We have audited the accompanying Standalone Financial Statements of Bharat
Dynamics Limited (‘the company’), which comprise the Balance Sheet as at 31 March
2025, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash
Flow Statement, the Statement of Changes in Equity for the year then ended, and notes to
the standalone financial statements, including a summary of Material Accounting Policies
and other explanatory information (hereinafter referred to as Standalone Financial
Statements").

In our opinion and to the best of our information and according to the explanations given to
us, the aforesaid standalone financial statements give the information required by the
Companies Act, 2013, as amended ('the Act’) in the manner so required and give a true
and fair view in conformity with the Indian Accounting Standards ('Ind AS ) specified under
section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015 and other accounting principles generally accepted in India, of the state of affairs of
the Company as at 31 March, 2025 and its profit (including other comprehensive income),
its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under Section 143(10) of the Act. Our responsibilities under those Standards are further
described in the "Auditors' Responsibilities for the Audit of the Standalone Financial
Statements" section of our report We are independent of the Company in accordance with
the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAO
together with the ethical requirements that are relevant to our audit of the Standalone
Financial Statements under the provisions of the Act and the Rules thereunder, and we
have fulfilled our other ethical responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion on the Standalone Financial Statements.

Emphasis of matter

We draw attention to the following matters in the notes to the Standalone Financial
Statements:

a) note 38(7) which describes inventory not moved for more than five years amounting
to ? 8331.44 lakhs (? 8338.85 lakhs as of 31 March 2024) for which no provision for

redundancy were made as is required by the company's accounting policy for the
reasons stated there at;

b) note 28 which describes the recognition of a provision for onerous contracts
amounting to ?13,461.18 Lakh during the quarter ended 31 December 2024, and an
additional provision of ? 678.96 Lakh during the quarter ended 31 March 2025, in
accordance with Ind AS 37 - Provisions, Contingent Liabilities, and Contingent
Assets

Our conclusion is not modified in respect of these matters

Key Audit Matters

1. Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements of the year ended 31
March 2025. These matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.

2. For each matter below, our description of how our audit addressed the matter is
provided in that context. We have determined the matters described below to be the
key audit matters to be communicated in our report.

Information other than the Standalone Financial Statements and auditors’ report
thereon

The Company’s Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual Report, but does not include
the standalone financial statements and our auditors’ report thereon. The Annual Report is
expected to be made available to us after the date of this auditors' report.

Our opinion on the standalone financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to
read the other information identified above when it becomes available and, in doing so,
consider whether the other information is materially inconsistent with the standalone
financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.

When we read the Annual Report, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to those charged with governance.

Responsibilities of management and those charged with governance for the
Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5)
of the Act with respect to the preparation of these standalone financial statements that give
a true and fair view of the financial position, financial performance including other

comprehensive income, changes in equity and cash flows of the Company in accordance
with accounting principles generally accepted in India, including the Indian Accounting
Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015 as amended. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent, and design, implementation
and maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the standalone financial statements, that give a true and
fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the Board of Directors either intend to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.

Those Board of Directors is also responsible for overseeing the Company's financial
reporting process.

Auditors’ Responsibilities for the audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone
Financial Statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditors' report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on
the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also

• Identify and assess the risks of material misstatement of the Standalone Financial
Statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Act, we are also responsible for expressing our opinion on whether the
company has adequate Internal Financial Controls with reference to Standalone
Financial Statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of Board of Director's use of the going concern
basis of accounting and, based on the audit evidence obtained whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditors' report
to the related disclosures in the Standalone Financial Statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditors’ report. However, future
events or conditions may cause the Company to cease to continue as a going
concern.

• Evaluate the overall presentation, structure and content of the Standalone Financial
Statements, including the disclosures, and whether the Standalone Financial
Statements represent the underlying transactions and events in a manner that
achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the Standalone Financial Statements
of the current period and are therefore the key audit matters. We describe these matters in
our auditors’ report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by

the Central Government of India in terms of Section 143(11) of the Act, we give in the

Annexure-1, a statement on the matters specified in paragraphs 3 and 4 of the said

Order, to the extent applicable.

2. Further to our comments in Annexure -1’, as required by section 143(3) of the Act,

based on our audit, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our audit of the
accompanying Standalone Financial Statements.

(b) In our opinion, proper books of account as required by law have been kept by the
company so far as it appears from our examination of those books.

(c) The Standalone Financial Statements dealt with by this report are in agreement
with the books of account.

(d) In our opinion, the aforesaid Standalone Financial Statements comply with Indian
Accounting Standards prescribed under Section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015 as amended.

(e) The company being a Government Company as defined under section 2(45) of the
Act, pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by the
Ministry of Corporate Affairs, Government of India, the provisions of sub-section (2)
of Section 164 of the Act, are not applicable to the company.

(f) With respect to the adequacy of the internal financial controls with reference to
Standalone Financial Statements of the company as on 31 March 2025 and the
operating effectiveness of such controls, refer to our separate report in Annexure-
2.

(g) The company being a Government Company as defined under section 2(45) of the
Act, pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by the
Ministry of Corporate Affairs, Government of India, the provisions of section 197 of
the Act, are not applicable to the company.

(h) With respect to the other matters to be included in the Auditors' Report in
accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as

amended), in our opinion and to the best of our information and according to the
explanations given to us:

i. The company does not have any pending litigations which would impact its
financial position;

ii. The Company does not have any long-term contracts requiring a provision
for material foreseeable losses;

iii. The company does not have any amount required to be transferred, to the
Investor Education and Protection Fund;

iv. (a) The management has represented that, to the best of its knowledge and
belief no funds have been advanced or loaned or invested (either from
borrowed funds or securities premium or any other sources or kind of funds)
by the Company to or in any person(s) or entity(ies), including foreign
entities ('the intermediaries’), with the understanding, whether recorded in
writing or otherwise, that the intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or
provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;

(b) The management has represented that, to the best of its knowledge and
belief no funds have been received by the Company from any person(s) or
entity(ies), including foreign entities (’the Funding Parties'), with the
understanding, whether recorded in writing or otherwise, that the Company
shall, whether directly or indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Funding Party
('Ultimate Beneficiaries’) or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and

(c) Based on such audit procedures performed as considered reasonable
and appropriate in the circumstances, nothing has come to our notice that
has caused us to believe that the management representations under sub¬
clauses (a) and (b) above contain any material misstatement.

v. (a) The final dividend proposed for the previous year, declared and paid by
the company during the year is in accordance with Section 123 of the Act, as
applicable.

(b) As stated in note no. 38(9) (b) to the accompanying standalone financial
statements, the Board of Directors of the Company have proposed final
dividend for the year ended 31 March 2025 which is subject to the approval
of the members at the ensuing Annual General Meeting. The dividend
declared is in accordance with section 123 of the Act to the extent it applies
to declaration of dividend.

(c) The interim dividend declared and paid by the company is in accordance
with section 123 of the Act.

vi. Based on our examination which included test checks, the company has
used accounting software for maintaining its books of account which has a
feature of recording audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded in the software.
Further, during the course of our audit we did not come across any instance
of audit trail feature being tampered with. Additionally, the audit trail has
been preserved by the company as per the statutory requirements for record
retention.

3. As required by section 143(5) of the Act, we give in Annexure-3', a statement on the
matters specified in the directions issued by the Comptroller and Auditor General of
India in respect of the Company

For Tej Raj & Pal

Chartered Accountants
FRN 304124E

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Partner

M. No. 252420

UDIN: 25252420BMIZID1772

Place: Hyderabad

Date: 27 May 2025