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, 2025, 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, 2025 are
summarised as under:

During the year, the Revenue from Operations of the Company
has increased by 2% to ' 30,98,092 Lakh from ' 30,38,084
Lakh in the previous year. The turnover of the Company has
increased by 7% to ' 30,10,465 Lakh from ' 28,16,185 Lakh
in the previous year. The Profit before Tax for the year has
increased by 6% to ' 10,82,001 Lakh from ' 10,19,897 Lakh
in the previous year. The Profit After Tax (PAT) has increased by
10% to ' 8,31,680 Lakh from ' 7,59,504 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, Dornier 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 carried out Repair and
Overhaul of Aircraft & Helicopters and Engines in addition to
providing required spares support to the customers.

ORDER BOOK POSITION

The Order Book position of the Company stands at
' 1,89,30,200 Lakh as on March 31, 2025.

During the year, the Company has received manufacturing
contracts of over ' 1,02,00,000 Lakh and ROH Contracts of
over ' 17,50,000 Lakh. Major Orders bagged include Contracts
for supply of LCH to Indian Army (IA) and Indian Air Force (IAF),
Su 30 MKI to IAF, Mid Life Upgrade of Dornier- 228 to IAF, AL-
31FP engine to IAF.

DIVIDEND

During the year, your Company has declared and paid interim
dividend of ' 25 per share of ' 5 each (500%) for the financial
year 2024-25, amounting to ' 1,67,193.75 Lakh.

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 Board of
Directors of the Company has recommended a final dividend of
' 15/- per share of ' 5 each. The Final Dividend if approved by
the shareholders, would involve cash outflow of ' 1,00,316.25
Lakh.

Thus, the total dividend including final dividend for the financial
year 2024-25 would be '40/- per equity share (800%),
amounting to ' 2,67,510 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/2023/07/
Dividend-Distribution-Policy 13.02.2025.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 ' 2,02,584 Lakh in FY 2024¬
25 (PY ' 2,16,786 Lakh). 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.

RESERVES

During the year, ' 92,176 Lakh was transferred to Research &
Development Reserve, ' 18,435 Lakh to Indigenisation Fund
Reserve and ' 4,69,032 Lakh to General Reserve.

BORROWINGS

As on March 31, 2025, short term and long term borrowings
of the Company was Nil.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls
with reference to financial reporting.

A detailed note on internal control system and their adequacy
is provided in the Management Discussion and Analysis Report.

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.

Since, Audit Committee was not in valid constitution w.e.f.
December 28, 2024, all proposals requiring recommendation/
approval of the Audit Committee were put up directly to the
Board.

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 for the
year ended March 31, 2025 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, 2025, your Company has 2 Subsidiaries
including 1 Wholly Owned Subsidiary and 19 Joint Venture

Companies (JVCs) including 7 Not-for-Profit Companies
(Section 8 Companies).

During the year, following JVCs (Section 8 Companies) have
been formed:

1. Electronic Warfare (Defence) Testing Foundation has been
incorporated on May 21, 2024 with equity contribution of
20% (23,480 equity shares of ' 1,000 each) for setting up
of Defence Testing Infrastructure under Electronic Warfare
domain with government financial assistance in the state
of Tamil Nadu;

2. Communication (Defence) Testing Foundation has been
incorporated on May 31, 2024 with equity contribution of
25% (26,131 equity shares of ' 1,000 each) for setting up
of Defence Testing Infrastructure under communication
domain with government financial assistance in the state
of Uttar Pradesh;

3. Advanced Materials (Defence) Testing Foundation has been
incorporated on June 4, 2024 with equity contribution of
20% (27,320 equity shares of ' 1,000 each) for setting
up of Defence Testing Infrastructure for Mechanical and
Material Testing with government financial assistance in
the state of Uttar Pradesh;

4. UAS Testing Foundation has been incorporated on June
21, 2024 with equity contribution of 33.33% (50,000
equity shares of ' 1,000 each) for setting up of Defence
Testing Infrastructure for Unmanned Aerial System (UAS)
with government financial assistance in the state of Uttar
Pradesh; and

5. System Testing and Research for Advanced Materials
Foundation has been incorporated on September 18,
2024 with equity contribution of 20% (20,000 equity
shares of ' 100 each) for setting up of Defence Testing
Infrastructure for Mechanical & Material Testing with
government financial assistance in the state of Tamil Nadu.

Due to non-performance of Infotech HAL Ltd, a JVC, an
application for its voluntary winding up had been submitted
to NCLT on March 19, 2024. Winding-up Order from NCLT is
awaited.

