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 acquisition of Defence equipment, changes in government regulations, tax laws, economic developments within the country and such other factors globally.


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

Overthe years, BDL has evolved as one among few industries in world having state-of-the-art facilities for manufacture and 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 fulfilling its basic role as guided weapon system manufacturer, BDL has also built-up in-house R&D capabilities primarily focused on Design & Engineering activities.

In response to the clarion call given by the Honble Prime Minister of India for creation of "Atmanirbhar Bharat", BDL, is relentlessly working to contribute its part towards creation of a self-reliant India in the area of Defence. The Company is endeavouring to forge alliance with foreign companies to take the Make in India mission further. Thrust is being given to explore tie-ups with Original Equipment Manufacturers (OEMs) for new missiles and underwater weapons for potential Transfer of Technology.

BDL has forayed into international market by offering its products to foreign countries. BDL has executed export order of Torpedoes and is geared up to take orders of other exportable products also.

1.1 Indian Defence Industry

The Indian defence market is in a state of transition, as a result of new policies promulgated by the government of India. India is the second largest armed forces in the world. The three services have several modernization plans underway. India plans to spend 130 billion dollars on military modernization in next 7-8 years, as achieving self- reliance in defence production is a key target for the Government of India. The ongoing DRDO projects in India are worth around US$7.3 bn. The Government has opened up the defence industry for private sector participation to provide impetus to indigenous manufacturing. Opening up of the industry also paves the way for foreign Original Equipment Manufacturers to enter into strategic partnerships with Indian companies.

A Defence export strategy has been formulated with a view to facilitate Defence Public Sector Undertakings (DPSUs) and private defence players in exploring business opportunities abroad.

Indias defence manufacturing sector has been witnessing a Cumulative Annual Growth Rate (CAGR) of 3.9% between 2016 and 2020. Demand growth is likely to accelerate with rising concerns of national security. The overall production sector decreased in 2019; however, growth was observed in the value of production by Defence PSUs due to numerous key product developments through research and development initiatives, in addition to various products and equipment being manufactured through transfer of technology. Indias defence exports during 2015-20 grew at a CAGR of 35 per cent. The defence exports in the country witnessed strong growth in the last two years. Defence exports in India was estimated to be at around US$ 1.29 bn in 2019-20. Indias defence import value is around US$ 463 million for FY20 and is expected to be at US$ 469.5 million in FY21.

India’s defence budget for 2020-21 was Rs.4,71,378 crore (US$ 67.4 billion), 9.37% higher than the budget estimates (BE) for the year 2019-20. Ministry of Defence (MoD) has provided more defence budget and thereby the resource requirement vis-a-vis the allocation narrowed from a 30% in 2018-19 to 25% in 2019-20.

The overall defence budget for fiscal year 2021-22 is T478196 crore, which has a marginal increase from the Rs.471378 crore earmarked in the 2020-21 budget. However, the allocation under Capital of Rs.1,35,060.72 crore for FY 2021-22 represents an increase of 18.75 per cent over FY 2020-21 bolstering efforts to modernize its military hardware amid border tensions. This is the highest ever increase in capital outlay of Defence in the last 15 years.

In October 2020, India and the UAE have agreed to take their defence cooperation further through joint production and mutual trade. This move is expected to boost domestic defence exports and achieve defence export targets worth US$ 5 billion in the next five years. Demand for defence equipment in India has been growing due to the ongoing territorial disputes with neighbouring countries. To modernise its armed forces and reduce dependency over external dependence for defence procurement, several initiatives have been taken by the government to encourage Make in India activities via policy support initiatives.

1.2 Indigenization

Government has notified a Policy for indigenisation of components and spares used in Defence Platforms in March, 2019 with the objective to create an industry ecosystem which is able to indigenize the imported components (including alloys 8t special materials) and sub-assemblies for defence equipment and platforms manufactured in India.

To encourage more participation from start-ups and Micro, Small 8i Medium Enterprises (MSMEs) in Defence Research & Development (R&D) in achieving the Atmanirbhar Bharat goal, the Honble Defence Minister released a new version of Defence Research and Development Organisation (DRDO) Procurement Manual 2020 on October 20, 2020. There are plans to establish new infrastructure including a defence park to manufacture defence equipment for forces. The project is aimed at promoting MSMEs and boosting Make in India initiative in defence manufacturing.

