mishra dhatu nigam ltd share price Directors report

The Members,

Mishra Dhatu Nigam Limited

Dear Members,

Your Directors are pleased to present their 48th Annual Boards Report, on the performance and achievement of your Company, together with the Audited Financial Statements (Standalone & Consolidated) for the financial year ended on March 31, 2022.

1. SIGNIFICANT ACHIEVEMENTS:

• Achieved highest ever Sales of Rs 85,949.02 Lakh for FY 2021-22 registering a y-o-y growth of 5.69% vis-?-vis Sales of Rs 81,323.08 Lakh achieved for FY 2020-21. Achieved highest ever Value of Production (VoP) of Rs 98,872.75 Lakh for FY 2021-22 registering a y-o-y growth of 28.13% vis-?-vis VoP of Rs 77,164.22 Lakh achieved for FY 2020-21.

• Achieved highest ever Operating Profit of Rs 20,781.36. Lakh for the FY 2021-22 registering y-o-y growth of 0.75% vis-?-vis Operating Profit of Rs 20,626.27 Lakh achieved for FY 2020-21.

• Achieved highest ever Profit Before Tax (PBT) for FY 2021-22 at Rs 23,911.98 Lakh vis-?-vis PBT of Rs 22,609.39 Lakh for FY 2020-21, registering y-o-y growth of 5.76 % and the highest ever Profit After Tax (PAT) of Rs 17,630.77 Lakh for the FY 2021-22, vis-a- vis Rs 16,629.15 Lakh achieved for FY 2020- 21, registering y-o-y growth of 6.02 %.

• Highest ever export turnover of Rs 8,702.16 Lakh was achieved during the FY 2021-22 vis-?-vis Rs 1,942.47 Lakh for FY 2020-21, registering y-o-y growth of 348 %.

2. HIGHLIGHTS OF OPERATIONS:

• PT 1M Seamless Pipes: MIDHANI has successfully developed PT 1M Seamless Pipes for applications in sea and fresh water. The pipes earlier imported was developed indigenously by MIDHANI and could be successfully manufactured into seamless pipes for pressure hull application.

• Spherical Pressure Hull: MIDHANI has successfully indigenously manufactured dummy Spherical Pressure Hull (SPH) of Dia 2.2 Meters ring for National Institute of Ocean Technology (NIOT) which is first ever in our country. MIDHANI has successfully developed Top Hatch, primary viewport, and secondary viewports for deep sea SPH components.

• Zircalloy tubes: First ever Zircalloy tubes were successfully forged and supplied for its use in Energy applications.

• Borated Zirconium strip: Even though, achieving uniform chemistry for strips was a difficult task, MIDHANI developed. Borated Zirconium strip of 1mm x 10mm X 1000mm for use in Energy application.

• Fluid End Component: MIDHANI developed and manufactured, ‘Fluid End Component- MDN 16-5-1, Super Martensitic Stainless Steel for its application in Oil and Gas Sector. The demand for this product in our country was being met through imports. With Indigenous R&D efforts, MIDHANI has indigenized the product.

• Bearing Steel: MIDHANI in collaboration with DMRL, has developed 5 types of bearing steels. The Light Combat Aircraft - Tejas LSP4 completed the first one-hour flight accommodated with indigenous aircraft bearings for the critical gear box and the same was confirmed by DRDO on Febuary 8, 2022.

3. FINANCIAL HIGHLIGHTS:

3.1 Your Company achieved a Sales Turnover of Rs 85,949.02

Lakh, Profit Before Tax (PBT) of Rs 23,911.98 Lakh, Profit After Tax (PAT) of Rs 17,630.77 Lakh and Operating Profit of Rs 20,781.36 Lakh for the FY 2021-22. The companys operations were impacted by the second wave of the COVID-19 pandemic during April - May 2021, however, with collective efforts, Company has achieved best ever results in terms of revenue and profits during the financial year.

3.2 Your Company achieved the following results during FY 2021-22:

		(Figures in Rs Lakh)
Particulars	FY 2021-22	FY 2020-21
Revenue from Operations	85,949.02	81,323.08
Other Income	3,130.62	1,983.12
Total income	89,079.64	83,306.20
Less: Operating Expenditure	59,718.16	56,797.75
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense	29,361.48	26,508.45
Less: Depreciation/ Amortization/ Impairment	3,299.53	2,699.53
Profit before Finance Costs, Exceptional items and Tax Expense	26,061.95	23,808.92
Less: Finance Costs	2,149.97	1,199.53
Profit before Exceptional items and Tax Expense	23,911.98	22,609.39
Add/(less): Exceptional items	-	-
Profit Before Tax	23,911.98	22,609.39
Less: Tax Expense (Current & Deferred)	6,281.21	5,980.24
Profit After Tax (1)	17,630.77	16,629.15
Other Comprehensive Income/(loss) (2)	60.62	(34.09)
Total Comprehensive Income (1+2)	17,691.39	16,595.06
Ratios (Percentages)
Profit Before Tax to Capital employed*	19.62	21.08
Profit Before Tax to Revenue from operations	27.82	27.80
Profit After Tax to Net Worth	14.81	15.50
Profit After Tax to Paid-up Share Capital	94.11	88.76
Sales to Capital Employed*	70.54	75.82
Sales to Gross Block	78.26	146.28
Per Capita Sales (H in Lakh)	111.62	106.58

*Capital Employed is calculated as Net worth + Long term Borrowings.

4. DIVIDEND POLICY:

4.1 The Board of Directors of your Company are pleased to recommend a final dividend of Rs 1.54 per equity share of the face value of Rs 10/- each i.e. @ 15.40%, for the financial year ended on March 31, 2022 and seek your approval for the same. The proposed final dividend, will be payable to those shareholders whose names appear in the Register of Members as on the Record Date i.e. September 22, 2022.

4.2 Further, during the year under review, the Board of Directors of the Company in their Meeting held on March 14, 2022 has declared and paid interim Dividend of Rs 1.56 per equity share of the face value of Rs 10/- each i.e. @ 15.60%.

4.3 Cumulatively, the Board of Directors of your Company has declared / recommended a total Dividend of Rs 3.10 per equity share of the face value of H10/- each i.e.

@ 31 % for the year ended March 31, 2022. At 32.94% of Profit After Tax (PAT) this is the highest ever dividend payout by the Company.

4.4 Your Company, being a Central Public Sector Enterprise (CPSE), follows the Guidelines on Capital Restructuring issued by Department of Investment and Public Asset Management (DIPAM) vide F. No. 5/2/2016-Policy dated May 27, 2016. As per the Guidelines, every CPSE would pay a minimum annual Dividend of 30% of PAT or 5% of the Net-worth whichever is higher subject to the maximum Dividend permitted under the extant legal provisions. The Companys dividend distribution policy is enclosed as "Annexure - I" and also available on the

Companys website viz. https://midhani-india.in/policies/.

4.5 The performance of MIDHANI with respect to the Return on Investment in comparison to the previous year is as under: Rs ( in Lakh unless otherwise stated)

Parameters	FY 2021-22	FY 2020-21
1. Dividend	5,807.57	5,208.05
2. Profit After Tax (PAT)	17,630.77	16,629.15
3. Net Worth*	1,16,093.41	1,04,270.29
4. Dividend/PAT (%)	32.94	31.32
5. PAT/Net Worth (%)	15.19	15.95
6. Dividend/Net Worth (%)	5	5

*Net worth is after considering Dividend for respective periods.