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 JVCs and Subsidiary Companies is attached to this
Report as Annexure-II.

SIGNIFICANT ACHIEVEMENTS

Significant achievements of the Company during the year are
as follows:

? 1^st Defence PSU to achieve the prestigious "Maharatna"

status on October 12, 2024.

? First AL-31FP Engine under 240 engines contract was
handed over to Indian Air Force on September 30, 2024,
ahead of schedule.

? Received Directorate General of Civil Aviation (DGCA)
Certification for Upgraded Dhruv Civil ALH on November
20, 2024.

? Delivered first Gas Generator (GG-01) module for
CE-20, Cryogenic Engine from Integrated Cryogenic
Manufacturing Facility (ICMF).

? Mistral-2 Missile Firing Trial conducted successfully on
LCH Prachand, at the Integrated Test Range, Chandipur,
Odisha, on December 2, 2024.

? Supplying of 12 types of riveted structures, four types of
welded propellant tankages, and two types of feedlines,
four fully integrated L-40 liquid boosters, to ISRO for its
GSLV-F15 NVS-02 Mission.

? Received Certification from Centre for Military

Airworthiness and Certification (CEMILAC) for
HTT-40 Trainer Aircraft in presence of Hon'ble Raksha
Rajya Mantri, during Aero India-2025.

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.

To ensure timely delivery to customers, production capacity is
being ramped up in a phased manner for the major Projects
namely, manufacturing of LCA at Bangalore and Nasik plants,
manufacturing of LCH at Tumakuru plant, manufacturing
& ROH of AL-31FP engines and manufacturing of ALH at
Bangalore.

DESIGN AND DEVELOPMENT PROGRAMS

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

The Company has made considerable progress towards the
realization of indigenous programmes viz. Basic Trainer Aircraft
(HTT-40), Light Combat Aircraft (LCA) MK1A, Light Utility
Helicopter (LUH), Indian Multi-Role Helicopter (IMRH) and
development of engines. The progress achieved in respect of
these Projects during the year is as under:

BASIC TRAINER AIRCRAFT (HTT-40)

HTT-40 is the Basic Trainer aircraft indigenously designed and
developed by HAL. HTT-40 would be used for basic flight

? Design, development and supply of Rotor & Transmission
system for IMRH & DBMRH through global OEMs.

? Design, development and production of Engines for
IMRH/DBMRH through a Joint venture Company "SAFHAL
Helicopter Engines Pvt Ltd".

SU-30 MKI INDIGENOUS UPGRADE

To enhance the operational capabilities of IAF, as Lead
System Integrator, the Company has undertaken design and
development for indigenous upgrade of Su-30MKI.

The Aircraft upgrade involves revamp of avionic architecture
with integration of Indigenous systems like Mission Computer,
Improved Sensors viz. AESA Radar, Electro Optic / Infra-Red (EO/
IR), Improved EW suite, Indigenous weapon control systems
and weapons, Higher Size displays, Sensor fusion, Net Centric
warfare capability and other associated indigenous avionic
systems.

UTILITY HELICOPTER-MARITIME (UH-M)

To enable stowage in Indian Navy ships, Utility Helicopter -
Maritime (UH-M), a 5.7 tonne dedicated Helicopter is being
developed for deck-based operations with all four Main Rotor
Blades foldable, for reducing its size.

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. Flight tests on UH-M
Prototypes are planned in FY 2025-26.

25 kN TURBOFAN ENGINE (HTFE-25)

The Company has undertaken 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. The engine can be used on a 5-ton weight
class aircraft in single engine configuration and on aircraft of
up to nine- ton weight class with twin-engine configuration.
Two core engines and one full engine have been built and
tested. Core engine tested for light up, acceleration and speeds
up to 99.5%. Further trials are under progress.

1200 kW TURBOSHAFT ENGINE (HTSE-1200)

Design and development of a 1200 kW Turbo shaft engine
is being undertaken for 3 to 6-ton category helicopters. Two
prototype engines (Jet mode engine & Power mode engine)
have been built. Components like radial straightener, diffuser,
and rear bearing support have been 3-D printed and evaluated
in the Jet mode version engine. Power mode engine run up
to a power level of 600 kW. Further trials are under progress.

RESEARCH AND DEVELOPMENT ACHIEVEMENTS

During the year, the Company has incurred a total R&D
expenditure of '2,48,233 Lakh, which is 8.25 % of the

Turnover. The Company has transferred a sum of ' 92,176
Lakh (15% of Operating PAT) to R&D reserve for contribution
to R&D corpus.

