Hindustan Aeronautics Ltd Management Discussions

1. INDUSTRY

Aerospace & Defence (A&D) Industry is a vast industry which encompasses Commercial and General Aviation, Military aircraft, Space systems, Ground Defence and Shipbuilding. In 2023, A&D industry has recovered from COVID disruptions in both Civil and Defence segments. The Defence segment is expected to grow in 2024-25 as many countries have significantly increased Defence budgets to strengthen their military capabilities due to global geopolitical conflicts. In Civil segment the global passenger traffic has reached to pre COVID level by the end of 2023. This has become a driving factor for large size manufacturing orders and aftersales activities in the A&D industry.

1.1 Global Scenario

1.1.1 Reports have estimated that the global A&D industry to grow from $884 billion in 2023 to around $1230 billion in next five years. The major driving force in the Defence segment is global geopolitical situation, whereas in civil segment increasing passenger traffic is driving the market growth.

1.1.2 The key challenges in the industry are supply chain dependencies, pressure to achieve high efficiency, low cost of production and workforce management. As solution, OEMs are looking for local sources for materials and components. Additionally to achieve efficiencies OEMs are moving towards innovation, digital technologies and smart factories.

1.2 Indian Scenario

1.2.1 The Indian A&D Industry is dominated by Defence segment. The major players of Indian A&D industry are Defence Public Sector Undertakings (DPSUs). Therefore defence projects, policies and funding of GoI plays crucial role in development of A&D industry in India.

1.2.2 In the Interim Union Budget 2024-25, 6,21,540.85 Crore have been allocated to Defence. This includes expenditure on salaries of armed forces and civilians, pensions, modernisation of armed forces, production establishments, maintenance, and research and development organisations. This is 4.7% higher than 5,93,537.64 Crore (BE for FY 2023-24).

1.2.3 The budgetary allocation for Capital Expenditure in Defence for FY 24-25 is 1,72,000 Crore, which is 9.4% more than the revised allocation of FY23-24. Allocated amount under this head caters to procurement of new equipment and modernisation requirements of the Defence Services.

1.2.4 In the budget, 92,000 Crore has been allocated for Revenue Expenditure other than salary. This head caters to repair and maintenance of equipment and MRO activities. Under "Aircraft and Aero-engine" category of the capital outlay, Defence Services have been allocated a combined amount of 40,777.86 Crore, which is around 44.5% more than BE of last year.

1.2.5 In the recent years significant impetus has been given by the Government to develop and strengthen the A&D Industry in the Country and indigenisation of Defence equipment under "Atmanirbhar Bharat Abhiyan" to reduce Defence import bill and make the Country selfreliant in Defence. Defence procurements are guided by the Defence Acquisition Procedure (DAP-2020) which lays down emphasis on higher indigenous content. To propel indigenisation, Five Positive Indigenisation Lists (PIL) have been issued by Department of Military Affairs (DMA), in which 21 items of HAL are listed. Major platforms included under these lists are Light Combat Aircraft (LCA) Mk1A, Light Combat Helicopter (LCH), Transport Aircraft (Do-228), Basic Trainer Aircraft (HTT-40), Small Jet Engines (PTAE), and Light Utility Helicopter (LUH). Similarly, Department of Defence Production (DDP) has released four Positive Indigenisation Lists which include 4,666 items to be taken up for indigenisation by DPSUs.

2. ORGANISATION STRUCTURE

2.1 Presently, HAL has 20 Production and 9 R&D Centres. These Divisions and R&D Centres are located at ten geographic locations in seven States across the Country. HALs Divisions and R&D Centres are organized into five complexes with current & future operations given below:

* Bangalore Complex (BC): Production, MRO and upgrade of Fixed-wing Aircraft and Engines of Indian and Western Origin, Aerospace Structures, Castings, Forgings & Rolled Rings.