The following policies/schemes were undertaken by the Government to encourage indigenous development of defence equipment and to boost the defence manufacturing in India:

• Govt, of India has announced total embargo on 101 defence items progressively beyond the year 2025. 101 Defence Products were declared in Negative list for imports, thus encouraging domestic manufacture and eliminating import of these products. Subsequently, another of 108 items was also announced by MoD for embargo on imports progressively upto 2025. The defence ministry estimates potential contract worth Rs.4 lakh crore (US$ 57.2 billion) for the domestic industry in the next 5-7 years (2025-2027).

• Defence Procurement Procedure was modified to further give priority to IDDM (Indigenously Designed, Developed and Manufactured) to encourage indigenous design and manufacture of defence equipment. This will enable India to reduce/eliminate imports in long run and also to export to friendly countries.

• Wherever imports are necessary, Defence Procurement Procedure was modified to permit as a special case while restricting percentage of import.

• All imported items by DPSUs/OFB units are being uploaded on MoDs SRIJAN Portal. This portal is designed so that vendors can access the requirements of these imported items and can assist in indigenising these items and thereby minimizing its imports.

• Increased FDI limit to 74% in defence sector addresses the primary concern of global OEMs on control to protect IP and technology. Automatic approval route could ensure minimal procedural delays. Foreign investment in the sector is subject to security clearance by the Ministry of Home Affairs and as per guidelines of the Ministry of Defence. Expected to result in enhanced FDI from foreign OEMs especially from key defence manufacturing hubs

• The new Defence Production and Export Promotion Policy 2020 of the MoD aims to achieve a turnover of Rs.175000 crores (US$ 25 billion), including an export of Rs.35000 crores (US$ 5 billion) in the aerospace and defence goods and services by 2025.

• The Government of India has announced a new policy for Public Sector Enterprises (PSEs). Corporatisation of Ordnance Factory Board (OFB), identification of strategic and non-strategic sectors in the PSEs are the key announcements of this policy. In the strategic sectors, minimum one and upto four PSEs will be retained.

• Government of India has further introduced policies to protect domestic industry by disallowing global tenders for contracts up to USD27 million ( Rs.200 crore). Procurements of value of up to Rs.200 crores (approximately USD27 million) is being reserved for domestic industry.

• The offset policy in capital purchase contracts with foreign defence OEMs, stipulates a mandatory offset requirement of a minimum of 30% for defence contracts. The minimum contract value for which offsets are mandatory has now been revised from INR 300 crore to INR 2,000 crore. Offset guidelines have been made flexible by allowing change of Indian Offset Partners (lOPs) and offset components, even in signed contracts.

As a part of BDLs contribution towards creation of Atmanirbhar Bharat, several initiatives have been taken up by BDL in this direction, which includes:

• Inauguration of Surface-Mount Technology facility & High Performance Computing facility.

• Laying foundation stone for setting up of Seeker Facility Centre and for establishing Warheads Production Facility and High Temperature Carbon Composite manufacturing facility for critical components.

In addition to the above, BDL has also commenced indigenization of components and subassemblies of various programmes which were being imported by the Company. 267 items are being planned under the indigenization programme which is expected to save around Rs.930 crores of imports for the country.

MoDs indigenization portal, SRIJAN is a one stop shop online portal that provides access to the vendors to take up items that can be taken up for indigenization. The 267 items planned for indigenization have been uploaded in this portal. BDL has received response for 97 items. The Company has already placed sanctioned order for indigenization for 35 items on NCNCbasis.

In order to support MSMEs, Start-ups and as well as to create a business opportunity, BDL is also entering into MoUs with the Start-up companies and all necessary technical support is being given to these companies.

(Source:; Press information bureau;; BDLs website and other documents;)


The 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 necessary technical skills to succeed without limiting its ability.

2.1 BDLs Products

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

2.2 Manufacturing facilities

The Company has three manufacturing facilities located in Hyderabad, Bhanur and Vishakhapatnam. All the manufacturing facilities have ISO 14001:2015 certifications 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 Electronics Division of the Company has been certified with AFQMS (Approval of the Firm and its Quality Management System) by DGAQA while the Electronics Lab of Milan Division and Bhanur unit and Material Testing Lab have been accredited for ISO /1 EC 17025:2005 (N ABL) certification.