The significant R&D achievements are as under:

? To enhance departure characteristics and spin resistance
across the flight envelope, Hindustan Jet Trainer (HJT-36),
HAL's flagship jet trainer aircraft, has been renamed as
'Yashas' following extensive modifications.

? First flight of indigenous Automatic Flight Control System
(AFCS) for LUH, carried out on August 30, 2024 and further
evaluation trials towards certification are progressing.

? Site Acceptance Test (SAT) of the first Jaguar DARIN III
Fixed Base Full Motion Simulator (FBFMS) completed.

? HAL has been identified as the Centre of Excellence for
Design, Development and Upgrade of flight simulators for
both fixed wing and rotary wing platforms.

? HAL has received export orders from M/s Lockheed Martin,
USA for design, development and Supply of SIL units of
CIT for Indian Navy's MH60R program.

? HAL is developing AESA radar for UH-M platform in design
consultancy with LRDE, DRDO.

? HAL developed Full Authority Digital Engine Control
(FADEC) has been cleared for flight test.

? HAL has completed development of Software Defined
Radio (SDR), latest development in aviation communication.

? Combat Air Teaming Systems (CATS) was displayed in
Aero India 2025.

? HAL obtained ITSO certification from DGCA for VHF Radio
used for Voice communication in ATC frequency band.

? Flight trials of indigenously designed & developed Nose
Landing Gear Actuator completed successfully on Do-228,
on January 10, 2025.

? First run of improved PTAE-7 engines in TWIN engine
configuration for CATS-W application completed on
November 21, 2024.

? Design & Development of Mission Management System
for DO-228 aircraft completed.

? Release trials of RudraM-III weapon from modified
Su-30MKI aircraft successfully carried out.

During the year, the Company has filed 208 IPR applications,
out of which, 94 IPRs have been granted.

Further, out of total number of 2620 IPRs filed by the Company,
1127 IPRs have been granted so far (Patents - 371, Industrial
Designs - 171, Copyrights - 583, Trademark - 2).

New Initiatives:

During the year, the Company has entered into following major
strategic partnerships and collaborations:

? Manufacturing of GE-414 aero-engines for LCA Mk2
Aircraft in India through ToT with General Electric (GE),
USA.

? Airframer contract with SAFHAL Helicopters Engines
Pvt. Ltd. (a JVC with Safran Helicopter Engines, France)
for design, development, manufacture and support of
Engines for IMRH and DBMRH.

? Contract with Safran Aircraft Engines (SAE), for export of
ring forgings for LEAP engines.

? Establishing up to 6 yearly C Checks facility for A-320 family
of aircraft at Nasik in collaboration with M/s Airbus, France.
It is intended to establish an integrated MRO hub in India
for providing one stop MRO solutions to commercial
airlines.

During the year, the Company has taken many R&D initiatives
for providing customised and superior technology solutions
through indigenous Design & Development for both Fixed and
Rotary Wing platforms. Some development initiatives are as
under:

? Level D Full Flight Simulator (FFS) for Civil Hindustan-228
aircraft for Pilots training.

? Directional Infra-Red Counter-Measure (DIRCM) for LCH.

? Smart Multi-Function Display (SMFD), Software for Mission
Computer (MC), Head Up Display & Up-Front Control
Panel and Control Display Unit for Su-30 MKI indigenous
upgrade.

? Environment Control & Fuel Monitoring system- Electronic
Unit (ECFM-EU), Radio Altimeter (RAM), VHF Omni¬
Range / Instrument Landing System (VOR/ILS), Tactical Air
Navigation (TACAN) for LCA Mk2.

The Company is leveraging Artificial Intelligence (AI) in various
aspects of defense systems development for reducing Pilot
Workload, enhancing Situation Awareness, Safety & Fleet
availability for Fixed Wing and Rotary Wing platforms.

The Company has also taken initiatives in Industry 4.0 & Quality
4.0 in selected areas.

BOARD AND ITS COMMITTEE MEETINGS

During the year, 13 (Thirteen) 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 31,2025, 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. However,
due to non-appointment of requisite number of Independent
Directors, Audit Committee and Nomination & Remuneration
Committee were not in valid constitution.

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

? Dr. D K Sunil, Director (Engineering and R&D) was
appointed as Chairman and Managing Director (CMD)
w.e.f. September 09, 2024.

? Shri Shalabh Tyagi, Joint Secretary (P&C), DDP, MoD
was appointed as Government Nominee Director w.e.f.
September 10, 2024.