* MiG Complex (MC): Production of indigenous Fixed- wing aircraft, Production, MRO and upgrade of Fixed- wing aircraft and Engines of mainly Russian Origin, Civil MRO and UAV Projects.

* Helicopter Complex (HC): Production, MRO and upgrade of Helicopters of Indian and Western Origin.

* Accessories Complex (AC): Production, MRO and upgrade of Transport aircraft, Production and MRO of Accessories and Avionics for Fixed-wing and Rotarywing Platforms (Indian, Russian and Western Origin), Depot Level Maintenance of UAVs.

* Design Complex (DC): R&D of Fixed-wing and Rotarywing aircraft, Unmanned Aerial Vehicles (UAV), Aeroengines, Avionics and Accessories.

BC, MC, HC and AC are headed by Chief Executive Officers (CEOs). Head of Divisions under each Complex reports to the respective CEOs, whereas Head of R&D Centres under Design Complex report to Director (Engineering and R&D). All the functional Directors and CEOs report to Chairman & Managing Director (CMD).

3. SWOT ANALYSIS

3.1 SWOT Analysis is the tool to identify potential opportunities and threats in the external environment and assess internal strengths and weaknesses of the organization. The SWOT analysis of the Company is as follows:

Strength

* The capability to cater a large spectrum of aerospace business which includes R&D, Production and MRO of the Fixed-wing aircraft, Rotary-wing aircraft, Aeroengines, LRUs and airborne systems.

* Expertise in aircraft upgrade for the Defence Customers which includes major changes like reengining, avionics upgrade, and weapon system integration for HAL and non-HAL platforms.

* Expertise in absorption of Transfer of Technology (ToT) of fighter and transport aircraft. HAL has successfully absorbed ToT and produced MiG-21, MiG-27, Su- 30MKI, Jaguar, Hawk, Dornier-228 and AVRO.

* Expertise in Design & Development of a wide range of helicopters including Utility and Combat helicopters. HAL has developed flagship platforms like ALH Variants, LCH & LUH in 3.5 to 5.5 ton class. Further, HAL is developing IMRH and DBMRH in 1015 ton class, proving D&D capabilities in wide range of helicopters.

* Trusted partner of Indian Defence Forces for providing support to aging fleets, some of which are more than 60 years old.

* Development of large scale Defence infrastructure with the support of Government of India and trained manpower with expertise in aerospace industry.

Weakness

* Dependency on foreign OEMs for critical materials and LRUs.

* Little presence outside India in export market.

* Dependency on limited customers for the contracts. Opportunity

* Atmanirbhar Bharat Abhiyan and other policy reforms by the Government promoting self-reliance and indigenous products.

* Active support from Govt. of India for export promotion to friendly foreign countries.

* Focus of Government to develop A&D industry in the Country, reduce import bill and make India an A&D hub.

* Gradually developing civil MRO opportunities in India.

* Development of new potential market in India such as for regional jets, UAVs etc.

* Growth potentials through alliance and partnership for global markets.

Threat

* Collaborations of Indian Private Companies with Global OEMs and their capability building.

* Change in preference of Defence customers by moving from nomination to competitive procurement.

* The Strategic Partnership (SP) Model may deprive HAL from some high value Defence orders.

* Direct competition from foreign companies pursuing Indian market.

* Dependence on MoD for contracts.

4. OUR STRATEGIES

4.1 We intend to pursue the following principal strategies to leverage our strengths and grow our business:

* Launching Design and Development programs for Indian Defence Services with initial company funding.

* Diversifying into civil market for both manufacturing and MRO opportunities.

* Enhancing Indigenisation to ensure higher indigenous content in our products & reduce supply chain dependency.

* Expanding our operations globally and acquire core technologies through collaborations with global OEMs/partners.

* Opening offices in the target geographies to explore global market.

* Strengthening and leveraging Marketing and Business Development functions.

* Enhancing customer satisfaction and improved quality of products and services.

* Strategic product development to bring out right products at right time.

