Bharat Dynamics Ltd Management Discussions

Forward looking statements

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company assumes no responsibility to publicly amend, modify or revise forward looking statements on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include governments strategy relating to acquisitionofDefenceequipment,changes regulations,tax laws, economic developments within government the country and such other factors globally.

1. BHARAT DYNAMICS LTD – AN OVERVIEW

H eadquartered in Hyderabad, Bharat Dynamics Limited (BDL), was incorporated on 16 July, 1970 as a Public Sector Undertaking under Ministry of Defence, Government of India.

O ver the years, BDL has evolved as one among few industries in world having state-of-the-art facilities for manufacture supply of Guided Missiles, Underwater Weapons, Air-borne products and allied defence equipment for Indian Armed Forces. BDL also offers Product Life Cycle Support for all equipment supplied and also refurbishment / life extension of vintage Missiles already available in the inventory of the Indian Armed Forces. While fulfillingits basic role as guided weapon system manufacturer, BDL has also built-up in-house R&D capabilities primarily focused on Design & Engineering activities.

BDL is relentlessly working to contribute its part towards creation of a self-reliant India "Viksit Bharat" in the area of

The Company is endeavouring to forge alliance with foreign companies to take the ‘Make in India mission further. Thrust is being given to engage with Original Equipment Manufacturers (OEMs) for new missiles and underwater weapons with potential Transfer of Technology. BDL has forayed into international market by offering its products to foreign countries.

1.1 Indian Defence Industry

I ndia is one of the strongest military forces in the world and holds a place of strategic importance for the Government of India.

India is the largest military spender and has positioned itself as a key player in the global defence industry. India ranked as the second-largest arms importer, though its imports declined by 9.3% between 2015-2019 and 2020-2024. The Indian defence significan economy and may likely to accelerate due to current geo-political situations. manufacturingindustryis T he Indian defence sector has witnessed significant developments and transformations during the financial year 2024-largely driven by strategic priorities, technological advancements, and geopolitical dynamics. 2025, Indias defence sector experienced remarkable growth, underscoring the nations commitment to self-reliance and global competitiveness in defence manufacturing. 1,26,887 crore in FY 2023-24, marking a 16.7% increase from the previous year.I ndiasdomestic This surge reflects the effectiveness of policies promoting indigenous manufacturing and the "Aatmanirbharta" (self-reliance) initiative. The public sector contributed 79.2% to this production, while the private sector accounted for 20.8%. The Government of India aims to escalate defence production to 3 lakh crore by 2029. 65% of defence equipment is now manufactured domestically, a significant shift from the earlier 65-70% import defence industrial base includes 16 DPSUs, over 430 licensed companies, and approximately 16,000 MSMEs, strengthening indigenous production capabilities.

T he Ministry of Defence has signed a record 193 contracts in 2024-25, with the total contract value surpassing 2,09,050 crore, nearly double the previous highest figure. This milestone reflects the governments commitment to strengthening national security through enhanced procurement and modernisation of the Armed Forces. Of these, 177 contracts, accounting for 92 percent, have been awarded to the domestic industry, amounting to 1,68,922 crore, which is 81 percent of the total contract value. This significant focus on indigenous manufacturing aligns with the vision of self-reliance in defence production, boosting local industries and generating employment across the sector.

I ndias defence exports soared to a record 21,083 crore (approximately $2.63 billion) in FY 2023-24, a 32.5% increase from the previous year. Over the past decade, exports have grown 30-fold, positioning India as a significant defence market. The private sector contributed about 60% of these exports, with Defence Public Sector Undertakings (DPSUs) accounting for the remaining 40%. The Government of India targets 50,000 crore in defence exports by 2029. The surge in the defence budget, from 2.53 lakh crore in 2013-14 to 6.81 lakh crore in 2025-26, underlines the nations determination to strengthen its military infrastructure.