? Dr. Rajalakshmi Menon, DS&DG, DRDO was appointed
as Government Nominee Director w.e.f. September 13,
2024.

? Shri Barenya Senapati, Executive Director (Finance) was
appointed as Director (Finance) w.e.f. October 22, 2024
and as CFO w.e.f. November 14, 2024.

? Shri Ravi K, Executive Director (Corporate Planning) was
appointed as Director (Operations) w.e.f. November 26,
2024.

Cessation

? Shri C B Ananthakrishnan ceased as Director (Finance) &
CFO due to superannuation on August 31, 2024.

? Shri Jayadeva E P ceased as Director (Operations) due to
superannuation on August 31, 2024.

? Shri T Natarajan ceased as Government Nominee Director
due to withdrawal of Nomination w.e.f. September 10,
2024.

? Shri M Z Siddique ceased as Government Nominee Director
due to withdrawal of Nomination w.e.f. September 13,
2024.

? Dr. Divya Gupta ceased as Independent Director on
completion of her tenure w.e.f. December 27, 2024.

? Shri Atasi Baran Pradhan ceased as Director (HR) due to
superannuation on February 28, 2025.

DECLARATION OF INDEPENDENCE

Declarations from Independent Directors of the Company
have been received, confirming that the Independent Director
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.

As per 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.

However, the performance of the Functional Directors is
evaluated by the Independent Directors in their meeting. The
performance evaluation of Independent Directors is 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/2025/07/Draft-MGT-7.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 Health care, Education, Skill Development,
Rural Development, Women Empowerment, Promotion of
Sports, etc. The other areas in which support extended were
contribution of vehicles and Assistive Devices to Divyangjans,
Organizing camps for early detection of Cancer among
Women, addressing Malnutrition and Stunting amongst
Children, provisioning of portable hand held X-Ray Machines
for screening of patients under National TB Elimination
Programme (NTEP), Setting up of Green Gyms, Sanitation etc.
The Company has spent an amount of ' 16,711 Lakh under
CSR for the Financial Year 2024-25 against the CSR budget/
obligation of ' 14,411 Lakh.

The Corporate Social Responsibility Policy, Composition of the
Committee and CSR Projects/ Activities of the Company is
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 2024-25 and attached to this Report, along with
reasonable assessment or assurance Report of BRSR Core,
received from Independent Assessment or 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 such other functions as it may deem
fit, including Financial, Operational, ESG, Cyber Security and
Business Continuity Plan, etc.

SIGNIFICANT AND MATERIAL ORDERS

During the year, no significant and material orders were passed
by the Regulators or Courts or Tribunals which impact the
going concern status and 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 2024-25.

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 change / commitment of the Company has
occurred after the end of the year 2024-25 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, disclosure of particulars
of employees drawing remuneration in excess of the limits
specified under provisions of Section 197 of the Companies Act
and the relevant Rules thereof, 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 2024-25, the performance rating of
which is awaited.

However, your Company has achieved "Excellent" performance
rating with a score of 92.50 for the year 2023-24.

INDIGENISATION AND ATMANIRBHAR BHARAT

Concerted efforts are undertaken by the Company to enhance
self-reliance, boost innovation, improve national security and
economic growth. Towards this, some of the key initiatives
taken by the Company are as under:

? Complex Aircraft systems, LRUs & other critical items are
identified for indigenisation under Positive Indigenisation
Lists (PILs).

? Creation of a dedicated indigenisation fund by transfer of
3% Operating Profit after Tax of the Company, to offer
further impetus towards indigenisation.

? A total of 3,215 items (including 51 PILs items) have been
indigenised, resulting into anticipated annual Foreign
Exchange saving of around ' 25,800 Lakh.

? NIL value PSO (Project Sanction Orders) for 60 items are
released to Indian Industry Partners there by taking this
number to a total of around 660 items for indigenisation
under Make-II.

? During the year, approx. 2,000 items are uploaded on
Srijan Portal (an Indigenisation portal) for inviting Indian
Industry Partners to participate in the indigenisation
programs of the Company. This number stand at around
27,000 in total.

? Taking forward the vision of Atmanirbharta and to sensitize
Indian Industry Partners for opportunities available for
indigenisation and their enhanced participation in the
Company's indigenisation programs, 34 various vendor
development programs/ seminars/ webinars/ conclaves/
exhibitions covering wide spectrum of vendors across the
Country were conducted/ participated by the Company.

