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Bharat Dynamics Ltd.

BSE: 541143 | NSE: BDL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE171Z01018 | SECTOR: Miscellaneous

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Annual Report

For Year :
2018 2017

Chairman's Speech

Dear Shareholder’s

It gives me immense pleasure in welcoming you all, on behalf of the Board of Directors to this 48th Annual General Meeting of your company.

I must admit that my journey over the last three and half years as Chairman and Managing Director of this company has been very exciting and eventful with “Team BDL” standing firmly behind me in overcoming each and every challenge that we have encountered during the journey.

Before I apprise you on achievements of the company in 2017-18 along with the operating scenario and the initiatives taken, I must say that this annual report is unique and holds a special significance as it is the first one after our successful IPO with a theme of “Expanding our Reach”. This clearly shows our intent and strategy to expand our reach to potential customers within and outside our country.


This year has been a momentous one in terms of performance. The performance of this year especially demonstrates the grit, tenacity and true character of our organization as we could register a record sales turnover of Rs.4576 Crore (with a value of production of Rs.4630 Crore) under very trying circumstances with overwhelming technical challenges. I would give credit to each and every employee and stakeholder who made it possible to achieve such an insurmountable task.

Turning to our financial performance, your company continues its journey in the path of profits and continues to pay dividends. I am happy to inform you that your board has decided to pay a final dividend of Rs.133.61 Crore for the year 2017-18 (i.e Rs.7.29/- per equity share of Rs.10/- each).


Indian industry today is on the threshold of entering into a new era where it will assume greater responsibility in making the nation self-reliant in Defence Production. The resurgence of India’s manufacturing sector has been remarkable. Not only are the profits soaring, the sector is also making its presence felt abroad as many Indian firms are becoming transnational companies.

The Indian manufacturing sector is internationally competitive with international quality standards, efficiency and manufacturing facilities. India is fast developing into a manufacturing hub for world corporations wanting to leverage the sector’s proven skills in product design, reconfiguration and customization with creativity, assured quality and value addition. India, also keen to strengthen its own defence and aerospace industry and has asked major weapon exporting countries to transfer technology to India.

Some of the flagship programmes of Government like “Make in India” and Indigenization have given an impetus for efforts on increasing indigenous defence manufacturing and becoming self-reliant.

In the last two years, private participation in India’s defence sector has been rising. Large Indian conglomerates have increased their exposure to defence manufacturing on one hand. On the other hand, foreign defence contractors are showing their confidence in India by expanding their tie-ups with Indian companies. This is facilitated by policy support, both specifically for defence, and generally under the Make in India campaign.

To increase the contribution of MSMEs, MOD has come out with special Defence Corridors at Tamilnadu and Uttar Pradesh.

India’s focus on indigenous manufacturing especially in the defence space is paying off as MOD over the last two years has unveiled several products manufactured in India like HAL’s Teja (LCA), penetration cum blast (PCB) specially designed for Arjun tank and not to forget your own product heavy weight Torpedo called

Varunastra developed by DRDO and manufactured with 90% locally sourced parts.

With the Government of India continues to unveil a host of initiatives to encourage defence indigenisation, BDL with its long experience, manufacturing expertise, concurrent engineering partnership with DRDO labs, robust supply chain, strong project management skills and reinforced D&E is poised to benefit and prosper.


(i) As already mentioned, your company has achieved a record turnover of Rs.4576 Crore despite many technical challenges.

(ii) Your company became a listed company by successfully completing its initial public offer of 22,451,953 equity shares of face value of Rs.10/each (representing 12.25% of the 100% paid-up capital held by Govt of India) through offer for sale by Government of India and making its debut in both BSE and NSE on 23 March, 2018. To your credit, the issue was oversubscribed by 1.3 times.

(iii) Your company has successfully started executing first export order of Light Weight Torpedo.

(iv) Your Company has bagged new orders worth Rs.2175 Crore, which includes MRSAM, Export order of LWT Torpedoes and others.

