Directors Report of Mishra Dhatu Nigam Ltd.

Mar 31, 2024

Your Directors take great pleasure in presenting the 50 Annual Board’s Report, highlighting the performance and achievements of your Company, along with the Audited Financial Statements (Standalone & Consolidated) for the Financial Year (FY) ended on March 31,2024.

1. SIGNIFICANT ACHIEVEMENTS:

• Achieved highest ever revenue of t1,07,267.45 Lakh for FY 2023-24 registering a Year-on-Year (Y-o-Y) growth of 23.02% vis-a-vis revenue of t 87,194.14 Lakh achieved for FY 2022-23.

• Achieved highest ever Value of Production (VoP) of t 1,14,764.49 Lakh for FY 2023-24 registering a Y-o-Y growth of 4.31% vis-a-vis VoP of t 1,10,026.63 Lakh achieved for FY 2022-23.

2. HIGHLIGHTS OF OPERATIONS:

• MIDHANI developed a new nickel-based superalloy i.e., Superni, Indian High Temperature Alloy (IHTA), designed for its use in steam generator tubes of India’s Advanced Ultra Super Critical (AUSC) thermal power plants. Superni IHTA is a Nickel-based precipitation hardening alloy characterized by high strength and creep resistance at elevated temperatures. It also offers excellent resistance to

coal ash corrosion and maintains high metallurgical stability at high temperatures.

• MIDHANI has developed Superfer 901 forged bars, a nickel-based superalloy with a matrix strengthened by additions of Molybdenum, Titanium, and Aluminum. This alloy withstands maximum service temperature of approximately 600°C (1100°F). It is mainly used in gas turbine engine components such as discs, shafts, rings, casings, and seals.

3. FINANCIAL HIGHLIGHTS:

3.1 Your Company achieved a revenue of t 1,07,267.45 Lakh for FY 2023-24 vis-a-vis revenue of t 87,194.14 Lakh achieved for FY 2022-23 registering a Year-on-Year (Y-o-Y) growth of 23.02 %. Company achieved Operating Profit t 10,102.43 Lakh for the FY 2023-24 vis-a-vis Operating Profit of t 17,876.78 Lakh achieved for FY 2022-23.

3.2 Profit Before Tax (PBT) for FY 2023-24 of your company was t 13,095.95 Lakh vis-a-vis PBT of t 21,654.92 Lakh for FY 2022-23 and Profit After Tax (PAT) of t 9,126.32 Lakh for the FY 2023-24, vis-a-vis t 15,587.61 Lakh achieved for FY 2022-23. The reduction in profit for FY 2023-24 was mainly attributable to the increase in raw material cost and increased raw material consumption.

3.3 Your Company achieved the following results during FY 2023-24:

(Figures in t Lakh)

Particulars	FY 2023-24	FY 2022-23
Revenue from Operations	1,07,267.45	87,194.14
Other Income	2,993.52	3,778.14
Total income |	1,10,260.97	90,972.28
Less: Operating Expenditure	87,852.31	61,443.70
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense	22,408.66	29,528.58
Less: Depreciation/ Amortization/ Impairment	5,855.20	5,300.45
Profit before Finance Costs, Exceptional items and Tax Expense	16,553.46	24,228.13
Less: Finance Costs	3,457.51	2,573.21
Profit before Exceptional items and Tax Expense	13,095.95	21,654.92
Add/(less): Exceptional items	-	-
Profit before Tax Expense |	13,095.95	21,654.92
Less: Tax Expense (Current & Deferred) |	3,969.63	6,067.31

Particulars	FY 2023-24 ^	FY 2022-23
Profit /(loss)for the year (1)	9,126.32	15,587.61
Other Comprehensive Income/(loss) (2)	(31.26)	(7.74)
Total Comprehensive Income (1 2)	9,095.06	15,579.87
Ratios (Percentages, except per capita sales)
Profit Before Tax to Capital employed	9.50	16.00
Profit Before Tax to Revenue from operations	12.21	24.84
Profit After Tax to Net Worth	6.92	12.12
Profit After Tax to Paid-up Share Capital	48.72	83.20
Sales to Capital Employed	77.81	64.42
Sales to Gross Block	82.44	71.00
Per Capita Sales (? in Lakh)	139.31	116.10

4. DIVIDEND POLICY:

4.1 Your Directors did not recommend final dividend for FY 2023-24, considering CapEx and capacity augmentation projects undergoing or new projects sanctioned by Board of Directors. Further, during the year under review, the Board of Directors of the Company in their Meeting held on March 14, 2024 has declared interim Dividend of ? 1.41 per equity share of the face value of ? 10/- each i.e. @ 14.10%. The interim Dividend was paid to the eligible shareholders on March 28, 2024.