EXPORTS

During the year, the Company has achieved approx. 29%
higher exports in comparison to previous Financial Year. To
boost export, following initiatives have been taken by the
Company:

? The Company participated in leading international Air &
Defence Shows including Defence Services Asia (DSA)-
2024 (Malaysia), Farnborough International Air Show
(FIA)-2024 (UK), Egypt International Air Show (EIAS)-
2024, Selangor Aviation Show (SAS)-2024 (Malaysia),
Africa Aerospace & Defence (AAD)-2024 (South Africa),
Asian Defense and Security (ADAS)-2024 (Philippines),
Vietnam International Defence Expo (VIDEX)-2024. Flying
& Static display of Do-228 and ALH were undertaken
during Selangor Aviation Show (SAS)-2024 (Malaysia) and
Egypt International Air Show (EIAS)-2024 respectively.

? Customer Demonstration Flights (CDFs) on HAL's
platforms and visits to HAL facilities were extended to the
prospective overseas customers during Aero India 2025.

? Imparting trainings to Guyana Defence Forces requisite for
operating HAL supplied Hindustan-228 aircrafts.

? Successfully completed major overhaul of one ALH
helicopter of Mauritius Police Force.

? HAL's exportable products have been enlisted on the Aero
Expo portal—a virtual international exhibition platform of
aviation sector.

VENDOR DEVELOPMENT

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

The Company has conducted 46 Vendor Development
Programmes, of which 08 were for Micro & Small
Enterprises (MSEs) owned by SC/ST Entrepreneurs & Women
Entrepreneurs, 03 was meant exclusively for MSEs owned
by SC/ST Entrepreneurs, 04 was meant exclusively for MSEs
owned by Women Entrepreneurs while the balance 31 were
for across all categories.

The Company has registered with RXIL, Mynd Solution and also
A TReDS Ltd. for enabling payments through TReDS platform
to MSMEs. A total of 83 Invoices worth of ' 5,400 Lakh were
uploaded and discounted on TReDS platforms.

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 and CHAMPION portal and the same is being
monitored regularly for resolution of payment or procedural
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.

To encourage 'Make in India' and promote manufacturing
and production of goods & services in India, 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).

PROCUREMENT THROUGH GeM PORTAL

The Company has implemented companywide procurement
through 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.

During the year, more than 14,278 orders were placed through
GeM portal amounting to ' 3,86,900 Lakh.

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. The Company has
achieved 53% of procurement from MSEs in the year 2024-25,
which is 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 was ' 2,59,300 Lakh.

The Company has made payment to all its MSE vendors within
the specified time in compliance with Micro, Small and Medium
Enterprises Development (MSMED) Act, 2006.

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
Company would be considered competent to participate in
the bidding process. Further, to encourage competition in
procurement and to reduce processing lead time, the Company
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, 2025 stood at
23,999.

As on March 31, 2025, a total of 4,019 Apprenticeship were
engaged in the Company in various Trades, which forms
11.56% of the total manpower strength including contractual
staff.

EMPLOYEE WELFARE

The Company continues to provide a wide range of welfare
measures for employees and their families, including
comprehensive Medical Facilities, Housing Facilities, Educational
Facilities for employees' children and Sports Facilities, among
others. Further, various initiatives are also being taken to
support employee well-being and overall development. In line
with this, the Company has introduced HAL Sabbatical Scheme
for employees enabling them to take leave for self-renewal,
skill development, or personal pursuits, offering flexibility to
address social obligations, family support needs, or wellness
journeys.

In furtherance of its employee-centric approach, the Company continues to provide financial security through the Group Life
Insurance Policy of ' 10 Lakh for all employees. Additionally, the Financial Assistance Scheme offers monthly monetary support
ranging from ' 15,000/- p.m. to ' 50,000/- p.m., based on the Grade/Scale of the employee, to dependents of deceased
employees, reaffirming the Company's dedication to comprehensive employee welfare beyond the workplace.

REPRESENTATION OF SC/STs RECRUITED / PROMOTED:

Representation of SC/STs in the total strength of the Company as on March 31, 2025 is as under:

Recruitments made during the period April 1, 2024 to March 31, 2025 and the SC/STs amongst them.

Vacancy based Promotions made during the period April 1, 2024 to March 31, 2025 and the SC/STs amongst them.

EMPLOYEE RELATIONS (ER) / INDUSTRIAL RELATIONS (IR)

The Employee Relations / Industrial Relations Scenario remained peaceful & cordial during the year. Effective communication
between the Management and the Trade Unions / Associations paved way for maintenance of industrial harmony and to eliminate
any scope of conflicts & misunderstandings. Meetings with the representatives of the Recognized Unions / Officers Associations at
the Divisional, Complex & Corporate Levels were held periodically to discuss various issues and its resolutions.

