Mishra Dhatu Nigam Ltd Directors Report

BOARDS REPORT

The Members,

Mishra Dhatu Nigam Limited

Your Directors take great pleasure in presenting the 52^nd Annual Boards Report, highlighting the performance and achievements of your Company, together with the Audited Financial Statements (Standalone & Consolidated) for the Financial Year (FY) ended on March 31,2026.

1. SIGNIFICANT ACHIEVEMENTS:

? During FY 2025-26, Company achieved its highest ever revenue of Rs.1,20,862.59 Lakh, achieving year- on-year (y-o-y) growth of 12.52% via-a-vis revenue of n,07,410.15 Lakh achieved for FY 2024-25.

? The Company has achieved highest ever Value of Production (VoP) for the FY 2025-26 which stood at ^1,19,391.98 Lakh registering a (y-o-y) growth of 12.04 % vis-a-vis VoP of Rs.1,06,562.38 Lakh recorded during the previous FY 2024-25

? The Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) for FY 2025-26 stood at Rs.27,558.83 Lakh, registering a (y-o-y) growth of 10.69% vis-a-vis EBITDA of Rs.24,896.79 Lakh recorded in FY 2024-25.

? Profit Before Tax (PBT) for FY 2025-26 stood at 18,409.40 Lakh, registering a (y-o-y) growth of 17.98% vis-a-vis PBT of Rs.15,603.90 Lakh recorded in FY 2024-25. Likewise, Profit After Tax (PAT) stood at Rs.13,078.62 Lakh in FY 2025-26, registering a (y-o-y) growth of 18.82% vis-a-vis PAT of Rs.11,006.87 Lakh recorded in FY 2024-25.

2. HIGHLIGHTS OF OPERATIONS:

? During FY 2025-26, MIDHANI achieved the prestigious NADCAP accreditation for Heat Treatment, a globally recognized quality certification for the aerospace and defence industries. The certification validates the manufacturing processes and quality systems, enabling global Original Equipment Manufacturers (OEMs) to directly source products from MIDHANI. The certification is expected to open new opportunities for expanding business with leading global aerospace and defence customers.

? MIDHANI secured 10 Airworthiness Certifications from CEMILAC (Centre for Military Airworthiness and Certification) for critical aerospace-grade alloys during FY 2025-26. These certifications qualify the Companys advanced superalloys and special steels for use in military aviation and advanced aero-engine applications. The certification reinforces MIDHANIs capability to develop and manufacture indigenously certified materials that meet the stringent performance and reliability standards.

? To strengthen Indias strategic materials ecosystem and ensure uninterrupted availability of critical raw materials for Defence programmes, MIDHANI signed a Memorandum ofUnderstanding with four key stakeholders for the establishment of a Metal Bank. The initiative was aimed at mitigating global supply chain disruptions by creating strategic reserves of critical alloying elements essential for the production of superalloys and other advanced materials. This pioneering initiative is expected to enhance supply chain resilience and ensure timely execution of strategically important national defence projects.

? FY 2025-26 was a landmark year in Titanium production as MIDHANI recorded its highest- ever production of approximately 750 tonnes, which was nearly double the previous years output. MIDHANI has significantly expanded its Titanium product portfolio with the development and supply of Titanium alloy slabs for aircraft structures, Titanium and superalloy rings for aero engines, Titanium shell forgings and dished head forgings for naval applications, and Indias largest Titanium casting.

? MIDHANI successfully supplied approximately 90 tonnes of indigenously developed Armour Grade Steel for the construction of the Presidential Dias used during the 76^th Republic Day celebrations on 26^th January 2026. The project was executed within a highly challenging timeline to support prestigious national initiatives.

? In a proud national milestone, MIDHANI has successfully supplied Titanium for an architectural application by designing, manufacturing and delivering 31 Titanium windows for the Shri Ram Janmabhoomi Temple at Ayodhya. MIDHANI took up the assignment of this prestigious project to demonstrate Companys technological excellence and to showcase the versatility of Titanium beyond strategic sectors, establishing a new benchmark for the use of advanced engineering materials in iconic national infrastructure.

3. FINANCIAL HIGHLIGHTS:

3.1 Your Company achieved a revenue of 71,20,862.59 Lakh for FY 2025-26 vis-a-vis revenue of n,07,410.15 Lakh achieved for FY 2024-25 reflecting a Year-on- Year (Y-o-Y) growth of 12.52%.

Company delivered a significant improvement in profitability, achieving an Operating Profit of 714,608.66 Lakh for the FY 2025-26 registering a Y-o-Y growth of 16.76% vis-a-vis Operating Profit of 712,511.75 Lakh achieved for FY 2024-25. This improvement underscores the Companys focus on operational efficiency.

3.2 EBITDA for the FY 2025-26 stood at 727,558.83 Lakh and registered Y-o-Y growth of 10.69% against the EBITDA of 724,896.79 Lakh recorded during FY 2024-25. Value of Production (VoP) for the FY 2025-26 stood at 71,19,391.98 Lakh against the VoP of 71,06,562.38 Lakh recorded during FY 2024-25.

3.3 Profit Before Tax (PBT) for FY 2025-26 stood at 718,409.40 Lakh registering a Y-o-Y growth of 17.98% vis-a-vis PBT of 715,603.90 Lakh for FY 2024-25. Profit After Tax (PAT) stood at 713,078.62 Lakh for the FY 2025-26 registering a Y-o-Y growth of 18.82%, vis-a-vis 711,006.87 Lakh achieved for FY 2024-25.

3.4 Your Company achieved the following results during FY 2025-26:

		(Figures in Rs. Lakh)
Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	1,20,862.59	1,07,410.15
Other Income	3,800.74	3,092.15
Total income	1,24,663.33	1,10,502.30
Less: Operating Expenditure	97,104.5	85,605.51
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense	27,558.83	24,896.79
Less: Depreciation/ Amortization/ Impairment	6,644.05	6,348.12
Profit before Finance Costs, Exceptional items and Tax Expense	20,914.78	18,548.67
Less: Finance Costs	2,505.38	2,944.77
Profit before Exceptional items and Tax Expense	18,409.40	15,603.90
Add/(less): Exceptional items	-	-
Profit before Tax Expense	18,409.40	15,603.90
Less: Tax Expense (Current & Deferred)	5,330.78	4,597.03
Profit /(loss)for the year (1)	13,078.62	11,006.87
Other Comprehensive Income/(loss) (2)	147.56	(97.90)
Total Comprehensive Income (1+2)	13,226.18	10,908.97

 

		(Figures in Rs. Lakh)
Particulars	FY 2025-26	FY 2024-25
Ratios (Percentages unless otherwise provided)
Profit Before Tax to Capital employed	11.88	10.73
Profit Before Tax to Revenue from operations	15.23	14.53
Profit After Tax to Net Worth	8.54	7.78
Profit After Tax to Paid-up Share Capital	69.81	58.75
Sales to Capital Employed	77.98	73.89
Sales to Gross Block	82.64	76.43
Per Capita Sales (Rs. in Lakh)	159.02	136.65

4. DIVIDEND POLICY:

4.1 Your Company, being a Central Public Sector Enterprise (CPSE), the Guidelines on Capital Restructuring issued by Department of Investment and Public Asset Management (DIPAM) as amended from time to time are applicable. As per the DIPAM Guidelines, every CPSE would pay a minimum annual Dividend of 30% of PAT or 4% of the Net- worth whichever is higher subject to the limit, if any, under any extant legal provision.

