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Bharat Dynamics Limited Audit Report / Information 2023

May 29, 2023

60477_rns_2023-05-29_e1d11787-d749-4a46-b0c1-51e0db16097a.pdf

Audit Report / Information

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BHARAT DYNAMICS LIMITED

(A Govt. of India Enterprise, Ministry of Defence) CIN :- L24292TG1970GOI001353

Corporate Office: - Plot No. 38-39, TSFC Building, Near ICICI Towers, Financial District, Nanakramguda, Hyderabad-500032 Registered Office: - Kanchanbagh, Hyderabad-500058 Tel: 040-23456145; Fax: 040-23456110 E-mail: [email protected]; Website: www.bdl-india.in

Ref: BDL/CS/2023/SE-26

Date: 29/05/2023

To, To, The Manager The Manager Compliance Department Compliance Department The National Stock Exchange of India Ltd BSE Limited Exchange Plaza, Phiroze Jeejeebhoy Tower, Bandra-Kurla Complex, Bandra (East) Mumbai- 400051 Dalal Street, Mumbai- 400001 Scrip Code BDL Scrip Code 541143

Sub: Annual Secretarial Compliance Report for the year ended 31[st] March 2023 under Regulation 24A of SEBI (LODR) Regulations, 2015.

*

Pursuant to Regulation 24A (2) of SEBI (LODR) Regulations, 2015, please find enclosed herewith the Annual Secretarial Compliance Report for the year ended 31[st] March, 2023.

For Bharat Dynamics Limited NAGARAJA Digitally signed by NAGARAJA NAGULA NAGULA Date: 2023.05.29 11:01:18 +05'30' N. NAGARAJA COMPANY SECRETARY

Encl: As stated above

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SECRETARIAL COMPLIANCE REPORT OF BHARAT DYNAMICS LIMITED FOR THE FINANCIAL YEAR ENDED 31[ST] MARCH, 2023

We have conducted the review of the compliance of the applicable statutory provisions and the adherence to good corporate practices by Bharat Dynamics Limited (hereinafter referred as ‘the listed entity’) {CIN: L24292TG1970GOI001353} having its Registered Office at Plot No.38-39, TSFC Building, Near ICICI Towers, Financial District, Nanakramguda, Hyderabad–500032, Telangana. Secretarial Review was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the listed entity’s books, papers, minutes books, forms and returns filed and other records maintained by the listed entity and also the information provided by the listed entity, its officers, agents, and authorized representatives during the conduct of Secretarial Review, we hereby report that in our opinion, the listed entity has, during the review period covering the financial year ended on 31[st] March 2023, complied with the statutory provisions listed hereunder and also that the listed entity has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter :

We, Puttaparthi Jagannatham & Co., a firm of Practicing Company Secretaries, Hyderabad, have examined:

  • a) all the documents and records made available to us and explanation provided by Bharat Dynamics Limited (“the listed entity”),

  • b) the filings/ submissions made by the listed entity to the stock exchanges,

  • c) Website of the listed entity

  • d) any other document/ filing, as may be relevant, which has been relied upon to make this certification

for the financial year ended 31[st] March 2023 (“Review Period”) in respect of compliance with the provisions of:

  • (a) the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Regulations, circulars, guidelines issued thereunder; and

  • (b) the Securities Contracts (Regulation) Act, 1956 (“SCRA”), rules made thereunder and the Regulations, circulars, guidelines issued thereunder by the Securities and Exchange Board of India (“SEBI”);

The specific Regulations, whose provisions and the circulars/ guidelines issued thereunder, have been examined, include:

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  • (a) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) as amended;

  • (b) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; Not Applicable to the Company during the review period;

  • (c) SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 as amended;

  • (d) SEBI (Buyback of Securities) Regulations, 2018; Not Applicable to the Company during the review period ;

  • (e) SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; Not Applicable to the Company during the review period;

  • (f) SEBI (Prohibition of Insider Trading)) Regulations, 2015 as amended;

  • (g) SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021; Not Applicable to the Company during the review period ;

  • (h) SEBI (Depositories and Participants) Regulations, 2018;

  • (i) SEBI (Debenture Trustee) Regulations, 1993; Not Applicable to the Company during the review period ;

  • (j) Framework for listing of Commercial Paper, issued by SEBI vide Circular SEBI/HO/DDHS/CIR/P/2019/115 dated 22[nd] October, 2019; and

  • (k) circulars/ guidelines issued thereunder;

and based on the above examination, we hereby report that, during the review period:

  • a) The listed entity has maintained proper records under the provisions of the above Regulations and Circulars/ Guidelines issued thereunder in so far as it appears from my/our examination of those records.