5. TRANSFER TO GENERAL RESERVE:

Your Company has transferred Rs 10,300.00 Lakh to

General Reserve for the FY 2021-22.

6. PERFORMANCE AGAINST MoU:

For the FY 2021-22, MIDHANIs MoU performance is expected to qualify for an overall ‘Good rating, however, the same is subject to evaluation and confirmation by Department of Public Enterprises (DPE).

7. MODERNISATION, EXPANSION & UPGRADATION PROGRAM OF THE COMPANY:

7.1 The aim of modernization, expansion and upgradation program of the Company is to enhance the competitiveness of Companys products by replacing legacy technologies with newer, more innovative platforms for increased sales and product growth. The up-gradation and modernization programs of the Company over the last decade contributed towards streamlining the rule-based business processes, thereby alleviating strain from the human workforce for increase in production tonnage capacity and product diversity.

7.2 In public sector, customer value translates to public service and with the modernization and upgradation initiatives, Company has successfully positioned itself to serve existing and new customers in domestic markets as well as to enter new business areas of strategic and National importance. The strategy is to apply technologies to workflows and make processes more dynamic and agile to sustain competitiveness. Capacity enhancement and ramping up of new facilities was the main catalyst in helping your Company to surpass previous records in physical performance during the financial year under report.

7.3 Projects related to Modernization, Expansion and Upgradation of MIDHANIs production activities successfully commissioned during the year ended on March 31, 2022 are as under:

• Wide Plate Mill: To ensure self-reliance in production of extra wide plates / sheets of special steel and other strategic materials plates, armour plates etc, a Wide Plate Rolling facility was successfully commissioned in 3rd Quarter of FY 2021-22.

• Hot Spring coiling machine for Production of Helical Springs: For manufacturing and supply of Helical Compression Springs for Railway Wagons, Coaches, Locomotives, a Spring Manufacture unit was set up and successfully commissioned.

• 30T Bogie Hearth Furnace: Replacement of old reheating furnace of capacity 30T for heating of billets was setup in Forge shop and the furnace was successfully commissioned in 3rd Quarter of FY 2021-22.

• 20T Fixed Hearth Furnace: A new fixed hearth furnace of capacity 20T was set up in Forge shop for re-heating of smaller ingots. The furnace was successfully commissioned in 3rd Quarter of FY 2021-22.

• Encon Furnace Bogie: Revamping of Bogie drive of the furnace was successfully completed in 4th Quarter of FY 2021-22.

• Tempering furnace for Wide Plate Mill (WPM): For processing of Armour plates and other special plates, Tempering Facility was successfully commissioned in 4th Quarter of FY 2021 - 22.

7.4 Projects related to Modernization, Expansion and Upgradation of MIDHANIs production activities which will be commissioned during the current financial year are as under:

• New 20T & 12T Fixed Hearth Furnace for Forge shop: New furnaces of capacity 20T & 12T for Re-heating of smaller size billets are being set-up in Forge Shop to replace old fixed hearth reheating furnace for Re-heating of smaller size billets. Major supplies for furnaces has been completed.

• New Vacuum Induction Melting Furnace: A new 8T Capacity ‘Vacuum Induction Melting Furnace (VIM) is being set up in Melt Shop-III in addition to existing VIM, which remains continuously operational to meet customers requirement. Erection of equipment has been completed and commissioning is under progress.

• 300 Kg Vacuum Arc Skull Melting Furnace: For installation of 300 Kg Skull Melting Furnace, relevant infrastructure has been provided successfully and erection of equipment is under progress.

• Establishment of new 10T VAR facility: It is planned to add one new ‘10T Vacuum Arc Re-melting Furnace (VAR) facility to meet customers requirement. Civil & structural works, auxiliary and electrical facilities are under progress.

7.5 Development of Armour unit at Rohtak: Considering increasing global market demand for body armour, Vehicle armour, Bullet Proof Morcha, Bullet Resistant Jackets etc, and to cater the needs of domestic market an armour unit of MIDHANI is being set up at Rohtak, Haryana. Major construction activities of Phase-I & Phase-II has been completed. Equipment like Fiber cutting machine, Water jet cutting machine, Hydraulic ballistic press, CNT spray machine, etc are commissioned. Plant is likely to be operational during FY 2022-23.

7.6 Aluminum Alloy Plant: ‘Utkarsha Aluminium Dhatu Nigam Limited (UADNL) is a (50:50) joint venture of MIDHANI and National Aluminium Co. Ltd, incorporated to set up High end Aluminum Alloy Production plant at Nellore, Andhra Pradesh. To establish green field project of Aluminum Alloy flat rolled product facility, land of 110 Acres is procured in Nellore. Corporate Office of UADNL has been set-up. Environmental Clearance and Consent for Establishment have been obtained. The technical consultant have been appointed.

The technical specification for technology Know-how and equipment supply is under progress.

8. LABOUR PRODUCTIVITY:

The value added per employee during the year was Rs 86.84 Lakh compared to Rs 78.84 Lakh in the previous year.

9. SALES AND OPERATIONAL EFFICIENCY:

Debt collection continued to be a focus area for the FY 2021-22. Trade receivable as "No. of Days Sales" has come down to 130 days as on March 31, 2022 as compared to 173 days as on March 31, 2021. High accumulation of Debtors is primarily on account of the budgets getting exhausted at customers end, which are primarily Government Departments / agencies.

10. DEVELOPMENT OF NEW PRODUCTS THROUGH R&D EFFORTS:

10.1 Every successful development of product begins with Research and Development (R&D), however, the role of R&D department is more complex than simple innovation. R&D is connected to marketing, cost management and other verticals of business strategy as Research and development is instrumental in creating new products and up-grading old products. MIDHANI places due importance to R&D.

10.2 An expenditure of Rs 681.79 Lakh has been incurred towards R&D expenses during FY 2021-22. Apart from, overseeing the research and development of new products, R&D Department in MIDHANI is also responsible for planning, team management, deployment of technical infrastructure and manpower to support specific processes.

10.3 Some of the major R&D initiatives undertaken during the year are as below:

New Product Developments:

• PT 1M Seamless Pipes: MIDHANI has successfully developed PT 1M Seamless Pipes for its strategic use in Naval Sector. The PT 1M Seamless Pipes are used to manufacture deformable semi-finished products like sheets, pipes, rods, etc for its applications in sea and fresh water with operating temperatures up to 150oC. The pipes were earlier imported from Russia. As a strategic material supplier – MIDHANI, took initiative and successfully developed this material indigenously and it could be manufactured into seamless pipes for pressure hull application.

• Titanium alloys for National Institute of Ocean Technology (NIOT) Project: MIDHANI has successfully indigenously manufactured dummy Spherical Pressure Hull (SPH) of Dia 2.2 Meters ring for National Institute of Ocean Technology (NIOT) which is first ever in our country. The main deep sea Titanium SPH components have high section thickness (~400mm) beyond the international specifications limiting thickness up to 150 mm. MIDHANI took the initiative and indigenously manufactured dummy SPH of Dia 2.2 Meters ring for deep sea spherical pressure hull components for Top Hatch, primary viewport, and secondary viewports.

• Zircalloy tubes for Energy applications: First ever Zircalloy tubes were successfully forged and supplied by MIDHANI for its use in Energy applications. For the first time in MIDHANI, an alloy was melted with a melt rate of 1400 Kg/hr in VAR furnace. The alloy being pyrophoric was handled expertly and due precautions were observed during cooling and machining which resulted in successful development.

