Kendriya Vidyalaya, Pattom Shift II

Accountancy Project

Submitted By:………………
 Table of Content
1. Acknowledgement
2. Certificate of Completion
3. Introduction: Bharat Dynamics Ltd.
4. Company's Profile
5. Board of Directors
6. Balance Sheet
7. Statement of Profit and Loss
8. Cash Flow Statement
9. Cash flow Statement Analysis
10. Ratio Analysis
11. Conclusion
12. Bibliography
 Acknowledgement

Working on this project has been an extremely pleasant

experience. I wish to place on record my sincere gratitude
to all those who have contributed to the successful
completion of this project.
First of all, I wish to thank God for the unconditional love
and care bestowed upon me.
I wish to express my sincere thanks to our principal
Mr. Girishankaran Thampi and my supervising teacher,
Mrs. Jamuna V.S for their help and guidance in the
successful completion of this project.
I am forever grateful to my parents and friends who have
always been a positive influence and strong support system
in all my endeavours.
Introduction: Bharat Dynamics Ltd

Bharat Dynamics Limited (BDL) is one of India’s most prominent defence

public sector undertakings, operating under the Ministry of Defence.
Established in 1970 in Hyderabad, Telangana, BDL was conceived with the
primary aim of manufacturing guided missiles and allied defence equipment.
Over the years, it has emerged as a critical pillar in strengthening India’s
defence capabilities, contributing significantly to the indigenization of defence
production.
The company was established to facilitate the indigenous production of guided
missiles, particularly after India began recognizing the strategic importance of
self-reliance in defence technology. The foundation of BDL was laid with
technical collaboration from the Soviet Union, which supported the production
of the first generation of anti-tank guided missiles. Since then, BDL has become
synonymous with India’s missile program, serving as a key player in the
development, manufacturing, and supply of defence systems.
BDL is strategically headquartered in Hyderabad and operates multiple
manufacturing units across the country. Each facility specializes in different
domains of missile systems and allied defence technology. The company's
offerings include surface-to-air missiles, anti-tank guided missiles, torpedoes,
underwater weapons, and countermeasures. These products have bolstered
India’s defence capabilities and strengthened its strategic autonomy.
In addition to fulfilling the requirements of the Indian Armed Forces, BDL has
expanded its reach to export markets. The company's focus on quality,
innovation, and the latest technological advancements has earned it a reputation
as a reliable defence manufacturer on the global stage. Through collaboration
with international defence organizations and governments, BDL has also
positioned itself as a trusted partner in the defence export sector.
The vision of BDL aligns with India’s broader goal of achieving self-reliance in
defence production, as emphasized by the "Make in India" initiative. By
fostering research and development (R&D) and leveraging modern technology,
BDL contributes to creating a robust defence manufacturing ecosystem. The
company has consistently collaborated with premier defence research
organizations, such as the Defence Research and Development Organisation
(DRDO), to ensure the development of cutting-edge missile systems.
Over the years, BDL has played a vital role in several landmark defence
programs, including the Integrated Guided Missile Development Program
(IGMDP). This initiative led to the development of indigenous missile systems
such as the Prithvi, Agni, and Akash missiles, all of which are now crucial
components of India’s defence arsenal.
BDL's consistent performance is a testament to its dedication to the nation’s
defence. The organization places a strong emphasis on sustainability, corporate
social responsibility (CSR), and ethical business practices. By focusing on its
employees’ welfare, maintaining high standards of safety, and engaging in
community development, BDL demonstrates its commitment to holistic growth.
In conclusion, Bharat Dynamics Limited stands as a beacon of India's defence
manufacturing sector. Its contributions to national security, indigenization, and
technological innovation make it an indispensable part of India's defence
framework. This project aims to explore the company's history, organizational
structure, operations, and future aspirations, providing a comprehensive
understanding of its role and impact.
 Company's Profile
Type Public Sector Undertaking (PSU)

Industry Defence Manufacturing

Founded 16 July 1970

Founder Government of India

Areas Served India and International Markets

Headquarters Kanchanbagh, Hyderabad, Telangana,

India

Owner Government of India (under the

ministry of Defence)