4.2 The Companys dividend distribution policy is enclosed as "Annexure - I" and also available on the Companys website viz. https://midhani-india. in/policies/ .

4.3 The Directors have recommended a final dividend of Rs.1.25 per equity share of the face value of Rs.10/- each i.e. @12.5% for FY 2025-26, Further, during the year under review, the Board of Directors of the Company had in their Meeting held on March 13, 2026 declared interim Dividend of Rs.0.85 per equity share of the face value of Rs.10/- each i.e. @ 8.50%. 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 23, 2026.

4.4 The interim dividend and final dividend recommended cumulatively translates to 30% of Profit After Tax (PAT) of FY 2025-26.

4.5 During the year under review, your Company sought exemption from DIPAM with respect to payment of minimum dividend for FY 2025-26 in accordance with DIPAM Guidelines.

4.6 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)
S.No Parameters	FY 2025-26	FY 2024-25
1. Dividend	3,934.35	1,405.34
2. Profit After Tax (PAT)	13,078.62	11,006.87
3. Net Worth*	1,50,635.61	1,41,491.34
4. Dividend/PAT (%)	30.08	12.77
5. PAT/Net Worth (%)	8.68	7.78
6. Dividend/Net Worth (%)	2.61	1

*Net worth is after considering Dividend for respective periods.

5. TRANSFER TO GENERAL RESERVE:

Your Company has transferred Rs. 9,800 Lakh to General

Reserve for the FY 2025-26.

6. Joint Venture/ Associate Company

6.1 Advanced Materials (Defence) Testing Foundation:

A Joint Venture Company i.e. Advanced Materials (Defence) Testing Foundation, (Section 8 Company) was incorporated on June 4, 2024 under Defence Testing Infrastructure Scheme promulgated by Ministry of Defence. The Joint Venture Members comprise Mishra Dhatu Nigam Limited, Hindustan Aeronautics Limited, Bharat Dynamics Limited, Yantra India Limited and PTC Industries Limited, each holding 20% of paid-up share capital of the Company. The Joint Venture Company will set up a Mechanical and Material Testing Facility at the Lucknow node of the Uttar Pradesh Defence Industrial Corridor, with MIDHANI leading the project. The project will be funded through a grant-in-aid of 75% of the project cost by the Government of India, while the balance 25% will be contributed by the Joint Venture members. Facility implementation related activities are on-going.

6.2 Utkarsha Aluminium Dhatu Nigam Limited:

Utkarsha Aluminium Dhatu Nigam Limited (UADNL), is a Joint Venture company of M/s National Aluminium Company Limited (NALCO), a Navratna CPSE under Ministry of Mines and M/s Mishra Dhatu Nigam Limited (MIDHANI), a Miniratna CPSE under the Ministry of Defence. The Company was proposed for setting up a 60,000 TPA integrated facility for the production of high-end aluminium alloy flat rolled products. The project was assessed through detailed studies and reports and was found to be commercially non-viable. Accordingly, it was recommended that the name of the Company be removed from the Register of Companies in accordance with the applicable provisions of the Companies Act, 2013 and the Promoters shall take an appropriate decision regarding the future course of action with respect to UADNL.

7. PERFORMANCE AGAINST MoU:

For FY 2025-26, MIDHANIs MoU performance is expected to qualify for an overall Very Good rating, subject to evaluation and confirmation by Department of Public Enterprises (DPE).

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

8.1 Over the years, the Companys consistent focus on upgradation and modernization has resulted in the establishment of additional facilities, expansion of production capacity, and diversification of its product portfolio.

8.2 Projects undertaken/ proposed for Modernization, Expansion and Upgradation of MIDHANIs production activities during the year ended on March 31,2026 are as under:

(i) Compacting Press for Titanium sponge:

Procurement of a 6000T capacity hydraulic compacting press is being planned for compacting Titanium sponge with master alloys to produce Titanium electrodes which will be utilized in both primary and secondary melting in the Vacuum Arc Re- melting (VAR) furnace. The project scope also covers establishment of necessary auxiliary facilities such as moulds, electrical and Programmable Logic Controller (PLC) systems, stacking devices and plasma welding.

(ii) Aerospace Fasteners Facility: State-of- the-art Aerospace Fasteners Facility was inaugurated and the facility will produce high- precision aerospace-grade fasteners from steel, titanium, and superalloys. The facility is equipped with cutting-edge technologies, including fully automated warm/hot head forging, thread rolling, and fillet rolling machines.

(iii) Welding Electrode Plant: Augmented facilities at MIDHANIs Welding Electrode Plant were inaugurated during the year The plant was augmented with a new dedicated welding area, raw material storage, and a specialized dehumidifier room. These enhancements prevent moisture-related defects (e.g., porosity, cracking), ensuring manufacturing excellence for specialized low- alloy and stainless-steel welding consumables used in strategic sectors.

(iv) Metal Bank: Metal Bank at MIDHANI serves as a strategic repository of critical raw materials. The project for setting up a Metal Bank progressed significantly during the year Modification of the existing shed was completed and the procurement process for specialized flooring is underway. Construction activities for the Metal Bank sheds are progressing as planned. Once set up the Metal Bank would contribute significantly to operational efficiency, supply chain resilience and the nations objective of self-reliance in strategic materials.

9. LABOUR PRODUCTIVITY:

The value added per employee for year ended on March 31,2026 was Rs.90.57 Lakh, vis-a-vis Rs.81.86 Lakh in the previous financial year

10. SALES AND OPERATIONAL EFFICIENCY:

As of March 31, 2026, MIDHANIs trade receivables, measured in terms of Number of Days Sales, increased to 167 days, compared to 139 days as on March 31, 2025. The rise in receivable days is due to huge increase in sales in the month of March 2026. Additionally, the higher share of dispatches made during the last quarter of the financial year contributed to the elevated receivables position as of the reporting date.

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

11.1 Research and Development (R&D) continues to be accorded high priority at MIDHANI and serves as the cornerstone of the Companys product development activities. The R&D function not only drives innovation but also contributes to product enhancement, cost optimisation and marketing support, thereby aligning with the Companys broader business objectives. Through continuous research and technological advancement, MIDHANI develops new products, improves existing ones and strengthens its ability to address the emerging requirements of the strategic sectors.

11.2 During FY 2025-26, the Company incurred an expenditure of Rs.2,215.23 Lakh towards Research and Development. The R&D function at MIDHANI is responsible for the development of new products and process technologies, continuous improvement of existing products, and effective utilization of technical infrastructure and skilled manpower to support critical manufacturing activities and strategic business objectives.

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

? Indigenous Product Developments:

• Development of Superni 701A nickel based super alloys for Aero engine:

MIDHANI has successfully developed and certified SUPERNI 701A, a nickel- based precipitation-hardening superalloy intended for demanding aeronautical applications with a maximum service temperature of 816?C. Owing to its narrow hot-working window, the alloy presented significant challenges during processing and forging. Despite these complexities, MIDHANI has successfully established the manufacturing process and developed certified forged bars up to 200 mm in diameter

• Development of Nickel based superalloy cast alloy for single crystal blade of aero-engine: MIDHANI has successfully developed and certified a Russian-origin cast superalloy for the manufacture of single-crystal turbine blades, one of the most critical components of aero engines. Remelt stock was produced using the 600 kg Vacuum Induction Melting (VIM) furnace

and for the first time at MIDHANI, singlecrystal alloy remelt stock bars of 70 mm diameter were successfully manufactured and qualified, meeting the stringent stress rupture requirements at 1000?C.