Plant Level, Shop Level and various bi-partite Committees with
representatives from the Management / Union are functioning
in the Divisions to discuss & resolve production related &
other matters. In order to address Employee Grievance /
Representations, Grievance Redressal Mechanisms are also in
place in the Company. Employee Grievance Redressal Portal
has been launched during the year for employees to submit
their Grievances online.

WOMEN EMPOWERMENT

Women Empowerment & Leadership Programs are being
conducted by the Company. 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
82 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
Company has been conferred with "Second Place for Best
Enterprise Award", under Maharatna Category during the 35^th
National Meet of WIPS Forum held on February 17-18, 2025 at
Vigyan Bhawan, New Delhi.

Ladies Clubs / Families Welfare Associations are also functioning
at different locations to take up various philanthropic / socio¬
cultural 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 2024-25 in
terms of Section 22 of the Act and Schedule V of SEBI (LODR)
Regulation 2015, is as indicated below:

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, Ministry of
Defence. The inspection reports pertaining to Parliamentary
Committee inspections and compliance reports related to the
assurances given to the Committees are being forwarded to
the concerned Authorities/ Offices in time after reviewing the
report at the Corporate Office level.

The meetings of Official Language Implementation Committee
in all the Divisions including Corporate Office are being
conducted regularly. Guidelines issued by the Dept. of Official
Language, Ministry of Home Affairs, New Delhi are being
circulated to all the Divisions/ Offices, to make aware of 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.

Hindi Incentive Scheme has been implemented effectively in
the Company. Further, In-House Hindi Magazines are being
published by the Divisions/ Offices 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 by the Company, so that Employees
could do their routine work in Hindi as far as possible.

The Inspection meetings were successfully done by Committee
of Parliament on Official Language at various Divisions of the
Company such as Kanpur Division, ACD, Aircraft Division and
Liaison Office, New Delhi.

During the year, Company has organized two days National
Seminar on Technical Terminology in Indian Languages in
coordination with CSTT, New Delhi under the aegis of Town
Official Language Implementation Committee, (Undertakings),
Bangalore and two half-yearly meetings of Town Official
Language Implementation Committee, (Undertakings),
Bangalore has also been organized under the Chairmanship
of HAL. Further, the Company has conducted 5 days Technical
Translation Training Programme exclusively for the Official
Language professional of the Company by Central Translation

Bureau, New Delhi. Akhil Bharatiya Kavi Sammelan was also
organized to popularize Hindi in 'C' region.

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 year 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. Initial phases of the project such as Business
process as-is study, To-be process finalisation, Project
Office & Hardware setup and Process demonstrations have
been completed. Development of customisations, reports
and dashboards are in progress.

? Integrated Communication System for LAN &
internet: To take forward the digital transformation,
an integrated system has been evolved where critical
information will be made available to top executives in a
secured manner on demand at faster pace.

? Infrastructure Modernisation: IT infrastructure in the
Company have been modernised by replacing obsolete
desktop machines and undertaking 3486 MS Office
Licenses.

? Implementation of Maya OS & Chakravyuh server:

Maya OS is a hardened Linux OS developed by CIRA
(Cyber Information Research Agency) with several
advanced security implementations in place which reduces
the probability of impact during any security breach.
As per recommendation of CIRA, Maya OS has been
deployed in 700 internet facing machines. For windows
based machines, log collector has been installed in 1216
machines, which helps to monitor the security aspects
centrally by CIRA.

? Implementation of e-Office: With a view to achieve
paperless office and enabling document movement in
digital form across organisation, e-Office system has been
implemented.

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:

? "Outstanding PSU of the year" awarded at All India
Management Association (AIMA) Managing award
ceremony on April 23, 2024 at New Delhi.

? First prize in the "33^rd National Award for Innovative
Training & Skill Development Practices" from Indian
Society for Training & Development (ISTD) on April 10,

2024 at New Delhi.

? First prize in the "Swacchta Pakhwada Award - 2023"
organized by DDP, MoD during December, 2023, which
was announced on June 18, 2024.

? Gold award at the "ET Government PSU Leadership
& Excellence Awards 2024" in the category of 'Skill
Development & Capacity Building' during the 5^th National
PSU Summit held at New Delhi on June 21, 2024 for its
outstanding initiatives towards Critical Skill Transfer (CST).