The Interim dividend declared and paid by Company i.e. ? 1.41 per equity share of face value of ? 10/- each i.e. 14.10% translates to 28.94% of Profit After Tax (PAT).

4.2 Your Company, being a Central Public Sector Enterprise (CPSE), the Guidelines on Capital Restructuring issued by Department of Investment and Public Asset Management

(DIPAM) vide F. No. 5/2/2016-Policy dated May 27, 2016 (DIPAM Guidelines) are applicable. As per the DIPAM Guidelines, every CPSE would pay a minimum annual Dividend of 30% of PAT or 5% of the Net-worth whichever is higher subject to the maximum Dividend permitted under the extant legal provisions. The Company’s dividend distribution policy is enclosed as “Annexure - I” and also available on the Company’s website viz. https://midhani-india.in/policies/.

4.3 During the year under review, your Company has sought exemption from DIPAM regarding payment of minimum dividend for FY 2023-24 in accordance with DIPAM Guidelines.

4.4 The performance of MIDHANI with respect to the Return on Investment in comparison to the previous year is as under:

S.No	Parameters	FY 2023-24	FY 2022-23
1.	Dividend	2,641.49	6,275.89
2.	Profit After Tax (PAT)	9,126.32	15,587.61
3.	Net Worth1	1,28,124.38	1,25,405.13
4.	Dividend/PAT (%)	28.94	40.26
5.	PAT/Net Worth (%)	7.12	12.43
6.	Dividend/Net Worth (%)	2	5

*Net worth is after considering Dividend for respective periods.

5. TRANSFER TO GENERAL RESERVE:

Your Company has transferred t 6,600 Lakh to General Reserve for the FY 2023-24.

6. JOINT VENTURE/ ASSOCIATE COMPANY

During the year under review, 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 partners of Company comprises of 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 Company will set up a Mechanical and Material Testing Facility which will be led by MIDHANI. The facility will be situated at Lucknow node of Uttar Pradesh Defence Industrial Corridor and Govt. of India will fund 75% of the project cost by way of grant-in-aid and 25% of the project cost will be funded by Joint Venture Partners.

7. PERFORMANCE AGAINST MoU:

For FY 2023-24, MIDHANI’s MoU performance is expected to qualify for an overall ‘Good’ rating, however, the same is subject to evaluation and confirmation by Department of Public Enterprises (DPE).

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

8.1 Over the past years, the Company’s continued focus on upgradation and modernization has resulted in the establishment of additional facilities, increased production capacity, and enhanced product diversity. As a result, MIDHANI has effectively positioned itself to cater to the needs of both existing and new customers in domestic and global markets, while also venturing into new strategic and nationally significant business areas.

8.2 Projects related to Modernization, Expansion and Upgradation of MIDHANI’s production activities during the year ended on March 31,2024 are as under: ¹

(RDSO) inspection for the final approval of the plant was completed in the month of June 2024.

• Establishment of new Titanium Shop: A dedicated Titanium melting facility to meet increased demand is being established. This new facility consists of 10T Capacity Vacuum Arc Re-melting Furnace, indigenously developed Plasma Welding Machine, Re-circulation water system, Cooling towers, independent power Distribution & DG Set in separate Pre-Engineered Building with provision for adding other equipment in future. The 10T VAR is under advanced stage of commissioning.

• Isothermal Forging Facility on 6000T Forge Press: To support the indigenization of critical aero engine components primarily made from Titanium alloys and Nickel-based superalloys, MIDHANI has established an advanced isothermal forging facility integrated with its 6000T press. Leveraging our expertise as a manufacturer of Titanium and Nickel-based superalloys, we can utilize this facility to develop and produce essential aero components. The facility is now in the final stages of commissioning and acceptance.