* Focus on increasing operational efficiencies by adapting latest technologies such as Industry 4.0, automation, additive manufacturing, etc.

5. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Ministry of Corporate Affairs vide Notification No 1/2/2014-CL-V dated 23^rd February, 2018 has exempted Government companies engaged in Defence Production to the extent of application of Ind AS 108 on "Operating Segment". Disclosure in this regard has been made at Clause No. 37 of Note No. 49 to the Accounts.

6. OUTLOOK

6.1.1 India has the third largest armed force in the world and plans to allocate additional budget for Defence procurement over next many years. Some specific big- ticket procurement that MoD allocations will be used for, include Su-30MKI aircraft new procurement, LCA Mk1A, AL-31FP engines for Su-30MKI, RD-33 engines for MiG- 29 fighters, additional C-295 transport aircraft and MQ- 9B drones.

6.1.2 As per the SIPRI Report, India has been the largest arms importer globally for the period 2019-2023 with 9.8% share of imports of major arms. This indicates high dependency and outflow of large portion of Defence budget to foreign countries. However, through the Make in India initiative and "Atmanirbhar Bharat Abhiyan", the Government has made efforts to vitalize the domestic Defence Industry to reduce dependency on other countries for the critical arms.

6.1.3 Indias resolve to reduce its reliance on imports through "Atmanirbharta" (self-reliance), is a pivotal development in the Defence sector. In the recent time, under the self-reliance drive, Indias annual Defence production is expected to touch 3 lakh Crore by 2028-29, along with arms exports of 50,000 Crore. In the last few years, India has emerged as weapon exporter and found place in the top-25 countries with around 21,000 Crore export value in the year 2023-24.

6.1.4 Indias self-reliance drive also aims at creating an environment where public, private, and foreign entities can work together and help India become one of the leading countries in Defence manufacturing. Accordingly, to boost Defence manufacturing sector, Positive Indigenisation Lists (PIL) have been released which intends to procure all restricted items from indigenous sources.

6.1.5 To bring the industry, especially the private sector, to the forefront of Defence innovation, the MoD in the last 10 years has made several efforts. These include the launch of new schemes such as Innovation for Defence Excellence (iDEX), Technology Development Fund (TDF) and simplified Make guidelines. While these schemes and guidelines have attracted many big and small players, these are especially beneficial for the start-ups and small & medium enterprises.

6.1.6 On the other hand, civil aviation is emerging as one of the fastest-growing sectors in India. India is projected to have more than 500 million domestic and international air travelers by 2030 and has the potential to become the worlds leading aviation market by 2047. According to DGCA, over 152 million passengers were carried by domestic airlines during the year 2023 as compared to 123 million during the same period of the previous year registering an annual growth of over 23.36 percent. Based on traffic projections, Air India and IndiGo ordered 470 aircrafts (220 from Boeing and 250 from Airbus) and 500 aircraft (Airbus A320), respectively during 2023.

6.1.7 Leading aircraft Original Equipment Manufacturers (OEMs) see India as an important market for both exports and manufacturing because of the high demand for aircraft, parts and equipment, strategic geographic location, engineering expertise, and competitive labour costs. To capture the Civil sector opportunities, the Indian Government has revised its MRO policy to increase the ease of doing business, with the goal of making India a global leader in the MRO sector. Approximately 90 percent of Indias MRO activity occurs outside India, predominantly in Sri Lanka, Singapore, and Malaysia. Local capabilities are nascent, but exhibit growth potential. Efforts are underway to make India a regional hub for MRO services, given its advantageous geographic location between Europe and Southeast Asia and its proximity to the Middle East. Indias growing fleet of aircraft is likely to translate into an increase in demand for maintenance services and MRO facilities.

6.1.8 The possible opportunities available for HAL in the future are:

* Thrust from the Government towards domestic products for developing a self-reliant industry will bring greater opportunities and new orders.

* The stability of military sector due to continuing geopolitical factors will attract commercial players to diversify into military sector as risk aversion strategy. This opens up opportunities for HAL.

