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CMD's Message

cmd

On this momentous occasion as BDL enters into its Golden Jubilee year, it gives me immense pleasure in welcoming you all, on behalf of the Board of Directors to this 49th Annual General Meeting of your Company.

I must admit, it is my privilege and honour to be a part of this great Company, built over five decades by the dedication, commitment and perseverance of the men and women associated with the Company since its inception.

It is remarkable to think that in 1970, BDL has started It is remarkable to think that in 1970, BDL has started its journey in a modest way with a single product and today it is evolved into a multi-product, multi-unit, handling varied technologies.

The journey has been long and the milestones many,as BDL grew from strength to strength spreading its customer base across geographies as its products being used both in India and abroad. Today, BDL has emerged as the one of the leading Defence PSU not only meeting the ever changing requirements of our armed forces, but also making a significant mark across the globe. It gives us a great sense of fulfilment of having met the requirements of our armed forces.

Fifty years is an achievement by any standards but when one looks at what has been achieved in this period, it gives us a sense of pride.

Before I apprise you on achievements of your company in 2018-19 along with the operating scenario and the initiatives taken, I must say that though it is early days of my journey as Chairman and Managing Director of this company, I found it very exciting and eventful with “Team BDL” standing firmly behind me and providing me a sense of reassurance in overcoming the future challenges in taking this
company to greater heights.

PERFORMANCE OVERVIEW:

This year has been a challenging one in terms of performance. The performance of this year especially demonstrates the determination and resolute character of our organization as we could register a reasonably good sales turnover of ₹ 3069 Crore (with a value of  production of ₹ 3235 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 this target especially under very difficult circumstances. The slight decline in VOS and VOP should not dampen our spirits as this drawback is mainly caused by some last minute technical hitches,
but not due to lack of our efforts. None the less, there is every reason to feel sanguine as majority of technical issues are resolved and your company is back on track and it is poised to get many new projects. I would like to advice all the employees to
work with same determination and strengths and put your best efforts and I am certain your company will bounce back with renewed vigour. 

Turning to 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 ₹ 30.61 Crore for the year 2018-19 (i.e. at ₹ 1.67 per equity share of ₹ 10/-each.)

OPERATING SCENARIO:


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.

India's defence industry has been growing at a modest pace for the past few years. Modernisation of the armed forces and indigenisation of manufacturing are the key focus areas. The segment is receiving the much needed push under the Make in India programme. The concept of import substitution is being gradually accepted by stakeholders. This is an opportune time to embark upon a new phase of self-reliance in the sector by manufacturing technologically advanced equipment within India. Private sector participation is gradually picking up. The objective of the Indian defence offset guidelines is to encourage foreign vendors to engage in complete transfer of technology arrangements with Indian offset partners. That said, the government is set to announce radical changes in the guidelines to bring in investments in the defence and aerospace segments. Going forward, the government plans to substantially step up investments in modernisation of the armed forces and creation of infrastructure especially in the aerospace and electronics segments. In this regard, the new Defence Procurement Procedure is expected to speed up the process of awarding of contracts by the Government.

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

coffee table book on BDL

The maiden Coffee Table Book on BDL entitled, “The Dynamic Decades of BDL” was released by Dr.Ajay Kumar Secretary (DP) on 25 Jan 2019 at BDL, Visakhapatnam Unit. The book depicts the most defining and inspiring moments of the company since its inception, which was in the year 1970.

 

ACCOMPLISHMENTS DURING THE YEAR:

1) New Orders:

I am pleased to announce that your company has bagged orders worth of Rs 2686 Crores excluding Taxes during 2018-19 which includes various types of missiles, launchers, test systems and accessories.  

2) Projects in Pipeline: In addition, I am happy to share that some indents are in advanced stages of order placement on BDL, for which your company top management has been continuously pursuing for expediting the order placement.   

3) New Partners in pursuit of Technology Upgradation: Keeping in pace with the current trends in the global defence industry, your company is always in pursuit for latest technologies and in process of continuous tie-ups with major weapon Design & Manufacturing giants around the world. As part of this, it has entered into MOUs/ NDAs/ LATOTs with various national and international defence players.

