Dear Members,

Your Board of Directors takes great pleasure in presenting the Report on the performance of the Company ("the Company" or "HAL"), and its Audited Financial Statements for the Financial Year ended March 31, 2024, together with Reports of the Statutory Auditors and the Comptroller & Auditor General of India (C&AG) thereon.

FINANCIAL HIGHLIGHTS

The financial highlights for the year ended March 31, 2024 are summarised as under:

(' in Lakh except per equity share data)

PARTICULARS	2023-24	2022-23
Revenue from Operations	30,38,084	26,92,785
Turnover	28,16,185	26,36,056
Exports	31,059	29,371
Profit Before Tax (PBT)	10,19,897	6,49,294
Provision for Tax	2,60,393	68,177
Profit After Tax (PAT)	7,59,504	5,81,117
R&D Expenditure	2,82,624	2,49,433
Earnings/ Share (in ') (Face value of '5 each)	113.57	86.89
Book Value / Share (in ')	434.32	351.48

During the year, the Revenue from Operations of the Company has increased by 12.82% to '30,38,084 Lakh from '26,92,785 Lakh in the previous year. The turnover of the Company has increased by 7% to '28,16,185 Lakh from '26,36,056 Lakh in the previous year. The Profit before Tax for the year has increased by 57% to '10,19,897 Lakh from '6,49,294 Lakh in the previous year. The Profit after Tax (PAT) has increased by 31% to '7,59,504 Lakh from '5,81,117 Lakh in the previous year.

PRODUCTION HIGHLIGHTS

During the year, the Company has produced new aircraft and helicopters, covering Light Combat Aircraft (LCA) Tejas Mk1A, LCA Tejas Trainer, Do-228, Advanced Light Helicopter (ALH) Dhruv and Light Utility Helicopter (LUH) in addition to the production of new engines and accessories, at its various Divisions. The Company has also overhauled various aircraft & helicopters and engines during the year.

ORDER BOOK POSITION

The Order Book position of the Company stands at '94,129 Crore as on March 31, 2024.

During the year, the Company received manufacturing contracts of over '19,000 Crores and ROH Contracts of over '15,000 Crores, contributing to an outstanding order book of '94,129 Crores as on March 31, 2024. Major Orders bagged include Contracts for supply of ALH to Indian Army and Indian Coast Guard, RD-33 engine to Indian Air Force, Dornier-228 Mid Life Upgrade to Indian Navy, Dornier-228 to Indian Coast Guard, 6 sets of LM2500 Gas Turbines (GT) and Gas Turbine Auxiliary Equipment (GTAE) for NGMV Program of Cochin Shipyard Ltd and 2 Nos. of Hindustan 228 export to Guyana Defence Forces.

DIVIDEND

During the year, your Company has declared and paid interim dividend of '22 per share of '5 each (440%) for the financial year 2023-24, amounting to '1,47,130.50 Lakh.

The Board of Directors of the Company has recommended a final dividend of '13 per share of '5 each to comply with the Guidelines of Department of Investment and Public Asset Management (DIPAM) on Capital restructuring with respect to payment of minimum dividend. The Final Dividend if approved by the shareholders, would involve cash outflow of '86,940.75 Lakhs.

Thus, the total dividend including final dividend for the financial year 2023-24 would be '35 per equity share (700%), amounting to ' 2,34,071.25 Lakh.

In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI (LODR) Regulations] and the Guidelines of DIPAM, the Company has formulated a Dividend Distribution Policy and the same is available on the Company's website at https://hal- india.co.in/backend/wp-content/uploads/2023/02/Dividend Distribution Policv.pdf

CAPEX

In order to maintain the state of the art infrastructure and technologies to meet Aerospace Standard and also to develop systems/platforms for meeting the requirements of the Defence Forces and to become Atmanirbhar, the Company has incurred Capital Expenditure (CAPEX) of '2,16,786 Lakhs in FY 202324 (PY '2,08,173 Lakhs). The investments are mainly towards Green Field Helicopter project at Tumakuru, augmentation of facilities of LCA, ROH of SU-30, ROH of AL-31FP Engine etc. besides the regular replacement and rationalisation of the existing facilities.

SUB-DIVISION OF EQUITY SHARES

During the year, the Company has sub-divided 1 (One) Equity Share of face value of '10 (Rupees Ten Only) each into two Equity Shares of face value of '5 (Rupees Five only) each fully paid up.

RESERVES

During the year, '92,718 Lakh was transferred to Research & Development Reserve, '18,544 Lakh was transferred to Indigenization Fund Reserve and '4,42,763 Lakh to General Reserve.

BORROWINGS

As on March 31, 2024, short term and long term borrowings of the Company was Nil.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. The Company has in place adequate internal financial controls for ensuring efficient conduct of its business. A detailed note on internal financial controls is provided in the Management Discussion and Analysis Report.

During the year, an Independent Chartered Accountant firm was appointed to review and report on the effectiveness of Internal Financial Controls (IFC) in the Company. The firm has submitted its Report confirming the existence of effective Internal Control System.

LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments as covered under the provisions of Section 186 of the Companies Act, 2013 (''the Act") form part of Notes to the Financial Statements.

RELATED PARTY TRANSACTIONS

During the year, your Company has entered into transactions with related parties after obtaining approval of the Audit Committee and/or Board, as the case may be. As per the threshold mentioned in the Related Party Transactions (RPTs) Policy, there were no material related party transactions with any of the related parties. The disclosures related to RPTs in accordance with the applicable accounting standards are provided in Clause No. 45A of the Notes to the financial statements. Details of contract(s) or arrangement(s) with related parties referred to in Section 188(1) of the Companies Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, in the prescribed form AOC-2, is attached to this Report as Annexure-I.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its Joint Venture Companies & Subsidiary Companies for the year ended March 31, 2024 have been prepared in accordance with the provisions of Section 129(3) of the Companies Act and applicable Accounting Standards, and form part of this report.

Pursuant to the first proviso of Section 129(3) of the Companies Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing salient features of the

Financial Statements of Subsidiaries / Associate / Joint Venture Companies in Form AOC-1 is appended to this Report, which forms part of the Financial Statements. The separate Audited Financial Statements in respect of the Subsidiaries are also available on the website of the Company at www.hal-india. co.in.