7. RISKS AND CONCERNS

The major risks and concerns for the Company are:

* Dependency on foreign OEMs for supply of critical components and Spares.

* Geo-political issues and instability can disrupt supply chain.

* Dependency on limited customers for new contracts.

* Competition from domestic and foreign players.

8. MEASURES TO TACKLE CHALLENGES

HAL has taken following measures to address the challenges, concerns and risks:

Mitigating Strategic Challenges

* The Company is focusing on diversification to enhance its revenues from commercial / civil sector to maintain growth and mitigate the risks of skewed Sales Portfolio toward Defence.

* The Company has entered into strategic partnerships with global OEMs to acquire core engine technologies in design and development of engines for helicopters and manufacturing of engines for fighter aircraft.

Mitigating R&D Challenges

* The Company is focusing on market-oriented products and technology developments to complement with its goals to expand in commercial and export market.

* The Company has always focused on participation of academia with Industry. Over the years, the Company has established chairs at IITs and IISc to benefit from technological developments and their application in our R&D programs.

* The Company is focusing on enhanced participation of Startup, SME/MSME companies in R&D and technology development.

Mitigating Marketing Challenges

* The Company has enhanced the impetus on strengthening and leveraging Marketing and Business Development to complement business expansion goals.

* The Company is appointing Channel partners in the target geographies for promoting its products and expansion in export markets.

Mitigating Operational Challenges

* The Company is focusing on enhanced digitalization and IT enabled systems for speedy communication and decision making.

* The Company is focusing on moving up the value chain by engaging in activities related to its core competency and source other activities from the ecosystem partners.

* The Company is focusing on use of advanced materials, Advanced Manufacturing Technologies and automation to improve product quality and achieve operational efficiencies.

9. CUSTOMER ORIENTATION

Customer orientation is an important aspect in HALs operations, reflected in our commitments to meet the Customer needs. We are dedicated to fostering a Customer satisfaction mindset through a Customer centric culture, Continuous Improvement, Responsive Communications, Quality and Reliability.

Key initiatives towards Customer orientation are as under:

i. Visit of Top Management to Customer Bases

Commands: Visit of Top Management and Senior officers to Customer Bases / Commands for interactions and understanding the Customer issues / concerns, if any, and faster resolution of the same.

ii. ALH Symposium: First of kind symposium on ALH was held on December 18, 2023 at New Delhi which involved participation of Indian Air Force, Indian Army, Indian Navy, Coast Guard, BSF, DGAQA, CEMILAC and HAL. This symposium was aimed to showcase / build awareness regarding numerous initiatives and improvements implemented in ALH fleet.

iii. Single Point of Contact (SPOC) Set Up: To enhance better Customer support & resolve the issues in time bound manner, fleet-wise SPOCs have been established at all four complex offices of HAL.

10. INTERNAL FINANCIAL CONTROLS

10.1 The Company has set up proper and adequate Internal Financial Controls with respect to financial statements. Systems Audit is carried out by an internal team of officials with finance and technical background. This is in addition to the internal audit by firms of Chartered Accountants/ Cost Accountants. Manuals pertaining to various functions/activities such as Purchase, Outsourcing, Stores, Accounts, Systems Audit etc., have been updated and implemented. Any instance of material weakness in the operations, if observed, is followed up with necessary remedial measures and suitable disclosures have been made in the Notes to Accounts.

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

10.3 The Statutory Auditors are also required to issue the Independent Auditors Report vide Section 143(3)(i) of the Companies Act. The Report issued thereupon has been attached along with the standalone and consolidated financial statements respectively.

10.4 To evaluate the effectiveness of internal controls, systems and procedures across different functions in the organisation, the Company has an independent Systems Audit Department. The Department evaluates the design and effectiveness of internal controls, identifies weaknesses and recommends improvements to mitigate risks. It also monitors compliance with laws, regulations and internal policies. Necessary systems improvement guidelines are also issued by the Department. The major observations of Systems Audit are placed before the Audit Committee for review.