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  • b) The listed entity has complied with the provisions of the above Regulations and circulars/ guidelines issued thereunder, except in respect of matter specified in Annexure – A to the report.

  • c) The listed entity has taken the following actions to comply with the observations made in previous reports as appended as Annexure – B to the report.

  • d) The listed entity has complied with the provisions of Para 6 of Circular No. CIR/ CFD/ CMD1/114/2019 issued by SEBI on 18th October, 2019 in terms of appointment of Statutory Auditors / Resignation of Statutory Auditors of Listed Entity; No reportable event during the review period and as informed by the management of the Company, the appointment of the listed entity's (Government Company) Statutory Auditor has been done by the office of the Comptroller and Auditor General of India (C&AG) as per the provisions of section 139(5) of the Companies Act, 2013. The appointment letter also contains the terms of appointment of the Statutory Auditors. Since terms of appointment were fixed by the C&AG, compliance by the listed entity with 6(A) and 6(8) of SEBI circular number CIR/CFD/CMDl/114/2019 dated October 18, 2019, are not applicable. Hence, we cannot comment on the said compliance.

  • e) In terms of the NSE Circular Ref No: NSE/CML/2023/30 dated 10[th] April, 2023 and the BSE Circular No: 20230410-41 dated 10[th] April, 2023, and amendments therein, our affirmations, is appended as below:

Sr. No. Particulars Compliance Status
(Yes/ No/NA)		 Observations/
Remarks by PCS
1 Secretarial Standard
The compliances of the listed entity are in accordance with the applicable Secretarial Standards (SS)
issued by the Institute of Company Secretaries India (ICSI), as notified by the Central Government
under section 118(10) of the Companies Act, 2013 and mandatorily applicable.		 Yes None

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2 Adoption and timely updation of the Policies:
• All applicable policies under SEBI Regulations are adopted with the approval of board of directors
of the listed entities.
• All the policies are in conformity with SEBI Regulations and have been reviewed & timely updated
asper the regulations/circulars/ guidelines issued bySEBI.		 Yes None
3 Maintenance and disclosures on the Website:
• The Listed entity is maintaining a functional website.
• Timely dissemination of the documents/ information under a separate section on the website.
• Web-links provided in annual corporate governance reports under Regulation 27(2) are accurate
and specific which re-directs to the relevant document(s)/section of the website.		 Yes None
4 Disqualification of Director:
None of the Directors of the Company are disqualified under Section 164 of the Companies Act,
2013 as confirmed bythe listed entity.		 Yes None
5 Details related to Subsidiaries of listed entities have been examined w.r.t.:
(a) Identification of material subsidiary companies.
(b)Disclosure Requirements of material as well as other subsidiaries.		 NA None
6 Preservation of Documents:
The listed entity is preserving and maintaining records as prescribed under SEBI Regulations and
disposal of records as per Policy of Preservation of Documents and Archival policy prescribed under
SEBI LODR Regulations,2015.		 Yes None
7 Performance Evaluation:
The listed entity has conducted performance evaluations of the Board, Independent Directors, and
the Committees at the start of everyfinancialyear asprescribed in SEBI Regulations.		 Yes None
8 Related Party Transactions:
(a) The listed entity has obtained prior approval of the Audit Committee for all Related party
transactions; or		 **NA ** No RPT during
the FY 22-23

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(b) The listed entity has provided detailed reasons along with confirmation whether the transactions
were subsequently approved/ratified/rejected by the Audit Committee, in case no prior approval
has been obtained.
9 Disclosure of events or information:
The listed entity has provided all the required disclosure(s) under Regulation 30 along with Schedule
III of SEBI LODR Regulations, 2015 within the time limits prescribed thereunder. Yes None
10 Prohibition of Insider Trading:
The listed entity is in compliance with Regulation 3(5) & 3(6) SEBI (Prohibition of Insider Trading) Yes None
Regulations, 2015.
11 Actions taken by SEBI or Stock Exchange(s), if any:
No action(s) has been taken against the listed entity/ its promoters/ directors/ subsidiaries either Yes None
by SEBI or by Stock Exchanges (including under the Standard Operating Procedures issued by SEBI
through various circulars) under SEBI Regulations and circulars/ guidelines issued thereunder except

as provided under separate paragraph herein ( ).
12 No additional non-compliance was observed for any SEBI regulation/circulars/guidance note etc.
Yes None
Place: Hyderabad
Date: 27 [th] May 2023 For Puttaparthi Jagannatham & Co.
Company Secretaries
Digitally signed
PUTTAPART
by PUTTAPARTHI
HI NAVAJYOTH
NAVAJYOTH Date: 2023.05.27
13:03:26 +05'30'
CS Navajyoth Puttaparthi
Partner
FCS No: 9896; C P No: 16041
Peer Review Certificate No. 1158/2021
UDIN: F009896E000396986
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Annexure – A