• Indigenised various nickel based super alloys for the aero engine:

MIDHANI has successfully indigenised and certified a range of nickel-based superalloys for critical aero-engine applications. These alloys have been successfully manufactured and supplied in various mill forms, including forged bars, rings, hot-rolled bars and cold-rolled sheets. In the absence of established literature or processing guidelines, MIDHANI successfully developed and optimized the melting, homogenization, forging, hot rolling and cold rolling process parameters through extensive experimentation and process validation. The indigenised products consistently met the stringent high-temperature mechanical property requirements and ultrasonic testing (UT) acceptance criteria.

• Development of Superni 41 nickel based super alloys for turbine blade of Aero engine: MIDHANI has successfully developed SUPERNI 41, a precipitation-hardenable nickel-based superalloy containing Cobalt, Molybdenum, Titanium, Aluminium and Boron, for high- temperature aerospace applications.

The alloy exhibits excellent mechanical strength at room temperature as well as elevated temperatures up to 870?C, along with outstanding oxidation resistance up to 980?C. Owing to its extremely narrow processing window, the alloy presents significant challenges during manufacturing and MIDHANI has successfully established the processing parameters, developed blade bars, and supplied them for export applications. The developed product achieved the stringent grain size requirement of ASTM No. 8 or finer

• Development of Ti-5553 for Aeronautical application: Successfully developed and established thermomechanical processing and heat treatment parameters for Titan 31 forged/hot-rolled flats and metastable beta Titanium alloy Ti-5553 forged products, achieving the required mechanical properties in all three principal directions, thereby meeting the stringent requirements for aeronautical applications.

• Development of Ti-32B for Naval application: Successfully developed and established specialized thermomechanical processing and open- die forging parameters for Titan 32B, equivalent to PT-3B, for the manufacture of heat exchanger shells and domes intended for strategic applications.

• Development of BT 20 rings for Aeronautical application: Successfully developed and certified BT-20 forged and ring-rolled rings for aeronautical applications. The stringent quality requirements were achieved through an innovative process route, ensuring compliance with demanding aerospace standards. This achievement significantly strengthened indigenous manufacturing capabilities and reduced dependence on imported materials for critical aeronautical applications.

? Process improvement:

• Yield Improvement:

Yield improvements were achieved through process and design innovations. A design modification enabled the casting of sticks directly from the distribution box to a round turntable, resulting in a 15% increase in casting yield. In addition, enhanced process efficiency in superalloy forging led to substantial raw material savings through higher forging yields. Further, in certain areas the yield successfully improved from 25% to 50%, contributing to improved productivity and cost efficiency.

• Successfully optimized the melting, forging and heat treatment parameters for SNI 80A blade bars, resulting in a uniform microstructure, enhanced mechanical properties, and a significant improvement in process yield from 25% to 50%.

• MIDHANI successfully qualified the Wide Plate Mill (WPM) for five aeronautical steel grades thickness up to 100mm. Following qualifications, materials has been successfully dispatched and this development would enhance product yield, reduce dependency on the Forge Shop, Heat Treatment Shop, and Hot Rolling Mill. It would also improve overall production efficiency through the WPM route.

• Plant reverts were successfully qualified for use in five aeronautical steel grades, resulting in significant cost savings on raw materials and a reduction in Work-In- Progess (WIP) inventory.

? Artificial Intelligence (AI)

During FY 2025-26, MIDHANI implemented two Projects for Artificial Intelligence. One project was for AI based Image analysis system for Predicting Alloy Microstructure and second project was for Prediction of Mechanical properties of Alloys based on Chemistry & Microstructure using AI. These AI implementations are aimed at optimisation of Internal processes enabling us to ensure product consistency with enhanced decision making in production and quality functions. The AI projects were also exhibited at India AI Impact Summit 2026.

12. INTELLECTUAL PROPERTY:

The Company continued to develop new products to meet growing market demand, achieving significant advancements in R&D activities. MIDHANIs products are unique, and to safeguard against infringement, the Company has placed a strong emphasis on encouraging the application of Intellectual Property Rights (IPRs). Recognizing the importance of IPR in identifying potential patents, MIDHANIs R&D team, in collaboration with the Training and Development department, also organizes in-person and online sessions to educate employees on IPR awareness and its application during the development phase.

13. ENERGY CONSERVATION:

13.1 During FY 2025-26, the Company continued to focus on energy conservation through efficient utilisation of resources and process optimisation. Operational practices such as grouping materials with similar heat treatment cycles, optimising batch sizes and scheduling continuous furnace operations were continued to improve furnace utilisation and enhance the Capacity Utilisation Factor (CUF), resulting in more efficient use of LPG.

13.2 As part of ongoing efforts to improve energy efficiency and power quality, the Company placed a purchase order for the procurement of a 3 MVAr Automatic Power Factor Correction (APFC) Panel. The installation is expected to improve the power factor from the present level of 0.95 to 0.99, building on the earlier improvement from 0.90 to 0.95 achieved through previous APFC installations. The project is scheduled for completion by December 2026 and is expected to contribute to reduced energy costs and improved power system performance.

13.3 Your company has also continued the phased replacement of over 40-year-old 11 kV/415 V distribution transformers with new high- efficiency transformers conforming to IS 1180 standards. During the year, two transformers were installed at the Bar and Wire Rod Mill, and replacement of two 1.6 MVA transformers at the CRS Shop is planned as the next phase. These replacements are expected to improve energy efficiency and reduce distribution losses.

13.4 As part of the ongoing power system improvement program, your company has initiated procurement for the replacement of the existing 11 kV paper-insulated high-tension (HT) cable from MRSS to LBSS-2 with a new XLPE cable covering a length of approximately 6 km. The replacement is expected to reduce distribution losses, improve the reliability of the power distribution network and ensure more efficient power transmission across the plant.

13.5 In efforts to increase the use of renewable energy, power supply commenced from the 850 kWp rooftop solar power plant at the Wide Plate Mill (WPM) located at MDIHANI plant. It was implemented under the RESCO model in association with NVVN Limited (NVVNL). The project is expected to help in managing peak power demand and reducing energy costs.

13.6 During the year, the Company also approached Singareni Collieries Company Limited (SCCL) for procurement of renewable (solar) energy. In addition, a 35 kWp rooftop solar power plant was installed at BPDAV School under the Companys Corporate Social Responsibility (CSR) initiative.

13.7 During the year under report there was an increase in specific consumption of LPG and Electricity due to the ongoing project works.

The summary of consumption of Electricity and LPG for the FY 2025-26 vis-a-vis FY 2024-25 are as below: • The summary of consumption of LPG:

Description	Unit	FY 2025-26	FY 2024-25
Annual consumption of LPG	MT	5,516.25	4,783.23
Specific consumption of LPG in Production	MT (LPG)/ MT (Prod.)	0.13	0.14

• The summary of consumption of Electricity:

Description	Unit	FY 2025-26	FY 2024-25
Annual consumption of Electricity	KWHr (in Crore)	7.02	6.35
Specific consumption of Electricity in Production	Kwh/T	1,704.30	1,891.96

14. MARKETING & BUSINESS DEVELOPMENT:

14.1 During FY 2025-26, MIDHANI secured contracts worth Rs.1,81,726 Lakh. As of April 1, 2026 the value of open orders stood at Rs.2,29,000 Lakh. Considering the current order book situation and expected new orders, the Company is well positioned for consistent growth.