? "Rajbhasha Kirti Puraskar" First prize for the year 2023-24
among the Public Sector Undertakings category of Region
'C' for excellence in implementation of Official Language
during the Hindi Day and 4^th All India Official Language
Conference organized at New Delhi on September 14,
2024.

? Dun & Bradstreet award for being "India's Top Value
Creator 2024 - Defence" during the Dun & Bradstreet- G7
CR Technologies 'India's Top 500 Value Creators' summit
held on November 29, 2024 in Mumbai.

? Platinum award for "Operational Performance Excellence"
as well as Bronze award for "Corporate Social Responsibility
and Sustainability" at 14^th PSE Excellence award event
held on December 12, 2024 in New Delhi.

? "IEI Industry Excellence Award 2024" (Platinum Award)
under Engineering Manufacturing and Processing
Category for demonstrating Outstanding Performance
with High Order of Business Excellence. The award was
presented by The Institution of Engineers (India) (IEI) in an
event held at Kolkata on December 19, 2024.

? "Aerospace and Defence Awards 2025" under the
category "Outstanding Contribution in Aerospace
Industry" instituted by "SAP Media Worldwide Ltd"
during the 10^th Aerospace & Defence Awards ceremony
held on February 09, 2025 at Bengaluru.

? "Sunrise Sector Pioneer Award" at Global Investors Meet

2025 for leading Aerospace and Defence Innovation on
February 13, 2025.

? Conferred with the certificate of appreciation for the
successful indigenisation of VPX-135 Single Board
Computer for Light Combat Aircraft in association with
M/s Mistral Solution Pvt. Ltd, Bangalore during the
indigenisation event "Samarthya" held during Aero
India 2025, Bangalore in the presence of Hon'ble Raksha
Mantri.

VIGILANCE

The Company has a well establishment and dedicated Vigilance
Department headed by Chief Vigilance Officer (CVO). To
uphold high ethical standards, transparency, accountability and
responsibility in the workplace, the Company has implemented
various initiatives. Towards this, vigilance officers are posted
at various Divisions and Offices of the Company. Preventive
vigilance has been the thrust area of the Vigilance Department
during the current year.

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

i. Preventive Vigilance: 191 complaints were handled, 341
regular scrutiny/surprise checks and 06 CTE type intensive
examinations were carried out across the Company. Four
system studies were also carried out on various topics and
system improvement suggestions were made.

A total of 190 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: Two in-house vigilance
e-magazines were published, as under:

? "Marg Darshan Vol.XXI" Issue No.1, an annual
magazine was released during Vigilance Awareness
Week (VAW) 2024 on the theme "Gender Dimension
in Fighting Corruption".

? "Vishleshan IV-A compendium of Vigilance

Interventions" - a preventive vigilance initiative
wherein an attempt is made to bring out the deviations
noticed by vigilance department in certain areas and
system improvement suggestions implemented to
improve the area.

iii. System Improvement measures: Based on the

recommendations of vigilance, several system

improvements have been implemented by the
management in the areas of HR, IMM, stores, works
and finance etc. Some of major system improvement
undertaken such as Sensitization of guidelines - provisions
applicable to MSME; Online Employee grievance redressal
system, Police Verification of Contractual Employees,
Calculation of Liquidated Damages (LD) on account
of delay in completion of works, Monitoring of Estate
Management, Procurement on proprietary basis, R&D
project and content management portal, Vigilance
Guidelines for Recruitment Activities, Directive on use
of Remote Access Software and Rate contract terms &
conditions for procurement, supply of In-house pharmacy.

iv. Vigilance Awareness Week: Vigilance Awareness
Week was conducted throughout the organization from
October 28, 2024 to November 03, 2024 on the theme
"Culture of Integrity for Nation's Prosperity". In order to
spread wider awareness and to promote transparency,
accountability & integrity amongst employees, other
stakeholders and school children, various activities and
events were conducted.

Further, three months' campaign was also carried out
from August 16, 2024 to November 15, 2024 in the areas
of:

? Capacity Building programs,

? Identification and Implementation of Systemic
Improvement measures,

? Updation of Circulars /Guidelines /Manuals

? Disposal of Complaints

? Dynamic Digital Presence

v. Capacity Building Program for Vigilance Officers:

26^th annual conference of vigilance officers of the
Company was conducted during October, 2024, as
a part of capacity building measures, which provides
a platform for vigilance professionals for knowledge
sharing, adoption of transparent policies etc. Also training
programs are conducted for officers and staff in premier
training institutions of the Country.

vi. Digital Initiatives: The R&D project & content
management portal and Online Employee grievance
redressal system in the Company was launched in
December, 2024, as part of digital initiatives.