• Borated Zirconium strip of 1mm x 10mm X 1000mm for Energy applications: Borated Zirconium strip of 1mm x 10mm X 1000mm for use in Energy application was developed by MIDHANI. Borated Zirconium of about 45 mm dia and 50 mm height was compacted and welded together to form an electrode, it was then melted in Electron Beam Melting (300 KW) Furnace at high power. The electrode after first melt was cut into four parts cross sectionally and melted thrice for achieving uniform chemistry which was a difficult task successfully achieved by MIDHANI.

• ‘Fluid End Component- MDN 16-5-1, Super Martensitic Stainless Steel for Oil and Gas Sector:

Demand of ‘Fluid End Component spares remain at higher end due to its short life which varies from 12 to 60 days; due to erosion in corrosive environment of oil and gas drilling wells. The demand for this product was met through imports only, with indigenous R&D efforts, MIDHANI has successfully developed and manufactured this product.

• Ferni 36 and Ferni 36 M: Ferni 36 is an Iron-Nickel alloy consisting of 36% Nickel and exhibits very low coefficient of thermal expansion. Ferni 36M is similar to Ferni 36 with modified chemical composition. These alloys were successfully manufactured and dispatched to customers by MIDHANI which are used in applications where high dimensional stability is required, such as precision instruments, valves in engines, clocks, seismic gauges, relays, transformers etc.

• FerCoNi: FerCoNi is an Iron-Nickel-Cobalt alloy that exhibits coefficient of thermal expansion similar to glass (both borosilicate & alumina). This alloy, successfully developed by MIDHANI is used in glass-to-metal hermetic sealing, ceramic-to-metal sealing, power tubes, microwave tubes, transistors, diodes, integrated circuits etc.

• SOFTMAG 48B: SOFTMAG 48B is a soft magnetic iron-nickel alloy, consisting of 48% Nickel and exhibits very high magnetic permeability with high saturation level. This alloy developed by MIDHANI has typical applications in magnetic shielding, sensors, transformers, choke, watches, etc.

• 13-8 Mo PH Martensitic Steel: 13-8Mo, Precipitation Hardening (PH) Martensitic Steel was the first newly developed grade for Oil and Gas sector against an export order. This alloy was developed and supplied by MIDHANI in a record time of two months.

• Cobalt free special steel: Cobalt free special steel finds its applications in tooling industry for service temperatures upto 350?C. MIDHANI has indigenously developed 18% Ni cobalt free special steel (MDN T250) on a product scale with a combination of high strength and fracture toughness. The product was developed first time and was supplied against an export order.

• Manufacturing of 2mm Cold rolled sheet of alloy Superalloy276: Superalloy 276 is a solid solution strengthened Nickel-Molybdenum-Chromium alloy with a small addition of Tungsten. It is one of the premier corrosion resistance materials for process industries. Superalloy 276 has excellent resistance in both oxidizing and reducing environments. MIDHANI has successfully developed and manufactured this material as part of indigenization efforts, as the alloy was one of the most imported items among all super alloys.

• 150 X 1050 X 4500 mm large slab of Superni 625: Alloy 625 is a nickel-chromium-molybdenum alloy that is used for its high strength, high toughness, and excellent corrosion resistance. The strength of alloy 625 is derived from the stiffening effect of molybdenum and niobium on its nickel-chromium matrix. MIDHANI has successfully manufactured the first ever large size slab measuring 150 X 1050 X 4500 mm.

Manufacturing and Process Technology Development:

• Optimization of chemical composition and heat treatment cycle to meet the mechanical properties of SNI 80A retainer rings: SNI 80A is Nickel-chromium alloy strengthened by addition of Titanium and Aluminium having good creep strength and high resistance to high temperature oxidation up to 8500c. Since this alloy is meant for high temperature application, the issues of hardness values being on the lower side were observed occasionally and was inconsistence. To improve the hardness, efforts were made to optimize the chemical composition and heat treatment parameters to meet the required hardness.

• Ageing parameters optimization to meet the property requirements of MDN2100 for tank ammunition applications: High strength martensitic ageing steel finds its usage as a sabot in tank ammunition. The material was always imported to meet the defence needs of the nation. As part of indigenization efforts, MIDHANI manufactured this material and has optimized the process parameters to meet the property requirements.

• Establishment of process parameters for rolling of MDN250 plates using new Wide Plate Mill facility:

Large sized MDN250 plates for space applications were being rolled at external facilities. MIDHANI has established a new wide plate rolling mill facility and also established process parameters for rolling of MDN250 plates to meet the requirements of space applications.

Artificial Intelligence (AI)

• As part of AI roadmap, two projects were initiated in MIDHANI having potential for extending to several other areas of MIDHANIs operations viz. process optimization of Special alloys; Alloy design and development through AI. A data-driven optimization technique through evolutionary algorithms Neural Networks has been used for process optimization of Special Steel. Multiple process parameters of a vacuum melting furnace were processed through a data model and the Algorithm has provided a tradeoff among critical parameters and improvement in melt duration.

• MIDHANI established a framework for new alloy design with the help of AI. The preliminary studies were conducted around the composition of a tool steel. The targeted application was focused to achieve low thermal expansion coefficient with considerable strength of the steel using Machine Learning approach. This framework is potentially usable for other alloy systems such as Super alloys and Titanium alloys with respect to specific applications.

11. INTELLECTUAL PROPERTY:

11.1 New products were developed to capture the emerging demand of the market. Remarkable progress in R&D activities were achieved which are reflected in the form of expansion of Intellectual properties assets of the company. The products manufactured by MIDHANI are unique in nature and to prevent infringement, Intellectual Property (IPRs) Rights application were encouraged.

11.2 In total 11 Nos of patents has been filed and 5 Nos of patents were granted to MIDHANI. During FY 2021-22, MIDHANI has filed 16 IPR applications including 5 Trademarks related to Armor products.

11.3 To create awareness on IPR, trainings were conducted by R&D team in association with Training and Development department. These sessions were conducted physically and through online mode. The IPR awareness drives for vendors were also conducted. The study material, recorded video links and other useful resources w.r.t IPR were shared with MIDHANIs registered vendors.

12. ENERGY CONSERVATION:

12.1 Efforts in the direction of Energy Conservation has continued during the year under report. MIDHANI is committed to developing, building, and promoting sustainable energy solutions. Due importance has been given to energy conservation measures at MIDHANI.

12.2 MIDHANI has set up a Solar Plant and entered into open access agreement with TSSPDCL & TSTRANSCO to avail the 4 MW solar power plant generated energy. The solar power plant had generated solar energy valued at Rs 303.00 Lakh for FY 2021-22.