14.2 Company also expanded its customer base by adding 30 new customers during the year and received orders for over 18 new grades catering to various strategic requirements.

14.3 The sector wise order booked during FY 2025-26 are as under:

	(Rs. Lakh)
Sector	Total value of orders
Defence	1,04,556
Space	45,740
Energy	15,260
Others	16,170
Total	1,81,726

14.4 Sector-wise Performance: The total orders executed during FY 2025-26 were Rs.1,20,862 Lakh and sector wise sales were as follows:

	(Rs. Lakh)
Sector	Total value of supplies
Defence	86,753
Space	10,670
Energy	4,980
Others	18,459
Total	1,20,862

14.5 Business Development:

> During FY 2025-26, MIDHANI continued to strengthen its position as a leading supplier of advanced metallurgical products for the strategic sectors. The Company maintained a strong focus on product indigenisation, development of high-value alloys and expansion of its manufacturing capabilities to meet the evolving requirements of strategic customers. Backed by our integrated manufacturing facilities and in-house research capabilities, MIDHANI continued to supply critical materials for several national programmes while expanding its presence in new application areas.

> The Company recorded its highest-ever turnover during the year, supported by sustained demand across its core business segments. The order book remained robust at approximately Rs.2,29,000 Lakh as on 1^st April 2026, with the defence sector continuing to constitute the major share of business. The Company also expanded its Titanium product portfolio and strengthened its capabilities in aerospace materials through the development and supply of advanced Titanium alloys, superalloys and specialised steel products for critical applications.

> During the year, MIDHANI achieved several significant milestones that are expected to support future business growth. Your Company secured NADCAP accreditation for Heat Treatment, obtained 10 CEMILAC airworthiness certifications for aerospace- grade alloys, and developed several new products including Titanium alloy rings, aircraft structural components, naval forgings and single crystal superalloy materials for aero engines. These developments have expanded the Companys capabilities in advanced materials and are expected to support greater business opportunities across the aerospace and defence sectors in India and abroad.

> As part of its long-term business strategy, MIDHANI initiated the establishment of a Metal Bank in association with key stakeholders to ensure the availability of critical raw materials required for strategic programmes. The initiative is aimed at mitigating supply chain disruptions and strengthening the resilience of the domestic manufacturing ecosystem. In addition, the Company continued to invest in capacity augmentation and modernisation of downstream facilities to improve productivity, operational efficiency and readiness for future business opportunities. Existing facilities, including Vacuum Induction Melting and Vacuum Arc Remelting Furnaces, can meet the growing demand in these areas, particularly from the aerospace sector

> The Company also continued its efforts to expand its global footprint. With internationally recognised quality certifications and ongoing customer qualification programmes, MIDHANI is well positioned to increase exports and strengthen business relationships with global aerospace and defence Original Equipment Manufacturers (OEMs). The management has also outlined plans for capital investment in advanced manufacturing facilities to support future growth and cater to the increasing demand for specialised alloys and strategic materials.

14.6 Information Technology (IT):

• During the year, MIDHANI also strengthened its cyber security framework through the revision of its Cyber Security Policy-2026. The Company completed an internal Vulnerability Assessment and Penetration Testing (VAPT) audit of its IT infrastructure and implemented the new on-premise NIC e-Office 7.x platform and migrated to the NIC-Zoho corporate email system.

• MIDHANI continued its digital transformation by implementing a range of online applications to improve operational efficiency and facilitate ease of doing business. Key initiatives included the ERP Enterprise Asset Management (EAM) module for equipment maintenance work orders, online Route Card and Manufacturing Process Planning (MPP) applications for process routing, and digital production log sheets for heat treatment operations.

• A contract labour management system incorporating biometric attendance and online contract bill processing was implemented. Introduction of online disciplinary inquiry and e-Measurement Book applications were made as part of Vigilance Awareness Week 2025. In addition, several QA 4.0 initiatives, including multiple production line calibration, process control and linear interpolation modules, were implemented.

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

15.1 MIDHANI participated as an exhibitor at the National Defence Industries Conclave (NDIC) held on 19^th - 20^th March 2026. The conclave, themed "Advanced Manufacturing Technologies," brought together key stakeholders from the defence and manufacturing sectors and provided a platform for showcasing the Companys capabilities and engaging with industry participants.

15.2 MIDHANI participated in the India AI Impact

Summit 2026, held at Bharat Mandapam, New Delhi, on 19^th - 20^th February 2026. During the summit, the Company showcased its AI-driven alloy development project, which leverages historical laboratory data on alloy composition and microstructure to predict the mechanical properties of alloys.

16. QUALITY MANAGEMENT ACTIVITIES:

16.1 During FY 2025-26, MIDHANI successfully completed the NABL audit of the Mechanical Testing Lab, Metallography, and NDT sections with an enhanced scope of testing, including high-temperature tensile, creep and stress rupture tests, alpha casing measurement, and immersion ultrasonic testing (AMS 2154). The Company also commissioned an X-Ray Diffraction (XRD) machine in the Metallography Laboratory, strengthening its capabilities in retained austenite measurement and texture identification.

16.2 The Quality Department continued to support manufacturing and product qualification activities by preparing and testing nearly 55,000 samples covering tensile, creep, impact, fatigue and fracture toughness evaluations. To further strengthen capabilities, a new immersion ultrasonic testing machine was procured and is currently under installation.

16.3 During the year, the Company made significant progress in enhancing its Non-Destructive Testing capabilities. As part of the ongoing efforts towards NADCAP accreditation for the NDT section, team successfully acheived NAS 410 Level-II certification in Ultrasonic Testing (UT), Magnetic Particle Testing (MPT) and Fluorescent Penetrant Testing (FPT). The Company is targeting NADCAP accreditation for NDT section in FY 2026-27.

16.4 The Quality Department was recognised with an Award for Excellence in Quality Orientation by the World Quality Congress & Awards. As part of the Quality 4.0 initiative, an online test results

system was implemented, resulting in reduced turnaround time and melt cycle duration. The Company also successfully completed the first audit cycle towards securing S-400 laboratory accreditation from GE Aerospace, and efforts are underway to achieve full accreditation.

17. SUPPLY CHAIN MANAGEMENT

PERFORMANCE:

17.1 Vendor Meet:

• To strengthen the MSME ecosystem in the strategic metals sector, MIDHANI organised the "MSME Conclave for Promotion of Indigenisation in Defence - 2025" on 16^th May 2025 at its Corporate Office, Hyderabad. The conclave witnessed active participation from MSME vendors and presentations on the SRIJAN Portal and Trade Receivables Discounting System (TReDS) were also made to them. The conclave highlighted MIDHANIs ongoing efforts to work closely with MSMEs in strengthening the domestic defence manufacturing ecosystem.

• As part of Vigilance Awareness Week 2025, MIDHANI organised a Vendor Meet on 1^st November 2025 exclusively for contractors providing manpower services. The meeting provided a platform to address issues faced by the contractors, and the Companys bill and payment processing system was explained to the participating vendors to enhance their understanding and facilitate smoother processing.

• MIDHANI also organised a Vendor Development Programme in association with the National SC-ST Hub (NSSH), Hyderabad, with the objective of promoting vendor development, encouraging greater participation of SC/ST entrepreneurs in the supply chain, and strengthening collaboration with MSMEs.