The listed entity has complied with the provisions of the above Regulations and circulars/ guidelines issued thereunder, except in respect of matters specified below:

Sr.
No		 Compliance
Requirement
(Regulations/
Circulars/
Guidelines
including
specific
clause)		 Regulation/
Circular No.		 Deviations Action
Taken
by		 Type of
Action
Advisory/
Clarification/
Fine/ Show
Cause Notice/
Warning, etc.		 Details of
Violation		 Fine
Amount		 Observations/
Remarks of the
Practicing
Company Secretary
#		 Management Response
@		 Remarks
1 17 Regulation
17 (1), SEBI
(LODR) 2015		 The
Company
has received
a mail dated
25.07.2022
from NSE Ltd
for non-
compliance.
& a notice
dated
22.08.2022
from NSE Ltd
for non-
compliance.		 NSE Clarification
& Fine		 Non-compliance
with the
Composition of
the Board that
Half of the
Board is not
Independent		 5,36,900 Refer Note 1 Refer Note 1 NA
2 17 Regulation
17 (1), SEBI
(LODR) 2015		 The
Company
has received
a mail dated
29.07.2022
from BSE Ltd		 BSE Clarification
& Fine		 Non-compliance
with the
requirements
pertaining to
the composition
of the Board		 5,36,900 Refer Note 1 Refer Note 1 NA

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to file a
revised XBRL
or give
clarification
& further a
notice dated
22.08.2022
was received
from BSE Ltd
for non-
compliance.		 including failure
to appoint non-
executive
director as
Chairperson of
the Board of
Bharat
Dynamics Ltd
and the number
of independent
directors is 5
which is less
than half of the
BOD strength.
3 23 Regulation
23(9) SEBI
(LODR) 2015		 The
Company
has received
a mail dated
14.07.2022
from NSE Ltd
and BSE Ltd
to pay fine of
Rs. 29,500/-
each for the
non-
compliance.		 BSE &
NSE		 Fine Late Submission
of related party
transactions.		 29,500 Refer Note 2 Refer Note 2 The delay
was purely
due to the
non-
availability
of XBRL
utility.
4 17 Regulation
17 (1), SEBI
(LODR) 2015		 The
Company
has received
a mail dated
16.11.2022
from NSE Ltd
for non-
compliance.		 NSE Clarification
& Fine		 Non-compliance
with the
Composition of
the Board
Half of the
Board is not
Independent		 4,48,400 Refer Note 1 Refer Note 1 NA

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&
The
Company
has received
a notice
dated
21.11.2022
from NSE Ltd
for non-
compliance.
5 17 Regulation
17 (1), SEBI
(LODR) 2015		 The
Company
has received
a mail dated
04.11.2022
from BSE Ltd
to File
Revised XBRL
or give
clarification
in this regard
to BSE.
&
The
Company
has received
a notice
dated
21.11.2022
from BSE Ltd
for non-
compliance.		 BSE Clarification
& Fine		 Non-compliance
with the
requirements
pertaining to
the composition
of the Board
including failure
to appoint non-
executive
director as
Chairperson of
the Board of
Bharat
Dynamics Ltd
and the number
of independent
directors is 5
which is less
than half of the
BOD strength.		 4,48,400 Refer Note 1 Refer Note 1 NA

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6 17 Regulation The NSE Clarification Non-compliance - Refer Note 1 Refer Note 1 The
17 (1), SEBI Company with the Company
(LODR) 2015 has received Composition of have given a
a mail dated the Board reply for the
08.05.2023 Half of the clarification.
from NSE Ltd Board is not
for non- Independent.
compliance.
# Observations/ Remarks of the Practicing Company Secretary:
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1. It is hereby opined that the Company has taken appropriate action by submitting a letter that it should not be held liable for payment of penalty since non –compliance is not due to any negligence/default by the Company. Further the Company being a Government of India Enterprise, the power to appoint Directors vests with the Government of India (GOI).