12.3 During the year under report, there was an increase in specific consumption of LPG and electricity due to the ongoing project particularly the Wide Plate Mill and the new VIM 8T Furnace. The summary of consumption of Electricity and LPG for the FY 2021-22 vis-?-vis FY 2020-21 are as below:

• The summary of consumption of LPG:

Description	Unit	FY 2021-22	FY 2020-21
Annual consumption of LPG	MT	5,473.53	4,045.62
Specific consumption of LPG in Production	MT (LPG)/ MT (Prod.)	0.18	0.16

• The summary of consumption of Electricity:

Description	Unit	FY 2021-22	FY 2020-21
Annual consumption of Electricity	KWHr (in Crore)	5.40	3.88
Specific consumption of Electricity in Production	Kwh/T	1762.89	1,272.29

13. MARKETING & BUSINESS DEVELOPMENT:

13.1 During the year under review, MIDHANI booked orders worth of Rs 81,691.00 Lakh. The order book position as on

April 1, 2022 stood at Rs 1,31,700 Lakh. With the current order book and considering the future orders in pipeline, your Company looks forward to steady growth in the upcoming years. The sector wise order booked during FY 2021-22 are as under:

Sector	Total value of orders (K Lakh)
Defence	55,440
Space	7,020
Energy	7,570
Others	11,661
Total	81,691

13.2 Sector-wise Performance: The total orders executed during the year under review were Rs 85,949.02 Lakh and the sector wise sales executed is as below:

Sector	Total value of supplies (K Lakh)
Defence	18,442.68
Space	38,728.16
Energy	1,143.53
Others	27,634.65
Total	85,949.02

13.3 Business Development:

As part of its growth strategy MIDHANI has invested in new facilities like Armour unit at Rohtak, Haryana and a new Wide plate cum sheet mill to tap other industries outside Defence, in particular, railways, inland security, oil and gas pipelines, and the power sector. This would be a step towards ‘Aatma Nirbhar Bharat Abhiyaan of Government of India which aims to produce goods indigenously and provide import substitute of advanced materials. The efforts of business development in the following sectors are explained:

• Aerospace: MIDHANI has collaborated with various Start-ups, MSMEs, component manufacturers and Original Equipment Manufacturers (OEM) to supply various grades of aeronautical materials. MIDHANI has supported organisations in aerospace sector by supplying quantities much lesser than Mininum Order Quantity (MoQ) for facilitating approvals. Discussions are in advanced stages with various global OEMs for qualification of materials, processes and Technology transfer through Defence offset. During FY2021-22, MIDHANI has developed ten new customers in aerospace sector and indigenized six different grades of materials.

• Armour: MIDHANI has supplied the lightest body armour produced under Transfer of Technology (ToT) with/ from BARC and other inhouse designed armouring products such as up-armoured vehicles, Bullet Resistant Jackets, to Itanagar Police, Greyhounds, Telangana Police, Assam police, Ordnance factories, Arunachal Pradesh Police, Indian Airforce, J&K police, etc.

• Railways, Oil & Gas: MIDHANI discussed with Railway Board members for supply of high-quality steel plates and spring for LHB coaches and wagons and has obtained few development orders. The same was produced in the new Springs facility and supplied. More orders are in the pipeline. MIDHANI has demonstrated manufacturing of Nickel alloy plates for the Oil & Gas industry and is in talks with the project partners for orders. Few customers are ready to sign long term contracts. In upcoming years, Oil and Gas sector is going to play a major role in MIDHANIs progress.

• Exports: Exports has been one of the key areas identified for business. Several discussions and meetings with many Defence attaches of countries have yielded enquiries and orders. MIDHANI achieved highest export sales of Rs 8,702.16 Lakh during FY 2021-22 registering y-o-y growth of 348%. MIDHANI has developed few new tailor-made alloys for exports.

13.4 Information Technology (IT):

• Efforts to strengthen Cyber Security framework continued during the year under review. To further strengthen cyber security posture, MIDHANI upgraded its IT Infrastructure in terms of Networks, Endpoints, and additional Desktop PCs etc. MIDHANI has NIC based e-mail accounts which are secured by ‘KAVACH a ‘Two Factor security authentication for NIC based corporate mail accounts. IT Department has completed Digital Signature integration to E-office application for secure document movement and approvals.

• Vulnerability Assessment and Penetration Testing (VAPT) Audit by CERT-In impaneled auditor was completed for the IT Infrastructure and Website. Intranet setup with E-office, ERP, Mails has been extended to new production facility of MIDHANI at Rohtak, Haryana. Separate ERP organization setup, including all the modules i.e. Production, Marketing, Finance, Human Resource, Taxation and Stores was also implemented for Rohtak Plant.

• During the year under report, QR Code for B2C Invoices with Java based utility was developed in-house to integrate QR generation with ERP and integration to invoice facility. This has helped MIDHANI be compliant with B2C QR invoices as per Ministry guidelines

• Successfully installed ‘Big Blue Button, an advanced open-source web conferencing and online teaching and learning platform in MIDHANIs Intranet system, with real time sharing of audio, video, slides, white boards, chat and screen to provide free and effective platform for web conferencing.

14. EXHIBITIONS/SEMINARS FOR PROMOTION OF COMPANY PRODUCTS/BRAND:

As part of ‘Azadi ka Amrit Mahotsav, MIDHANI held an exhibition for the general public from 13th to 19th December, 2021 to show case various products being manufactured by MIDHANI. The exhibition received an over-whelming response and was a grand success with a footfall of 20,000+ visitors recorded in Hyderabad and 5000+ recorded in Rohtak. Dr. (Smt.) Tamilisai Soundararajan, Honble Governor - Telangana addressed the valedictory function of the exhibition and appreciated the role played by MIDHANI in serving the strategic sectors of the country.

15. QUALITY MANAGEMENT ACTIVITIES:

15.1 The Quality Management Systems in MIDHANI have been approved by Directorate General of Aeronautical Quality Assurance (DGAQA) in accordance with AFQMS-2018 standard with validity up to June 30, 2023.

15.2 Quality Management Systems of ‘Aeronautical Materials Testing Laboratory (AMTL) operated by MIDHANI have been approved by Directorate General of Aeronautical Quality Assurance (DGAQA) in accordance with AFQMS-2018 standard during October 2021 with validity up to June 30, 2024.

15.3 Certificate of accreditation from National Accredited Board for Testing Laboratories (NABL) in accordance with standard ISO/IEC 17025:2017 for Chemical and Mechanical testing laboratories has been renewed in the month of March 2022 with validity up to December 1, 2022.

15.4 Certification of Quality Management Systems of MIDHANI for compliance with AS9100:2016 and ISO 9001:2015 has been renewed during the month of December 2021 with validity up to May 15, 2024.

15.5 Quality Month - 2021 program on the theme "Sustainably Improving Our Products, People, and Planet" was organized by Quality Management Department of MIDHANI in the month of November 2021.

16. SUPPLY CHAIN MANAGEMENT PERFORMANCE:

16.1 Micro and Small Enterprises (MSEs) Vendor Meet: A Vendor Development webinar was organized with MSE vendors on the occasion of "Commonwealth of 75 years of Indias Independence" on April 15, 2021 to encourage MSEs and startups participation. To encourage MSEs participation, during the meet, MSEs were appraised about the opportunities available and benefits extended to MSEs by MIDHANI, and they were also appraised about the items specifically to be procured from them.

16.2 Vendor Meet: MIDHANI organized ‘Vendor Meet on October 30, 2021, to interact with the vendors and to showcase the recent developments, product profiles of MIDHANI and to also understand the issues, if any, being faced by vendors to improve the process.

16.3 Encouragement to Micro and Small-Scale Industries:

MIDHANI continues to encourage MSE units by regularly sourcing various goods and services from them. Percentage value of goods/services procured from MSE units stood at 37% of total domestic value procurement during FY 2021-22.

16.4 Integrity Pact (IP): To ensure transparency and integrity of all the contracts, MIDHANI signs "Integrity Pact" with respective bidders in all procurement indents of high value contracts. At present, Shri Anand Deep, IRS (Retd.) and Shri P. Mallikarjuna Rao, IFS (Retd.) are holding the position of Independent External Monitors (IEMs) of MIDHANI. About 85% of the total value of Contracts / Purchase Orders were covered under IP during FY 2021-22.

