mishra dhatu nigam ltd share price Management discussions


1.1 Certain statements in this report regarding our business operations may constitute forward-looking statements. These include all statements other than statements of historic fact, including those regarding the financial position, business strategy, management plans and objectives for future operations. Forward-looking statements can be identified by words such as ‘believes, ‘estimates, anticipates, ‘expects, ‘intends, may, will, plans, outlook and other words of similar meaning in connection with a discussion of future operational or financial performance. Forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and that may be incapable of being realized, and as such, are not intended to be guarantee of future results, but constitute our current expectations based on reasonable assumptions. Actual results could differ materially from those projected in any forward-looking statements due to various events, risks, uncertainties and other factors. We neither assume any obligation nor intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

1.2 The financial statements are prepared under historical cost convention, on accrual basis of accounting and in accordance with the provisions of the Companies Act, 2013 (the "Act") and comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. The management of Mishra Dhatu Nigam Limited ("MIDHANI" or "the Company") has used estimates and judgments relating to the financial statements on a prudent and reasonable basis in order that the financial statements reflect in a true and fair manner, the state of affairs for the year.

1.3 The following discussions on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the annual report.

2.0 Global Economy:

2.1 Global economic output increased by 5.5 % in CY2021, but is predicted to decline to 4.1 % in CY2022 and 3.2% in

CY2023.1 Rapid vaccine rollouts in developed countries boosted the global economic growth while reducing health-care costs. While the economy registered a strong rebound during 2021. The year 2022 brought with it a new set of challenges. Russias invasion of Ukraine and the sanctions that ensued led to a sharp rise in commodity prices. Russia and Ukraine have been key suppliers of essential goods like food and energy. The outbreak of the war threatened the supply of these materials. As a result price tensions continued to persist for those commodities for which supply from Russia and Ukraine has historically dominated global markets. Additionally, the conflict has put Metal output under pressure due to the rising energy prices. Given that Russia holds 49% of world nickel exports, the crisis has led to a shortage of the metal, thereby leading its price to spike.2 These metal prices are likely to continue to be impacted by broadening sanctions and speculative activity in the market.

2.2 There has also been a surge in oil prices since the supply chain mounted following sanctions on Russian banks. Due to this, Inflationary pressures have constantly been on the rise. Reduced wealth and gender inequalities have also had an impact on people.

2.3 Improving the vaccination rate in EMDES, on the other hand, is crucial for long-term growth. Due to the elimination of closure restrictions and the return of economic activity, consumer spending is increasing. This is owing to rising demand and consistent increases in discretionary expenditure.

2.4 Furthermore, the goods trade industry has recovered and is now higher than it was before the epidemic. Global economy is being boosted by this, as well as various countries accommodating fiscal and monetary policies. Pre-existing inflation, however, is on the rise once more, exacerbated by global tensions. Supply-chain disruptions have created uncertainty, resulting in a considerable increase in food and energy costs. Despite this, the global economy is likely to make a robust return, barring externalities.

2.5 Inflation is frequently brought on by supply-demand mismatches brought on by pandemics and higher commodity costs than a year before. In CY2022, price pressures are expected to diminish marginally. As a result of increased food costs, the delayed impact of higher oil prices, and exchange rate depreciation, which impacts the pricing of imported goods, price pressures are expected to persist in various emerging market and developing nations.

3.0 Indian Economy:

3.1 The Indian economy staged a solid rebound in the fiscal 2021-22 owing to the governments immediate fiscal and monetary response to the pandemic. Although the health crisis had been more severe as against the first wave of the pandemic, almost all indicators demonstrated the economic impact of the second wave had been much smaller than the first. Most of the sectors showed rebound during the year. Among sectors, the Manufacturing sector showed a strong recovery when its pace speeded up in the second and third quarter. Additionally, the rising capital expenditure by the government on infrastructure and an uptick in the housing cycle have been responsible for reviving the construction sector which allowed the consumption and production of steel to revert to pre-pandemic levels.