SUBSIDIARY/ ASSOCIATE/ JOINT VENTURE COMPANIES

As on March 31, 2024, your Company has two Subsidiaries including one Wholly Owned Subsidiary and fourteen Joint Venture Companies (JVCs) including two Not-for-Profit Companies (Section 8 Companies).

During the year, one new 50:50 Joint Venture Company has been incorporated on November 9, 2023 with the name SAFHAL Helicopter Engines Pvt Ltd with Safran Helicopter Engines SAS, France to carry out business of indigenous design, development, certification, production, sale & support of helicopter engines with one of the first opportunities identified as engine for Indian Multi Role Helicopter (IMRH) & Deck Based Multi Role Helicopter (DBMRH) projects.

Further, Infotech HAL Ltd, a Joint Venture Company has submitted an application to NCLT on March 19, 2024, towards winding up of the JV due to its non-performance for a long time.

Pursuant to the provisions of Section 134(3)(q) of the Companies Act read with Rule 8(1) of the Companies (Accounts) Rules, 2014, a Report on the performance and financial position of each of the Joint Venture Companies and Subsidiary Companies is attached to this Report as Annexure-II.

SIGNIFICANT ACHIEVEMENTS

During the year, the Company has maintained the growth momentum and achieved all-round improved performance. Significant achievements of the Company during the year are as follows:

* The first LCA Tejas twin seater was handed over to the Indian Air Force (IAF) in the presence of Raksha Rajya Mantri.

* The first production series of LCA Mk1A fighter has completed its Maiden flight.

* The Export Contract with Guyana Defence Forces for supply of 2 Nos. Hindustan-228 aircraft was signed in FY 2023-24 and due to proactive approach of the Company, both the aircraft were supplied in record time within a month of signing of contract.

* The first Mid Life Upgraded (MLU) Dornier aircraft fitted with Pollution Surveillance System (PSS) was handed over to ICG.

* Delivered 30 types of riveted structure, six types of welded structure and satellite's bus structure Rover, Lander and Castings & Forgings for Chandrayaan-3.

* Delivered 10 types of riveted structures and 5 types of welded propellant tankages for PSLV C57 (Aditya L1) mission and PSLV C58 (XPoSAT) mission.

* Handed over first 'Closed Inter Tank Structure (C32)' and first 'Development Service Module' for the Gaganyaan Experimental Mission of ISRO.

* Received DGCA approval under 'CAR21 Subpart G' for series production of Hindustan-228 aircraft and 'Maintenance Type Training Certificate' under CAR147 category B1 and B2 for imparting AME type rated licence on Hindustan-228 aircraft.

CURRENT PROJECTS AND PROGRAMS

During the year, the Company has produced the Light Combat Aircraft (LCA) Tejas MK1A & MK1 aircraft, Do-228 aircraft, Advanced Light Helicopter (ALH) Dhruv, Light Utility Helicopter (LUH), engines, accessories and aerospace structures against various customer orders.

During the year, a New Design and Test facility at Aero Engine Research & Development Centre in Bangalore was inaugurated on December 29, 2023, to accelerate Research and Development of aero-engines.

The Company has also undertaken Design and Development of the Indian Multi Role Helicopter (IMRH) and Weapon systems integration on ALH & LCH.

DESIGN AND DEVELOPMENT PROGRAMS

The Company continued to boost the "Atmanirbhar Bharat Abhiyan" of Govt. of India with its focused efforts towards design and development of products, technologies and capabilities to meet the future requirements of Indian defence forces and non-military aerospace market in India.

The Company has considerably progressed towards the realization of indigenous programmes viz. Basic Trainer Aircraft (HTT-40), Light Utility Helicopter (LUH), Light Combat Aircraft (LCA MK1A), Indian Multi-Role Helicopter (IMRH) and Development of Engines. The progress achieved in respect of these projects during the year are as under:

* BASIC TRAINER AIRCRAFT (HTT-40)

HTT-40 is the Basic Trainer Aircraft indigenously designed and developed by the Company. HTT-40 would be used for basic flight training, aerobatics, instrument flying and close-formation flights whereas its secondary roles would include navigation and night flying. Features of the aircraft include Air-conditioned cockpit, Tandem seating, Zero- Zero ejection seats and Multifunction Displays. A total of 3 prototypes have been built which includes two flying prototype and one Structural Test Specimen (STS).

During the year, Propeller vibration survey completed, Inverted spin demonstration completed, all system

Certification were obtained and Approved Release to Service Document (RSD) received from CEMILAC. Production activities are in advanced stages against the Contract for supply of said aircraft.

* LIGHT COMBAT AIRCRAFT (LCA Mk1A)

LCA Mk1A is an advanced variant of indigenously developed LCA MK1 equipped with Mission Computers (MC), Digital Map Generator (DMG), Smart Multi-function Displays (SMFD), Combined Interrogator and Transponder (CIT), Advanced Radio Altimeter and integrated with Air to Air and Air to Ground weapons.

The design and development activities for LCA Mk1A systems were undertaken and certification activities are progressing. Concurrently, series production activities are also being progressed. The first production series fighter Aircraft of LCA Mk1A completed its maiden flight. Further, software fine-tuning and flight tests for weapon trials are being progressed to facilitate delivery of aircraft.

* LIGHT UTILITY HELICOPTER (LUH)

The LUH is a single engine, 3 Ton weight class helicopter having Glass Cockpit with Multi-Function Displays. The LUH is intended to meet different role requirements including high altitude operation. Three flying prototypes have been built and were extensively flight tested.

Work on Automatic Flight Control System (AFCS), Autorotation, Emergency Flotation System (EFS), Helmet Mounted Display System (HMDS) is progressing for completion in 2024-25.

* INDIAN MULTI ROLE HELICOPTER (IMRH)

The Company has undertaken design and development of IMRH, a Medium Lift Helicopter of 13 Ton class primarily for high altitude troop and cargo transport. The sea variant of IMRH is named Deck Based Multi Role Helicopter (DBMRH).