17.2 Encouragement to Micro and Small-Scale Industries: MIDHANI continues to encourage the growth of Micro and Small Enterprises

(MSEs) by procuring a wide range of goods and services from them. During FY 2025-26, procurement from MSEs accounted for 53% of the total domestic procurement value, reflecting the Companys continued support for the sector During the year, purchase orders valued at T26.90 crore were also placed on women-owned MSEs, further promoting inclusive participation in the Companys supply chain.

17.3 Integrity Pact (IP): In order to uphold transparency and integrity in all our contracts, MIDHANI has implemented the practice of signing integrity pacts with the respective bidders for high-value contracts. Shri Sunil Kumar Chourasia, IOFS(Retd) and Shri T. Bal Raj, ITS (Retd) act as our Independent External Monitors (IEM) to ensure compliance and adherence to ethical standards. During FY 202526, approximately 83.50 % of the total value of contracts and Purchase Orders (POs) were covered under the Integrity Pact, reaffirming our commitment to maintain integrity and accountability in our operations.

17.4 Government e-Market Place (GeM): MIDHANI is putting all efforts for procurement through the Government eMarket Place (GeM) platform. During FY 2025-26, MIDHANI released purchase orders amounting to Rs. 25,460 Lakh through GeM portal.

18. RISK MANAGEMENT:

18.1 MIDHANI has a comprehensive Risk Management Policy that has been approved by the Board. The identification and assessment of risks associated with various processes in MIDHANI have been extensively discussed in the Internal Production Review Meetings. In compliance with Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements Regulations, 2015), MIDHANI has constituted a Risk Management Committee.

18.2 As part of the Management Discussion and Analysis section of this Annual Report, a detailed list of the identified risk elements faced by the Company are enumerated. This ensures transparency and allows stakeholders to have a comprehensive understanding of the risks involved in MIDHANIs operations. By actively managing and addressing these risks, MIDHANI remains committed to safeguarding its interests, promoting sustainable growth, and ensuring the long-term success of the organization.

19. HUMAN RESOURCE DEVELOPMENT:

19.1 Human Resource Development continued to receive focused attention during FY 2025-26 as the Company remained committed to building a competent, motivated and future-ready workforce. The HRD function supported the Companys business objectives by strengthening employee capabilities and fostering a culture of continuous learning and professional development.

19.2 During the year, HRD initiatives covered employee training and development, performance management, career progression, leadership development and succession planning. These initiatives were aimed at enhancing employee competencies, encouraging continuous improvement and preparing the workforce to meet the evolving requirements of the Company.

19.3 The HRD function remained focused on creating a skilled and motivated workforce, while fostering a culture of learning, collaboration and continuous improvement. Employee learning and development continued to be an important focus area during the year Training programmes were organised to enhance technical, managerial and behavioural competencies, enabling employees to keep pace with changing business requirements and emerging technologies.

19.4 Manpower Position:

As on 31^st March 2026, the Companys manpower strength comprised 499 Non-Executives, 8 Non-Unionised Supervisors and 253 Executives, as against 510 Non-Executives, 15 Non-Unionised Supervisors and 261 Executives as on 31^st March 2025.

19.5 The total manpower strength under permanent category of your Company as on March 31, 2026 is as under:

Particulars	Non Executives	Non Unionized Supervisors	Executives	Total
Male	460	5	218	683
Female	39	3	35	77
Total	499	8	253	760

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
98	43	228	130	499

19.6 Employee Welfare Initiatives:

The various employee welfare initiative taken during FY 202526 are as below:

• As part of its employee welfare initiatives, the Company continued to recognize academic excellence among the children of employees belonging to SC, ST and OBC categories.

Monetary awards are presented to meritorious students, including cash awards to the highest scorers in each category and to students securing 75% and above marks in the Class X Board examination or equivalent. Merit scholarships of Rs.6,000 and Rs.3,000 per annum are awarded to the wards of employees studying in Classes I to X who secure first and second rank, respectively, in the final examinations of the preceding academic year. The Company also continued to extend scholarships to the children of employees pursuing Graduation in Metallurgical Engineering, in accordance with the approved scheme, at the rate of Rs.1,000 per month for the duration of the course.

• The Company continued to provide PostRetirement Medical Benefits to eligible retired employees through a Group Insurance Policy. Under the scheme, the Company bears 85% of the insurance premium, while the remaining 15% is contributed by the retired employee.

• Brahm Prakash D.A.V School, located in the MIDHANI Township, continued to provide education to the children of employees with emphasis on their overall development through academics, sports, cultural activities and other co-curricular programmes. Company also continued to provide financial assistance towards the education of employees children studying in the school by reimbursing Rs.500 per month per child, subject to a maximum of two children for NEXs, in accordance with the approved scheme.

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

19.7 Women Empowerment:

• The Company continued to provide a conducive work environment that enables women employees to contribute effectively across various functions, including production, maintenance, materials management, marketing, finance, human resources and other support services. Their continued participation across operational and administrative areas reflects the Companys commitment to equal opportunity and inclusive growth.

• The Company also continued to extend all statutory welfare measures and facilities for the well-being of its women employees. The Company has complied with the applicable provisions relating to maternity benefits as prescribed under the Maternity Benefit Act, 1961.

• Creche:

The Company continues to provide a fully operational Creche facility for the children of its employees, offering a safe, secure and child-friendly environment. The facility is equipped with appropriate play materials and is managed under the supervision of trained women staff to ensure the care and well-being of children during working hours. To support employees availing the Creche facility, the Company also provides flexible working hours to eligible women employees, in accordance with the applicable policy.

• International Womens Day was celebrated at MIDHANI to recognise the contributions of women employees across the organization. The celebration reflected the Companys continued commitment to fostering an inclusive and supportive workplace for women.

19.8 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.

19.9 Environment Management:

MIDHANI continues to maintain a green and eco-friendly campus through dedicated landscaping and plantation efforts. More than 50% of the Companys land is under green cover, providing a natural habitat for a variety of flora and fauna. The premises support diverse species of birds, squirrels, peacocks and rabbits, reflecting the Companys commitment to environmental conservation and biodiversity.

20. DIRECTORS, EMPLOYEES AND RELATED DISCLOSURES:

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

21. TRAINING & DEVELOPMENT:

21.1 During FY 2025-26, the Training & Development Department achieved 3,814 man-days of training through a combination of 27 internal and 45 external training programmes. A total of 1,526 employees, comprising Executives, NonUnionised Supervisors, Non-Executives, Fixed Term Contract employees and Casual employees, participated in these programmes.

21.2 Training Department also organised 10 plant visits, benefiting 291 participants, facilitated internships/project work for 28 students, and conducted skill development training for 39 apprentices, all of whom successfully completed their apprenticeship during the year

22. STATUTORY & SOCIAL OBLIGATIONS:

22.1 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 expenditure of T332.29 Lakh towards CSR as against the mandatory requirement of T325.67 Lakh. In terms of Rule 7(3) of The Companies (Corporate Social Responsibility Policy) Rules, 2014 the excess CSR amount of T6.62 Lakh spent during FY 2025-26 is to be set off against the requirement of Section 135(5) of the Companies Act, 2013 up to immediate succeeding three financial years.

• The Company has prepared an annual report on its CSR activities, in compliance with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The report can be accessed at https://midhaniindia.in/csr/ and forms part of Annual Report as Annexure - III. Details about the composition of the Corporate Social Responsibility and Sustainable Development Committee of MIDHANI can be found in the "Report on Corporate Governance," which is included in this Annual Report.