3.2 A further plan to increase capex is included in the Union Budget for FY2023, which would assist to attract greater investment. This is because the countrys solid financial position is moving the economy ahead. Moving forward, India is on course to be the next worlds fastest-growing major economy, and it is aggressively seeking supply-side measures to boost the recovery, including industry deregulation and the repeal of retrospective taxes, among other things. However, the continuation of high prices and rising geopolitical tensions may provide some downside risks. Nonetheless, India has a long history of overcoming hardship and is well equipped to deal with minor setbacks. 3.3 Overall, macroeconomic stability indicators show that Indias economy is well positioned to meet the difficulties that will face it in 2022-23. One of the reasons for Indias success is its distinct response strategy. Indias response has also been marked by an emphasis on supply-side improvements rather than a complete reliance on demand management.

3.4 Agriculture, which is regarded as the backbone of Indian GDP, has outperformed forecasts, providing roughly 17% of GDP.

4.0 Outlook

In FY2022–23, Indias GDP growth will be between 7.5 and 8.0 percent, and between 6.7 and 7.1 % in FY2023–24.3 The Russia Ukraine war has triggered a turmoil in the global markets, the prevailing uncertainty worldwide has left India as no exception. Supply chain disruptions caused due to the western sanctions and a trade shock are significantly weighing on India as well. The rising commodity prices and crude oil prices globally are impacting India by aggravating inflationary pressures that existed even before the war struck. Additionally, because the partial pass-through of higher food and energy costs has a negative impact on consumers attitudes and wallets, pent-up demand which was soaring in FY2021-22 will also expected to grow with a slight lag. Companies will wait for demand signals and cost hikes before spending. Growth is expected to increase up in the second quarter of FY2022–23 as uncertainties fade. Capital outflows and a swift depreciation of the currency may follow from the early geopolitical disputes, but both are anticipated to recover by the end of 2022.

5.0 Industry Overview

5.1 Iron ore, bauxite, chromium, manganese ore, baryte, rare earths, and mineral salts are all abundant in India. Due to reforms such as the Make in India campaign, Smart Cities, Rural Electrification, and a focus on building renewable energy projects under the National Electricity Policy, as well as increased infrastructure development, Indias metals and mining sector is expected to undergo significant changes in the coming years.4 5.2 The steel industrys performance is critical to the economys expansion. Despite being hit by COVID-19, the steel industry has recovered, with cumulative crude and finished steel production in 2021-22 (April-October) of 66.91 MT and 62.37 MT, respectively, up 25.0% and 28.9% over the same period last year.5 Its worth noting that global steel output has slowed recently. The drop in global steel output is due to lower worldwide production. According to a World Steel Association news release from November 2021, global crude steel output was 143.3 million tonnes (Mt) in November 2021, down 9.9% from November 2020.6

Steel consumption is expected to rise this year and next as the global economy improves. In the coming fiscal year, the steel sector is likely to see a rise in demand as well.

5.3 India is the worlds second-largest crude steel producer, with 104.91 million tonnes produced during January to November 2021.

5.4 Total Finished Steel production was 111.858 MT, up 21.3% from the previous year. During FY22, India exported 13.5 MT of finished steel worth INR one lakh crores. Actual crude steel output is expected to reach 255 MT between 2030 and 31. By 2030-31, per capita finished steel consumption is predicted to reach 160 kg. Steel output (weight: 17.92%) grew by 9.3% in July 2021 compared to July 2020. By 2047, the demand for stainless steel in the United States is estimated to exceed 20 MT. During the fiscal year 2021, India produced 120 million tonnes (MT) of crude steel.7

6.0 High Performance Alloys

6.1 High-performance alloys—also known as superalloys—are metal materials designed to provide enhanced characteristics, like higher mechanical strength, better corrosion and oxidation resistance, greater thermal creep resistance. These properties enable them to withstand use in demanding applications, like aerospace and marine industries.

6.2 The worldwide market for high-performance alloys is estimated to reach USD 15.64 billion in 2030, with a revenue CAGR of 5.3 percent during that time period.8 The Non-Ferrous Metal segment within the high performance alloys is expected to increase at a 5.6 percent compound annual growth rate (CAGR) to reach US$5.4 billion by the conclusion of the analysis period. Another segment, Super Alloys currently accounting for 30.9 percent of the global market for High Performance Alloys is projected to grow at a CAGR of 4.3% for the next 7-year period.

