessed, quantified, appropriately mitigated and managed.

37.3 During the year under report on obtaining approval of the Board, Company has given wide publicity about the Risk Management Policy. Divisional Level Committees have been formed by all the Divisions to assess the current status of Risk and identify measures to mitigate the risks and also to evaluate the mitigation measures so identified. Periodical Review meetings are being took place and a report being placed before the Board once in every Six months.

38. COMMENTS OFTHE COMPTROLLER&AUDITOR GENERALOF INDIA:

Comments of Comptroller and Auditor General of India (C&AG) under Section 619 (4) of the Companies Act, 1956 on the accounts of the Company for the period ending 31 Mar 2014 are placed next to the Statutory Auditors’ Report.

ACKNOWLEDGEMENTS

39.1 Your Directors gratefully acknowledge the valuable support and assistance received from all Government Agencies particularly from Ministry of Defence, Department of Defence Production, DRDO Laboratories, Central Government Departments, AP State Government, Quality Assurance Agencies of Government of India, other PSUs for the help extended from time to time.

39.2 The Directors take this opportunity to place on record their deep appreciation for the valuable contribution made and co-operation extended by the employees at all levels to propel the Company to greater heights also in sustaining its growth path in years to come.

39.3 The Directors wish to thank Shri Ravikanth, JS (MS) for his valuable guidance during his association with the Company. The Directors place on record their appreciation for the support and invaluable advises given to the Company during the tenure of Prof RK Mishra and Shri KL Mehrotra, Part Time Non Official Directors whose tenure was completed on 07 Mar 2014.

for and on behalf of the Board of Directors

Place: Hyderabad SN MANTHA

Date: 24 Jul 2014 Chairman and Managing Director