IMRH and DBMRH would be designed to meet the requirement of all the three military services and its future extension will cater to offshore operations, utility, VVIP transport etc., roles will help diversify into Civil market.

The preliminary design studies of IMRH has been completed. HAL is progressing with the D&D activities as a Lead agency.

* UTILITY HELICOPTER-MARITIME (UH-M)

Utility Helicopter - Maritime (UH-M) is a 5.7 Ton dedicated Helicopter for deck based operations with all four Main Rotor Blades foldable, to enable stowage in Navy's ships.

Ministry of Defence accorded Acceptance of Necessity (AoN) for procurement of Utility Helicopter-Maritime.

Design and Development activities are progressing with internal funding. Preliminary Design Review (PDR) has been completed and further design review of major systems like Traversing system and other LRUs is progressing.

* 25 kN TURBOFAN ENGINE (HTFE-25)

Design and Development of a 25kN thrust class turbofan engine, which can be used on Basic/ Advanced military trainers, on small business jets and also large UAV applications is under progress. The engine can be used on a 5 Ton weight class aircraft in single engine configuration and on aircraft of up to 9 Ton weight class with twin- engine configuration. Two core engines have been produced so far and are undergoing development trials.

* 1200 kW TURBOSHAFT ENGINE (HTSE-1200)

The 1200kW Turbo shaft engine would be used as power plant for 3 to 6 Ton category helicopters. One Technology Demonstrator of HTSE-1200 engine has been built and presently under testing.

RESEARCH AND DEVELOPMENT ACHIEVEMENTS

During the year, the Company has incurred a total R&D expenditure of '2,82,624 Lakh which is 10.04 % of the Turnover and has transferred a sum of '92,718 Lakh (15% of Operating PAT) to R&D Reserve for contribution to R&D corpus.

The significant R&D achievements are as under:

* Indigenously designed and developed HTT-40 Basic Trainer Aircraft received the Release to Service Document (RSD) from CEMILAC in January, 2024.

* The Light Combat Aircraft (LCA) Naval Trainer Prototype NP5 successfully completed its maiden flight on August 18, 2023.

LCA Navy flight testing activities will provide vital inputs towards design and development of the upcoming Naval aircraft project "Twin Engine Deck Based Fighter" (TEDBF).

* The indigenous Beyond Visual Range (BVR) air-to-air missile, successfully fired from Light Combat Aircraft (LCA), off the coast of Goa on August 23, 2023.

During the year, HAL has filed 186 Intellectual Property Right (IPR) applications which make cumulative number of 2,413 IPRs filed by Company. Further, 270 IPRs have been granted during the year taking cumulative IPRs held by the organization to 1,026 (Patents - 348, Industrial Designs - 136, Copyrights - 540, Trademark - 2)

BOARD AND ITS COMMITTEE MEETINGS

During the year, 12 (Twelve) Board Meetings were held and the maximum interval between any two meetings was not more than 120 days.

The details of meetings of the Board and Committees thereof held during the year are furnished in the Corporate Governance Report, which forms part of this Report.

COMMITTEES OF THE BOARD

As on March 31,2024, the Board has five Statutory Committees namely Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility & Sustainable Development Committee, Stakeholders Relationship Committee and Risk Management Committee.

A detailed note on the composition, terms of reference and meetings of the Board and its Committees is provided in the Corporate Governance Report.

CHANGES IN BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, following changes took place in the Board of Directors and Key Managerial Personnel (KMP) of the Company:

Appointment

* Shri M Z Siddique was appointed as Govt. Nominee Director on the Board of the Company w.e.f July 18, 2023.

* Shri Atasi Baran Pradhan was appointed as Director (HR) on the Board of the Company w.e.f July 19, 2023.

Cessation

* Dr. Tessy Thomas ceased as Govt. Nominee Director on the Board of the Company due to withdrawal of Nomination w.e.f May 8, 2023.

DECLARATION OF INDEPENDENCE

Declarations from Independent Directors of the Company have been received, confirming that they met the criteria of independence as prescribed under Section 149(6) of the Companies Act and Regulation 25(8) of the SEBI (LODR) Regulations.

COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The appointment, tenure and remuneration of Functional Directors including Chairman and Managing Director (CMD) are determined by the Government of India. The Terms & Conditions of appointment, including the period of appointment, the Scale of Pay and other entitlements are notified by the Government of India.

Government Nominee Directors are appointed by the Department of Defence Production, Ministry of Defence and they are not entitled to any remuneration / sitting fees.

Independent Directors are appointed by the Government of India and they are entitled to sitting fees for attending the Board / Committee meetings as prescribed by the Board in line with the Companies Act and Rules made thereunder.

In view of the Gazette Notification No GSR 463 (E) dated June 5, 2015 of the Ministry of Corporate Affairs (MCA), the Company, being a Government Company, is not required to frame a Policy on Directors' appointment and remuneration, including criteria for determining qualifications etc. under Section 134(3)(e) of the Companies Act.

BOARD EVALUATION

Pursuant to the Gazette Notification No GSR 463 (E) dated June 5, 2015 of the MCA, formal annual evaluation by the Board of its own performance, its Committees and individual directors, are exempted for the Company, as the performance of Directors is evaluated by the Administrative Ministry. However, the performance of the Functional Directors are evaluated by the Independent Directors in their meeting.

The performance evaluation of Independent Directors are carried out by the Board without the presence of Independent Directors.

ANNUAL RETURN

In accordance with the provisions of the Companies Act, Annual Return in the prescribed format has been hosted on website of the Company at https://hal-india.co.in/backend/wp- content/uploads/2024/07/Form MGT 7-2023-24-draft-1.pdf

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company being a defence Central Public Sector Enterprise (CPSE), the disclosure of information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo under the provisions of Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is exempted vide Notification GSR No.680 (E) dated September 4, 2015.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Companies Act, Companies (Corporate Social Responsibility Policy) Rules, 2014 & Amendment thereof and DPE Guidelines, the Company has undertaken various activities during the year as per its CSR Policy. The projects / programmes / activities taken up are in line with Schedule VII of the Companies Act. The thrust areas under CSR are Healthcare, Skill Development, Education, Enhancing Employability through Training, etc. The other areas in which support extended were Environment Sustainability, Sports Development, Rural Infrastructure Development, Sanitation etc. The Company has spent an amount of '1 1,998 Lakhs under CSR for the year as against the CSR budget/ obligation of '10,931 Lakhs.