11 DISCUSSION AND ANALYSIS OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

( in Lakh)

Sl. Particulars No.	Year Ended March 31, 2024	Year Ended March 31, 2023
1 Turnover	28,16,185	26,36,056
2 Revenue from Operations	30,38,084	26,92,785
3 Value of Production	30,11,802	27,05,441
4 Gross Margin	11,63,747	8,33,476
5 Profit Before Tax	10,19,897	6,49,294
6 Tax Expense	2,60,393	68,177
7 Profit After Tax	7,59,504	5,81,117
8 R&D Expenditure	2,82,624	2,49,433
9 Net Worth	29,04,642	23,50,617
10 Trade Receivable	4,61,667	4,71,918
11 Cash and Bank Balance	26,42,184	20,30,615
12 Borrowings	-	-
13 Book Value Per Share (Face value of 5) ()	434.32	351.48
14 Earnings Per Share (Face value of 5) ()	113.57	86.89
15 Dividend Per Share (Face value of 5) ()	22	27.5*
16 Debtors Turnover Ratio (No. of times)	6.03	5.63
17 Inventory Turnover Ratio (No. of times)	2.22	1.99
18 Interest Service Coverage Ratio	-	-
19 Current Ratio	1.7:1	1.7:1
20 Debt Equity Ratio	-	-
21 Operating Profit Margin (%) on Turnover	29%	18%
22 Net Profit Margin (%) on Turnover	27%	22%
23 Return on net worth %	26%	25%

*Includes final dividend of 7.5 per share for face value of 5 each (? 15 per equity share of face value of 10 each declared in 60^th AGM for the financial year 2022-23).

Reason for significant changes in ratios for FY 202324:

* Debtors Turnover ratio increased due to improved collection from customers.

* There is a growth in sales during the current year as compared to previous year and also there is a considerable reduction in average inventory in the current period which has resulted improvement in Inventory Turnover Ratios.

* Increase in Operating Profit Margin mainly due to recognition of LCA IOC Contract amendment Sales and increase in Repair and Overhaul Sales.

* Net Profit Margin has improved due to revenue recognition of LCA IOC Contract amendment Sales and increase in interest income. The Company earned interest income of 1,633 Crore in FY 2023-24 (PY 929 Crore).

* Return on Net Worth has improved due to increase of Net profit.

12. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The major HR Initiatives for the year 2023-24 aimed at enabling a culture of continuous learning, employee engagement, and talent management including employee welfare. The initiatives undertaken during the year are summarised as under:

A. Revamped Campus Recruitment Policy:

Recognizing the importance of attracting and nurturing top talent at the entry level, the extant Campus Recruitment System of the Company was revamped. This initiative facilitates induction of both Management Trainees (across various disciplines) and Design Trainees through Campus recruitment. Selection will be on the basis of ranking of top-ranked National Institutional Ranking Framework (NIRF) institutes with a focus on Engineering, Management, Law, and Architecture programs and receipt of slot / response from the Institutes. CA / CMA graduates will be inducted as Management Trainee (Finance) from the Institute of Chartered Accountants of India (ICAI) / Institute of Cost & Management Accountants of India (ICMAI). Campus recruitments would be limited to a maximum upto 50% of total MT / DT vacancies.

B. Introduction of Town Hall Meetings: In pursuance of the valuable insights which emerged from the 2022 Employee Engagement Survey, Town Hall meetings across Divisions / Offices were organised. The meetings provide a platform / forum for open and direct communication between Executives and Top Management on quarterly basis. The scope of the aforesaid meetings encompasses sharing of information pertaining to significant departmental and functional milestones, transparency around future targets, initiatives, and special assignments. Open House sessions facilitated by HR Heads encourage a participative and inclusive environment which further bolsters employee engagement.