• The CSR activities undertaken by our Company during the reporting year encompass the following 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 has sponsored the activities of MIDHANI Primary Health Care Centre (MPHCC) which is providing medical services to the needy patients by extending Outpatient consultation, Eye Camps, Cardiac and Orthopedic Camps. An expenditure of T114.62 lakh was incurred, and outstation medical camps were also conducted to extend the services to people in remote areas.

ii) Sponsored T4.99 Lakh for procurement of medical equipment Blood Cell Counter and Blood Bank Refrigerator

iii) Sponsored an Ambulance to Dharmabharathi Charitable Trust, Keralam with a budget of Rs.10 Lakh.

iv) Sponsored T97.96 Lakh for the treatment of patients with severe burns.

(b) Sanitation: An amount of Rs.12.87 Lakh was incurred towards sponsorship for renovation of washrooms in BPDAV school. Further, Public Toilet near MIDHANI is also being maintained under CSR.

(ii) Promotion of Education:

(a) Free Education for children belonging to SC/ST/OBC category whose parents fall in lower income group are being given admission in to Nursery/LKG/UKG. The entire fees is borne by MIDHANI till they complete 10^th Class. During the year Company has sponsored free education to 60 children at an expenditure of Rs.13.45 lakh.

(iii) Skill Development:

(a) Every year MIDHANI is inducting apprentices to help students have exposure to the real time environment and gain knowledge from experienced professionals. As part of the stipend paid to the apprentices, an amount of Rs.1.35 lakh is accounted under CSR as per the guidelines.

(b) Sponsored 174 sewing machines for Women and Self-help groups at Jharkhand with an expenditure of Rs.7.24 Lakh.

• The Annual Report on CSR forms part as Annexure -III of this Annual Report.

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

• Company has 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) has not received any complaint pertaining to sexual harassment.

22.3 CONTRIBUTION TO EXCHEQUER:

• During FY 2025-26, your Company contributed an amount of Rs.30,359.69 Lakh in the form of Dividend, Duties and Taxes vis-avis Rs.30,800.00 Lakh during FY 2024-25.

22.4 COPY OF ANNUL RETURN:

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

22.5 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 forms part of Annual Report as Annexure - IV.

22.6 BUSINESS RESPONSIBILITY REPORT:

• As per the requirements of Regulation 34 of SEBI Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) forms part of Annual Report as Annexure-V. This report highlights the various initiatives undertaken by the Company in terms of environmental sustainability, social responsibility, and governance practices. We encourage you to review this report for a comprehensive understanding of our commitment to responsible business practices.

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

• MIDHANI, as a Public Authority under the RTI Act 2005, has appointed a Nodal officer, Appellate Authority, and Central Public Information Officer (CPIO) to ensure compliance with the RTI Act 2005. The Company promptly provides information requested by citizens within the specified time frame. MIDHANI also fulfills its obligation of Suo Motu disclosures under Section 4(1)(b) of the RTI Act by displaying information on its official website.

• During FY 2025-26, 61 RTI applications were received and 62 applications were disposed of, including those from the previous period. As on March 31,2026, 1 RTI application was yet to be replied. Additionally, 8 RTI appeals were raised during FY 2025-26 and 6 RTI appeals were disposed within the stipulated time in the said period. MIDHANI submits quarterly returns to the authorities in accordance with the regulations.

22.8 RAJBHASHA IMPLEMENTATION:

• In compliance with the directives of the Government of India, the Official Language Act, 1963, and the Official Language Rules, 1976 made thereunder along with subsequent instructions issued by the Government of India for the promotion of Hindi in official work, MIDHANI has adhered to the policies without any deviation. The company has consistently demonstrated commitment towards the progressive use of Hindi in its day-to-day operations.

• During the year, the Company continued its efforts to promote the use of Hindi in official work by holding four quarterly meetings of the Official Language Implementation Committee under the chairmanship of the Chairman & Managing Director During the year, the Company organised eight Hindi Awareness Workshops, benefiting around 163 employees, to promote the use of Hindi in official work. Under the Hindi Teaching Scheme, 40 employees also received formal training in the Hindi language, further strengthening their ability to carry out official work in Hindi.

• As part of the Ministry of Home Affairs directives, MIDHANI celebrated "Hindi Month" from 18^th September 2025 to 19^th October 2025 and also started monthly Hindi Competition. The event aimed to propagate the use of Hindi on a larger scale across the organization. In recognition of its efforts in implementing the Official Language Policy during FY 2024-25, MIDHANI was awarded the Best E-House Journal Award for its Rajbhasha e-House Journal "Sankalp" (awarded on 29^th May 2025).

22.9 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 2025-26.

• 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 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 at https://midhani-india.in/policies/ .

23. VIGILANCE ACTIVITIES:

23.1 The Vigilance Department of the Company is led by Ms. Spurthi Reddy, an IRS officer, serving as the Chief Vigilance Officer (CVO). As CVO, Ms. Spurthi Reddy guides the Chairman & Managing Director (C&MD) on all vigilance-related matters and acts as a liaison between the organization and the Central Vigilance Commission (CVC). Preventive vigilance continued to be a key focus area during FY 2025-26.

23.2 During FY 2025-26, the Vigilance Department continued its preventive vigilance efforts through regular examination of procurement contracts, case files and key processes, along with periodic and surprise inspections. Eight Chief Technical Examination (CTE) type inspections covering procurement, civil works and utilisation of equipment were carried out, and recommendations were submitted to the Management for necessary action. The Vigilance Department also undertook measures to review and standardise rules and procedures across the organisation with the objective of improving transparency, ensuring consistency in decisionmaking and reducing the scope for discretionary practices in day-to-day operations.

23.3 Structured meetings between the Chairman & Managing Director and the Chief Vigilance Officer were also held periodically to review vigilance-related matters and strengthen the vigilance framework. Vigilance Department suggested twelve systemic improvements and good practices covering Human Resources, Civil, Security, Stores Management, and Procurement & Contracts. These recommendations were considered by the Management.

23.4 Vigilance Awareness Week 2025 was observed from 27^th October to 2^nd November 2025 on sthe theme "Vigilance: Our Shared Responsibility" as prescribed by the Central Vigilance Commission (CVC).

24. VIGIL MECHANISM:

24.1 MIDHANI invites reporting of unfair, unethical activities, if any in the company from the employees. In this regard, a Whistle blower policy has been put in place. The Whistleblower Policy was first adopted by the Board of Directors at its 206^th Meeting on January 23, 2013. It was later amended as the Whistleblower Policy - 2018 to align with the Public Interest Disclosure and Protection of Informers Resolution, 2004 (PIDPI).

24.2 The Audit Committee periodically reviews the functioning of the Vigil Mechanism, including the surveillance system and any whistle-blower complaints received, to ensure transparency and accountability in the organization.

24.3 The Whistleblower Policy - 2018 serves as MIDHANIs Vigil Mechanism, providing a structured platform for individuals to report unfair or unethical practices that may affect the organization. The policy ensures confidentiality and protection against retaliation for whistleblowers, thereby promoting transparency and accountability.

24.4 The policy is readily accessible on the companys website. at https://midhani-india. in/department vigilance/role-functions- ofvigilance- department/ .