The Corporate Social Responsibility Policy, Composition of the Committee and CSR Projects/ Activities of the Company are available on the Company's website at https://hal-india.co.in/ investors/corporate-social-responsibility-2 Salient features of the Policy form part of the Annual Report.

Annual Report on CSR activities undertaken by the Company during the year, pursuant to Section 135 of the Companies Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is attached to this Report as Annexure-III.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34(2)(f) of SEBI (LODR) Regulations, the Company has prepared Business Responsibility and Sustainability Report (BRSR) on Environment, Social and Governance (ESG) parameters in the prescribed format for the year 2023-24 and attached to this Report, along with reasonable assurance Report of BRSR Core, received from Independent Assurance Provider.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

The Company has a Board approved Risk Management Policy, in place. The Policy aims at elimination or reduction of risk exposures through identification and analysis of various types of risks and facilitating timely action for taking risk mitigation measures.

In line with Regulation 21 of the SEBI (LODR), Regulations, the Board of Directors had constituted the Risk Management Committee for monitoring and reviewing of the risk management plan and other such functions as it may, deem fit including ESG, Cyber Security and Business Continuity Plan, in line with applicable laws.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the operation of the Company in future.

PUBLIC DEPOSITS

Your Company has not accepted any deposit during the year. Further, there was no outstanding deposit and/or unpaid or unclaimed principal amount or interest against any deposit either at the beginning or at the end of the year 2023-24.

ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS

During the year, the Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

MATERIAL CHANGES SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

No material changes / commitment of the Company have occurred after the end of the year 2023-24 and till the date of this report, which affect the financial position of the Company.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Pursuant to Gazette Notification No. G.S.R. 463 (E) dated June 5, 2015 issued by the MCA, the provisions of Section 197 of the Companies Act and the relevant Rules, regarding disclosure of particulars of employees drawing remuneration in excess of the limits specified, are exempted for the Company.

MOU WITH GOVERNMENT

Your Company has signed Memorandum of Understanding (MoU) with the Ministry of Defence (MoD), Government of India (GoI) for the year 2023-24, the performance rating of which is awaited.

However, your Company has achieved "Excellent" performance rating with a score of 91.50 for the year 2022-23.

INDIGENISATION AND ATMANIRBHAR BHARAT

The Company has put in concerted effort on indigenisation of components, accessories and systems required to manufacture as well as repair & overhaul of aircraft, engine and associated accessories. To reduce dependence on imports, savings in foreign exchange and manage obsolescence, every year, HAL indigenizes various items/ components and systems of foreign origin fitted on HAL platforms through in-house capabilities or with the help of local vendors, thus fostering self-reliance through 'Make in India'.

In line with the Atmanirbhar Bharat Abhiyan of Govt. of India, during the year, the Company has indigenised 2,046 Nos. of items with anticipated annual foreign exchange saving of '385 Crore. To align with national priorities and ensure inclusive growth, the Company has been also encouraging Indian private sector participation in the indigenization/ Make in India efforts to undertake various high value systems/equipment of foreign origin fitted on HAL platforms.

The other major initiatives / achievements during the year are as under:

> Creation of a dedicated Indigenisation fund:

The Company has created a dedicated indigenization fund by transferring 3% of its operating profit after tax every year. This fund will be used for carrying out indigenization activities and will provide further impetus for indigenization.

> Identification of critical items for indigenization and inclusion in the Positive Indigenisation Lists issued by MoD:

In a major initiative, the Company has identified and made a comprehensive roadmap for indigenization of complex aircraft Systems, LRUs & other critical Items across its major platforms. These items are planned to be indigenized in the next 4-5 years in a phased manner through participation of Indian Private Industries and Government Agencies involving Academia. 430 such imported items are included in the Four PILs (PIL-1: 23, PIL-2: 22, PIL-3: 360, PIL-4:25) issued by DDP, MoD. During the year, 59 PIL items (cumulatively 71) have been indigenized.

> Uploading of imported items in Srijan Defence Portal:

Ministry of Defence (MoD) has developed and launched Srijan Defence Portal (an indigenization portal) to support Indian Industries with opportunities for Make in India in Defence. The Company has so far uploaded around 25.000 Nos. of imported items in the portal for information to private vendors and their likely participation in the indigenisation programmes of the Company.

Private vendors are showing interest for indigenisation of items uploaded in the portal. The Company is continuously interacting with the interested vendors and briefing them about the various opportunities available in the Company for indigenization.

> Indigenisation through Make-II Procedure:

HAL's Make-II programme is a step towards supporting the 'Atmanirbhar Bharat' & 'Make in India' mission. HAL's Make-II (Industry Funded) procedure is in compliance of the Make-II framework promulgated by MoD and envisages the assured order quantity after successful development of items through private vendors. The Company has identified the items to be indigenized through Make-II procedure and uploaded on the Srijan Defence Portal. Expression of Interest (EoIs) of these items are being issued in phased manner to take up for indigenisation under Make-II. So far, the Company has issued EoIs for around 1.000 items and Project Sanction orders have been placed for around 600 items for indigenisation under Make-II.

> Organising / participation in Seminars, Conferences and Exhibitions on Indigenisation / Vendor Development program

During the year, to sensitize Indian Vendors for opportunities available for indigenization and their enhanced participation in indigenization programmes, the Company has conducted/ participated in more than 40 Nos. of vendor development programs / seminars / exhibitions at Divisional level. Participants were also briefed about the Indigenisation procedure and support provide by the Company during indigenization.

OUTSOURCING

As part of the "Make in India" drive and the Atmanirbhar Bharat Abhiyan, HAL has been nurturing & developing a vibrant indigenous aerospace & defence ecosystem. In its path of moving towards being a lead integrator, HAL has been striving to develop Tier-II and gradually Tier-I suppliers over a period of

time while retaining the core areas as prime integrators. HAL has comprehensively reviewed its outsourcing procedures to address the issues noticed and to enhance the ease of doing business with HAL, from the vendors' perspective. An updated version of the Outsourcing Manual (Rev 05-2024) was issued in March, 2024.