6.3 Top car manufacturers employ high-performance alloys to minimise total vehicle weight. Other significant factors projected to fuel market expansion include innovations in aluminium and magnesium mining, as well as increasing extraction of alloying metals.

6.4 The 3.6% CAGR forecast for the worldwide Refractory industry is driven by the United States, Canada, Japan, China, and Europe. These regional markets, which had a total market value of US$805.8 million in 2020, are expected to grow to US$1 billion by the end of 2026.9 China will continue to be one of the fastest developing markets in this area. The Asia-Pacific market is expected to reach US$124.7 million by 2026, led by nations like Australia, India, and South Korea.

7.0 Defence Manufacturing:

7.1 Government spend 3.7 % of worldwide military spending, making it the worlds third largest military spender. Defense spending accounted for 2.9 percent of Indias total GDP in 2020, with $72.9 billion spent on defence. The government has chosen the defence industry as one of the key areas for boosting Atma Nirbhar Bharat, or Self-Reliant India, due to rising demand. Exports of defence products, including significant items, totaled H1,940.64 crore in FY 2014-15 and H8,434.84 crore in FY 2020-21, respectively. By 2025, the government wants to have a turnover of $25 billion, with $5 billion in Aerospace and Defense goods and services exported.

7.2 The defence capital investment was boosted in the budget 2021-22 to fund defence modernization. According to the most recent budget release, domestic industry would get 68 percent of the defence capital procurement budget in 2022-23. (Up from 58% in 2021-22).

7.3 To meet export requirements, a draft Production and Export Promotion Policy (DPEPP) 2020 has also been formulated. By 2025, the country wants to turn over H1,75,000 crore ($25 billion), including H35,000 crore ($5 billion) in Aerospace and Defence goods and services. To construct a dynamic, resilient, and competitive defence sector, including the aerospace and naval shipbuilding industries, to meet the demands of the armed services with high-quality goods.

7.4 Under the leadership of the defence minister, the Defence Acquisition Council (DAC) adopted the general parameters of the Strategic Partnership Model (SPM). Through a transparent and competitive procedure, long-term strategic collaborations with qualified Indian industry majors are formed. Indian industrial partners will form partnerships with global OEMs to seek technology transfers and manufacturing know-how in order to establish indigenous manufacturing infrastructure and supply chains.

8.0 Indian Aerospace Industry:

8.1 Indias passenger growth is expected to reach 442 million by 2035, according to the International Air Transport Association (IATA), with the aviation industry sustaining 19.1 million jobs and contributing $172 billion to the countrys GDP. According to Boeing, India will require an additional 2,500 passenger planes to fulfil its fast increasing demand.10 3.56 million Tonnes of goods were handled.

Indian airlines have placed big aircraft orders to meet present and expected increases in demand for commercial air travel. By 2038, the countrys aviation fleet is expected to triple in size, reaching over 2500 aircraft.

8.2 During the fiscal 2021-22, the Hindustan Aeronautics Limited placed an order worth H5,375 crores for 99 F404-GE-IN20 engines and support services with GE Aviation, USA, to power the Tejas Light Combat Aircraft and also facilitate Indias goal of achieving self-reliance in the aerospace and aeronautics industry. This has been the largest-ever deal and the purchase order placed by HAL for LCA which will boost the Indian Aerospace industry.

8.3 The Indian Civil Aviation MRO industry is now valued at roughly $900 million and is expected to expand to $4.33 billion by 2025, with a CAGR of 14-15 percent.11 There is also the possibility of providing OEMs with design and engineering services linked to components and assemblies. With the expansion of the aircraft industry, there will be a demand for leasing, financing, ground support, and other sorts of services.

8.4 For civil aviation infrastructure development projects, FDI of up to 100 percent is permitted, but any airline share more than 49 percent requires government permission. Therefore, with a tremendous increase in demand for aircraft and components, the Indian aerospace sector is on the verge of becoming a worldwide player. Low labour costs, a large supply of engineering, design, and technical skills and knowledge, high growth markets, and active backing from the governments new policies are only some of the advantages.