Products Guided Missiles, Torpedos,

Countermeasure systems, underwater
weapons

Services Manufacturing, testing, supply of

defence equipment, Maintenance and
support services
 Board of Directors
Bharat Dynamics Limited (BDL) is governed by a distinguished Board of
Directors comprising individuals with extensive experience in defense, finance,
and corporate governance. The board's composition is as follows:
Chairman & Managing Director:
• Commodore A. Madhavarao (Retd.): Serving as the Chairman and
Managing Director, Commodore Madhavarao leads BDL with a focus on
strategic growth and operational excellence.
Government Directors:
• Shri U. Raja Babu: Director General (MSS), contributing to BDL's
strategic alignment with national defense objectives.
• Shri Amit Satija: Joint Secretary (DIP), providing oversight and
ensuring compliance with governmental policies.
Whole-Time Directors:
• Shri P. V. Raja Ram: Director (Production), overseeing manufacturing
operations to ensure the delivery of high-quality defense products.
• Shri D. V. Srinivas Rao: Director (Technical), leading technological
advancements and innovation within the company.
• Shri G. Gayatri Prasad: Director (Finance), managing the financial
health and fiscal strategies of BDL.
Independent Directors:
• Shri Sunil Chintaman Mone: Provides independent judgment and
expertise to the board's deliberations.
• Prof. (Dr.) Sanghamitra Mishra: Brings academic insights and a diverse
perspective to the board.
• Shri Rajendra Singh Shekhawat: Offers valuable experience in
governance and policy-making.
• Shri Nanda Kumar Subburaman: Contributes with his extensive
background in industry and management.
• Dr. Pawan Sthapak: Adds value with his expertise in strategic planning
and organizational development.
• Shri Jashwant Lal: Enhances the board with his experience in corporate
governance and ethics.
 Balance Sheet: Definition
A balance sheet is a financial statement that contains
details of a company's assets or liabilities at a specific
point in time. It is one the three core financial
statements used for evaluating the performance of a
business.

A balance sheet serves as a reference documents for

investors and other stakeholders to get an idea of the
financial health of an organisation. It enables them t
compare current assets and liabilities to determine the
business's liquidity or calculate the rate at which the
company generates returns. Comparing two or more
balance sheets from different points in time can also
show how a business has grown.
Balance Sheet as on 31st March 2024
Profit and Loss Statement: Definition
A profit and loss statement are also known as income
statement is a Financial report that show a company's
revenues and expenses over a given period of time,
usually a fiscal quarter or year, It is one of four major
statement in a financial reporting process and it sows
the organisation net profit or loss during that time. A
profit and loss statement looks at the bigger picture
which helps companies identify where they to fine-tune
their business strategy, in that way, business can stay in
control of their future direction and profitability
Statement of Profit and loss on quarter and
year ended 31st March 2024
Cash Flow Statement: Definition
A Cash Flow Statement is a financial statement that shows the cash inflows and
outflows of a company during a specific period, typically a financial year. It provides
insights into how a company generates and uses its cash, helping stakeholders assess
the company's liquidity, financial health, and ability to meet its obligations.

The cash flow statement helps in understanding how well a company is managing its
cash to fund its operations, investments, and financial obligations. It is important for
both internal decision-making and external analysis by investors, creditors, and
analysts.
Cash Flow Statement
TOOLS USED
FOR ANALYSIS
Cash flow
Statement
Analysis
 Merits
• Liquidity Assessment – Evaluates the company’s ability to meet

short-term obligations.

• Operational Efficiency – Highlights cash generated from core

business activities.

• Investment Decisions – Assists in analyzing capital expenditures

and growth strategies.

• Debt Management – Monitors repayment capabilities and interest

coverage.

• Financial Planning – Helps in forecasting future cash flows and

budgeting.
 Demerits
• Ignores Non-Cash Items – Excludes depreciation and amortization,

missing long-term expense impacts.

• Historical Data Focus – Relies on past performance, limiting

predictive value.

• No Profitability Insight – Does not measure profitability or financial

performance directly.

• Limited Detail – Lacks information about specific expenses or

earnings sources.

• Short-Term Emphasis – Focuses mainly on immediate cash flows,

ignoring long-term financial health.

 Cash Flow Statement Analysis
1. Cash Flow from Operating Activities (CFO):

• Net Cash Flow: ₹41,171.86 lakhs (positive).

• Key Contributors:
o Profit before tax: ₹82,823.52 lakhs.
o Depreciation and amortization: ₹6,703.92 lakhs (non-cash
adjustments).
• Impact of Working Capital:
o Increase in trade receivables: (-₹12,587.45 lakhs).
o Increase in inventories: (-₹16,315.65 lakhs).