O verall, the 2024-2025 period marked a transformative phase for Indias defence sector, characterized by substantial growth in production, exports, strategic collaborations, and technological innovations, aligning with the nations vision of achieving self-reliance in defence. With an emphasis on indigenous production, technological advancements, and strengthening geopolitical alliances, India is positioning itself as a key player in global defence and underscore its transformation globally competitive military manufacturing hub. T he combination of strategic policy interventions, increased domestic participation, and a focus on indigenous innovation has significantly strengthened the countrys defence capabilities. The increase in production, the exponential rise in exports, and the success of initiatives like the Make in India reflect Indias commitment to achieving Atmanirbharta in defence.

As the fiscal year progresses, the focus will likely continue on enhancing defence capabilities, improving infrastructure, and ensuring that the country remains prepared to face evolving security challenges in the region and beyond. With ambitious targets set for 2029, the nation is poised to further expand its global footprint, reinforcing its position as a dependable partner in the international defence market while enhancing national security and economic growth. (Source: www.mod.gov.in; Press informationbureau; and other documents.)

1.2. Indigenization

T he Ministry of Defence has taken numerous steps for self-reliance in the defence sector and Positive Indigenization Lists is one of the most important transformative reforms in pursuit of Indigenization. It is one of the key constituents of the Governments ‘Atmanirbhar Bharat Abhiyan to transform the defence sector to achieve self-reliance and boost exports with the active participation of the public and private sector. The Department of Defence Production (DDP) and the Department of Military Affairs (DMA) have issued five Positive Indigenisation Lists (PILs) for LRUs, assemblies, sub-assemblies, sub-systems, spares, components, and high-end materials. These lists set fixed timelines beyond which procurement will be restricted to domestic manufacturers. Out of over 5,500 items listed, more than 3,000 have been indigenised as of February 2025. Key indigenised technologies include artillery guns, assault rifles, corvettes, sonar systems, transport aircraft, light combat helicopters (LCHs), radars, wheeled armoured platforms, rockets, bombs, armoured command post vehicles, and armoured dozers.

B harat Dynamics Limited (BDL) as part of its contribution to the creation of an Atmanirbhar Bharat (Self-Reliant India), has been focusing on indigenising technology from the moment a contract is signed. BDL manufactures missiles under Technology Transfer (ToT) agreements with DRDO and with Foreign Original Equipment Manufacturers (OEMs). The ToT for foreign OEM designed products was only 60%. However, BDL has achieved indigenisation levels of more than 80% to 90% in many of its products through its indigenisation initiatives. In the case of DRDO-designed products, most of them have achieved indigenisation levels of more than 90%. BDL is putting forth maximum efforts to achieve higher levels of indigenisation for all its products. BDL is utilizing the Srijan Portal, a Ministry of Defence indigenisation portal. The main objective of Srijan portal is to partner the Private sector in Indigenisation efforts of Defence PSUs. BDL uploads the details of imported items which are planned for Indigenisation and the Indian Industry can come forward for developing these items.

BDL has uploaded 1198 Nos. of imported items on the portal. Till this year, 217 items (cumulatively) have been Indigenised.

Necessary technical support is being provided to Micro, Small and Medium Enterprises (MSMEs) to encourage them to produce quality items. BDL 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.

2. REVIEW OF BDLS BUSINESS

T he company operates in an environment characterised by both increasing complexity in factors influencing national security and continuing economic challenges in India and globally. A significant component of BDLs outlook in this environment is to focus on execution, improving standards and quality and predictability of the delivery of our products to the Indian Army. BDL also continues to invest in technologies to fulfil the requirements of the Indian armed forces and also invest in its people so that the company has necessarytechnicalskillstosucceedwithoutlimiting its ability.

2.1 BD Ls Products

				Counter-
SAMs/AAMs	ATGMs	Torpedoes	Launchers		Test Equipment
				measures
Akash	Milan2T,	Light	Launchers for	Counter Measures	Functional
Weapon System,	Konkurs-M,	Torpedoes,	Konkurs-M	Dispensing	monitoring
Medium Range SAM,	INVAR,	Heavy Weight	& MILAN 2T	Systems and	equipment for
ULPGM,	NAG	Torpedoes	ATGMs	Underwater	ATGMs & SAMs
Astra Weapon System				decoys

2.2 Manufacturing facilities

T he company has three manufacturing facilities located in Hyderabad, Bhanur and Vishakhapatnam. All the manufacturing facilities have been certified with ISO 14001:2015 Environmental Management System (EMS). All production Divisions are certified to AS 9100D Standard for Aerospace Quality Management System. The Corporate Office located at Hyderabad is certified with ISO 9001:2015 (Quality Management System). 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 companys own internal auditors, while surveillance audits are carried out by certification bodies as per the prescribed frequency.