16.5 E-Procurement: To bring higher transparency in procurement, MIDHANI has maximized procurement through e-procurement process. During FY 2021-22, about 98% of total procurement value other than exempted category were done through e- procurement mode.

16.6 Government e-Market Place (GeM): MIDHANI is maximizing its procurement through GeM. During the FY 2021-22, MIDHANI released Purchase Orders for procurement of Goods and services of value of Rs 2,660.00 Lakh through GeM vis-?-vis procurement value of Rs 78.80 Lakh during the FY 2020-21 which is more than three fold increase.

17. RISK MANAGEMENT:

MIDHANI has a Board approved Risk Management Policy and the Risks associated with various processes in MIDHANI were discussed in the Internal Production

Review Meetings and Corporate Management Committee Meetings, from time to time. A Risk Management Committee in terms of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements Regulations, 2015 (SEBI Listing Regulations) has also been constituted. The identification of the risk elements faced by the Company is listed out in Management Discussion and Analysis, which forms part of this Annual Report.

18. HUMAN RESOURCE DEVELOPMENT:

18.1. MIDHANI continues to aim at building a motivated, committed and satisfied work force to achieve its organizational goals. HR Management has transformed to a strategic function from that of a conventional support function. MIDHANI recognizes Human Resource as its most important asset that could be a major differentiator in the face of competition.

18.2.Aligning Talent Management initiatives with Technology is extremely important for rapid growth of the Company. Keeping in view the current trends, several HR Policies such as Promotion Policies, Post-Retirement Benefits Schemes, Recruitment Schemes etc. were amended/ introduced to stay abreast with requirement of employees and Company.

18.3.The employees are highly skilled and self-motivated individuals. One of the major challenges before the Company is to periodically up-grade knowledge and skills of its workforce by means of training and development modules. Special emphasis was given for the development of SC, ST, OBC and PWDs among employees.

18.4.Manpower Position: The manpower strength of MIDHANI as on March 31, 2022 stands at 486 Non-executives,

36 Non-Unionized Supervisors and 248 Executives compared with 470 Non-executives, 41 Non-Unionized Supervisors and 250 Executives as on March 31, 2021.

18.5. The total manpower strength under permanent category of your Company as on March 31, 2022 is as under:

Particulars	Non-Executives	Non-Unionized Supervisors	Executives	Total
Male	442	34	219	695
Female	44	2	29	75
Total	486	36	248	770

Statement showing the representation of SC/ST/OBC/PH and their recruitment etc., is enclosed as ‘Annexure - II

Note: Excluding Directors

Representation of SC/ST/OBC among Non-Executives:

SC	ST	OBC	Others	Total
88	46	207	145	486

18.6. Employee Welfare Initiatives: The various employee welfare initiative taken during the FY 2021-22 are as below:

• Better work-life Balance:- As an employee welfare measure and for better work-life balance, management declared second Saturday of every month as Holiday w.e.f. July 2021.

• Encouraging Small Family Norms: In order to encourage employees to opt for small family, Management, as a policy, allows casual leave for employees who undergo sterilization operation varying from 6 to 14 days based on the type of sterilization operation.

• Social obligations / welfare programs: Monetary awards were presented to meritorious students/ children of our employees belonging to SC, ST and OBC categories @ Rs 1,000/- per child in each category who scored highest percentage of marks and @ H500/- each to all the students of above categories who scored 75% and above marks in 10th standard Board examination or equivalent held in March/ April. As per the Company scheme, a scholarship for children of employees for pursuing graduation in Metallurgical Engineering has been granted @ Rs 1000/-p.m., till completion of the course. MIDHANI Employees Family Benefit Scheme 2021 was also introduced during the year under report.

• School Activities: Brahm Prakash D A V School is managed by the Company for the benefit of children of MIDHANI employees. A lot of emphasis is laid on all round development of the child including extracurricular activities such as Sports, Games, Scouts and Guides etc. Reimbursement @ Rs 500/- per child

per month was made by the Company every month (max. 2 children) for the children studying in BPDAV. In case of any increase in tuition fee by school authorities in future over and above the existing fee, the same will be borne 50% by the workmen and 50% by the Management.

• Township: MIDHANI continues to discharge its social obligations by maintaining a township consisting of 87 quarters to cater to the housing needs of the employees working in essential services of the Company.

18.7. Women Empowerment:

• MIDHANI encourages its women employees to strengthen their technical skills and overall grooming. Management nominates women employees for in-house as well as external training programs.

• MIDHANI is extending all facilities as per the statutes for the welfare of the women employees. Women employees of MIDHANI belonging to Executive and Non-Executive cadre are spread out throughout various departments of Company. There are a total of 75 women employees collectively working on par with men towards achieving the Company goals.

• MIDHANI celebrates International Womens Day program on March 8, 2022 every year. International Womens Day on March 8, 2022 was celebrated on the theme "Break the Bias". As part of this program, MIDHANI conducted interactive session for women employees where they discussed improvements in women welfare measures. Women employees of all age groups actively participated in the program.

18.8.Industrial relations: The industrial relations continued to be peaceful and cordial during the year under report. The management continues to receive maximum support and cooperation from the employees as in the past.

18.9.Environment management: MIDHANI continued its efforts to maintain and promote ecological balance in and around factory premises by developing and maintaining extensive plantation. A thick canopy of greenery with thousands of plants of more than 200 species constitutes the green belt in and around MIDHANI. This not only controls air / dust pollution but also provide habitat to birds of different species.

19. DIRECTORS, EMPLOYEES AND RELATED DISCLOSURES:

In accordance with Ministry of Corporate Affairs notification no. GSR 463(E) dated June 05, 2015, Government Companies are exempt from provisions of Section 197 of the Companies Act, 2013 and rules thereof.

20. TRAINING & DEVELOPMENT:

20.1 During the year under report, Training & Development Department achieved 1236-man days training as against 1362 man in the previous year. Such shortfall was due to the ongoing COVID-19 pandemic due to which only limited physical training programs could be held. 1236-man days of training programs were arranged for 284 Executives (including Non-Unionized Supervisors), 486 Non-Executives, and 1145 contract workmen including Fixed Term Contract employees.

20.2Under the industry - Academia - interface program, two Plant visits were organized during the year and among one of them was the Instructional visit of Indian Army Officers in rank of ‘Major, pursuing Advance Mechanical Engineering (PT-II) course at Faculty of Electrical and Mechanical Engineering (FEME) under Military College of Electronics and Mechanical engineering (MCEME), Secunderabad.

20.3 In line with the directions of Chief Vigilance Commission and Administrative Ministry, two week in-house ‘Mid-Career Training Program (MCTP) including two days module on Preventive Vigilance and one day Field visit, was organized by MIDHANI for 32 Middle level Managers in a single batch. The objective was to help middle level managers to become more confident about their roles and responsibilities, to gain acquaintance, which shall help them to become better executives in the decision making process.

21. STATUTORY & SOCIAL OBLIGATIONS:

21.1 CORPORATE SOCIAL RESPONSIBILITY:

• The Corporate Social Responsibility and Sustainable Development Policy of MIDHANI in line with the Companies Act 2013 was approved by the Board of MIDHANI. The policy is available at https://midhani-india.in/policies/ .

• For the year under review MIDHANI has incurred its highest ever expenditure of Rs 481.46 Lakh for CSR activities against the mandatory requirement of Rs 452.38. Lakh. Thus, the cumulative CSR expenditure incurred by MIDHANI over the years has crossed Rs 3,320.65 Lakh.