9.0 Energy Sector:

9.1 After China and the United States, India is the worlds third largest energy and oil user. India is attempting to transition to a gas-based economy by boosting natural gass portion of the countrys energy mix from 6.3 % to 15 % by 2030. Under the Pradhan Mantri Ji-VAN Yojana, the goal is to set up 12 commercial scale 2G bio-ethanol projects with viability gap funding of up to H150 crore each plant. The Sustainable Alternative towards Affordable Transportation (SATAT) Scheme aims to install 5000 compressed biogas (CBG) units. Indias oil demand will climb by about 4 million barrels per day by 2040, the biggest increase of any country.

9.2 From April to December 2021, total crude oil output was 22378.40 TMT, which is 4.47 percent and 2.63 percent lower than the target for the period and production for the same time previous year, respectively. Over the years, Indias output and consumption of petroleum products have steadily increased. Petroleum product output increased by 5.9% YoY to 250 MMT in 2021, compared to 236 MMT in 2020. Petroleum product consumption increased by 3.6% YoY to 201 MMT in 2021 from 194 MMT in 2020.

9.3 In December 2021, natural gas production grew by 19.5 percent over December 2020. Up to September 2021, a total of 21735 kilometres of pipes have been installed as part of the Gas Grid. By 2024-25, India wants to increase pipeline coverage by 60%, to 34,500 kilometres. By 2027, all states should be connected by a trunk national pipeline network. The total amount of natural gas

11https://www.investindia.gov.in/sector/aviation produced in March 2022 was 2886.23 MMSCM, up 7.46 % from March 2021.

9.4 India is the worlds fourth-largest liquefied natural gas importer (LNG). On both coastlines, LNG supply is advancing, with three new LNG terminals and one expansion project under development on the west coast and two on the east coast. The total capacity will be 62.5 MMTPA when all of the projects are completed.12

10.0 Super Alloys:

From USD 8819 million in 2020 to USD 14850 million in 2027, the worldwide Super alloy market is predicted to rise at a CAGR of 6.4% between 2022 and 2027.13 The market for super alloys in the United States was worth USD million in 2020 and is expected to grow at a CAGR of percent to USD million by 2027.

11.0 Titanium:

11.1 Titanium market size is expected to reach $7,608 million by 2025, after rising at a CAGR of 4.7 percent from 2020 to 202514, owing to increased use of titanium in different sectors such as automotive, construction, and aerospace. Numerous uses of titanium alloys, fueled by their low thermal expansion and high co-efficient fire resistance, have driven up market demand dramatically.

11.2 The most popular use for titanium is aerospace, which is expected to expand at a CAGR of 4.3 percent during the projected period. Titanium is in high demand in aircraft because of its strong corrosion resistance and coefficient of thermal expansion compatibility with CFRP. The usage of Titanium in aircraft can also increase that aircrafts range while decreasing its fuel use.

12.0 Speciality alloys:

From 2020 to 2027, the Special Steel Market is expected to increase at a CAGR of 2.4 percent, from USD 207.8 billion in 2019 to USD 252.2 billion in 2027. The large consumption of Special Steel Market in the substantially rising industries of car, aviation, aerospace, and railway is expected to have a favourable influence on the Global Special Steel Market. Over the projected period, rising demand for manufacturing tools and machineries will drive market expansion. Over the forecast period, rising urbanisation in emerging nations would significantly boost market growth. However, the high costs of Special Steel Market manufacture might limit market expansion. The Global Special Steel Market study offers a comprehensive analysis of the industry.