(v) With its strong domain expertise in manufacturing of missiles and other allied equipment, your company has entered into technology tie-ups with Indian premier Defence labs which includes licencing agreement for production of Varunastra with NSTL, productionization of ASTRA with DRDO etc.

(vi) In addition, the company is actively pursuing with ministry for expeditious allocation of various projects namely Akash further orders, VSHORADS and ATGMs which are in different stages of processing.

(vii) Being a missile manufacturing company, quality of the product is the utmost requirement and the products of the company should work first time and every time. Hence, in pursuance of high quality standards, Milan, Akash and Bhanur divisions have upgraded to AS 9100D Aerospace Quality standards.

(viii)Information technology is playing a key role in improving the efficiency of organizations in every sector with no exception for Defence. Implementation of Enterprise Resource Planning along with strict cyber security were of vital importance at our company.

Accordingly, your Company has successfully implemented multi-function integrated ERP at all units to streamline our processes resulting in speed, accuracy and transparency in complete operations of the organisations.

We have built a state of art data centre to host the enterprise level data and a disaster recovery centre for safety and security of data.

BDL has been certified with ISO 27001:2013 for Information Security Management of its IT Systems.

(ix) During the year, your company has expanded the infrastructure and facilities at three existing facilities and made the test bed system fully operational as part of first phase at Ibrahimpatnam.

(x) Human Resource Development is the most vital for the growth of the organization and motivated employee force is the most valuable asset of the organization. In that direction, the company has L0 imparted training programmes for 658 Executives and 530 Non Executives on latest technical and need based topics to meet the present and future requirements of the company. In addition, the company also sponsored senior executives for various management Development Programmes at top ‘B” Schools in the country.


Good governance is central to the integrity, reputation and performance of any Organization.

Your Company has a well-established, transparent and fair administrative set up to provide professionalism and accountability. The philosophy of this company in respect of Corporate Governance is to ensure transparency in all its operations, make appropriate disclosures, comply with laws and regulations, maintain ethical standards and ensure the interests of all the stakeholders. This organization allows the Executive Management to concentrate on its strategic priorities and implement the strategic plan under the best possible conditions. It is carried out in conjunction with the Group’s transformation.

Your Company’s governance framework is designed to safeguard its long-term success for the benefit of shareholders and other stakeholders. It continues to evolve as the Group develops and promotes transparency, respect and accountability. It ensures that the Board can operate in a culture of openness which, coupled with its wealth of expertise and the collaborative attitude which permeates the Group, optimises its effectiveness.

Quarterly and annual compliance reports on Corporate Governance are being forwarded to Stock Exchanges and MOD in the prescribed format as per SEBI listing Regulations and DPE Guidelines respectively. The evaluation rates your company as “Excellent”.

Your Company’s activities are monitored by several external agencies like Statutory Auditors, Comptroller and Auditor General of India, CVC, MOD (Dept of Defence Production) etc.


Your Company is committed to protecting the environment and the health and safety of our employees, customers and the communities where we work and live. We recognize that by integrating sound environmental, health and safety management practices into all aspects of our business., Your Company strives for continual improvement in our environmental, health and safety management systems and in the environmental quality of our products, processes and services.

BDL also recognizes that we have a responsibility to our employees, suppliers and partners and to the communities, in which we operate.

Your Company meticulously follows promotion of Industrial Safety, health and environmental cleanliness and all statutory obligations are complied with. Safety Committee meetings are held at regular intervals for reviewing, monitoring and upgrading safety aspects.

BDL strongly believes in maintaining a clean and green environment at all its manufacturing units. Clean surroundings, Green Environment, stringent Pollution Control measures, zero effluent discharge, energy conservation, systematic management and disposal of hazardous wastes etc. have become a part and parcel of our regular well-established environment management system.

All the three productions units are awarded with IS14000 environmental quality standard is a testimony for the above. Commissioning of Grid converted 5 Megawatt Solar power plant at Bhanur Unit is a step towards our commitment in green energy.


Gone were the days where customers (services) used to approach OEMs with their requirements. Present day demands that Organizations proactively seek to know about the requirements of services and accordingly work towards the same.