• An annual report on the CSR activities of the Company as mandated under the Companies (Corporate Social Responsibility Policy) Rules, 2014, is available at https://midhani-india.in/csr/ and enclosed as Annexure - III. The composition of Corporate Social Responsibility and Sustainable Development Committee of MIDHANI is provided in "Report on Corporate Governance" which forms part of this Annual Report.

• The projects taken up for CSR activities by your Company during the year under report fall under below mentioned areas:

(i) Promotion of Health Care and Sanitation;

(ii) Promotion of Education;

(iii) Skill Development; and

(iv) Others

(i) Promotion of Health Care and Sanitation: (a) Promotion of Health care:

i) ‘MIDHANI Primary Health Care Centre was set up through ‘MIDHANI Primary Health Care Trust to cater to the medical needs of the public living in and around MIDHANIs corporate office. An amount of Rs 116.81 Lakh was spent towards equipment purchase.

ii) Basic checkup and medicines are provided at free of cost to the patients at MIDHANI Primary Health Care Centre. Expenditure incurred in hiring of Doctor and Medicines was Rs 42.24 Lakh.

iii) Sponsored Oxygen Generator Plant and shed to Osmania General Hospital at an expenditure of Rs 87 Lakh.

(b) Annual maintenance of Toilets constructed by MIDHANI under Swachh Bharat: Annual Maintenance of Toilets constructed by MIDHANI:

i) Location: Public Toilet constructed around MIDHANI. ii) Total Project Expenditure: Rs 1.75 Lakh. iii) No of beneficiaries: 100-150 per day.

(ii) Promotion of Education:

(a) Children belonging to SC/ST category whose parents fall in lower income group are being given admission in to LKG and the entire fee shall be borne by MIDHANI till they complete 10th Class. This year Company has sponsored for 8 (eight) such children.

(b) Sponsored Dual Desks to various Government Schools of Kothagudem (Aspirational Dist) at an expenditure of Rs 59.80 Lakh.

(iii) Skill Development:

(a) Every year MIDHANI is inducting more than 10% apprentices to help students have exposure to the real time environment and gain knowledge from the experienced professionals. As part of the stipend paid to the apprentices, an amount of Rs 88.38 Lakh is accounted under CSR as per the guidelines.

(b) Contributed Rs 40 lakh to Coimbatore

Innovation and Business Incubator as advised by Ministry of Defence for promotion of Innovations for Defence Excellence (iDEX) an initiative of the Government of India launched by the Honble PM.

• Actual Expenditure incurred in FY 2021-22 is Rs 4,81,46,165/- which includes previous years unspent amount of Rs 41,11,000/- against mandatory expenditure of Rs 4,11,27,000/- hence, MIDHANI has incurred excess expenditure of Rs 29,08,165. The

Board of MIDHANI has accorded its approval to set-off Rs 29,00,000 such excess CSR expenditure in compliance with the conditions stipulated under Rule 7(3) of the Companies (CSR Policy) Rules, 2014.

21.2 DISCLOSURE UNDER SEXUAL HARRASEMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

• Your Company has always provided a safe and harassment free workplace for every individual working in the company and for women in particular. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy.

• During the year under review the Internal Complaints Committee (ICC) did not receive any complaint pertaining to sexual harassment and no such complaint are pending at the end of FY 2021-22.

21.3 CONTRIBUTION TO EXCHEQUER:

During FY 2021-22, your Company contributed an amount of Rs 22,363.05 Lakh in the form of Dividend, Duties and Taxes vis-?-vis Rs 18,953.18 Lakh during previous financial year.

21.4 COPY OF ANNUL RETURN:

The Annual Return as provided under sub-section (3) of Section 92 of The Companies Act 2013 is available at website of the Company viz. https://midhani-india.in/ annual-return/

21.5 REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Report on conservation of Energy, Technology Absorption and foreign exchange earnings and outgo is enclosed at Annexure – IV

21.6 BUSINESS RESPONSIBILITY REPORT:

As stipulated under the Regulation 34 of SEBI Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as a part of the Annual Report as Annexure- V

21.7 IMPLEMENTATION OF RIGHT TO INFORMATION (RTI) ACT 2005:

MIDHANI being a Public Authority under RTI Act 2005 is discharging its obligation thereof. MIDHANI is furnishing information sought by the citizens of India within the stipulated time. MIDHANI has also fulfilled its obligation of Suo Motu disclosures under Section 4 of RTI Act 2005, by displaying information on its official website.

21.8 RAJBHASHA IMPLEMENTATION:

• As per Government of India directives, the Official Language Act 1963, the Official Language Rules 1976 made there under and the orders issued by Government of India from time to time for promoting the use of Hindi for Official purpose was complied by MIDHANI without deviation. The quarterly meetings of Official Language Implementation Committee were held under the Chairmanship of Chairman & Managing Director of the Company during the year under report.

• MIDHANI continues to encourage usage of Hindi as the Official Language and in order to encourage daily usage of official language to carry out day-today official work, Seven (7) nos. of Hindi Awareness Workshops were organized for the employees during the year under report. Prabodh, Praveen, Pragya and Parangat Hindi training courses were also conducted for the employees during the year under report. In-house Half yearly Hindi Magazine ‘Sankalp for the period of April 21 to September 21 and October 21 to March 22 was also published by MIDHANI.

21.9 RELATED PARTY TRANSACTION:

• Disclosure of related party transactions as per Ind AS-24, issued by the Institute of Chartered Accountants of India, is provided at note no. 40 of the Notes forming part of Annual Accounts for FY 2021-22.

• All contracts /arrangements /transactions entered into by the Company with related parties during the year under review, were in ordinary course of business of the Company and on arms length terms. The related party transactions were placed before the Audit Committee/Board for review and/or approval.

• During the year, the Company did not enter into any contract /arrangement /transaction with related party, which could be considered material in accordance with the Companys ‘Policy on Materiality of and dealing with Related Party Transactions and accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable. The aforesaid Policy is available on the Companys website viz. https://midhani-india.in/policies/

22. VIGILANCE ACTIVITIES:

22.1 The companys Vigilance department is headed by a Chief Vigilance Officer (CVO). At present, Dr. Upender Vennam, an IPoS officer, heads companys vigilance set up as CVO. He acts as an advisor to the Chairman & Managing Director (C&MD) in all matters pertaining to vigilance. He also provides a link between organization and the Central Vigilance Commission (CVC).

22.2 Preventive Vigilance has been the thrust area of the Vigilance department and the same received focused concentration during the current year which includes simplification and standardization of rules and procedures to eliminate discretion and arbitrariness. Three structured meetings between C&MD and CVO during FY 2021-22 were held apart from the regular activities of Vigilance. Systemic improvements and good practices in the areas of Human Resources, Procurement/Contracts are regularly suggested by the Vigilance department.

22.3 Vigilance setup in MIDHANI has been continuously endeavoring to bring in the transparency, fairness and ethicality in all transactions and processes of the Company through creating a sense of awareness campaign and training program. Vigilance Awareness Week – 2021 was observed from 26th October to 01st November, 2021 focusing on CVC theme of "Independent India @ 75: Self Reliance with Integrity".

22.4 The 9th issue of MIDHANI in-house vigilance magazine "JAGRUTI" covering the messages, articles, case studies etc., was published and made available to all the employees.

23. VIGIL MECHANISM:

23.1 The Whistle Blower Policy was initially adopted by the Board of Directors at its 206th Meeting held on January 23, 2013. The same was subsequently amended as Whistle Blower Policy – 2018 in line with Public Interest Disclosure and Protection of Informers Resolution, 2004 (PIDPI), which envisages a mechanism by which a complainant can blow a whistle by lodging a complaint and also seek protection against his victimization for doing so.