The Company is also in the process of setting up two additional manufacturing facilities at Ibrahimpatnam (near Hyderabad) and Amravati in Maharashtra which shall be used to manufacture SAMs and Very Short Range Air Defence Missiles (VSHORADM) respectively.

2.3 Order Book

Our current order book as on 01 April 2021 is Rs. 8386 Crore.

2.4 Financial Performance

i) Performance of the Company in financial terms is summarized below:

Rs. in Crore

% of increase/ (Decrease)
S.No Particulars 2020-21 2019-20
1) Sales/Revenue from Operations 1914 3105* (38.36)
ii) Value of Production 2043 2601* (21.45)
Hi) Profit Before Tax 341 742 (54.04)
iv) Profit After Tax 258 535 (51.78)
v) Value Added 1073 1587* (32.39)
Vi) Earnings per share# (in Rupee) 14.06 29.18 (51.82)

# EPS has been calculated based on profits excluding the other comprehensive income.

* Figures has been reclassified and regrouped.

Notes-Reasons for Increase/decrease in performance

Covid-19 pandemic and lockdown protocols have led to severe disruptions, affecting production, sales and profit during current reporting period. Therefore, the performance of the company for this period is not comparable with corresponding period or any period of previous year.

ii) Following data reflect the financial position of the Company:


Rs. in Crore

% of Increase/ (Decrease)
2020-21 2019-20
Gross Block (PPE) 1070 1011 5.84
Accumulated Depreciation 327 258 26.74
Net Block 743 753 (1.33)
Working Capital 2378 2260 5.22
Capital Employed 3293 3192 3.16
Net Worth 2685 2607 2.99

Notes- Reasons for increase/decrease in financial position

• Covid-19 pandemic and lockdown protocols have led to severe disruptions, affecting production, sales and profit during current reporting period. Therefore, the performance of the company for this period is not comparable with corresponding period or any period of previous year.

• Though there is an increase in gross block of Rs.59 Crore during 2020-21, net block has gone down by Rs.10 Crore which is mainly due to depreciation of assets.

• Working Capital is increased by Rs.118 Crore which is due to;

- Increase in Current Assets by Rs.324.93 Crore which is mainly due to increase in inventories by Rs.540.49 Crore which could not be converted into sales due to Covid Pandemic and decrease in trade receivables (Billed and Unbilled) by Rs.1225.23 Crore. Decrease in trade receivables is mainly account of collection.

- Increase in Cash & Bank balances by Rs.897.46 Crore which is mainly account of realization of trade receivables.

- Increase in other Current Assets by T112.61 Crore which is mainly on account of advance paid to vendors for supply of materials.

- Increase in Current Liabilities by Rs.206.31 Crore which is mainly due to increase in trade payable by Rs.397.11 Crore and Decrease in provision by Rs.96.26 Crore due to utilisation and reversal of provisions.

- Decrease in other Current Liabilities by Rs.71.12 Crore mainly due to discharge of contractual obligation.

iii) Key Financial Ratios:

In 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 along with the detailed explanations there for:

Particulars FY 2020-21 FY 2019-20 Change (in %) Explanation for change of 25% or more
Debtors Turnover Ratio (times) 0.92 1.37 (32.85%) refer below Note 1
Inventory Turnover Ratio (times) 1.70 2.46 (30.89%) refer below Note 2
Interest Coverage Ratio (times) 136 228 (40.35%) refer below Note 3
Current Ratio (times) 1.94 1.98 (2.02%) Not Applicable
Debt Equity Ratio (times) Nil Nil Nil Not Applicable
Operating Profit Margin (%) 12.87 21.08 (38.95%) refer below Note 4
Net Profit Margin (%) 13.47 17.23 (21.82%) Not Applicable
Return on Net worth (%) 9.74 21.94 (55.61%) refer below Note 5


Covid-19 pandemic and lockdown protocols have led to severe disruptions, affecting production, sales and profit during current reporting period. Therefore, the performance of the company for this period is not comparable with corresponding period or any period of previous year.

1. Trade Receivables as on 31 Mar 2021 stood at Rs.323 Crore showing decrease of Rs.15 Crore over previous year.

2. Due to decrease in Turnover.

3. Interest comprise of interest on Overdraft, MSME Interest.

4. OPM decreased due to increase in operating profit which is result of change in the product mix i.e., More manufacturing than Trading activity (Ground support).