EXPORTS

To boost export, following initiatives have been taken by the Company during the year:

> Two Hindustan-228 aircraft were supplied to Guyana Defence Force, well ahead of the contractual delivery commitment.

> HAL Regional Office was established in Kuala Lumpur, Malaysia on July 1 1, 2023 to facilitate close defence industrial collaboration between India and Malaysia. The Regional Office symbolizes the potential for closer defence industrial collaboration between India and Malaysia and is intended to serve as a hub for the HAL's engagement with the wider South-East Asian region.

> Letter of Intent (LoI) was signed between HAL and the Ministry of Defence of The Republic of Argentina in Bengaluru on July 20, 2023, on productive cooperation and acquisition of Light and Medium Utility Helicopters for the armed forces of the Argentine Republic.

> The Company participated in various International Air Shows including Paris Air Show-2023, Dubai Air Show- 2023, Langkawi International Maritime and Aerospace Exhibition (LIMA)-2023, Egypt Defence Expo (EDEX)-2023 to showcase its products in the International forum. Light Utility Helicopter (LUH) was for the first time showcased in an International event in LIMA 2023.

VENDOR DEVELOPMENT

During the year, the Company has taken several vendor development initiatives to increase the number of vendors.

The Company has conducted 31 Vendor Development Programmes, of which 3 were for Micro & Small Enterprises (MSEs) owned by SC/ST Entrepreneurs & Women Entrepreneurs, 1 was meant exclusively for MSEs owned by SC/ST Entrepreneurs while the balance 27 were for across all categories.

The Company has registered with RXIL, Mynd Solution and also with A TReDS Ltd. for enabling payments through TReDS platform to MSMEs, and payments are being made through these platforms. All efforts are also being made to bring the MSMEs on TReDS platform.

The Company has registered with MSME SAMBANDH portal and the procurement details are being updated monthly in this Portal. The Company has also registered with MSME SAMADHAAN portal and the same is being monitored regularly for resolution of payment complaints of MSEs, if any.

The Company has implemented companywide e-Procurement system through its own e-Procurement portal which is adopted for tenders issued outside GeM portal. A 24X7 e-Procurement help desk has been established to provide information, support, training, operational issues / clarifications to the vendors.

The Company has implemented the Public Procurement (Preference to Make in India), Order 2017 and its amendments thereof issued by Department for Promotion of Industry and Internal Trade (DPIIT) to encourage 'Make in India' and promote manufacturing and production of goods & services in India.

PROCUREMENT THROUGH GeM PORTAL

The Company is a part of GeM Portal & implemented companywide GeM procurement. A detailed procedure for vendor registration were obtained from GeM and informed the same to all prospective domestic suppliers for on-boarding on GeM Portal.

All efforts are continuously being made to persuade the potential domestic suppliers (covering area of Goods, Services and Outsourcing) to on-board them on the GeM Portal.

The Company is taking up all procurements which are available in GeM Portal and invariably followed/ensured by all the buying groups. Also, the Company is taking up several procurements through BoQ Module and Custom Bid Module for those items which are not available in GeM Portal and strive to achieve a sizable procurement through GeM Portal.

During the year, 16,469 orders were placed through GeM portal amounting to '2,903 Crore.

PROCUREMENT FROM MICRO & SMALL ENTERPRISES (MSEs)

The Company has implemented the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 & its amendments issued by Ministry of MSME vide order No.21 (22)-2018-MA dated November 9, 2018. HAL has achieved more than the mandated procurement of 25% from MSE entrepreneurs (excluding specific defence procurement as per Sl.No.14 of the Policy).

During the year, the total value of procurement including outsourcing made from MSEs is '2,134 Crore.

INTEGRITY PACT (IP)

Your Company has system of signing of Integrity Pact (IP) with vendors for all procurement of Goods, Services & Works / contracts having value of '5 Crore and above. Only those Vendors / bidders, who commit themselves to IP with the HAL would be considered competent to participate in the bidding process. Further, to encourage competition in HAL procurement and to reduce processing lead time, HAL has implemented the Omnibus Integrity Pact with effect from January 1, 2018. This Omnibus IP shall be valid upto 5 years and the same can be proposed by bidder for consideration against any offers submitted by the vendor during the validity period of Omnibus IP.

HUMAN RESOURCE DEVELOPMENT

The strength of employees as on March 31, 2024 stood at 23,766.

As on March 31, 2024, a total of 3,661 Apprenticeship were engaged in the Company in various Trades, which forms 10.55% of the total manpower strength including contractual staff.

EMPLOYEE WELFARE

The Company continues to extend welfare benefits to the employees and their dependents in the form of comprehensive Medical Facilities, Housing Facilities, Canteen Facilities (for employees only), and Educational facilities for employee's Children, Sports Facilities, etc. Pursuant to introduction of

HAL Sabbatical Scheme for Executives, in recognition of the need for introduction of such facility for Workmen, HAL Sabbatical Scheme for Workmen was also introduced wherein the Scheme allows Workmen to take leave for self-renewal, skill development, or the pursuit of personal interests and also offers flexibility to employees to address social obligations, support family members, or embark on wellness journeys during the leave period.

The Company also extends the Group Life Insurance Policy of '10 Lakhs on behalf of its employees and also the Financial Assistance Scheme which provides for monthly monetary support ranging from '15,000/- p.m. to '50,000/- p.m. depending upon the Grade / Scale of the employees, to the dependents of the deceased employees.