23.2 The Company encourages reporting of unfair, unethical activities, if any, in the Company from the employees. The Audit Committee reviews the functioning of the vigil mechanism and whistle blower compliant, if any, periodically.

23.3 Whistle Blower Policy – 2018 works as Vigil Mechanism of MIDHANI and aims at providing the stakeholders of MIDHANI, ways and means to report issues that might impact MIDHANI as an organization. The Whistle Blower Policy of MIDHANI is available on the Companys website viz. https://midhani-india.in/department_vigilance/role-functions-of-vigilance-department/

24. AWARDS AND RECOGNITION:

24.1 MIDHANI was conferred with "Best Development Program Public Sector for Middle Level Management" from National Awards for Excellence in Training & Development at the 7th Edition, World HRD Congress on August 27, 2021, at Taj Lands End Mumbai.

24.2 Dr. Sanjay Kumar Jha, Chairman & Managing Director, received the "Telangana State Intellectual Property Award" for the Best IP Portfolio in the PSU category by Confederation of Indian Industry (CII) and Telangana State Global Linker from Shri K.T. Rama Rao, Honble Minister for Industries, MA & UD, IT, E&C Govt. of Telangana.

24.3 MIDHANI was honored with "Best Performance Award" by The Indian Institute of Metals under category II "Secondary Processing" in an online award ceremony.

24.4 MIDHANIs Training & Development department was conferred with an award "Best Training & Development Programme Award" by "Transformance Forum" at 2nd Edition of "L&D Vision and Innovation Summit Awards 2022" for its Mid-Career Training Programme (Batch I, II&III) held on February 24, 2022 at Mumbai.

24.5 In the Hindi Diwas function organized by the Department of Official language (DOL), Ministry of Home Affairs (MHA), Dr. B. Balaji, Deputy Manager, Hindi Cell & Corporate Communicaton, MIDHANI was honored with "Rajbhasha Gaurav Puraskar" for Technical Article in Hindi "Armouring Ke Utpadan Men Agrani MIDHANI", under the Non-Hindi speaking Region for the year 2020-21.

25. COMPANY PERFORMANCE AND FUTURE OUTLOOK:

A detailed analysis and insights into the financial performance and operations of your Company for the year under review and future outlook, is appearing in

Management Discussion and Analysis, which forms part of this Annual Report.

26. CORPORATE GOVERNANCE:

26.1 The basic principles and philosophy of Corporate Governance is followed in letter and spirit in every aspect of Companys decision making in tune with the contemporary demand for good Corporate Governance and adherence to guidelines issued by Department of Public Enterprises from time to time. A Code of Business Conduct and Ethics, applicable to all Board Members and Senior Management, has been implemented in the Company. The adherence to the code is confirmed by respective members on an annual basis. A certificate to this effect by Chairman and Managing Director forms part of the Annual Report at Annexure – VI.

26.2 A detailed report on Corporate Governance forms part of this Annual Report. Certificate for adherence to the guidelines issued by DPE and SEBI Listing Regulations in this regard, duly signed by a practicing Company Secretary, is also made a part of the Annual Report at

Annexure – VII.

26.3 In accordance with Revised Grading norms for CPSEs, in the matter of compliance of Guidelines on Corporate Governance issued by DPE, your Company has scored 100% for the FY 2021-22.

27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

27.1 MIDHANI has established a framework for internal controls, commensurate with the size and nature of its operations. The internal control system is supplemented by an extensive program of internal audits and their reviews by the management. The in-house internal audit function supported by professional external audit firms conduct comprehensive risk focused audits and evaluate the effectiveness of the internal control structure and functions on a regular basis.

27.2 The Company has laid down internal financial controls as detailed in the Companies Act, 2013. These have been established across the levels and are designed to ensure compliance to internal control requirements, regulatory compliance and appropriate recording of financial and operational information.

27.3 External Audit firm Eswar & Co. were engaged to carry out Internal Audit during the year under report, to ensure adequacy of systems and controls. Their reports thereon were further reviewed by the Audit Committee/Board. In addition, the In-house Internal Audit team also regularly carries out audits of specific processes. Internal Audit Reports along with corrective actions initiated are discussed with the Management and were reviewed by the Audit Committee/Board. The Audit Committee/Board also reviews the adequacy and effectiveness of internal controls.

27.4 There were no instances of fraud reported to the Audit Committee/Board by the Auditors pursuant to Section 143(12) of the Companies Act, 2013 and rules made thereunder. Hence no disclosure under Section 134(3)(ca) is made.

28. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

28.1 The Board of your Company at the beginning of the FY 2021-22 comprised of Three (3) Directors i.e. Two (2) Functional Directors, One (1) Government Nominee Director all eminent personalities with vast experience from diverse fields.

28.2As on date of this Report, the Company has Six (6) Directors i.e. Three (3) Functional Directors, One (1) Govt. Nominee Director and Two (2) Independent Directors.

28.3 During the year under review, the following changes in composition of Board of Directors were observed:

• Administrative Ministry i.e. Ministry of Defence vide letter No. 11(70)/2021/Misc.D(NS) dated December 24, 2021 appointed Shri Valluri Chakrapani (DIN:00867270) as Independent Director on the Board of Mishra Dhatu Nigam Limited, w.e.f. December 24, 2021 for a period of three (3) years i.e. till December 23, 2024 or until further orders by Ministry of Defence whichever is earlier.

• Administrative Ministry i.e. Ministry of Defence vide letter No. 11(70)/2021/Misc./D(NS) dated March 25, 2022 appointed Smt. Vallikkat Thanayankizhil Rema (DIN: 09561611) as Woman Independent Director on the Board of Mishra Dhatu Nigam Limited for a period of 3 years commencing, w.e.f. April 5, 2022 till April 4, 2025 or until further order by Ministry of Defence whichever is earlier.

• The Members of Company have accorded their approval by way of Special Resolution on June 30, 2022 through Postal ballot process for appointment of Smt. Vallikkat Thanayankizhil Rema as Independent

Director of the Company pursuant to Regulation 17(1C) & 25(2A) of SEBI Listing Regulations.

• Administrative Ministry vide letter no : 2(13)/2015/MDN/ D(NS-I) dated May 27, 2022, entrusted the additional charge for the post of Director (P&M) to Cmde Siddharth Mishra, C&MD Bharat Dynamics Limited (BDL) for a period of 06 months w.e.f May 11, 2022. However, the charge was not assumed.

• Administrative Ministry i.e. Ministry of Defence vide letter No. 5/1(1)/2020/D(NS) dated June 9, 2022, appointed Shri Thulasiraman Muthukumar (DIN: 09636771) as Director (Production & Marketing) in pay scale of Rs 1,60,000 – 2,90,000 (IDA) on the Board of Mishra Dhatu Nigam Limited for a period commencing from date of his assumption of charge of post till June 30, 2025 or until further orders by Minsitry of Defence, whichever is earlier. Shri Thulasiraman Muthukumar assumed charge of post of Director (Production & Marketing) w.e.f. June 23, 2022.

• The Members of Company have accorded their approval by way of Ordinary Resolution on August 03, 2022 through Postal ballot process for appointment of Shri Thulasiraman Muthukumar as Director (Production & Marketing) of the Company pursuant to Regulation 17(1C) of SEBI Listing Regulations.