4) New Infrastructure:  Keeping abreast with changing technologies, your company is in constant pursuit of establishing new infrastructure for manufacturing and testing latest weapons systems.  As part of this,

  • Established Production facilities for manufacture of Man-Portable Anti-Tank Guided Missile (MPATGM) at your Bhanur unit which was inaugurated by Dr G. Sateesh Reddy, Chairman DRDO on 29th Sep 2018.
.G.Sateesh Reddy, Chairman DRDO and others

Dr.G.Sateesh Reddy, Chairman DRDO and others may be seen  inaugurating the MP-ATGM production facilities

  • Acoustic Tank Test Facility, one of its kind of the world class test facility used for testing underwater weapons like Torpedoes, mines, Sonobuoys, Decoys etc at your Vizag unit inaugurated by Secretary(DP) on 25th Jan, 2019.
Dr Ajay Kumar inaugurated the Acoustic Tank Test Facility at BDL’s Visakhapatnam Unit

On 25 Jan 2019, Secretary (DP) Dr Ajay Kumar inaugurated the Acoustic Tank Test Facility at BDL’s Visakhapatnam Unit.

  • In House D&E has upgraded its labs by procuring latest equipment and software tools including RF Prototyping Software, RF Antenna Design Software, Opto-mechanical Software, DSP tools, IP cores, Keil Microcontroller tools etc.
  • A Full-fledged Surface Mount Technology (SMT) line is established in Electronics Division at KBU which enables to take up the in-house assembly of all complex sub-systems like OBP, SCU, CGU etc.

5)  Technical Breakthroughs: The dedication and hard work of your employees has achieved significant success and paid rich dividends in terms of technical achievements.

i) Your Company has contributed for the prestigious Anti Satellite Missile (Mission Shakti) by developing Reactive Armour System & Control Bay  (Electronics Assembly) and total Cable Harness.

ii) Successfully associated with MPATGM Guidance flight Trials on 14th & 15th Mar 2019 at Pokhran.

6) Quality Systems: Being a missile manufacturing Company, quality of the product is of paramount importance and your products should work first time and every time. Hence, in pursuance of high Quality Standards, all the production Units in all the three units are certified with International Aerospace Quality Management Standard AS 9100D. Your Information Technology Division (ITD) is certified with ISO-IEC 27001-2013, Information Security Management Systems (ISMS).  

In addition, all the three units have been upgraded to ISO 14001:2015 Environment Management System (EMS).

CORPORATE GOVERNANCE:

The philosophy of your company in respect of corporate Governance is its commitment to values, ethical business conduct, transparency, makes appropriate disclosures, comply with laws and regulations.

Your Company has a well established relationships between a company’s management, its Board, its shareholders and other stakeholders. Your company with its established processes and structure through which the objectives of the company, the means of attaining the objectives and systems of monitoring performance are well in place.

Your company is complying to all mandatory provisions of SEBI and other Government statutory bodies relates to Board Composition, audit committees, Board Procedures, Management Discussions, analysis of Annual reports, certification of Financial Statements,  internal controls and Corporate Governance reporting.  Quarterly and annual compliance reports on Corporate Governance are being forwarded to MOD in the prescribed format.

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.

I am glad to convey that your company has been rated consistently as “Excellent” by MOD in the Corporate Governance category, which itself is a testimony for its established mechanisms, relations, regulations and processes by which it is Governed.

ENVIRONMENT PROTECTION & SAFETY:

Your Company is committed to protecting the environment, health and safety of our employees, customers and the communities where we work and live. The company contributes in all aspects of environment by maintaining a clean and green environment. As part of this, your company carries out tasks like Effluent water treatment, water conservation, tree plantation, rain water harvesting and landscaping utilizing effluent water. Committees at working level and steering level for handling various types of pollution in BDL are periodically reviewing the status of pollutions and implement necessary corrective / improvement mechanisms. 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. The two committees i.e. industrial safety committee, which is statutory and Explosive Safety Committee are functioning to meet the safety needs of BDL. Safety Committee meetings are held at regular intervals for reviewing, monitoring and upgrading safety, health and environment as per statutory requirement. The works are carried out in compliance with Factory’s act 1948 and Explosive safety strictly adhering to the Storage and Transport of Explosive Committee (STEC) regulations.  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.