REPRESENTATION OF SC/STs

The position regarding representation of Scheduled Castes / Scheduled Tribes (SC / STs) is as follows:

Representation of SC/STs in the total strength of the Company as on January 1, 2023 and January 1, 2024

Category	Total Strength as on		Number of SCs as on		Number of STs as on
(Grade / Scale of Pay)	1.1.2023	1.1.2024	1.1.2023	1.1.2024	1.1.2023	1.1.2024
Group - A (Grade - II & above )	7,602	7,502	1,369	1,359	473	478
Group - B (Grade-I)	13	12	2	2	1	1
Group - C (Scale -3 to Special Scale)	17,035	16,447	3,022	2,942	1,326	1,320
Group - D (Scales - 1 & 2 )
(i) Excluding Safai Karmacharis	4	2	1	-	-	-
(ii) Safai Karmacharis	-	-	-	-	-	-
Total	24,654	23,963	4,394	4,303	1,800	1,799

Recruitments made during the period January 1, 2023 to December 31, 2023 and the SC/STs amongst them

Category (Grade / Scale of Pay)	Total number of Post filled	No. of Reservations made for		No. of Posts filled by appointment of
		SCs	STs	SCs	STs
Group - A (Grade - II & above )	197	32	13	33	9
Group - B (Grade-I)	1	-	-	-	-
Group - C (Scale - 3 to Special Scale)	133	19	23	24	25
Group - D (Scales - 1 & 2)
(i) Excluding Safai Karmacharis	-	-	-	-	-
(ii) Safai Karmacharis	-	-	-	-	-
Total	331	51	36	57	34

Vacancy - based Promotions made during the period January 1, 2023 to December 31, 2023 and the SC/STs amongst them

Category (Grade / Scale of Pay)	Total number	No. of Reservations made for		No. of Posts filled by Promotion of
	Promoted	SCs	STs	SCs	STs
Group - A (Grade - II & above )	1,297	NA	NA	223	89
Group - B (Grade-I)	-	-	-	-	-
Group - C (Scale - 3 to Special Scale)	-	-	-	-	-
Group - D (Scales - 1 & 2 )
(i) Excluding Safai Karmacharis	-	-	-	-	-
(ii) Safai Karmacharis	-	-	-	-	-
Total	1,297	-	-	223	89

EMPLOYEE RELATIONS (ER) / INDUSTRIAL RELATIONS

The Employee Relations Scenario in the Company has remained peaceful & cordial during the year. Smooth relations were maintained between the Management and the Unions / Associations by effective communication, so as to eliminate any scope for conflicts & misunderstandings and thus Industrial Harmony were maintained. Regular Meetings with the representatives of the Recognized Unions / Officers Associations at the Divisional, Complex & Corporate Levels were held to discuss and resolve issues.

Plant Level & Shop Level Committees with representatives from the Management / Trade Unions are functioning in the Divisions to discuss & resolve production related matters. In order to address employees issues / grievances, Grievance Redressal Mechanisms are also in place in the Company.

WOMEN EMPOWERMENT

Women Empowerment & Leadership Programs are being conducted by HAL. The main objective of the programs is to enhance self-awareness & self-management, enhance competencies to drive business results, enhance ability to influence & harness the power of effective networking and to build essential leadership competencies. At present, around 73 Women Employees hold Senior Management posts i.e., above Grade VII.

HAL is a Corporate Life Member of Women in Public Sector (WIPS) Forum. Women employees are encouraged to participate in programmes / activities of WIPS Forum. The 34^th Annual Conclave (National Meet) of WIPS was held in HAL, Bengaluru on 12^th & 13^th February, 2024 on the Theme "Women - The Future of Sustainable Growth". During the event, HAL was awarded the "Best Performing Enterprise Award" in Navaratna Category.

Ladies Clubs / Families Welfare Associations are also functioning at different locations to take up various philanthropic / sociocultural activities. Women's Day is celebrated on 8^th March every year.

PROHIBITION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified in the Company. In line with the Guidelines received from time to time, necessary actions have been taken to prevent Sexual Harassment of Women at Workplace. The HAL CDA Rules applicable to Officers and the Certified Standing Orders applicable to Workmen have the required provisions in this regard.

Internal Complaints Committees as per Section 4 of the Act have been constituted. Information for the year in terms of Section 22 of the Act, is as indicated below:

(i) Number of Cases pending as on 01/04/2023 :	Nil
(ii) Number of Complaints of Sexual Harassment : received in the Financial Year 2023-24	1
(iii) Number of Complaints disposed of during : the Financial Year 2023-24	1
(iv) Number of Cases pending as on 31/03/2024 : & its status	Nil

Awareness Programme on Sexual Harassment were also conducted at Divisions / Offices during the year.

RAJBHASHA IMPLEMENTATION

The Company is constantly taking efforts to implement Official Language in all the Divisions/ Offices effectively as per directives issued by Dept. of Official Language, Ministry of Home Affairs and Dept. of Defence Production.

Hindi Incentive Scheme has been implemented effectively amongst the Divisions of HAL. Further, In-House Hindi Magazines are being published by the Divisions/ Offices of HAL to motivate the employees. In accordance with the Official Language guidelines, Hindi Workshops and Seminars are also being conducted on various topics from time to time, so that employees could do their routine work in Hindi as far as possible.

During the year, the responsibility of Town Official Language Implementation Committee (TOLIC), (Undertakings), Bangalore has been entrusted to Hindustan Aeronautics Limited by Department of Official Language, Ministry of Home Affairs, New Delhi. Under the Chairmanship of HAL, propagation and use of Official Language (Hindi) is being carried out for Bengaluru based 72 Member Offices / Undertakings.

The Joint Regional Official Language Conference of the South & South-West Regions was organized on January 19, 2024 in HAL Management Academy, Bengaluru by the Department of Official Language, Ministry of Home Affairs with the joint collaboration of TOLICs of Banks, Central Govt. Offices and Undertakings. The in-house OL magazine 'Nabharatna' of HAL Corporate Office was released by the Minister of State for Home affairs during the inaugural ceremony.

The meetings of Official Language Implementation Committee in all the divisions of HAL including Corporate Office are being conducted regularly. Necessary new guidelines issued by the Dept. of Official Language, Ministry of Home Affairs, New Delhi are also being circulated to all the divisions of HAL to create awareness on latest orders pertaining to implementation of Official Language. The periodical reports are also being sent online as per directives issued by the Department of Official Language, Ministry of Home Affairs, New Delhi.

The inspection reports pertaining to Parliamentary Committee inspections on Official Language and compliance related to the assurances given to the Committees are being sent to the concerned Authorities / Offices on time after reviewing the report at the Corporate level.