5. Due to decrease in profitability.

iv) All the applicable accounting standards are followed except IND-AS-108 relating to segment reporting keeping in view of the nature of business and the sensitive nature of the disclosure, where necessary exemption is being provided by MCA. However, such non-disclosure does not have any financial effect on the accounts of the Company.

2.5 Company Objectives

• To become self-reliant and competitive in Guided Missiles and Underwater Guided Weapon Technology and Production.

• To maximize utilization of existing production capacities.

• To become a prime competitor in the world market and export products to friendly countries.

2.6 Opportunities & Threats


• BDLs multiple years of expertise in manufacturing various defence equipment coupled with its advanced facilities enable the company to expand its market in India and abroad.

• BDL has an experienced senior management and staff having vast experience in defence equipment manufacturing.

• Increased thrust on defence indigenisation under the "Make in India" policy has thrown up more opportunities for BDL.

• BDL has a strong supply chain comprising of technically qualified vendors and suppliers to ensure timely delivery of materials.

• BDLs primary customer is Ministry of Defence, Government of India (Gol). The Gol has been allocating increased budget for acquiring defence equipment.

• The 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.


• Slowdown in the economic activities and lower defence budget by Gol could adversely impact BDLs business.

• Higher dependency on single customer i.e. Ministry of Defence (MoD)

• Cancellation of orders can weaken the order book and future revenue.

2.7 Key Strategies

Key strategies of BDL are aimed at enhancing the companys market position by expanding capabilities, capitalising on opportunities in domestic and international markets, and enhance the companys competitive advantage focusing more on indigenisation.

To achieve our strategic goals, the Company would focus on the following:

2.7.1 Expanding Infrastructure: The Company would continue to invest in infrastructure. The upcoming manufacturing facilities at Ibrahimpatnam and Amravati will enable the company to cater to the growing demand of its customers. These two manufacturing facilities shall be utilised to manufacture SAMs (including a new generation of SAMs) and VSHORAD missiles respectively. BDL is also setting up Seeker Facility Centre and Warheads Production Facility.

2.7.2 Automation: BDL has been constantly upgrading its manufacturing technologies and processes to state- of-the-art including industry 4.0, Robotics operated workshops, latest Surface Mounted Devices assembly lines and maintains highest quality standards in its products by adopting to best QA practices like AS 9100, Zero defect, etc. The pursuit results into reduction in production cost, benchmarking of productivity norms and modernization of management system and less dependence on imported technology. The Company intends to automate its production systems where feasible to increase the productivity.

2.7.3 Focus on Research & Development:

The Company believes that the recent changes to the government policies allowing private sector companies to participate in defence contracts will provide significant competition. In order to address these challenges, BDL intend to increase its R&D activities to develop innovative products to its customers. BDLs R&D expenses have also grown up significantly over the past few years. The Company believe that development of new products will enable it to diversify its offerings and mitigate product dependencies. In this direction, BDL, as a part of Atmanirbhar Bharat Week observed during August 2020, has introduced two new products viz., Konkurs Missile Test Equipment and Konkurs Launcher Test Equipment. These two products were launched by Honble Raksha Mantri on 13 Aug 2020 during a virtual ceremony. The Company has also established the missile development group with the objective to design and develop missiles. BDL is striving to develop Artificial Intelligence based products. Thrust is also being given to efforts towards Innovation of in-house developed products. Synergy is being maintained between the industry and academia to sustain balance between experience and knowledge industry.

2.7.4 Improving Processes: The Company also intends to carry out process improvements, with the aim of improve our productivity and efficiency of its operations and thereby lower costs.

2.7.5 New Generation Weapons: BDL intends to leverage its experience to develop weapons such as new generation SAMs, ATGMs, Air to Air Missile System and heavyweight torpedoes which will enable the Company to further increase its revenues. BDL is also the joint development partner-cum production agency with the DRDO for the next generation of ATGMs, Air to Air Missile and SAMs. BDL has also entered into several MoUs and non-disclosure agreements with various companies for developing new products and transfer of technologies.

2.7.6 Exports: BDL primarily caters to the requirements of the Indian armed forces. With encouragement from Government of India, BDL is actively exploring export markets. Further, with the Cabinet Committee on Security (CCS) clearing regarding clearance of Akash Weapon System for Export to nine countries, BDL is geared up to take up the export orders. BDL has already received export leads for Akash from few countries. BDL is therefore set to expand its customer base in the international market. BDL has adequate production facilities to cater to the domestic as well as export demand for its products. To meet the objective of expanding its footprints in the international market, BDL is consistently pursing with potential overseas customers for export of its products.