13.0 Key Strategies and Initiatives:

Our Strategies Our Plans Key initiatives
Growth and modernization Seeks growth (through both greenfield and brownfield) based on the development of technology for customers and product Aluminium Alloy Plant – MIDHANI- NALCO Joint Venture; Utkarsha Aluminium Dhatu Nigam Limited is being set up. The Company proposes to manufacture High end Aluminium Alloy at Nellore, Andhra Pradesh
• Aim for geographical expansion of the Company and to operate from multiple locations
• In process of setting up two new manufacturing facilities in Rohtak and Nellore
• Seek to enter into the new markets of oil and gas, mining, power, railways, chemical and fertilizers
Increased focus on research and development Entered into collaborations with Indian and international research institutions and organizations to gain access to the required know-how for developing certain key advanced technology products 16 IPRs has been filed during the year and two patents have been granted to MIDHANI during the year. New products have been developed for Aero Space, Navy and Energy Sectors.
• Aims for forward and backward integration by manufacturing components/ value added products
Strengthen Human capital Intends to continue to focus on improving health, safety and environment for the employees and provide various programs and benefits for their wellbeing and skill-enhancement Mid Career training program was conducted for Middle Level management.
• Intends to develop entrepreneurship skills and further strengthen the workforce through more comprehensive training programs, creating a core of skilled workers for future growth by providing them with a conducive, safer and healthier working environment COVID -19 vaccination drive was organized for all Employees Annd their dependents.

14.0 SWOT Analysis:

Strengths: Weakness:
• Core competence and integrated manufacturing facility to develop and manufacture, ‘strategic metals and alloys, custom-made alloys. • Customer concentration as more than 70% of the orders come from Indias defence and space sector.
• Capability to produce a range of semi-finished and finished products like forged rings, near net shapes and titanium tubes. • Need to source raw materials from foreign suppliers and limited requirement leads to higher input costs.
• The only manufacturer of Titanium alloy in India. • In select products, the lack of economies of scale and high input cost makes products noncompetitive at the global level.
• Access to Research & Development (R&D) capability to indigenously develop customized products/ alloys for programs of national importance, through DRDO, ISRO, and other R&D institutions. • Need to balance levels for raw materials, Minimum Stock Levels (MSL) and unsold inventory leads to capital lock-up and high delivery timelines.
• Ability to expand into space and energy sectors. • Lack of technology and infrastructure for developing finished components using own materials which leads to reduced value addition.
Opportunities: Threats:
• The government is expected to invest close to H10 lakh crore (USD 130 billion) on military modernisation in the next 5-6 years. The Defence Acquisition Policy (DAP) 2020 emphasises on >50% indigenous content for a majority of the procurement categories. • Procurement/supply chain risks are not evenly distributed amongst the suppliers for almost half of the raw materials procured.
• Emerging competition from private sector entities in India.
• Requirement of indigenous content in platforms and systems is likely to translate into demand for indigenous raw material providing thrust to the Indian metals & alloys manufacturers. • Single order quantity and dispersed requirements from buyers leading to not meeting economies of scale.
• Demand in associated sectors including aerospace manufacturing, space, electric vehicles, railways to be tapped to obtain economies of scale. • High volatile prices of some of the critical imported raw materials coupled with their restricted availability.
• Indigenisation requirements likely to shift potential orders to more vertically integrated organisations.

15.0 Review of our operations:

15.1 We are a modern and integrated metallurgical plant for manufacturing a wide spectrum of critical alloys in variety of forms such as ingots, forged bars, rings hot rolled sheets and bars, cold rolled sheets, strips and foils, wires, castings, fasteners and tubes using state of the art production facilities for defence, space, aeronautics, power and thermal power, electronics, telecommunications and engineering industries and other sectors in India.

15.2 We are manufacturers of High Performance Alloys, special steels and stainless steels, Super alloys (nickel base, iron base and cobalt base), commercially pure titanium and titanium alloys, soft magnetic alloys, controlled expansion alloys, heat resistance alloys, special purpose alloys, refractory metals and other alloys in different shapes, properties and sizes. We have process capabilities across the product manufacturing value chain, including melting, forging, rolling, wire drawing, investment casting, machining and quality testing.

15.3 Our Company is the only facility in India to carry out vacuum based melting and refining through world class vacuum melting furnace such as vacuum induction melting, vacuum arc re-melting, vacuum degassing/ vacuum oxygen decarburisation, electro slag re-melting and electron- beam melting. It enables our Company to venture new markets with innovative and advanced products. The wide spectrum of advanced melting facilities enables us with the flexibility to provide our customers with high quality products which meet their stringent quality requirements. Our value chain is supported and strengthened by our strong financials, human resources and logistics.