New website of the Company has been launched this year and it is being updated in bilingual at Corporate Office level.

INFORMATION TECHNOLOGY (IT) INITIATIVES

During the year, your Company has taken many IT initiatives towards adopting the latest technology, increasing customer satisfaction, implementing paperless processes and improving Cyber security. Some of the major IT initiatives and achievements of the Company during the period are:

* Project Parivartan: upgrade of ERP system: Project Parivartan was conceptualised for upgradation of existing IFS to the higher version (IFS Apps 10) and deployment in a centralised new generation hardware with built-in redundancy and establishment of disaster recovery site at Bangalore.

* Launch of HAL New Website: New Website of the Company has been designed and developed using latest technologies with focus on Products, Services and R&D capabilities of HAL.

* Centralised Internet and Firewall: Cyber Security being of paramount concern in defence organisations, the Company has implemented centralized Internet

framework with deployment of centralised Firewall. One high speed internet facility (IGbps) has been made available through the central firewall to the Bangalore based divisions connected in a ring architecture towards achieving better economy and management.

* BRSR Portal: The Company has developed the portal for uploading the relevant data and back-up documents for BRSR Core by all the Divisions for preparation of BRSR. BRSR portal provides automated calculations of various metrics required for submitting the report based on the data pertaining to parameters such as Energy, Water, Waste, Air Emission etc. Portal also has a provision to capture associated evidence with respect to data points.

* Implementation of ISO 27001 certification: As part of strengthening the cyber security posture of the Company, initiatives undertaken for ISO 27001 certification for all Production Divisions, R&D Centres and Offices of the Company.

* Implementation of Maya OS: As per recommendation of Cyber Information Research Agency (CIRA), Maya OS has been deployed in 70 internet facing machines at Corporate Office and planned to be extended to all Divisions of the Company.

AWARDS & RECOGNITIONS

During the year, your Company has received various Awards and Recognitions. Some of the important accolades conferred to the Company are as under:

* 'CSI Cyber Security Awards 2023' under the category 'Outstanding Police/Law, Enforcement Initiative/Defence Sector' by CSI Mumbai Chapter in association with IIT Bombay.

* Prestigious 'Organisational Excellence Award' by Project Management Associates (PMA), India for HAL's remarkable achievements in managing indigenous projects LCA and HTT-40.

* 'Heavy & Medium Engineering -Defence' category award by Dun & Bradstreet during 'PSU and Government Summit 2023'.

* 'India's Top Value Creator award' under Defence category by Dun & Bradstreet during Top 500 Value Creators Summit 2023.

* 'PSE Excellence Awards' instituted by Indian Chamber of Commerce under Operational Performance Excellence, Contribution of Women & differently abled in PSEs, Corporate Governance and CSR & Sustainability categories.

* 'IEI Industry Excellence Award 2023' (Platinum) under Engineering Manufacturing and Processing Category for demonstrating outstanding performance with a high order of Business Excellence.

* 'Best Contributor to Atmanirbhar Bharat - Manufacturing / OEMs' award received at the Wings India 2024 at Hyderabad.

* 'INDIA Public Sector Enterprises Awards' for Excellence for being "Best Strategic Central Public Sector Enterprise of India - Aerospace & Defence".

VIGILANCE

Vigilance Department of the Company is headed by Chief Vigilance Officer (CVO), an IRAS officer. Vigilance Officers are posted across Divisions and Complex Offices of the Company including Corporate Office. Preventive Vigilance has been the thrust area of the Vigilance Department and the same received focussed attention during the current year. Vigilance setup in the Company has been continuously endeavouring to bring transparency, fairness and equity in all transactions and processes of the Company through creating a sense of awareness on system and procedure through awareness campaign and training program.

Some of the key activities that have been carried out by Vigilance Department during the year are as under:

i. Preventive Vigilance:

* 389 complaints were handled, 388 regular scrutiny/ surprise checks and 15 CTE type intensive examinations were carried out across the Company. 4 system studies were carried out on various topics like procurement of shelf life items with focus on total procurement and its utilization/non-utilization during the last 3 years, study on high value machines purchased in last 5 years - receipt, installation, commissioning & prove out and its utilization, study on CAMC/AMC executed in last 5 years for maintenance/service of high value machines and their breakdown profile and study of payment recommendations made to CPPC by the division and system improvement suggestions were made.

* A total of 114 awareness sessions were conducted on various topics. Key note address by eminent speakers were organized to spread vigilance awareness among employees on various topics.

ii. Vigilance Publications: Three in-house Vigilance e-magazines were published, as under:

* "Marg Darshan", an annual magazine was released during VAW 2023 on the theme "Corruption free India for a developed Nation" covering articles from internal and external writers as a part of efforts towards spreading preventive vigilance concepts.

* "Vishleshan-III", a compendium of vigilance interventions was published. Vishleshan-III is a compendium of selected cases bearing vigilance angle, set of case studies to succinctly draw up the mistakes made in a process and highlight lessons to be learnt and system improvements to be made to avoid the same mistakes in future.

* A comic book on "PIDPI" was also published and released during VAW 2023.

iii. System Improvement measures: Based on the recommendations of vigilance, several system improvements have been issued by the management in the areas of HR, IMM, stores, works and finance etc. like guidelines on custom clearance of imported consignments, maintenance of BGs, EMD & SD details in IFS, Standard operating procedure for making returnable material gate passes, engagement of contract labour, HAL travelling allowance rules (Inland), store credit for raw materials etc.

iv. Vigilance Awareness Week: Vigilance awareness week was conducted throughout the organization in nine different geographical locations across Country from October 30 to November 5, 2023, on the theme "Say no to corruption; Commit to the Nation". Awareness campaign comprising of in-house and public outreach activities were conducted to spread awareness among employees & general public.

v. Management Audit of Vigilance Unit (MAVU)

The following improvements were implemented based on the suggestions made by MAVU Audit team:

* Uniformity in Charge memorandum and differentiation of major and minor Disciplinary proceedings;

* Training on capacity building for IO/POs and officers dealing with framing of charge sheet;

* Rotation of officials posted in sensitive areas;

* Updation of manuals;

* Implementation of e-office module.