T he company is setting up of additionalmanufacturing facilities at Ibrahimpatnam (near Hyderabad), Amravati in Maharashtra

Jhansi in UP which will be used to manufacture SAMs (including new generation Missiles), VSHORADs, rockets and propellants for various ATGMs.

2.3 Ord er Book

Our current order book as on 31 March 2025 is about 22814 crore.

2.4 Fin ancial Performance i) P erformance of the company in financial terms is summarized below:

	in Crore
			% of Increase/
Particulars
	2024-25	2023-24	(Decrease)
Sales/Revenuefrom	3345	2363	41%
Value of Production	3767	2592	45%
i) I mport Material Consumed	110	148	(26%)
ii) I ndigenous Material Consumed	1990	972	105%
Total Material Consumed	2100	1120	86%
Value Added	1667	1472	13%
Profit	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 10 each into 2 fully paid up equity shares having a face value of 5 each.

ii) F ollowing data reflect the financial position of the company:

	in Crore		% of Increase/
Particulars
	2024-25	2023-24	(Decrease)
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.

iii) K ey Financial Ratios:

I n accordance with the SEBI (LODR)Regulations,2015, the company is required to give details of significant changes

(change of 25% or more as compared to the immediately previous financial year) in the following key sector specific financial ratios alongwith the detailed explanations there for:

Particulars	FY 2024-25	FY 2023-24	Change (in %)	Explanation for change of 25% or
				more
DebtorsTurnoverRatio	5.89	9.57	(38%)	Reduction is mainly due to increase in
				trade receivables on account of higher
				sales in the month of March 2025.
Inventory Turnover Ratio (times)	1.45	1.25	(16%)	-
(times InterestCoverageRatio	Nil	Nil	-	-
Current Ratio (times)	2.38	3.07	(22%)	-
DebtEquityRatio	Nil	Nil	-	-
Operating Profit	12%	20%	(40%)	Reduction on account of Onerous
				Provision ( 14140.14 Lakh) made
				during the year, resulted in lower Net
				Profit during 2024-25. Further during
				2023-24, there was one off refund /
				reversal of 16491.29 which is partly
				offset by one time exp 4599.42 lakh.
Net Profit Margin (%)	16%	26%	(38%)	Reduction on account of Onerous
				Provision ( 14140.14 Lakh) made
				during the year, resulted in lower Net
				Profit during 2024-25. Further during
				2023-24, there was one off refund /
				reversal of 16491.29 which is partly
				offset by one time exp 4599.42 lakh.
Return on Net worth (%)	14%	18%	(22%)	-

iv) A ll the applicableAccountingStandardsarefollowedexceptIND-AS-108relatingto Segment reporting keeping in view of the nature of business and the sensitive nature of the disclosure. As the company is engaged in defence production, exemption wasgrantedfromapplicabilityofAccountingstandard on segment reporting under section 129 of companies Act, 2013 vide Notification dated 23 February 2018 of their letter no. SEBI/HO/CFD/DIL1/OW/P/2017/18400/1 dated August 03, 2017.

2.5 Com pany Objectives i) T o attain complete Self-Reliance in the development, production, and lifecycle support of all categories of Missile Systems, including advanced strategic weapons. ii) T o become competitive in Guided Missiles and Underwater Guided Weapon Technology and Production. iii) T o maximize utilization of existing production capacities. iv) T o become a prime competitor in the world market and export products to recognized brand in weapon Systems, setting benchmarks in innovation, quality, and strategic partnerships. Establish BDL as a trusted supplier of export-quality weapon Systems.

2.6 Op portunities & Threats Opportunities i) BDL s multiple years of expertise in manufacturing the company to expand its market in India and abroad. ii) BDL has an experienced senior management and staff having vast experience in defence equipment manufacturing. iii) I ncreased thrust on defence Indigenization under the "Make in India" policy has thrown up more opportunities for BDL.