Interpretation:
The company has strong operational efficiency, generating positive
cash flow despite challenges in managing working capital (e.g., higher
receivables and inventory levels). Cost control measures and non-cash
adjustments played a crucial role.

2. Cash Flow from Investing Activities (CFI):

• Net Cash Used: -₹72,240.48 lakhs.

• Major Outflows:
o Investments in property, plant, and equipment: (-₹8,088.97
lakhs).
o Increased bank deposits: (-₹82,866 lakhs).
• Relief from Interest Income: ₹18,697.02 lakhs.

Interpretation:
The company’s heavy investments indicate a focus on capacity
expansion and long-term growth. The high deposits reflect a cautious
approach to liquidity management.

3. Cash Flow from Financing Activities (CFF):

• Net Outflow: ₹14,835.55 lakhs.

• Key Outflows:
o Dividend payments: (-₹14,517.41 lakhs).
o Lease liability repayments: (-₹146.64 lakhs).

Interpretation:
A conservative financing strategy prioritizes shareholder returns and
efficient liability management. This reflects a focus on stability.

4. Net Cash Flow:

• Total Cash Decrease: -₹45,904.17 lakhs.

• Closing Cash Balance: ₹59,384.20 lakhs (down from
₹1,05,288.37 lakhs).

Interpretation:
Although cash reserves have declined, the company’s strategic
investments and operational efficiency highlight its long-term growth
and financial robustness.
Graph Analysis of Cash Flow Statement
Ratio
Analysis
 MERITS
• Financial Performance Evaluation – Provides a clear
assessment of profitability, liquidity, and solvency.
• Decision-Making Tool – Aids management in planning,
budgeting, and making strategic decisions.
• Comparative Analysis – Facilitates comparisons with past
performance and industry benchmarks.
• Trend Analysis – Helps in identifying financial trends and
forecasting future performance.
• Simplifies Data – Condenses complex financial data into
simple and understandable ratios.
Demerits
Historical Data Dependence – Relies on past
financial data, which may not reflect current or future
performance.
Ignores Qualitative Factors – Focuses only on
quantitative data, overlooking management efficiency
and market conditions.
Accounting Policies Impact – Variations in accounting
methods may distort comparisons.
Inflation Effects – Fails to adjust for inflation,
potentially misrepresenting values.
Limited Scope – Cannot provide a complete picture
without considering external economic factors and non-
financial data.
Liquidity Ratio

1.

Interpretation: This suggests excellent short-term liquidity and implies that the
company can easily meet its short-term obligations.

2. Liquidity Ratio

Interpretation: This means the company is in a strong position to pay off immediate
obligations without relying on inventory sales.
 Solvency ratio
1. Debt to equity ratio

Interpretation: This indicates moderate financial risk, as the company is somewhat

reliant on debt financing.

2. Total Asset to Debt Ratio

Interpretation: This shows the company is not highly leveraged and can comfortably
cover its debts using assets.

3. Proprietary Ratio

Interpretation: A higher ratio suggests financial stability and lower dependence on debt.
4. Debt to Capital Employed ratio

Interpretation: This is a low-risk capital structure, showing strong reliance on

equity and limited dependence on borrowed funds.
Profitability Ratio
Profitability ratio
Ratio Graph Analysis
 Conclusion
This project has provided a comprehensive analysis of BDL’s financial performance,
incorporating ratio analysis and cash flow analysis to evaluate its stability, profitability, and
liquidity.

The cash flow analysis highlights the company’s ability to generate positive cash flows from
operating activities, demonstrating strong operational efficiency despite challenges in
managing working capital. The investing activities indicate a strategic focus on growth and
capacity expansion, while the financing activities reflect a stable and conservative approach
to managing liabilities and ensuring shareholder returns.

Although there has been a net cash outflow, the company maintains healthy cash reserves and
continues to balance short-term liquidity with long-term investments effectively.

Overall, BDL emerges as a financially robust and well-managed organization. Its strategic
decisions and focus on growth, stability, and efficiency make it a dependable and forward-
looking company. This project has been a valuable learning experience, enhancing my
understanding of financial analysis and interpretation.
 Bibliography
1. https://bdl-india.in/
2. TS Grewal
3. ww.google.com (for the Logos)
4. Accountancy Class 12th textbook
5. www.youtube.com