QUALITY INITIATIVES AND FLIGHT SAFETY

* Third-Party Inspection (TPI) model for inspection activities at vendor premises has been successfully deployed. As on date, eight TPI bodies have been empanelled by the Company to carry out inspection of outsourced components on behalf of Divisions at the premises of subcontractors. 8^th TPI body has been empanelled during the year, in-coordination with DGAQA HQ New Delhi.

* Two Quality Conclaves were held during the year, with an objective to foster a culture of zero tolerance towards lapses and to strengthen our Quality System.

* NADCAP approval for various special processes viz. Chemical Processing, Heat Treating, etc. have been obtained by different Divisions of the Company to enhance consistency & reliability of special processes.

* Quality Circle teams from different Divisions have participated in State/ Chapter, National and International level competitions of CCQC/NCQC/ICQCC 2023 and have won 30 'Gold', 14 'Excellence', 9 'Par Excellence' and 1 'Silver' category awards. This has resulted in learning from interactions with different Quality Circle teams from other companies.

* Conducted 27 training programs/workshops at customer bases/field units and 78 training programs/workshops at HAL premises on critical aircraft systems. This has resulted in knowledge sharing and enhanced skill set & increased availability of equipment at customer end.

* Implementation of Industry 4.0 is being adopted at New Helicopter Factory Tumakuru on pilot project basis. Further, Industry 4.0 is also introduced in various divisions for implementation of AI based inspection system & online data fetching through Bluetooth technology thus encouraging a paperless manufacturing system.

* A fully automated Process Shop has been established at Accessories Division, Lucknow with an integrated SCADA (Supervisory Control and Data Acquisition) control system. The processing line is capable of performing number of process sequences without human intervention with online monitoring and recording of processing parameters. An online system has also been developed by Avionics Division, Korwa for Graphical Analysis of Bath solutions and trend monitoring of Anodization & Passivation process.

* Digital Dashboards and Online Portals have been developed towards paperless office for recording, measuring and monitoring of various quality parameters and generation of related reports and formats.

* Flight Safety Capsule was conducted at HMA to bring awareness about Flight Safety and Maintenance Safety among the young Officers of HAL. Also, a course on Human Factors in Aviation was conducted at Nashik, Engine Division and MRO as per DGCA guidelines for Officers and Workmen.

AUDITORS

Statutory Auditors

HAL being a CPSE, Statutory Auditors of the Company were appointed by the Comptroller & Auditor General of India (C&AG). M/s A John Moris & Co., Chartered Accountants, Bengaluru was appointed as Statutory Auditors for auditing the Accounts of the Company for the year and 17 firms of Chartered Accountants were appointed as Branch Auditors.

The Auditors' Report does not contain any qualification, reservation or adverse remarks.

The Auditors' Report on financial statements for the year 2023-24 and comments of the Comptroller & Auditor General of India (C&AG) under Section 143(6) of the Companies Act are attached to this Report, which is self-explanatory.

Cost Auditors

The Company has appointed M/s Murthy & Co. LLP, Cost Accountants, Bengaluru as Cost Auditors for conducting the Cost Audit of the Company for the year 2023-24. The Company maintains cost records as specified by the Central Government under Section 148(1) of the Companies Act, which are audited by Cost Auditors.

Internal Auditors

The Company has appointed 14 firms of Chartered Accountants for carrying out internal audit of the Company for the year 2023-24.

Secretarial Auditor

In terms of Section 204(1) of the Companies Act, the Company has engaged M/s. DPSP & Associates, Company Secretaries, Bengaluru to conduct Secretarial Audit of the Company for the year 2023-24. The Secretarial Audit Report is annexed to this Report as Annexure - IV and forms part of Annual-Report.

The management's reply on the qualification of the Secretarial Auditor, form part of Secretarial Audit Report, which is selfexplanatory.

Annual Secretarial Compliance Report

As per Regulation 24A of the SEBI (LODR) Regulations, the Company has filed the Annual Secretarial Compliance Report for the year 2023-24 with the BSE Ltd and National Stock Exchange of India Limited within the stipulated time.

CORPORATE GOVERNANCE REPORT

In terms of Regulations 34 read with Schedule V of SEBI (LODR) Regulations and DPE Guidelines, a report on Corporate Governance for the year 2023-24 along with Compliance Certificate on Corporate Governance issued by the Secretarial Auditor of the Company, is attached to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per Regulations 34(2)(e) of the SEBI (LODR) Regulations, the Management Discussion and Analysis Report (MDAR) forms part of the Annual Report of the Company.

VIGIL MECHANISM

The Company has a Whistle Blower Policy approved by the Board. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and the same is hosted on the Company's website at www.hal-india.co.in.

Employees are encouraged to raise any of their concerns by way of whistle blowing and none of the employees have been denied access to the Chairman of the Audit Committee.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, your Directors state that:

(a) In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on March 31, 2024 and of the profit and loss of the Company for the year ended on that date;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a "going concern" basis;

(e) the directors have laid down internal financial controls which are being followed by the Company and that such internal controls are adequate and are operating effectively;

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors are extremely thankful and acknowledge the excellent support extended by the Government of India, in particular the Ministry of Defence, Department of Defence Production, Defence Acquisition and Defence Finance as well as other Ministries of the Government of India in all the endeavours of the Company.

Your Directors also place on record their sincere appreciation towards the Company's valued customers, in particular the Indian Defence Services, for the support and confidence reposed by them in the Management of the Company, and look forward to the continuance of this mutually supportive relationship in the future.

The Company wishes to place on record its appreciation for the co-operation extended and services provided by the Comptroller & Auditor General of India (C&AG), the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Statutory/ Internal Auditors, Cost Auditors, Secretarial Auditors, Bankers, Collaborators, JV Partners and Suppliers.

Your Directors are also thankful to the shareholders for the trust and confidence reposed in the Company and look forward to their continued support to propel the Company to greater heights.

Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's Executives and Workmen for progress and prosperity of the Company.

For and on behalf of the Board of Directors Hindustan Aeronautics Limited

Place: Bengaluru

Date: July 23, 2024