2. Fine was imposed upon the company by considering the date of submission of report in PDF mode, irrespective of the fact that the same shall be required to be submitted in XBRL mode only, for which XBRL utility was not provided by the stock exchanges in a timely manner.

  • @ Management Response:

1. The Company has taken appropriate action by submitting a letter that it should not be held liable for payment of penalty since non – compliance is not due to any negligence/default by the Company. Further the Company being a Government of India Enterprise, the power to appoint Directors vests with the Government of India (GOI).

2. As per the Regulation 23(9) of SEBI(LODR) regulation 2015 effective from 1st April 2022, read with BSE Notice No 20210906-31 & NSE circular No NSE/CML/2021/34 dated 6th September 2021 and BSE Notice No 2011019-25 and NSE Circular No. NSE/CML/2021/42 dated 19th October 2021, the Company is required to submit a report on related party transactions every six months within 15 days from the date of publication of its standalone and consolidated financial results in XBRL mode only. Since, the XBRL utility as per the

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new format was not made available by both NSE and BSE for filing within the prescribed period of 15 days after the publication of Company’s Financial Results, the same could not be filed by the Company within the said period. However, by following better governance practice, as precautionary measure, the same was filed in PDF mode on 15th June 2022. However, NSE & BSE considered the submission of the report in PDF mode as delay in filing and imposed a fine of Rs 29500 each without considering the fact that the same shall require to be submitted in XBRL mode only for compliance.

Subsequently on release of XBRL Utility by the Stock Exchanges on 12th July 2022 the report was again filed in XBRL mode within the prescribed due date extended for the purpose.

Since there was no delay on the part of the Company in filing the Report in XBRL mode and since no instructions were passed for filing the Report in PDF mode, waiver application was filed with NSE (being designated stock exchange for the purpose). The fine was reversed by the NSE vide letter NSE/LIST-SOP/REG/REVERAL/0381 dated 5th April 2023.

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Annexure - B

The listed entity has taken the following actions to comply with the observations made in previous reports:

Sr.
No		 Compliance
Requirement
(Regulations/
Circulars/
Guidelines
including
specific
clause)		 Regulation/
Circular No.		 Deviations Action
Taken
by		 Type of
Action
Advisory/
Clarification/
Fine/ Show
Cause Notice/
Warning, etc.		 Details of
Violation		 Fine
Amount		 Observations/
Remarks of
the Practicing
Company
Secretary		 Management Response Remarks
1 17 17(1)(a) of
SEBI (LODR)		 The Company
being one of
the
top 500 Listed
Entity, it does
not have
atleast
One
Independent
Woman
Director
Director till
third quarter
end.		 BSE &
NSE		 Fine Till the third
quarter end,
the Company
did not meet
the
requirement
under proviso
to 17(1)(a) of
the SEBI (LODR)
Regulations.		 43,07,000 It is observed
that the
Company
being a
Government
Company
under the
Administrative
Control of
Ministry of
Defence, the
power to
appoint
Directors
(including
Independent
Directors) and
the terms and
conditions of
such
appointments
including		 The Government of
India has appointed one
Independent Woman
Director on 27th
December 2021 and
accordingly the
Company has complied
with the 17(1) (a) of the
LODR Regulations from
fourth quarter onwards
of FY 2021-22.		 NA
2 17 17(1)(b) of
SEBI (LODR)		 During the
period under
review, the
Company had
a Executive
Chairman and
did not
complywith		 BSE &
NSE		 Fine Till the third
quarter end,
the Company
did not meet
the
requirement
under proviso
to 17(1) (b)of		 The Government of
India has appointed five
new Independent
Directors including One
Independent Woman
Director on the Board in
December 2021.
Furthermore,one		 NA