• New 20T & 12T LPG Fired Fixed Hearth Furnaces for Forge shop: In the Forge Shop, a project is underway to replace the old LPG-fired fixed hearth reheating furnaces with new, more efficient furnaces of 20T and 12T capacities for reheating smaller-sized billets. The 20T furnace has already been commissioned and is currently in production use. The installation of the 12T furnace is expected to be completed soon.

• Fastener Plant: To address the domestic demand for aerospace fasteners, which are largely imported, MIDHANI has embarked on an indigenization initiative. To meet the needs of its strategic clientele, MIDHANI invested in state-of-the-art automatic fastener manufacturing machines. This comprehensive setup encompasses the entire production process from head forging to finishing operations, enabling the production of high-quality, indigenous aerospace fasteners.

• Augmentation of Bar & Wire Drawing facility: To

capitalize on current and future business opportunities, MIDHANI is significantly upgrading its Bar & Wire Drawing facility. Key machines have already been commissioned and two Straight Line Machines for drawing wires from 10 mm to 6 mm, and a Wet Wire Drawing Machine for 3 mm to 1.2 mm, are in

advanced commissioning stages. Auxiliary machines are also being installed to boost productivity.

8.3 Other new projects being proposed/explored for the coming years are as under:

• Metal Powder Production Unit: A unit for producing Titanium and Nickel alloy powders for automotive, aerospace, and biomedical applications is being explored as currently, these powders are imported.

• Compacting Press for Titanium Sponge: An 8000T hydraulic compacting press is being explored for making Titanium electrodes.

• New Wire Rod Mill: To improve quality, productivity, yield, and to reduce processing time, a new Wire Rod Mill is being proposed. This new mill would be designed to produce 5.5 mm diameter wires directly from 45mm sq. rods weighing approximately 60 Kg (output from the existing Bar Mill).

• Supporting Facility for Wide Plate Mill: To meet production requirements at the Wide Plate Mill and to process various grades, additional operational facilities are necessary to meet market demands. Plans include procuring a Shot Blasting machine, a Guillotine Shear, and Plasma Cutting Machines for precise plate cutting. Enhanced inspection capabilities with specialized tables are also planned for large plate examinations. Additionally, a facility for grinding Work Rolls and Back-Up Rolls will be installed to support continuous operations.

9. LABOUR PRODUCTIVITY:

The value added per employee for year ended on March 31,2024 was t 81.06 Lakh, vis-a-vis t 94.42 Lakh in the previous financial year.

10. SALES AND OPERATIONAL EFFICIENCY:

As of March 31, 2024, MIDHANI’s trade receivables, measured in ‘No. of Days Sales,’ improved to 110 days from 132 days on March 31,2023. This reduction reflects enhanced efficiency in collections and better management of credit terms, contributing positively to the company’s cash flow and working capital management.

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

11.1 Research and Development (R&D) is the cornerstone of successful product development. At MIDHANI, our

R&D department extends beyond innovation, integrating marketing, cost management, and product enhancement into our broader business strategy. R&D is crucial for creating new products and improving existing ones, making it a key driver of our growth and success. We place a high priority on the value and significance of R&D in our operations.

11.2 An expenditure of t 1,836.16 Lakh was incurred towards R&D during FY 2023-24. In addition to overseeing the research and development of new products, the R&D department at MIDHANI is entrusted with the crucial responsibilities of planning, team management, and deployment of technical infrastructure and manpower to support specific processes.

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

• Indigenous Product Developments:

• Development of ‘INDIAN HIGH TEMPERATURE ALLOY’ (IHTA) Forged Billets: MIDHANI has

successfully developed a new nickel-based superalloy, IHTA, for use in the steam generator tubes of thermal power plants. This advanced alloy, is a precipitation hardening alloy known for its high strength and creep resistance at elevated temperatures. It also boasts excellent resistance to coal ash corrosion and maintains exceptional metallurgical stability under high-temperature conditions. The IHTA alloy can withstand temperatures up to 760°C and extremely high pressures of 350 bars, making it ideal for steam generator tubing applications in power plants.