25. AWARDS AND RECOGNITION:

• MIDHANI Quality Circle Team has won the prestigious Gold Award at the 50^th International Convention on Quality Control Circles (ICQCC) 2025, held in Taipei, Taiwan, from 3^rd to 6^th November 2025 for the project titled Innovation in Casting of Liquid Metal in Cylindrical Moulds.

• Dr S.V.S. Narayana Murty, Chairman & Managing Director, MIDHANI, was felicitated by Honble Minister for State, Ministry of Agriculture and Farmers Welfare Shri Bhagirath Choudhary at the Government Achievements & Rising PSEs Expo-2025, held in New Delhi on 23^rd June 2025. The recognition was conferred in appreciation of MIDHANIs outstanding contributions to innovation in specialized materials and advanced manufacturing for critical sectors such as Aerospace and Defence.

• At the Chapter Convention on Quality Concepts CCQC - 2025 held from 22^nd - 23^rd September 2025 organized by Quality Circle Forum of India, Hyderabad Chapter, MIDHANI team was bestowed with the prestigious Quality Movement Award. Team Agniveer of MIDHANI also clinched the Gold Award in the Quality Circle category.

• MIDHANI Primary Health Care Center (MPHCC), managed by the MPHCC Trust, received the prestigious Gold Award in the PSU & Healthcare category at the CSR Times Awards, held on 15^th July, 2025.

26. COMPANY PERFORMANCE AND FUTURE OUTLOOK:

• The Annual Report includes Management Discussion and Analysis, providing a comprehensive analysis of the Companys financial performance, operations, and future outlook.

27. CORPORATE GOVERNANCE:

27.1 The Company adheres to the principles and philosophy of Corporate Governance, ensuring good decision-making practices in line with current standards and guidelines from the Department of Public Enterprises. A comprehensive Code of Business Conduct and Ethics is in place which is applicable to all Board Members and Senior Management. A certificate from the Chairman and Managing Director affirming compliance with Code of Business Conduct and Ethics for Board and Senior Management forms part of Annual Report as Annexure - VI.

27.2 The Annual Report includes a comprehensive report on Corporate Governance, providing detailed information on the Companys adherence to guidelines issued by the Department of Public Enterprises (DPE) and SEBI Listing Regulations. A certificate confirming compliance with these guidelines, signed by a practicing Company Secretary, forms part of Annual Report as Annexure - VII.

27.3 In line with the Revised Grading norms for CPSEs, your Company has achieved a perfect score of 100% for the FY 2025-26 in terms of compliance with the Guidelines on Corporate Governance issued by the Department of Public Enterprises (DPE).

28. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

28.1 MIDHANI has implemented a robust framework for internal controls, which is designed to align with the companys size and operations. This internal control system is further strengthened by a comprehensive program of internal audits and management reviews. The internal audit function, supported by external audit firms, conducts thorough and risk-focused audits to assess the effectiveness of the internal control structure and its functions on a regular basis. This ensures the integrity and reliability of the companys operations.

28.2 The Company has implemented robust internal financial controls in accordance with the requirements of the Companies Act, 2013. These controls are implemented at various levels within the organization to ensure compliance with internal control requirements, regulatory compliance, and accurate recording of financial and operational information. The internal financial controls are designed to safeguard assets, prevent fraud, maintain financial accuracy, and promote operational efficiency.

28.3 The Company engaged the services of external audit firm Sagar & Associates to conduct the internal audit during the year, with a focus on assessing the adequacy of systems and controls. The audit reports prepared by Sagar & Associates were thoroughly reviewed by the Audit Committee. Additionally, the inhouse Internal Audit team conducted regular audits of specific processes. The findings and recommendations from these audits, along with the corrective actions initiated, were discussed with the Management and reviewed by the Audit Committee. The Audit Committee also assessed the adequacy and effectiveness of internal controls in place.

28.4 No instances of fraud were reported to the Audit Committee by the Auditors in accordance with Section 143(12) of the Companies Act, 2013 and the rules prescribed. Therefore, no disclosure is required under Section 134(3)(ca) of the Companies Act, 2013.

29. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

29.1 The Board of your Company at the beginning of FY 2025-26 comprised of Four (4) Directors i.e. Two (2) Functional Directors, One (1) Government Nominee Director and One (1) Independent Director, all eminent personalities with vast experience from diverse fields.

29.2 As 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.

29.3 During the year under review and as on date of report, the following changes in composition of Board of Directors/KMP was observed:

• The tenure of Smt. V.T. Rema (DIN: 09561611) ended w.e.f. April 5, 2025 as Independent Director on the Board MIDHANI.

• Department of Defence Production, Ministry of Defence vide letter No. 5/1 (1)/ 2022/ D (NS) dated April 15, 2025 conveyed the appointment of Dr S.V.S. Narayana Murty as Chairman and Managing Director of the Company on immediate absorption basis with effect from date of assumption of charge of the post till the date of his superannuation i.e. 31.12.2029 or until further order by MoD (whichever is earlier). In view of above, Dr S.V.S. Narayana Murty (DIN: 11065319) assumed charge as Chairman & Managing Director of the Company on April 28, 2025.

• Department of Defence Production, Ministry of Defence vide letter No. 11(70)/2021/ Misc./D(NS) dated April 18, 2025 conveyed the re-appointment of Smt. V. T. Rema (DIN: 09561611) on the Board of MIDHANI as Independent Director for a period of one- year w.e.f. April 18, 2025 or until further order by MoD (whichever is earlier).

• Department of Defence Production, Ministry of Defence vide letter No. 11(70)/2021/ Misc./D(NS) dated April 18, 2025 conveyed the appointment of Shri Ajay Kumar Chauhan (DIN: 09394953) and Ms. Aruna Sarap (DIN: 09583629) on the Board of MIDHANI as Independent Director for a period of one- year w.e.f. April 18, 2025 or until further order by MoD (whichever is earlier).

• The tenure of Shri Gowri Sankara Rao Naramsetti (DIN: 08925899) as Director (Finance) & CFO of MIDHANI ended on May 31, 2025. The tenure of Shri T. Muthukumar (DIN: 09636771) as Director (Production & Marketing) of MIDHANI ended on June 30, 2025.

• Department of Defence Production, Ministry of Defence vide letter No. F.No. 5/1 (1)/ 2024/ D (NS) dated July 17, 2025 conveyed the appointment of Smt. Madhubala Kalluri - General Manager (Finance & Accounts, MIDHANI) as Director (Finance) ofthe Company with effect from date of assumption of charge of the post till the date of her superannuation i.e. 31.08.2027 or until further order by MoD (whichever is earlier). Smt. Madhubala Kalluri (DIN: 11202794) assumed charge as Director (Finance) of the Company on July 21, 2025. She was designated as Chief Financial Officer (CFO) of MIDHANI w.e.f. August 13, 2025.

• Department of Defence Production, Ministry of Defence vide letter No. F.No. 5/1 (2)/ 2024/D(NS) dated October 3, 2025 conveyed the appointment of Shri Padavittan Babu- General Manager (Technical Services, MIDHANI) as Director (Production & Marketing) of the Company for a period of five years with effect from date of assumption of charge of the post or until further order by MoD (whichever is earlier). Shri P. Babu (DIN: 11233808) assumed charge as Director (Production & Marketing) of the Company on October 7, 2025.

• Department of Defence Production vide 8(29)/2026-D (Coord/DDP) dated June 5, 2026 conveyed the appointment of Shri Prakash Rajpurohit (DIN: 06895578), JS (Defence Industries Production), MoD, as Government Nominee Director on the Board of MIDHANI w.e.f. June 5, 2025.