Government initiatives like ‘Make in India and the negative list of imports educe foreign opportunitiesforBDLtodevelopindigenouscapabilities, dependency, and enhance Self-Reliance . iv) BDL has a strong supply chain comprising of technically qualified vendors and suppliers to ensure timely delivery materials. v) BDL s primary customer is Ministry of Defence, Government of India (GoI). The GoI has been allocating increased budget for acquiring defence equipment. vi) T he opening up of export market and ease of doing business have facilitated the company to execute export orders successfully in the recent times and receive more enquiries from other countries.Simplifiedexport regulations and favourable government policies open avenues to attract new customers and improve the order book position. vii) O ngoing geopolitical conflicts have increased the demand for affordable, reliable Defence pricing, driven by lower labour and conversion costs, makes it an attractive supplier.

Threats wer defence budget by GoI could adversely impact BDLs business.lo i) S lowdownintheeconomicactivities and ii) H igher dependency on single customer i.e. Ministry of Defence (MoD). Reliance onasingledomesticcustomer limits diversification and exposes BDL to market volatility. iii) Canc ellation of orders can weaken the order book and future revenue. Short closure of orders adversely impacts ability to maintain a strong order book position . iv) D elayed Technology Acquisition: Time-consuming processes to acquire niche technologies and supply disruptions from foreign OEMs, exacerbated by geopolitical conflicts, timely product development. hinder v) O pening up of the Defence sector. As private sector participation increases, evaluating long-term business prospects becomes increasingly complex. vi) Export Permissions and ToT Issues: Non-clearance of export permissions and reluctance of foreign OEMs to transfer critical technologies cause delays in development and Productionization. vii) I dle production lines due to the non-availability of firm orders lead to workforceshiftsandoperationalinefficiencies.

2.7 K ey Strategies

K ey strategies of BDL are structured into four interdependent strategies: Product Portfolio Strategy, R&D and Technology Strategy, Export Strategy, and Management & Human Resources Strategy. Together, these Strategies aim to establish BDL as a trusted global brand, drive technological Self-Reliance, expand its International footprint, and cultivate a workforce that embodies innovation and excellence. E ach Strategy encapsulates specific objectives and actionable goals to align BDLs growth trajectory with Indias Defence planning and the Global Defence landscape. To achieve our strategic goals, the company would focus on the following:

2.7.1 Product Portfolio Strategy: BDLs Product Portfolio Strategy focuses on achieving comprehensive Self-Reliance in the development, production, and lifecycle support of advanced weapon Systems. This includes Missile Systems, Underwater Weapons, and Cutting-Edge Technologies such as Hypersonic Missiles, Directed Energy Weapons, and Autonomous Systems. BDL aims to diversify its product portfolio by exploring dual-use technologies that cater to both defence and civilian applications, thereby expanding its market reach. The vision emphasizes the co-development of critical propulsion Systems, seekers, warheads, and other components to eliminate reliance on foreign supply chains. By 2030-31, BDL aspires to achieve a turnover of 10,000 crore, positioning itself as a premier manufacturer of strategic and tactical company also intends to carry out process improvements, with the aim of improve our productivity and efficiency of its operations and thereby lower costs. In addition to above, BDL as a part of diversification plan, new verticals have been identified like guided bombs, drone delivered payloads, war head manufacturing, engines for cruise missiles, products for space applications and propellants, rockets, which are expected to create new business opportunities for 2.7.2 R&D and Technology Strategy: Central to BDLs growth is its commitment to technological leadership and innovation. The Technology and R&D Strategy outlines dual goals of leveraging advanced technologies and achieving Self-Reliance in critical components. While AI, ML, and quantum computing are transformative, the primary emphasis is on indigenizing critical Subsystems of Missiles, such as seekers, edge processors, and advanced propulsion Systems. Joint development with DRDO, academia, and Start-ups, coupled with focused in-house efforts, will enable BDL to reduce dependency on foreign suppliers and secure its position as a leader in Missile technology. BDL will focus on assimilating advanced technologies such as artificial intelligence (AI), machine learning (ML), and Industry 4.0 into its operations and product lines. BDL plans to allocate 9% of its revenue to R&D over the next five years, fostering collaborations with academia, Start-ups, and MSMEs to develop indigenous and critical technologies. The vision also prioritizes increasing intellectual property generation, ensuring self-sufficiency in technology, and fostering a culture of innovation. Through strategic partnerships and technology transfer agreements, BDL aims to co-develop Niche Technologies with Global OEMs and leverage Government-to-Government agreements for critical advancements. 2.7.3 Export Strategy: BDLs Export Strategy is driven by the goal of establishing the company as a trusted supplier of export-quality weapon Systems. By 2029, BDL aims to achieve 25% of its annual turnover from export business, focusing on Anti-Tank Guided Missiles (ATGMs), Surface to-Air Missiles (SAMs), Air-to-Air Missiles (AAMs) Underwater Weapons, and Avionics Systems. The vision includes strengthening relationships with Friendly Foreign Nations and Nations facing geopolitical contributing to global security and enhancing Indias diplomatic ties. BDL also seeks to integrate into the global supply chains of leading defence companies and establish long-term partnerships for co-production and joint ventures. 2.7.4 Management & Human Resources Strategy: BDLs Management & Human Resources Strategy emphasizes the importance of organizational excellence and workforce development. The company aims to implement advanced technologies such as AI and ML across all departments, including manufacturing, logistics, and product support, to enhance operational efficiency. BDL is committed to continuously upgrading employee skills, fostering a culture of innovation, and building a high-technology absorption quotient among its workforce. By encouraging intrapreneurship and supporting Start-ups, BDL seeks to create an Ecosystem that drives innovation and excellence. The vision also underscores the importance of sustainability, targeting increased renewable energy usage and adherence to global environmental standards.

3. RISKS AND CONCERNS:

V arious risks identified with mitigation plans includes risks related to industry, increased market competition, time decline or recession in market segments and product and product inputs prices, cost control and change demand risks. Also risks related to environment, health and safety, IT, R&D, intellectual property and new technical demands such as digitalization/ smart industry are high on the agenda and proactively mitigated, managed with identified improvement activities and followed up on regularly.

3.1 Business Risk: The company operates in a competitive environment with both domestic and international players. Its ability to compete effectively, innovate, and maintain high-quality standards will determine its future success. Furthermore, the company primarily dependent on a single customer, the Indian armed forces through the Ministry of Defence, Government of India (MoD). A decline or reprioritization of the Indian defence budget, the reduction in their orders, termination of contracts or failure to succeed in tendering projects and deviations in the short term and long term policies of the MoD or the Indian armed forces in the future will have a material adverse impact on our business, financial condition,and results of operations, growth prospects and cash flows. BDL also operates in evolving markets where a level playing opportunity is given to private sector which makes it difficult

H aving rich expertise in this business and a well-established infrastructure, the company has ability to handle adverse situations and also geared up to face competition from private sector. Further in order to expand the customer base, BDL is actively exploring export markets with the encouragement from the Government of India. Moreover, the company also kept various diversification plans in place which includes entering into Space Technology and its related products and services.

3.2 P olicy Compliance with regulatory requirements and adherence to quality standards are paramount in the defence Risk: industry. The company must ensure strict compliance with regulations and certifications to maintain credibility and trust with its customers. The company is also subject to a number of procurement rules and regulations of the MoD, Government regulations and other rules and regulations. The companys business could be adversely affected in case of any sudden and unforeseen changes in the applicable rules. Restrictions on current and future export of the products and could adversely affect BDLs business, results of operations and financial conditions C ompany is complying with all rules and regulations as per the policies of Government of India and is also taking necessary precautions in advance where possible in anticipation of any changes in the rules. 3.3 Operational & Labour Risk: The companys operations are based out of three units in Telangana and Andhra Pradesh. The loss of, or shutdown of, BDLs operations at any of its units in Telangana and Andhra Pradesh will have a material adverse effect on companys business, financial condition and results of operations. Some of BDLs workforce is represented by labour unions so the companys business could be harmed in the event of a prolonged stoppage of work T he company always continues to maintain cordial relations with all the employees and as such does not foresee material adverse effects in this regard.