16.0 Our Manufacturing Locations:

Hyderabad: Hyderabad Plant is equipped with highly integrated and flexible manufacturing facilities to produce a wide variety of special metals and alloys in various mill forms such as forged bars/ flats, Rings; near net shapes and closed die forgings, hot rolled bars/ sheets, cold rolled sheets, strips and foils; wires, castings, tubes and fasteners.

Rohtak Plant: At Rohtak plant, Armour products will be manufactured.

17.0 Manufacturing facilities:

The manufacturing facilities at MIDHANI include Primary and Secondary melting furnaces such as Electric Arc Furnace with Ladle Refining Furnace, Vacuum Degassing/ Vacuum Oxygen Decarburisation, Vacuum Induction Melting Furnace, Vacuum Induction Refining Furnace, Vacuum Arc Re-Melting Furnace, Electro Slag Re-Melting Furnace and Electron Beam Melting Furnace. Subsequent operations are carried out at 6000T/1500T Forge Presses, Ring Rolling Mill, Hot Rolling and Cold Rolling Mills, Bar and Wire Drawing Mills etc. based on the output, form and sizes required. The auxiliary supporting services like conditioning, heat treatment, machining, pickling, quality control also form part of our manufacturing processes.

18.0 Our Products:

• Special Alloys (Ferritic, Austenitic, Martensitic, Maraging, Armour Steel)

• Super Alloys (Iron/Cobalt/Nickel Based)

• Titanium Alloys in the form of melted, forged, rolled and drawn product.

• Special Steels and Titanium Alloy grades constitute a major portion of production tonnage.

19.0 Key Raw Materials:

The primary raw materials used by our Company for manufacturing various products are: (a) Nickel metal; (b) Cobalt metal; (c) Various Master Alloys; (d) Pure Iron; (e) Titanium sponge; (f) Chromium metal; (g) Mild Steel scrap/ Stainless Steel scrap; (h) High Carbon/Low Carbon Ferro Chrome; (i) Aluminium metal; (j) Manganese Metal; and (k) Various Ferro alloys.

20.0 Research & Development:

We seek to achieve growth through the design, development, production, sale and support of innovative products that incorporate advanced technologies. The product requirements of our customers changes and evolve regularly, and we invest substantial amounts in research and development efforts to pursue advancements in a wide range of technologies and products

Our in-house research and development team works towards improvement of product quality and processes innovation. We place strong emphasis on research and development to enhance our product range and improving our manufacturing processes.

By utilizing in-house research and development capabilities, MIDHANI has indigenized various critical technologies, alloys and products. This reduced dependence on imports of various critical materials. MIDHANI has been handling challenging developmental tasks, taking a lead position in indigenization of critical technologies and products to render support to several programmes of national importance.


21.1 The Summarized financial position for the Financial Year 2021-22 and for the two preceding Financial Years is given below:

Figures in Rs Lakh
Particulars 31-Mar-22 31-Mar-21 31-Mar-20
Non-current assets
Property, Plant and Equipment 93,748.33 42785.85 43,970.52
Capital work-in-progress 13,186.56 54874.46 40,482.01
Intangible assets 100.42 105.72 104.11
Financial Assets
(i) Investments 2,210.11 2210.11 2,210.11
(ii) Loans 1.59 35.60 64.85
Non-current tax assets (Net) 555.93 553.82 543.63
Other non-current assets 434.03 396.93 999.69
Total Non-Current Assets (1) 1,10,236.97 100,962.49 88,374.92
Current assets:
Inventories 1,09,149.16 80,083.79 91,050.37
Financial Assets
(i) Trade receivables 30,630.83 38,613.55 29,739.51
(ii) Cash and cash equivalents 6,258.15 9,394.67 11,089.67
(iii) Other financial assets 1,171.02 855.22 1,335.36
Other current assets 20,620.01 16,161.97 18,208.54
Total Current Assets (2) 1,67,829.17 1,45,109.20 1,51,423.45
Total Assets (1+2) 2,78,066.14 2,46,071.69 2,39,798.37
Particulars 31-Mar-22 31-Mar-21 31-Mar-20
Equity share capital 18,734.00 18,734.00 18,734.00
Other Equity 1,00,337.94 88,529.11 77,104.66
Total Equity (1) 1,19,071.94 1,07,263.11 95,838.66
Non-current liabilities
Financial liabilities
(i) Borrowings 2,775.88 - 18.41
(ii) Other Financial Liabilities 8,093.72 39,461.20 32,597.80
Provisions 162.81 136.67 125.18
Deferred tax liabilities (net) 3517.17 3,377.37 3,123.40
Other non-current liabilities 64,264.72 31,572.08 38,409.92
Total Non-current liabilities (2) 78,814.30 74,547.32 74,274.71
Current Liabilities
Financial liabilities
(i) Borrowings 23,981.88 16,043.55 13,344.23
(ii) Trade payables 17,588.16 8,556.71 12,889.84
(iii) Other financial liabilities 10,947.17 5,744.96 4,418.10
Other current liabilities 24,400.15 29475.99 35,992.01
Provisions 3,262.54 4440.05 3,040.82
Total Current Liabilities (3) 80,179.90 64,261.26 69,685.00
Total Equity and Liabilities (1+2+3) 2,78,066.14 2,46,071.69 2,39,798.37
Working Capital 87,649.27 80,847.94 81,738.45
Capital Employed 1,21,847.82 1,07,263.11 95,857.07
Net Worth 1,19,071.94 1,07,263.11 95,838.66
Net worth per rupee of paid-up capital (H) 6.36 5.73 5.12