13. HAL MANAGEMENT ACADEMY (HMA)

During the year, HMA conducted 143 programs against a plan of 97 programs covering 3,360 Officers (5,963 participants) and 30,713 man-days of training. This accounts to 46% of the Officers of the Company. Also, 718 external candidates participated in various training programs. In addition to the planned programs, HMA introduced a new concept called Weekend Programmes wherein training will be provided on special subjects / Division based training requirements / niche technology & regulatory areas. A total of 16 Weekend programs were conducted with 412 participants. Some of the initiatives undertaken in training/ development program during the year are as follows:

i. The 46^th Batch of Management Trainees (MTs) / Design Trainees (DTs) including 153 trainees were inducted on 22^nd November, 2023. Presently, the trainees have completed the Induction programme, Basic Management Module Phase-I & II at HMA, Group Project work and On Job Training (Phase-1) at respective division of posting. The trainees will carry out Individual Project Work at respective division of posting.

ii. Certification programs such as Six Sigma Green Belt, Disciplinary Proceeding Certification Workshop and Corporate Governance were conducted during the year. 110 executives are certified.

iii. HMA collaborated with reputed Institutions such as IIM-Ahmedabad, IIM-Indore, IIM-Bangalore, IIT- Madras, IIIT-Dharwad, ISI-Bengaluru, CII, NLSIU, IICA, IMTMA etc. for various Management Development Programs.

iv. To foster the culture of Learning & Development, HMA offered its own customised Online Certification programs which is conducted on an Online Learning Management System.

v. The Company has signed MoUs with IICA, Akasa Airlines and Karnataka Aerospace Technology Centre (KATC) for collaboration in offering Management Development Programs and writing papers/articles.

14. SKILL DEVELOPMENT

14.1 Skill Development Policy (SDP) for the employees in nonexecutive cadre has been introduced in the Company with an objective to enhance individuals skill, knowledge

and understanding to achieve performance excellence by eliminating waste in terms of Rework, Rejection & Premature product failures, thereby enhancing productivity, quality & customer satisfaction and strengthening the competitiveness of the Company.

14.2 During the year, the Company has undertaken the following initiatives for skill development:

* More than 775 training contents have been developed to impart the skill training to the employees across HAL by the Domain specialists.

* Post Assessment Training (PAT): Over 675 employees have completed Class Room Training (CRT), Shop Floor Training (SFT) / Work Place Training (WPT) and Coaching / Mentoring (CMT).

* Over 150 Critical Skill Transfer (CST) projects have been completed and nearly 386 employees have acquired the critical skills during the year. So far, over 700 projects have been completed across the Company.

* Mission Prakshalan (5S implementation) has been launched in all the Departments across the Company to transform the organization into a clean, safe and efficient world-class Organization. It is being executed by identified officers trained as 5S Champions. 320 projects have been completed and over 60 new champions trained during the year. So far, over 860 projects have been completed across the Company.

* Mission Abhyudaya (Industry 4.0) has been launched to prepare employees to cope up with the imminent arrival of digital manufacturing ecosystem. Over 6500 employees across HAL have been trained during the year.

15. MANPOWER

Total Employees as on March	Officers	Workmen		Total Workmen
		Direct	Indirect
31, 2024
23,766	7,466	10,474	5,826	16,300

16. ENVIRONMENT PROTECTION & CONSERVATION

Various Divisions of the Company located at Bangalore, Nashik, Koraput, Hyderabad, Lucknow, Kanpur, Korwa, Kasaragod and Barrackpore have taken measures towards Environment Protection & Conservation, governed by various Acts & Rules like the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, Solid Waste Management Rules, 2016, The Air (Prevention and Control of Pollution) Act, 1981, Environment (Protection) Act, 1986, Water (Prevention and Control of Pollution) Act, 1974, etc. All the Divisions are ISO 14001 certified and comply with the rules prescribed by respective State Pollution Control Boards. All emissions and waste generation is monitored as prescribed by the Pollution Control Boards.