3.4 Supply Chain Management Risk: Efficient supply chain management is critical for timely delivery and cost control. BDL needs to optimize its supply chain processes and establish robust partnerships with suppliers to enhance operational efficiency. Company is dependent on multiple key Original Equipment Manufacturers ("OEM") for subassemblies/ components, single source suppliers and sub-contractors. Any failure on the performance of any of them could have a material impact on companys operations BDL is continuously striving to expand its vendor base and sufficiently safeguarded with liquated damage clause in case of any failure on the performance. BDL is also developing multiplevendors where single source suppliers are currently existing across its programmes to reduce its dependence and continuity in the programme.

3.5 T echnology To thrive in a rapidly changing environment, BDL should foster a culture of innovation, agility, and Risk: adaptability. Embracing emerging technologies and trends while addressing evolving customer needs will be essential for long-term sustainability. BDL manufactures products that incorporate advanced technologies. The introduction of new products and technologies involves risks and the company may not realize the degree or timings of benefits initially anticipated. T he company has further activated its own Research & Development department and started increasing its investment in R&D to encounter technology risks. In addition to this, the company is also concurrently works with DRDO in development of several projects.

4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

T he company has implemented comprehensive internal controls and systems that are appropriate for its size and the nature of its business, in order to uphold financial propriety. It has established documented policies and procedures for various functions including Purchase, Sub-contract, Works contract, Accounting, HR, IT, and Security, as well as Sub-delegation of Powers. These policies and procedures are regularly reviewed and updated to align with the evolving business environment.

T o ensure the effectiveness of internal controls, the company maintains an in-house Internal Audit Department comprising qualified professionals. The Internal Audit Department is responsible for monitoring and assessing the adequacy and effectiveness of the organizations risk management, control, and governance processes. The scope of the Internal Auditors work is approved by the Audit Committee of the Board. Additionally, external audit firms are appointed to provide independent assurance and to report on the companys financial statements. The reports from both the Internal Audit Department and the external audit firms are carefully analysed and reviewed by the Audit Committee for theirrecommendationsandguidance.

T he company remains committed to adopting global best practices in its processes and controls, aiming to achieve the highest level of Corporate Governance. Continuous efforts are made to enhance internal controls and align them with international standards, ensuring transparency, accountability, and effective risk management.

5. MA TERIAL DEVELOPMENTS IN HUMAN RESOURCES, INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER PEOPLE EMPLOYED

5.1 The manpower strength of the Company as on 31 March 2025 is as under:

Particulars	Non-Executives	Executives	Total
Male	1338	648	1986
Female	172	111	283
Total	1510	759	2269
Previous Year	1621	769	2401

5.2 Industrial Relations

T he company places great importance on maintaining positive working relations between striving to create a congenial environment within the organization. In line with this commitment, the Central Labour Department conducted a Verification of membership of Trade Union through Secret Ballot Elections during the year. T he management, in collaboration with the recognized trade union, establishes and maintains effective procedures for consultation, and communication regarding the terms and conditions of employment. These procedures aim to ensure the speedy settlement of disputes and foster a harmonious work environment. The recognized trade union acts as the representative of the employees in consultations and negotiations with the management, specifically in matters related to industrial relations and employment.

T hrough these collaborative efforts, the company strives to create a framework for open dialogue, mutual understanding, and the resolution of issues in a fair and transparent manner. By promoting strong working relations with the trade unions, the company aims to foster a conducive and productive work atmosphere for its employees.

6. ENVIRONMENTAL MEASURES:

D uring the year, your company has constructed and implemented 1.34 lakhs (Cap.) artificial recharge structure as part of Sanchay Jan Bhagidari initiative under Jal Shakti Abhiyan 2024. The company is committed to contributing to a clean and green environment by integrating best practices that promote sustainability and environmental responsibility. A systematic approach is followed, focusing on implementing cleaner technologies and adopting the principles of recycle, reuse, T o ensure environmental protection, the company operates effluent treatment plants and sewage treatment plants. These facilities play a vital role in treating and managing wastewater and sewage generated by the companys operations. Additionally, the company actively engages in various environmental conservation activities such as water conservation, tree plantation, proper disposal of hazardous waste and metal scrap, and landscaping. These initiatives contribute to preserving natural resources and reducing the environmental impact of the companys activities.