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the
requirement
of half of the
Board of
Directors
shall comprise
of
Independent
Directors till
third quarter
end.		 the SEBI (LODR)
Regulations,
where there is a
requirement of
Six Independent
Directors on the
Board.		 remuneration,
evaluation
vests with the
Government
of India (GOI).
However, the
Company has
complied with
all the
regulations as
on date.		 position of Independent
Directors was filled up
in February 2023.The
composition of Board is
fully complied with as
on 31stMarch 2023.
3 17 17(2A) of
SEBI (LODR)		 The Company
has no
Independent
Directors till
the third
quarter end;
hence there
were no
independent
directors
present at the
board
meetings till
third quarter
end.		 BSE &
NSE		 Fine The Company
did not meet
the
requirement of
17(2A) of SEBI
(LODR)
Regulations.		 94,400 The Government of
India has appointed five
new Independent
Directors including One
Independent Woman
Director on the Board in
December 2021.
Furthermore, one
position of Independent
Directors was filled up
in February 2023. The
composition of Board is
fully complied with as
on 31stMarch 2023.		 NA
4 18 18(1) (b) of
SEBI (LODR)		 There were
no
Independent
Directors till
the third
quarter end
to constitute
an		 BSE &
NSE		 Fine The Company
did not meet
the
requirement of
Regulation
18(1) (b) of SEBI
(LODR)
Regulations.		 13,07,440 The Company has
complied with the 18(1)
(b) of SEBI (LODR)
Regulations on
appointment of five
new Independent
Directors on the Board
byGovernment of India		 NA

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Independent
Audit
Committee.		 from fourth quarter
onwards of FY 2021-22.
5 19 19(1) (a) and
(b) of SEBI
(LODR)		 The Company
does not have
enough Non-
executive
directors to
constitute the
Nomination
and
Remuneration
Committee till
the third
quarter end.		 BSE &
NSE		 Fine The Company
did not meet
the
requirement of
Regulation
19(1) (a) and (b)
of SEBI (LODR)
till the third
quarter end.		 13,07,440 The Company has
complied with the 19(1)
(a) and (b) of SEBI
(LODR) Regulations on
appointment of five
new Independent
Directors on the Board
by Government of India
from fourth quarter
onwards of FY 2021-22.		 NA
6 19 19(1)(c) of
SEBI (LODR)		 The Company
does not have
enough Non-
executive
directors to
constitute the
Nomination
and
Remuneration
Committee till
the third
quarter end.		 BSE &
NSE		 Fine The Company
did not meet
the
requirement of
Regulation
19(1) (c) of SEBI
(LODR) till the
third quarter
end.		 The Company has
complied with the
19(1)(c) of SEBI (LODR)
Regulations on
appointment of five
new Independent
Directors on the Board
by Government of India
from fourth quarter
onwards of FY 2021-22.		 NA
7 20 20(2)/(2A) of
SEBI (LODR)		 The Company
has no
Independent
Director till
the third
quarter end
to fulfill the		 BSE &
NSE		 Fine The Company
did not meet
the
requirement of
Regulation
20(2)/(2A) of
SEBI(LODR)till		 13,07,440 The Company has
complied with the
20(2)/(2A) of SEBI
(LODR) Regulations on
appointment of five
new Independent
Directors on the Board		 NA

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condition of
at least one
member as
Independent
Director in
the
Stakeholder
Relationship
Committee.		 the third
quarter end.		 in the month of
December 2021 by
Government of India
from fourth quarter
onwards of FY 2021-22.
8 21 21(2) of SEBI
(LODR)		 The Company
has no
Independent
Director till
the
third quarter
end to fulfill
the
condition of
at least one
member
as
Independent
Director in
the
Risk
Management
Committee.		 BSE &
NSE		 Fine The Company
did not
meet the
requirement
of Regulation
21(2) of SEBI
(LODR).		 7,12,720 The Company has
complied with the
regulation 21(2) of SEBI
(LODR) Regulations on
appointment of five
new Independent
Directors on the Board
in the month of
December 2021 by
Government of India
from fourth quarter
onwards of FY 2021-22.		 NA

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Assumptions & Limitation of scope and Review:

  1. Compliance of the applicable laws and ensuring the authenticity of documents and information furnished, are the responsibilities of the management of the listed entity.

  2. Our responsibility is to certify based upon our examination of relevant documents and information. This is neither an audit nor an expression of opinion.

  3. We have not verified the correctness and appropriateness of financial Records and Books of Accounts of the listed entity.

  4. This Report is solely for the intended purpose of compliance in terms of Regulation 24A (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is neither an assurance as to the future viability of the listed entity nor of the efficacy or effectiveness with which the management has conducted the affairs of the listed entity.

Place: Hyderabad Date: 27[th] May 2023

For Puttaparthi Jagannatham & Co. Company Secretaries

PUTTAPARTH I NAVAJYOTH

Digitally signed by PUTTAPARTHI NAVAJYOTH Date: 2023.05.27 13:03:45 +05'30'

CS Navajyoth Puttaparthi Partner FCS No: 9896; C P No: 16041 Peer Review Certificate No. 1158/2021 UDIN: F009896E000396986

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