• Development of SNI 76 (Hastelloy X) forged bars: SNI 76 is a nickel-based superalloy, strengthened by the addition of chromium, iron, and molybdenum. It can operate effectively at temperatures up to 1200°C and exhibits exceptional resistance to oxidizing, neutral, and carburizing atmospheres. Its outstanding high-temperature oxidation resistance makes it ideal for many industrial furnace applications and is widely used in the aerospace industry for manufacturing critical components such as jet engine combustion chambers, tailpipes, afterburners, turbine blades, and vanes.

• Development of Monel K 500 Forged & Hot Rolled bars: Monel K500 is a nickel-copper alloy known for its high strength and excellent

resistance to various corrosive environments. MIDHANI expedited the development of Monel K500 to meet the urgent requirements of ISRO for the Gaganyaan Crew Module’s Cabin Pressurization and Controlled Systems (CPCS). This alloy was chosen for its exceptional resistance to ignition, crucial for components carrying high-pressure oxygen. MIDHANI has successfully supplied forged bars for the Gaganyaan program, contributing to India’s ambitious space exploration efforts.

• Development of SNI 41 Forge slab: SNI 41 is

a nickel-based precipitation hardening alloy that offers high strength up to 871°C and oxidation resistance up to 982°C. It is generally used in jet engine combustion chambers due to its exceptional resistance to combustion gases. Additionally, SNI 41 is utilized in turbine castings, including blades and wheels, combustion chamber liners, gas turbine nozzle partitions, petrochemical reactor components, fasteners, and missile components. Its robust properties make it ideal for high-temperature and high-stress applications in various industries.

• Development of SNI 925 forged bars: SNI 925

is an age-hardenable Nickel-Iron-Chromium alloy with the addition of Molybdenum, Copper, Aluminum, Titanium, and Niobium. SNI 925 offers an exceptional combination of strength, impact toughness, and resistance to localized corrosion, as well as tolerance to stress corrosion cracking in sulfide-containing aqueous environments. MIDHANI has successfully developed and exported SNI 925 forged bars, meeting specific customer requirements.

• Development of Superfer 901 Forge bars:

Superfer 901 is an age-hardenable Nickel-Iron-Chromium superalloy with substantial additions of Molybdenum, Titanium, and Aluminum. It is primarily used in gas turbine engine components such as discs, shafts, rings, casings, and seals, with a maximum service temperature of approximately 600°C (1100°F). MIDHANI has successfully fulfilled export orders by supplying forged bars of Superfer 901, demonstrating their capability to meet international standards and customer requirements.

• Development of SNI C22 forged & Hot Rolled bars: SNI C 22 is a Nickel-based solid solution alloy with significant additions of

Molybdenum, Chromium, and Tungsten. This alloy is widely used in gas turbine combustor components, as well as in equipment for the food processing, pharmaceutical, and pulp and paper industries due to its exceptional strength and corrosion resistance.

• Development of Superfer 800HT forged bars: The mechanical properties of Superfer 800HT, combined with its resistance to high-temperature corrosion, make it exceptionally useful for applications involving long-term exposure to elevated temperatures and corrosive environments. It is widely used in industrial furnace structural components such as fixtures, radiant tubes, muffles, and retorts. Additionally, it is employed in steam superheating tubes of boilers.

• Development of MDN 218 hot rolled and forged bars: MDN 218 is an austenitic stainless steel composed of 18% chromium, 8% nickel, 8% manganese, and 0.15% nitrogen, with the balance being iron. It offers excellent high-temperature properties up to 982°C and exhibits oxidation resistance comparable to Type 309 stainless steel, significantly surpassing that of Type 304 stainless steel. MDN 218 is renowned for its exceptional wear and galling resistance, making it ideal for applications such as automotive valves, fasteners, and marine shafts.

• Development of Titan 24 forged bars:

Successfully established thermo-mechanical processing techniques for TITAN24 (PT7M), with a focus on enhancing impact properties and controlling hydrogen variation.

• Artificial Intelligence (AI)

• In FY 2023-24, a framework by utilizing machine learning and genetic algorithms was established to optimize the processing of Ultra High Strength Steel significantly improving quality. This framework has provided valuable insights into minimizing Ultrasonic Testing (UT) defects in Ultra High Strength Steel products. MIDHANI plans to use this optimization framework for further process and product development.