28.4 In accordance with provisions of the Companies Act, 2013, Shri Gowri Sankara Rao Naramsetti, Director (Finance) (DIN: 08925899) retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered himself for re-appointment.

28.5 Brief resume, nature of expertise, details of directorship held in other companies, of the Director(s) proposed to be appointed / re-appointed at the ensuing AGM, along with their shareholding in the Company, as stipulated under Secretarial Standard-2 and Regulation 36 of the SEBI Listing Regulations, is provided in the Notice of the 48th AGM.

28.6 Performance Evaluation: The Company is a Government Company and Independent Directors are appointed / reappointed by the President of India, through Administrative Ministry. The evaluation of the performance of the Independent Directors and their fulfillment of Independence criteria as specified in the SEBI Listing Regulations, are being carried out by the Government of India as per its own processes. However, due to the vacant position of Independent Directors on Board of MIDHANI no meetings of Independent Directors could be held to review the performance of the Board during FY 2021-22.

29. REMUNERATION POLICY:

29.1 MIDHANI is a Government of India owned Public Sector Enterprise under administrative control of Ministry of Defence. Directors of the Company are presidential appointees, and their remuneration is fixed in accordance with the DPE Guidelines. As per Article 67 of the Articles of Association of MIDHANI, the President of India will appoint Directors and determine their remuneration. Since the Board level appointments are made by the President of India, the evaluation of performance of such appointees is also done by the Government of India.

29.2 The terms and condition of payment of sitting fees to Independent Directors and Govt. Nominee Director is available on the Companys website viz. https://midhani-india.in/policies/.

29.3 Further, provisions of Section 178(2), (3) and (4) are not applicable on Company vide Ministry of Corporate Affairs notification dated June 5, 2015.

30. DECLARATION AND MEETING OF INDEPENDENT DIRECTORS:

30.1 Independent Directors of the Company have confirmed that they meet the criteria of Independence as prescribed under both, the Companies Act, 2013 and SEBI Listing Regulations. Further, Independent Directors have complied with Rule 6, Sub-rule 1 & 2 of Companies (Appointment and Qualifications of Directors) Rules, 2014.

30.2 The Independent Directors have also confirmed that they have complied with the "Code of Business Conduct and Ethics for Board Members and Senior Management" of the Company.

30.3 A separate meeting of Independent Directors in line with provisions of Companies Act, 2013 could not be held during the year under report due to the post of Independent Directors remaining vacant.

31. DIRECTORS RESPONSIBILITY STATEMENT:

31.1 Pursuant to Section 134(5) of the Companies Act, 2013, your Directors state that: a. in the preparation of the Annual Accounts for the financial year ended March 31, 2022, the applicable Indian Accounting Standards (Ind AS) have been followed along with proper explanations on the material departures;

b. the Directors have such Accounting Policies have been selected and applied consistently and judgments and estimate have been made; that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year i.e. March 31, 2022; and of the Profit of the Company for the year ending on March 31, 2022;

c. the Directors have taken proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013, as amended from time to time, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the accounts for the financial year ended on March 31, 2022 on a ‘going concern basis;

e. the Directors have laid down proper internal financial controls in place and that such internal controls are adequate and are operating effectively; and

f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

32. AUDITORS:

32.1 Statutory Auditors: C&AG of India appointed M/s Sarath & Associates, Chartered Accountants, Hyderabad, [Firm Registration No. 005120S] as Statutory Auditors of the Company for conducting audit of accounts for the year ended March 31, 2022. The Auditors Report of Statutory Auditors on the Financial Statements for the financial year ended on March 31, 2022, is an unmodified opinion i.e. it does not contain any qualification, reservation or adverse remark.

32.2 Cost Auditor: Your company is required to maintain cost records as specified by Central Government under section 148(1) of the Companies Act, 2013. Your Company appointed Sandeep Zanwar & Associates, Cost Accountants, Hyderabad, [Firm Registration No 100283] as Cost Auditors for the FY 2021-22 in terms of Section 148 of Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

32.3 Secretarial Auditor: In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 your Company appointed R&A Associates, Hyderabad [Firm Registration No.P1994AP011100] as Secretarial Auditors of the Company for the FY 2021-22. The Secretarial Audit report is placed at ANNEXURE – VIII along with management reply to the observations therein.

32.4 Internal Auditor: Your Company engaged Eswar & Co. [Firm Registration No. 007288C] to conduct Internal Audit for the FY 2021-22.

33. COMMENTS OF COMPTROLLER & AUDITOR GENERAL OF INDIA:

The comments on the Accounts by the Comptroller and Auditor General of India for the year ended March 31, 2022 and MIDHANIs reply thereto is placed in this report after Statutory Auditors Report.

34. DISCLOSURES UNDER COMPANIES ACT, 2013:

34.1 Borrowings and Debt Servicing: During the year under review, your Company has met all its obligations towards repayment of principal and interest on loans availed.

34.2 Particulars of loans given, investments made, guarantees / securities given: The details of investments made and loans/ guarantees/securities given, as applicable, are given in Notes No. 6, 7 and 14 of the Annual Financial Statements.

34.3 Board Meetings: During the financial year ended on March 31, 2022, the Board met five (5) times on June 24, 2021, August 12, 2021, November 9, 2021, February 10, 2022 and March 14, 2022. For further details of these meetings, Members may please refer ‘Report on Corporate Governance which forms part of this Annual Report.

34.4 Board Committees: For details regarding Board Committees, Members may please refer ‘Report on Corporate Governance which forms part of this Annual Report.

34.5Secretarial Standards: Your Directors state that the Secretarial Standards i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings, respectively have been duly followed by the Company.

35. GENERAL AFFIRMATIONS AND DISCLOSURES:

35.1 Your Directors state that no disclosure is required in respect of the following matters, as there were no transactions/events in relation thereto, during the year under review: a) Details relating to deposits covered under Chapter V of the Companies Act, 2013. b) Issue of equity shares with differential rights as to dividend, voting or otherwise. c) Issue of shares (including sweat equity shares) to employees of the Company under any scheme of the Company.

35.2 Your Directors further state that:

a) there was no change in the share capital of the Company during the year under review.

b) no material changes/commitments of the Company have occurred after the end of the FY 2021-22 and till the date of this report, which affect the financial position of your Company.

c) no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the ‘going concern status and Companys operations in future.

d) During the year, no corporate insolvency resolution process was initiated under the Insolvency and Bankruptcy Code, 2016, either by or against the Company, before National Company Law Tribunal or other court(s).

36. ACKNOWLEDGEMENT:

36.1 The Board of Directors are extremely thankful for the continued patronage and gratefully acknowledge the valuable support and assistance received from all Government agencies particularly from Ministry of

Defence, all establishments under DRDO and other agencies of Central and State Government. Your Directors also place on record sincere thanks to customers, vendors, Bankers, C&AG, Statutory /Internal Auditors, Chairperson - Audit Committee, Chairman of other sub Committees of the Board, Advisers, Consultants etc., of the Company for their continued support and guidance during the year.

36.2 Your Directors take this opportunity to place on record their deep appreciation for the valuable contribution made and excellent co-operation rendered by all the employees.

36.3 Your Directors express their appreciation and gratitude to all the shareholders/investors for the trust and confidence reposed in the Company and look forward to their continued support to propel the Company to greater heights.

For and on behalf of the Board of Directors

sd/-

Dr. Sanjay Kumar Jha

Chairman & Managing Director

DIN : 07533036

Place: Hyderabad

Date : August 30, 2022