T he company emphasizes the efficient utilization of resources by utilizing treated effluent operations. This approach helps in conserving water and reducing the strain on freshwater sources. pollution levels and environmental performance are conducted through ISO 14001 core team meetings, internal audits, and management review meetings. These activities ensure ongoing monitoring and improvement of the Management System.

F urthermore, annual surveillance audits are conducted at all three units of the company to evaluate the effectiveness of the Environmental Management System. This systematic review process helps identify areas for improvement and ensures compliance with environmental regulations and standards.

T hrough these concerted efforts, the company aims to minimize its environmental footprint, promote sustainable practices, contribute to a cleaner and greener environment for the benefit of present and future generations.

7. FO REIGN EXCHANGE CONSERVATION

T he company is striving constantly to conserve foreign exchange by reducing import of components and subsystems from OEMs by increasing indigenous content in the assembly of final products.

8. FUTURE OUTLOOK

As we look ahead to the financial year 2025 26, Bharat Dynamics Limited (BDL) is well-positioned to build upon its strategic strengths and play a pivotal role in advancing Indias defence self-reliance goals under the Viksit Bharat Vision 2047. Our unwavering commitment to innovation, quality, and operational excellence continues to drive our transformation into a modern, agile, and globally competitive defence enterprise.

T he Global and National security environment continues to evolve rapidly, driving increased demand for advanced defence systems. In this context, BDL is aligning its strategies to capitalize on emerging opportunities, both within India and across friendly foreign nations. We are proactively engaging with the Indian Armed Forces to support their modernization efforts, while simultaneously expanding our footprint in the global defence export market through targeted collaborations and offset partnerships.

T o meet the rising demand and ambitious indigenization goals, BDL is taking decisive steps to enhance production capacities, including modernization of existing facilities, establishing of the new facilities and transitioning to includes the adoption of digital manufacturing technologies, smart automation, and AI-driven analytics, aimed at improving efficiency, reducing cycle times, and ensuring high product reliability.

W e are also advancing our R&D ecosystem to develop next-generation missile systems and allied defence technologies.

Joint development projects with DRDO and FOEMs remain a cornerstone of our growth strategy. In parallel, we are pursuing technology acquisition and co-development opportunities through cross-investments and strategic partnerships, enabling us to bridge critical capability gaps in high-end technologies.

W e are conscious of external risks, including geopolitical volatility, global supply chain

However, with a robust order book, a healthy pipeline of anticipated Orders, and a strong liquidity position, BDL is equipped to navigate these uncertainties. Continued policy support for defence indigenization, Make-in-India initiatives, and increased budgetary allocations further strengthen the operating environment for BDL.

BDL will continue to focus on organizational capacity building, talent development, and fostering a high-performance 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 nationaldefence preparedness, and emerge as a global player in the defence manufacturing sector.

T he Government of India has cleared a wide range of BDL products for export. To tap into the global market, the company has established an export cell within its Business Development Division. This cell is tasked with identifying potential markets, exploring export opportunities, and formulating country-specific strategies, including the identification of suitable products for each market. BDL offers these products that are designed and manufactured indigenously at competitive price. BDL has already made in-roads into the Global Defence Market and intends to increase its presence by having customized solutions specific to the customers. BDL has also emerged as an effective solution provider for life cycle management of these products. BDL intends to synergize with the local defence industry of our customers to build a robust life cycle support provided locally.

BDL recognizes the critical necessity of optimizing its production lines to enhance efficiency and productivity. By processes and integrating cutting-edge technologies, BDL endeavours to elevate its manufacturing capabilities, ensuring timely delivery without compromising on quality standards.

L ooking forward, the future outlook of your company remains promising with substantial order book, strategic growth thec success in the evolving defence landscape. and emphasis on technological innovation position