QUALITY INITIATIVES AND FLIGHT SAFETY

? During the year, DGCA has granted fresh approval to
various divisions of the Company for the following:

a) CAR 21 - POA "Production Organisation Approval"
granted to Engine Division, Bangalore.

b) CAR 145 - MOA "Maintenance Organisation
Approval" granted to Helicopter-MRO Division,
Bangalore and Avionics Division, Korwa.

? During the year, various divisions of the Company
have been awarded fresh approvals by the authority
of the National Aerospace and Defence Contractors
Accreditation Program (NADCAP) Management Council
for special processes, which are as under:

a) Hardening process & Tempering process at Accessories
Division, Lucknow.

b) Sulphuric Acid Anodising at Avionics Division,
Hyderabad.

c) Sulphuric Acid Anodizing & Magnesium Chromating
at TAD-Kanpur.

d) Chemical processes at Aircraft Division, Bangalore.

? As per Govt. of India initiative of 100 days 100 projects
for Quality 4.0 in 2024, 10 Quality 4.0 projects were
successfully completed on-time by the Company.

? Institute of Printed Circuit (IPC) training has been
conducted by Institute of Printed Circuit India for HAL
employees working in Electrical & Electronics field and
certified 161 employees of the Company during the year.

? 263 Operators have been approved by DGAQA across
HAL divisions for self-verification of inspection stages to
empower the Operators for intermediate inspection stages
and less complex inspection stages as per Guidelines on
Operator Self-Verification Program (CQAG 9015).

? Conducted 18 training programs/workshops at customer
bases/field units and 70 training programs/workshops at
HAL premises for Customers on critical aircraft systems.

? During the year, Internal Corporate Quality Audit has been
successfully Completed for 18 Manufacturing & Overhaul
Divisions, 10 R&D Centres, 4 PBL Bases of ICG and 5 IAF
Bases.

? HAL & DGAQA have jointly released a guideline for
Approval of Supplier/ Sub-contractor & its Quality
Management System (CQAG-9017: ASQMS) enabling
Suppliers/ Sub-contractors to clear and supply Products
produced by them under "Certificate of Confirmity
(COC)". During Aero India 2025, M/s Godrej & Boyce
Mfg. Co. Ltd, Mumbai has been approved under ASQMS
by HAL Accessories Division, Lucknow.

? Trained HAL officers by accreditation body to conduct
audits for AS9100 compliance across the divisions to
ensure the product meets the highest standards of Safety
and Quality. The total number of auditors available across
the HAL Divisions are:

a) Lead Auditors - 10 Officers

b) Internal Auditors - 691 Officers

? LCA-Tejas Division, Bangalore has developed AI Based
solution for Snag Disposition Information Management
System.

? A fully automated system has been developed and
integrated with SCADA (Supervisory Control and Data
Acquisition) system with Heat Treatment furnaces to
control & monitor the furnaces parameters online without

human intervention and to eliminate the errors at TAD
Kanpur, Engine Division, Koraput and Engine Division,
Bangalore.

? Foundry & Forge Division, Bangalore has established
Rapid Quench Heat Treatment (RQHT) facility and the
facility is integrated with Industry 4.0 features utilizing
SCADA system for comprehensive record management,
documentation and process control. Key features of
this facilities are 3 Axis Robotic Manipulator, automated
loading and unloading which will result in 133% increase
in working volume and improvement in productivity by
4-6 folds.

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 Gupta Nayar & 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
2024-25 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 2024-25. 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 13 firms of Chartered Accountants
and 1 Cost Accountant firm for carrying out internal audit of
the Company for the year 2024-25.

Secretarial Auditors

In pursuant to the provisions of Section 204 of the Companies
Act, 2013, the Board of Directors has appointed, M/s. DPSP
& Associates, Practicing Company Secretaries, Bengaluru as
Secretarial Auditors of the Company for the year 2024-25.

The Secretarial Audit Report is annexed to this Report as
Annexure - IV. The management's reply on the qualification
of the Secretarial Auditor, form part of Secretarial Audit Report,
which is self-explanatory.

As per Regulation 24A of the SEBI (LODR) Regulations, the
Company has filed the Annual Secretarial Compliance Report
for the year 2024-25, signed by the Secretarial Auditor with
the BSE Limited 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 2024-25 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.

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/investors

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, 2025, 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, 2025 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
Auditor, 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

Ly.

(Dr. D K Sunil)

Chairman and Managing Director

Place : Bengaluru
Date : July 21, 2025