• Department of Defence Production vide Letter No. 11(70)/2021/Misc./D(NS) dated August 21, 2026 conveyed the appointment of Shri Sameer Mundra (DIN: 00078727) as Independent Director of the Company for a period three years or until further orders issued by Ministry of Defence, whichever is the earliest.

• Department of Defence Production vide Letter No. 11(70)/2021/Misc./D(NS) dated August 21, 2026 conveyed the appointment of Shri Pugazhendhy Arumugam (DIN: 11912614) as Independent Director of the Company for a period three years or until further orders issued by Ministry of Defence, whichever is the earliest. The letter also specified that in case on non-availability of DIN, the appointment would be effective from date of allotment of DIN. Accordingly, Shri Pugazhendhy Arumugam obtained his DIN: 11912614 on August 25, 2026 and his appointment as Independent Director got effective from August 25, 2026, till August 24, 2029.

29.4 The Members of Company at their 51^st Annual General Meeting held on September 30, 2025 approved the following:

a) Appointment of Dr S.V.S. Narayana Murty (DIN: 11065319) as Chariman & Managing Director of the Company.

b) Re-appointment of Smt. V. T. Rema (DIN: 09561611) as Independent Director of the Company

c) Appointment of Shri Ajay Kumar Chauhan (DIN: 09394953 on the Board of MIDHANI as Independent Director of the Company.

d) Appointment of Ms. Aruna Sarap (DIN: 09583629) on the Board of MIDHANI as

Independent Director of the Company.

e) Appointment of Smt. Madhubala Kalluri (DIN: 11202794) as Director (Finance) of the Company.

29.5 Smt. Madhubala Kalluri, Director (Finance) (DIN: 11202794) would retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered herself for reappointment.

29.6 The Notice of the 52^nd Annual General Meeting (AGM) provides a brief resume, expertise, directorship details in other companies, and shareholding information of the Director(s) proposed for appointment/re-appointment at the AGM, in accordance with Secretarial Standard-2 and Regulation 36 of the SEBI Listing Regulations.

29.7 Performance Evaluation: Being a Government Company, the appointment/ re-appointment of Independent Directors is done by the President of India through the Administrative Ministry. The evaluation of Independent Directors performance and their compliance with the Independence criteria specified in the SEBI Listing Regulations is conducted by the Government of India through its internal processes.

30. REMUNERATION POLICY:

30.1 MIDHANI is a Government of India owned Public Sector Enterprise under the administrative control of the Ministry of Defence. The Directors of the Company are appointed by the President of India and their remuneration is determined in accordance with the Guidelines issued by DPE. As per Article 67 of MIDHANIs Articles of Association, the President of India is Competent Authority for appointing Directors and deciding their remuneration. Given that these appointments are made by the President of India, the evaluation of the performance of these appointees is also conducted by the Government of India.

30.2 The terms and condition of payment of sitting fees to Independent Directors and Govt.

Nominee Director is available on the Companys website at https://midhani-india.in/policies/ .

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

31. DECLARATION AND MEETING OF INDEPENDENT DIRECTORS:

31.1 The Independent Directors of the Company have affirmed their compliance with the independence criteria outlined in both the Companies Act, 2013 and SEBI Listing Regulations. Additionally, they have fulfilled the requirements specified in Rule 6, Sub-rule 1 & 2 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

31.2 The Independent Directors have provided confirmation of their adherence to the "Code of Business Conduct and Ethics for Board Members and Senior Management" of the Company.

31.3 During FY 2025-26, one (1) meeting of the Independent Directors was conducted on January 30, 2026, in accordance with the provisions of the Companies Act, 2013, and SEBI Listing Regulations.

32. DIRECTORS RESPONSIBILITY STATEMENT:

32.1 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, 2026, 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, 2026; and of the Profit of the Company for the year ending on March 31,2026;

c. the Directors have taken proper and sufficient care 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, 2026 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.

33. AUDITORS:

33.1 Statutory Auditors: Comptroller and Auditor General (C&AG) of India appointed M/s Anjaneyulu & Co, Chartered Accountants, Hyderabad, [Firm Registration No. 000180S] as Statutory Auditors of the Company for conducting audit of accounts for the year ended March 31, 2026. The Report of Statutory Auditors on the Financial Statements for the financial year ended on March 31, 2026, is an unmodified opinion i.e., it does not contain any qualification, reservation or adverse remark.

33.2 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 BVR & Associates, Cost Accountants, Hyderabad, [Firm Registration No 000453] as Cost Auditors for the FY 2025- 26 in terms of Section 148 of Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

33.3 Secretarial Auditor: The shareholders of the Company at their Annual General Meeting held on September 30, 2025, have appointed Hanumanta Raju & Co, Company Secretaries Hyderabad as Secretarial Auditor of the

Company, to hold office for 5 (five) consecutive years from the conclusion of the 51^st Annual General Meeting held in calendar year 2025, until conclusion of the 56^th Annual General Meeting to be held in the calendar year 2030. The Secretarial Audit Report forms part of Annual Report as Annexure - VIII along with managements reply to the observations therein.

33.4 Internal Auditor: Your Company engaged Sagar & Associates. [Firm Registration No.003510S] to conduct Internal Audit for FY 2025-26.

34. COMMENTS OF COMPTROLLER & AUDITOR GENERAL OF INDIA:

The Nil Comments certificate on the Accounts issued by the Comptroller and Auditor General of India for the year ended March 31, 2026 is placed in Annual Report after Statutory Auditors Report.

35. DISCLOSURES UNDER COMPANIES ACT, 2013:

35.1 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.

35.2 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.

35.3 Board Meetings: During the financial year ended on March 31, 2026, the Board met nine (9) times on April 25, 2025, May 28, 2025, June 30, 2025, August 13, 2025, September 30, 2025, November 13, 2025, December 12, 2025, February 12, 2026 and March 13, 2026. For further details of these meetings, Members may please refer Report on Corporate Governance which forms part of this Annual Report.

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

35.5 Secretarial 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.

36. GENERAL AFFIRMATIONS AND DISCLOSURES:

36.1 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.

36.2 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 2025-26 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).

e) the Company has complied with the provisions relating to the constitution of Internal Complaints Committees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

37. ACKNOWLEDGEMENT:

37.1 The Board of Directors wishes to extend its deepest gratitude for the unwavering support and cooperation received from various Government agencies. We acknowledge the Ministry of Defence, establishments under DRDO, and other Central and State Government agencies for their invaluable assistance.

37.2 The Board also sincerely appreciates the continuous support from our customers, vendors, bankers, the C&AG, statutory and internal auditors, the Chairperson of the Audit Committee, the Chairpersons of other sub-committees of the Board, as well as our advisers, consultants, and stakeholders. Your guidance and partnership have been instrumental to our progress throughout the year

37.3 The Board extends its sincere gratitude to all employees of the Company for their outstanding contributions and unwavering cooperation. Your dedication and hard work have been key to our collective achievements.

37.4 Lastly, the Board extends its profound gratitude to our shareholders and investors for their steadfast trust and confidence in the Company. We look forward to your continued support, which will undoubtedly drive the Company towards even greater success in the future.

	For and on behalf of the Board of Directors
	Dr. S.V.S. Narayana Murty
	Sd/-
	Chairman & Managing Director
	DIN: 11065319
Place: Hyderabad
Date : August 28, 2026