INTERACTIONS WITH CUSTOMERS:

Customer demands are increasing with the rapid onset of technological innovation. Present day demands that Organizations proactively seek to know about the requirements of services and accordingly work towards the same.

Accordingly, Your company has considerably strengthened its product support Department for effective customer support. Exclusive retired service officers are being recruited for ensuring that the required support is reached the customer well within the committed downtime. Your company is in the process of establishing support teams at important locations in the close proximity of the customer i.e at base level depots or maintenance workshops of armed forces. Teams from D&E and production divisions regularly travel to the User locations to understand their requirements and to resolve their issues. Your company is also proposing to establish seamless communication channels with customers by installing latest electronic support equipment like Chatbots / Intelligent Virtual Assistant by using latest technologies like Artificial Intelligence (AI). This enables effortless conversations through voice or text, So you can offer more choices, more self-service, and consistency across channels to achieve customer care excellence. Regular interactions with customer reps are organized by way of periodical meetings for getting to know their requirements and monitoring the progress.

VENDOR DEVELOPMENT:

Your Company considers its vendors as partners in progress and believes in establishing mutually beneficial relationships. 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 is perhaps the first one to organize AS9100D, an international airworthiness quality certification training for its vendors as part of vendor development. Your company believes in hand holding our vendor partners in terms of technology transfers, establishment of facilities, sharing our infrastructure wherever needed etc.

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. 

ROAD AHEAD:

Your Company has a healthy and consistent order book of Rs 7258 Crores as on 01st April 2019. Though there was a slight concern about the dip during 2018-19, as I have told in the beginning that your company is back on track resolving the bottlenecks it had. In addition, 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.

In the years to come, your company will be primarily focussing in the following areas:

  •   Optimization of existing production lines
  • Maximizing the geostrategic reach by increasing the export and indigenization.
  • Co-development with design agencies for new projects.
  • Offset projects
  • Upgradation through innovation of its products.

As part of the focus in above areas, following initiatives were taken by your company.

i) Engaged in Co-Development Programmes of DRDO.

ii) it is entering into new domains and is in the process of developing infrastructure for manufacture of seekers.

iii) Your company is also under discussions with various foreign OEMs to get new technologies.

iv)It has significantly strengthened its in-house R&D by inducting professionally qualified personnel from premier institutions like IITs and NITs.

iv) Your company is progressing well in its in-house R&D efforts of developing a third generation anti-tank guided missile Amogha-III for which top management is totally committed. Though the path ahead in completing may have challenges, I am confident, your company with its grit and determination will overcome and come out with your own in-house designed, developed and produced missile.

v) In addition, 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.

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

Based on the order book position, anticipated orders and above mentioned initiatives, I am quite confident that your company is well poised for a sustained growth.

CSR FOCUS:

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. Your company has taken various steps for fulfilment of its social responsibilities under CSR activities by adopting villages, development of aspirational districts, Swacha Bharat, Skill development etc. Your company has carried out these activities by spending approximately Rs. 16 crores during the last year.

 BDL is committed to contribute actively towards enhancing their living standards through its CSR interventions in water and sanitation, health, education and skill development. Your Company continues to take forward its good work in backward/underdeveloped areas in Andhra Pradesh and Telangana as part of its CSR activities.

For Further details on CSR activities, please refer to Page Nos 37

CONCLUSION:

I offer my profound gratitude for the whole-hearted dedication, cooperation and hard work of its employees, encouragement received from its esteemed customers (the three services and their inspectorates), support from vendors, Technology Development and hand holding from DRDO, guidance from the Ministry of Defence, Government of India. We truly value your continued patronage.

I wish to thank the Principal Director of Commercial Audit Statutory Auditors and Ex-Officio Member, the Statutory Auditors of the company and Audit Committee of the board for the valuable advice and cooperation extended by them.

I am confident that with continuous dedicated efforts, commitment and hardwork, your company shall march forward to achieve greater heights and will become a billion-dollar company in the coming few years.  

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

Finally, I would like to take this opportunity to thank all the shareholders for their trust and support and solicit continued support to fulfill your expectations.

Thanking You

Jai Hind  !!!

Cmde Siddharth Mishra (Retd)

Chairman and Managing Director