22.1 For the FY 2021-22, MIDHANIs MoU performance is expected to qualify for an overall "Good" rating. Despite a record performance in terms of turnover, export sales and VoP, the decline in MoU performance is mainly attributable to factors that were beyond organizational control of MIDHANI like market Capitalization, Govt. mandate on GeM etc. However, the rating is subject to evaluation and confirmation by Department of Public Enterprises.

22.2 The performance of your company against various parameters was as under:

Name of the Parameter Unit Actual
1 Revenue from Operations H Lakh 85,949.02
2 Asset Turnover Ratio % 32.04
3 EBITDA as a percentage of Revenue % 32.96
4 Return on Net Worth % 15.58
5 Return on Capital Employed % 21.39
6 Value of Production H Lakh 98,872.75
7 Trade Receivables as number of days of Revenue from Operations Number of Days 130.08
8 CAPEX H Lakh 12,629.26
9 CAPEX achievement till end of 3rd quarter (Upto 31st December 2021) H Lakh 9,433.04
10 Expenditure on R&D/ innovations Initiatives as % of PBT % 2.85
11 Exports as % of Revenue from Operations % 10.12
12 Reduction in total imports as % of Revenue from operations over previous syear % -7.40

22.3 The performance of MIDHANI against the parameter of Market Capitalization i.e. the improvement of share price of MIDHANI over BSE S&P Industrials index was calculated at -32.45%. 22.4 The significant highlights of the performance for the 2021-22 and comparison with the previous two years is as under:

(Figures in Rs Lakh)
Particulars 2021-22 2020-21 2019-20
1 Sales - To Customers 85,949.02 81,323.08 71,287.57
Sales – Export 8,702.16 1,942.47 1,042.04
2 Value of Production 98,872.75 77,164.22 97,010.91
3 Cash Profit (Excl prior period items) 27,211.51 25,308.92 22,820.06
4 Profit Before Tax 23,911.98 22,609.39 20,208.62
5 Net Profit (PAT) 17,630.77 16,629.15 15,973.38
6 Value Added 66,868.27 60,157.17 59,350.32
7 Value added per employee 86.84 78.84 75.51
8 Productivity per employee 128.41 101.13 123.42
9 Value added per direct worker 180.24 195.32 194.59
10 Paid up Capital 18,734.00 18,734.00 18,734.00
11 No of Employees 770 763 786

23.0 Some of the important financial ratios indicating financial health and working of the Company at the end of last three years are as under:

Particulars 2021-22 2020-21 2019-20
A. Current Ratio 2.09 2.26 2.17
B Profitability Ratios
a) Profit Before Tax to
i) Capital Employed (%) 19.62 21.08 21.08
ii) Net worth (%) 20.08 21.08 21.09
iii) Sales (%) 27.82 27.80 28.35
b) Profit After Tax to Equity (%) 94.11 88.76 85.26
c) Earnings Per Share H 9.41 8.88 8.53