Various risks identified with mitigation plans includes risks related to industry, increased market competition, time to market, 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 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 cashflows. BDL also operates in evolving markets where a level playing opportunity is given to private sector which makes it difficult to evaluate its business and future prospects.

Mitigation: Having rich expertise in this business and a well-established infrastructure, 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.

3.2 Policy Risk:

The company is 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 other regulations could adversely affect BDLs business, results of operations and financial conditions

Mitigation: Company 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

Mitigation: The 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 Supplier/Service Provider Risk:

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

Mitigation: 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 multiple vendors where single source suppliers are currently existing across its programmes to reduce its dependence and continuity in the programme.

3.5 Technology Risk:

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.

Mitigation: The Company has activated its own Research & Development department and started increasing its investment in R&D to encounter technology risks. In addition to this, the Company also concurrently works with DRDO in development of several projects.


BDL intends to increase R&D activities in association with DRDO and continue to have joint-development programs. BDL is also exploring various business opportunities with foreign OEMs and towards this, BDL has signed MoUs with the foreign OEMs during the year under review. BDL believes that development of new products will enable the Company to diversify its offerings and mitigate product dependencies. It has established the missile development group with the objective to design and develop missiles and also strive to develop Artificial Intelligence based products.

With the announcement from the Union Cabinet regarding clearance of Akash Weapon System for Export, BDL has geared up to take up the export order. Given the export potential and demand of Akash in the international market, BDL has been promoting the product at various forums including national and international exhibitions and received export leads for the Akash Weapon System. BDL has already supplied Torpedoes to a friendly foreign country. Now, with the export clearance accorded by the Government of India, BDL is set to expand its customer base in the international market. Your company is confident of meeting the export demand in addition to meeting requirements of the Indian Armed Forces, asyourcompany has adequate established production facilities.

BDL, as a part of its Global Outreach, is endeavouring to forge alliance with foreign companies to take the Make in India mission further. The Government of Indias Make in India programme, the ease of doing business and recent ‘Atmanirbhar Bharat initiatives have created a congenial ecosystem for the foreign OEMs to tie up with Indian Companies like BDL to establish the production facility in India. In this context, BDL has recently signed a Teaming Agreement with Thales, UK to set up manufacturing facility in India to manufacture STAR Streak Missile System under Transfer of Technology. The Agreement will also provide opportunity for BDL to offer STAR Streak Missile System to the Indian Armed Forces as well as Design and Development of the system, qualifying it under the Make in India programme. Through this agreement, BDL will become a part of the STAR Streak global supply chain, providing opportunity for export of the system to existing and future STAR Streak Air Defence customers, including the UK Armed Forces. The agreement also represents opportunity for industrial cooperation between UK and India and will facilitate for closer collaboration and co-development between industries of the two nations.

As an endeavour to give a push to Atmanirbharta in Defence, the Government of India has created a negative list of imports. The creation of the negative lists of imports will open up a large number of opportunities to the Indian Industry. With this, a sizeable increase in order inflows can be expected.

BDL has been identified as the production agency for Akash and Astra Air-to-Air Missiles. These missiles are indigenously designed and developed by DRDO and are being manufactured by BDL. Moreover, Project sanction order has also been issued by Ministry of Defence to BDL for development of 3rd Generation ATGMs in India, which is another step towards creation of Atma Nirbhar Bharat in Defence sector.

As a part of Atma Nirbhar Bharat, BDL has made an Indigenization Plan for the next five years and set a target of indigenization of 166 items. Against the target of 72 items to be indigenized during the year 2020-21, 79 items indigenization was completed and the value of imports was negated to Rs.144.71 Crores.

Linder Buy & Make Category of Capital Acquisition, the foreign vendor is required to transfer the Technology to Indian Production agency for indigenous production of the items. Foreign OEM can select Indian Production agency of its choice for transfer of technology. BDL is exploring various business opportunities with Foreign OEMs and in this regard during the year, BDL has entered into few MoUs with Foreign OEMs as below:

• MoU with Naval Group France, Naval Group, India and MoU with Rafael Advanced Defence System Ltd (Naval Division) to manufacture UnderWater Weapons.