Accordingly, your company has strengthened its Marketing and Business Development for maintenance of regular interaction with customers. Teams from D&E and production divisions regularly travel to the User Depots to understand their requirements and to resolve their issues. Regular interactions with customer reps are organized by way of periodical meetings for getting to know their requirements and monitoring the progress.


Our Vendors are our valued partners in our business development and we shall work with them in a spirit of mutual co-operation to meet our business objectives.

Corporate Commercial Department identifies the vendors, rates the vendors based on feedback received based on different parameters like Quality, Delivery time and Quantity etc.

Your Company considers its vendors as partners in progress and believes in establishing mutually beneficial relationships. BDL provides necessary technical assistance in the form of Project and Production Engineering, to maintain quality levels.

Vendor Meets are conducted by individual divisions and by Corporate Commercial Department in order to have clear, transparent and common understanding and thereby ensuring level playing field to all.


Your Company has a healthy order book position of Rs.8889 Crore as on 1st April 2018. There is a slight concern that out of Rs.8889 Crore of total order book, only Rs.1800 Crore is slated to be produced during 2019-20. None the less, there is every reason to feel sanguine about the future as many projects which are identified for BDL are in different stages of allocation. Your company is actively pursuing with the Ministry for clearance of these projects, which will strengthen our Order book in coming years.

Your Company has strengthened its Marketing and Business Development department. An Executive Director (Mktg) has been appointed for spearheading the marketing with a clear task of expanding our reach in and outside country. ED(Mktg) will be operating from Delhi office and will be available at beck and call of ministry’s requirements.

In addition, your company has reinforced its in-house Design and Engineering (D&E) group and assigned with a task of developing our own ATGM for which top management is totally committed. Though it looks overwhelming, I am confident, once the task is completed, a new rejuvenated BDL will be born and the image of your company will be boosted by many folds in the Defence circles.

Besides, your company is putting up its determined efforts towards indigenization of ATGM’s with the objectives of self-reliance, import substitution, FE savings and overall cost reduction.

In addition, Government’s continuous thrust for initiatives like Make in India, indigenisation and import substitution will provide ample opportunities and BDL with its decades of experience under its belt will exploit maximum advantage

Based on the order book position, anticipated orders and other initiatives, I am quite confident that your company is well poised for a sustained growth. Your company is establishing new manufacturing facilities at different locations to meet its commitments in respect of orders on hand and those in pipeline.


BDL has always believed in sustainable and responsible growth led by its values. Corporate Social Responsibility (CSR) is interwoven in the business model of your Company. The Company’s CSR efforts endeavour to support the less privileged, rural and urban communities, with a focus on sections of the vulnerable and marginalised local communities that live in close proximity to its manufacturing facilities in semi-rural locations. BDL is committed to contribute actively towards enhancing their living standards through its CSR interventions in water and sanitation, health, education and skill development. During the year, the company took up about 32 social projects such as mid-day meal for school children, mobile medical units for elderly people in Nalgonda and Visakhapatnam districts. In addition, your company has taken up several tasks like skill development, contribution to development of sports, Swatch Bharat, welfare of people with disabilities and marginalized sections of the society. The Company has spent an amount of Rs.1839.40 lakh for these activities.

Your Company continues to take forward its good work in backward/underdeveloped areas in Andhra Pradesh and Telangana as part of its CSR activities.


I offer my heartfelt gratitude for the support extended by Ministry of Defence, other Ministries of Government of India, Department of Defence Production, DRDO, Principal Director of Commercial Audit and Ex-Officio Member, three services and their inspectorates and our customers for their valuable guidance and support. We truly value your continued patronage.

I express my profound thanks to all our employees and business associates for their dedicated contribution to the Company’s performance and growth over the years. I am confident that with continuous dedicated efforts, commitment and hard work, your company shall march forward to achieve greater heights and will make your dream of becoming a global leader in airborne and defence equipment manufacturers a true.

I convey my sincere thanks to my colleagues on the Board for their counsel and support.

And finally, I thank the retail and institutional investors for positively responding to our initial public offer.

With best wishes,

V.Udaya Bhaskar

Chairman & Managing Director