24.0 The other Key Financial Ratios are as under:

Particulars FY 2021-22 FY 2020-21 Change in % as compared to FY 2020-21 Detailed explanation for change of 25% or more
1. Debtors Turnover 2.48 2.38 4.20 -
2. Inventory Turnover 0.66 0.69 -4.35 -
3. Interest Coverage 13.66 22.10 -38.19 Due to higher Finance cost, for meeting up Working Capital requirement
4. Current Ratio 5. Debt Equity Ratio 2.09 0.22 2.26 0.15 -7.52 46.66 - Due to availment of CAPEX loan and increase in working capital requirement.
6. Operating Profit Margin (%) 24.18 25.36 -4.65 -
7. Net Profit Margin (%) 20.51 20.45 0.29 -
8. Return on Networth 15.58 16.38 -4.88 -

25.0 Amount available for Appropriation:

The amount available for appropriation is Rs 17,630.77 Lakh as against Rs 16,629.15 Lakh in the previous year.

26.0 Risks and Risk Analysis:

Risk Type Risk Definition Risk Probability Risk Impact Risk Mitigation
Market Risks Customer portfolio of MIDHANI comprises more of government / government related organisations. Change in government priorities may affect the existing or proposed strategic programmes. M/L H MIDHANI is diversifying its customer portfolio by targeting sectors like Oil & gas, Power, Engineering etc. Also, machine tool, bearings and Industrial Valve steels are being considered with forward integration into end products/components line Compression Springs, Armoured products etc.
Competition Risks Competition from private players and imports which may, in some cases, be cheaper M/L M/H MIDHANI is focusing on better customer service by way of regular workshops/ meetings with customers by Directors of the company. Also, faster & effective job execution is being focused upon.
People Risk Manpower risk, Labour issues, any inability to recruit skilled manpower M/L M/L Recruitment policies to be updated and the trades/skills of the non- executives to be aligned with those defined by the Ministry of Skill Development and Entrepreneurship (MSDE).
Epidemic and Pandemic Risk Pandemics like Covid 19 L M/H Vaccination drive has been conducted for all employees. Regular health and medical checkup are also organized.
Policy Risks Govt policy related risk – level playing field to private sector etc. M/H L/M Pursuit of business development activities to build market opportunity pipeline. Conduct market intelligence for new material requirements and obtain detailed information from target clients on various grades, specifications and compositions of materials required.
Raw Material Risks MIDHANI manufactures & supplies materials / products for high performance applications which need critical raw materials as input. Raw materials like Nickel, Cobalt, Molybdenum are imported and sometimes due to business environment availability & price is a challenge. L/M M/H Raw material procurement at MIDHANI is closely monitored by Directors of the Company. E_orts have been taken to procure majority of materials during favourable forex rate. Further, we also undertake bulk procurement of critical raw material in view of anticipated orders. We maintain a reverse auction for all e-procurement above Rs 10 Lakh.

(L: Low, M: Medium, H: High)


27.1 The permanent manpower strength of MIDHANI as on March 31, 2022 is 770 employees including 51 employees

(9 Executives and 43 Non-Executives cadre) recruited during FY2021-22. The average age of the employees is 40 years. With the current workforce the company is rightly poised to undertake complex tasks and to uphold industry-leading quality standards while catering to the customer demands. Rational distribution of human skills among functional areas like administration, finance, production and marketing continue to be the key focus to increase performance efficiency and for seamless inter departmental communications and collaboration.

27.2 During the year under review, Training & Development Department (T&D), achieved 1236 man days training.

27.3 As per the directions of Central Vigilance Commission (CVC) and Ministry of Defence (MoD), two week In-House Mid-Career Training Program (MCTP) has been organized by MIDHANI including two days module on Preventive Vigilance and one day Field visit (outbound training program to Forensic laboratory) for 32 Middle level Managers in two batches, with the objective that to become more confident about their roles and responsibilities, to gain knowledge and make them better executives in the decision making process. The program was highly fruitful and well appreciated by participants and Management.


28.1 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.

28.2 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.

28.3 External Audit firm Eswar & Co. were engaged to carry out Internal Audit during the year under report, which 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.