• MoU with L&T MBDA Missile Systems Ltd, a Joint Venture between L&T and MBDA as per which, the companies have decided to collaborate for Fifth Generation Anti-Tank Guided Missiles as well as the future SRSAM missile program.

• Teaming Agreement with Thales, UK for indigenous manufacture of STARSTREAK Missiles in India.

• MoU with ROXEL, France for establishing propellant manufacture facility in India.

• MoU with STE "SPETSTECH NOEXPORT", Ukraine for joint development, transfer of technology (TOT) and joint manufacturing of various missile systems including optical sight as well as repair, refurbishment and life extension of existing missiles stocks in India.

Currently, BDL has a healthy order book position of Rs.8386Crore as on 01 April 2021, which will keep the production lines engaged in the year ahead.


BDL has put in place all required internal controls and systems commensurate with its size and nature of the business to meet the canons of financial propriety. The effectiveness of the internal controls is continuously monitored by an inhouse Internal Audit Department comprising of professionally qualified personnel. Internal Audits main objective is to provide to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance of the adequacy and effectiveness of the organizations risk management, control and governance processes. The scope of the Internal Auditor was approved by the Audit Committee of the Board. Appointment of External audit firms has been continued to ensure adequacy and report thereon. These audit firms are in addition to Internal Audit Department supporting the department. A detailed analysis of reports of Internal Audit Firms as well as reports of Internal Audit Department of the Company are placed before the Audit Committee for its review and advice.

a) Cost reduction initiatives: During the year under report, an amount of around Rs.66Crore has been achieved under cost review/reduction programme by way Indigenisation efforts, Change in process, Development of alternative tools, Scrap Disposal, Power & fuel, Transport, Testing of material, Proof firing expenditure, Material handling, hiring of vehicles, Publicity etc.

b) Economy Measures:-ln line with Ministry of Finance Office Memorandum on Expenditure Management, Economy Measures and Rationalization of expenditure and keeping in view of COVID-19 pandemic, Company has observed financial prudence and economy on areas like travelling expenses, advertisement and publicity expenses, purchase of new vehicles, conducting seminars and conferences, courtesy and entertainment, etc during the year 2020-21. Inventory of raw-material, work-in progress and spare parts is maintained at optimal levels. Energy consumption, fixed and variable overheads and Contingency expenditures are being constantly reviewed and pruned to bare minimum.


6.1 The manpower strength of the Company as on 31 March 2021 is as under:

Non- Executives Executives Total
Male 1709 765 2474
Female 198 104 302
Total 1907* 869* 2776*
Previous Year 2004* 909* 3001*

* Excluding temporary employees.

BDL has a very well defined training and development programmes for the Executives and Non-Executives. The Company is certified with PCM M (People Capability Maturity Model) Level 2 rating. It is a maturity frame work for implementing the workforce practices that continually improve workforce capabilities and major source of gaining competitive advantage and strategic advantage. Implementation of PCMM will give scope to the company for attracting and retaining the talent. BDL is first Defence PSU to implement the PCMM Level certification for H R Process.

The Company has institutionalized the Succession Planning Process through Gap Analysis, identifying critical roles and identifying key bench strength for each critical role position, Readiness index of the successors based on Performance Management Systems and other criteria as per the succession planning policy of the Company. Inputs from Assessment Development Centres were also taken while grooming the successors. The vacancies of all critical posts as per succession plan are filled meticulously through regular incumbent with the internal talent pool and if required with outsiders in case internal talent pool is not available.

6.2 Industrial Relations

The Company continues to enjoy cordial and harmonious Industrial Relations with the cooperation and support of all sections of employees viz. Recognized Trade Union, Associations such as SC, ST, OBC and Officers Association. Statutory and Non Statutory Committees such as Works Committee, Safety Committee, and Welfare Committee are contributing to workplace discipline.


BDL contributes in all aspects for clean and green environment by systematically integrating best practices to bring in cleaner technologies and greening the environment through recycle, reuse and reduce approach. Effluent treatment plant, Sewage treatment plant are being operated. Various environmental protection activities such as water conservation, tree plantation, disposal of hazardous waste and metal scrap, planting of saplings and landscaping, utilizing treated effluent water and domestic water have been carried out. The Company has been reviewing status of various types of pollutions through ISO 14001 core team meetings, internal audits and management review meeting at regular intervals. Annual surveillance audits are being carried out at all the three units to assess the effectiveness of Environmental Management System.


The 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.