Various measures taken by the Company for environment protection and conservations are as under:

Non-hazardous Waste Management:

Municipal Solid Waste (MSW) generated from Townships and Factories is segregated at source in Townships and Factories (Wet, Dry, Garden, Sanitary and Rejects). Through the process of Vermi-Composting, the Biodegradable waste comprising of domestic waste and horticulture waste is being converted to manure. For better utilization of biodegradable waste generated from HAL Estates, the Company has installed Solid Waste Management Units like Organic Waste Converters and Bio Gas Plants at select places. At Bangalore, 1.5 Tons per day capacity bio-gas plants are installed. Metal scrap is stored in designated areas and disposed periodically through MSTC Limited (Central PSU). The Company has taken an initiative towards recycling and reusing the waste paper generated from various offices of HAL, Bangalore by setting up a Waste Paper Recycling Unit (75kg / day). Various products made from the unit include Writing Pads, Visiting Cards, Bags, Files, Folders, etc.

Hazardous Waste Management

Effluents: The Divisions which use and generate hazardous effluents such as chrome, acid/alkali, cyanide etc. are having independent Effluent Treatment Plants (ETPs). Effluent samples after treatment are periodically checked in the Laboratories. The sludge from the ETPs is disposed through Agencies authorized by Pollution Control Boards. The waste water discharged from the ETPs is tested and further treated in Sewage Treatment Plants (STPs), if meeting the norms. The water processed in the STPs is being used for horticulture purposes within the Divisions and no waste water is discharged outside the premises. The sludge generated from the STPs is converted into manure and reused or disposed through authorized agencies.

E-Waste: The Company, as part of its operations, generates e-waste from old Electrical and Electronics Systems such as LRUs, Avionics Control / Test Systems, Electronics Items in Plant & Machinery, Computer Systems (IT) and Communication Systems, which needs to be disposed after their life expiry or damage. Apart from production activities, e-waste is also generated in Townships which is segregated and collected at source. The e-waste generated & collected is stored in designated areas (under cover) and auctioned through MSTC Limited

(Central PSU) for disposal through authorized Dismantlers / Recyclers / Refurbishers.

Used Oil/Lubricants: Used Oil and Lubricants produced during testing, maintenance / overhauling of equipment, vehicles and machinery is collected at source in leak proof containers. The same is stored safely in demarcated areas inside salvage yards and handed over to recyclers authorized by the respective Pollution Control Boards, through MSTC Ltd.

Plastic: Most of the Divisions have taken initiatives towards banning of Plastics Bags / Articles and declaring No-Plastics Zones. The Non bio-degradable waste like polythene etc., is being collected and sent to recycling Agencies, as per Rules.

Other Hazardous wastes such as bio-medical waste, composite waste etc. are collected, stored and disposed through authorized agencies as per Pollution Control Board norms.

Rain Water Harvesting (RWH):

The Company has installed Rain Water Harvesting (RWH) systems at all its locations. The stored water is used for gardening and other non-potable uses. Rain Water Harvesting Systems are made compulsory in all new buildings.

Water bodies like Lakes and Ponds adjacent to some of the Divisions, are cleaned and taken care as a step towards ensuring availability of constant source of Ground Water.

Air emissions:

The emissions from process stacks and Diesel Generators are periodically monitored for compliance with the limits prescribed by Pollution Control Board.

Renewable Energy:

* Total of 7.57 MW capacity rooftop based solar power plants has been installed till date. Projects for installing another 1.4 MW capacity rooftop solar power plants are in progress.

* Total of 26.50 MW capacity ground mounted solar power plants has been installed till date.

* HAL has installed 14.7 MW capacity wind power plants in Karnataka.

The entire energy generated by the above power plants is utilized for captive consumption at our production units. The captive consumption is avoiding more than 66000 Tons of CO2e emissions in the reporting year thereby contributing to the mitigation of climate change.