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:

# 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:

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:

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.

14.5 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.

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.