• The current AI projects at MIDHANI are as under:

Microstructure Prediction: Using AI’s computer vision algorithms to predict the grain size and phase fraction of alloys.

Mechanical Properties Prediction: Employing artificial neural networks to predict mechanical properties based on alloy chemistry and microstructure.

12. INTELLECTUAL PROPERTY:

12.1 The company has developed new products to meet growing market demand, achieving significant advancements in R&D activities. This progress is reflected in the expansion of the company’s intellectual property assets. MIDHANI’s products are unique, and to safeguard against infringement, the company has placed a strong emphasis on encouraging the application of Intellectual Property Rights (IPRs). During the year, four (4) patent applications were filed.

12.2 Recognizing the crucial role of IPR knowledge in identifying potential patents during the development phase, our R&D team collaborated with the Training and Development department to organize comprehensive training sessions. These sessions, conducted both in-person and online, aimed to educate employees about the importance of IPR and to equip them with the necessary understanding and skills.

13. ENERGY CONSERVATION:

13.1 Throughout the reporting year, MIDHANI remained steadfast in its efforts towards energy conservation. Our commitment to developing, implementing, and advocating for sustainable energy solutions remains unwavering.

13.2 The following energy-saving measures were implemented by MIDHANI during the FY 2023-24:

Dynamic Reactive Power Compensation Panels:

Implemented hybrid solutions using both Active Harmonic Filters (AHF) and Automatic Power Factor Correction (APFC) panels, improving the plant power factor from 0.92 to 0.96 and saving approximately H 180 Lakh per annum.

Solar Power Generation: A 4MW ground-mounted solar power plant and a 60KWp rooftop solar power plant generated 3,127,548 kWh of energy, reducing carbon footprints by 2,502 tons per annum and generated solar energy worth H 195 Lakh (Approx.).

LED Lighting: Converted 100% of lights to LED.

Energy-Efficiency: Replaced 100 conventional fans with Brushless Direct Current (BLDC) fans, with procurement of an additional 200 fans expected by August 2024 and

initiated procurement of five-star ACs to replace older three-star units.

13.3 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 2023-24 vis-a-vis FY 2022-23 are as below:

• The summary of consumption of LPG:

Description	Unit	FY 2023-24 FY 2022-23
Annual	MT	5,411.10 5,634.24
consumption
of LPG
Specific	MT	0.19 0.14
consumption	(LPG)/
of LPG in	MT
Production	(Prod.)

• The summary of consumption of Electricity:

Description	Unit	FY 2023-24	FY 2022-23
Annual	KWHr	5.87	6.52
consumption of	(in
Electricity	Crore)
Specific consumption of Electricity in Production	Kwh/T	2,031.28	1,565.32

14. MARKETING & BUSINESS DEVELOPMENT:

14.1 During FY 2023-24, MIDHANI secured orders worth ?1,36,349 Lakh. As of April 1,2024, the open order book position stood at ?1,57,972 Lakh. With the current order book and anticipated future orders, the company is poised for steady growth in the coming years.

14.2 The sector wise order booked during FY 2023-24 are as under:

Sector	Total value of orders
Defence	96,149
Space	8,436
Energy	6,222
Others	25,542
Total	1,36,349

14.3 Sector-wise Performance: The total orders executed during the year under review were t 1,07,267.45 Lakh and the sector wise sales executed is as below:

Sector	Total value of supplies
Defence	52,563.62
Space	18,623.40
Energy	13,491.84
Others	22,588.59
Total	1,07,267.45

14.4 Business Development:

• Over the past decade, majority of MIDHANI’s business has been derived from the space sector, with special steels being a primary product. Recently, geopolitical conditions have caused a shortage of special metals and alloys globally, enabling MIDHANI to attract international buyers. As a result, direct exports increased from t2,101 Lakh in FY 2022-23 to t6,372 Lakh in FY 2023-24. Strategic investments in Vacuum Induction Melting and Vacuum Arc Remelting are expected to further diversify exports and expand Super Alloy and Titanium Alloy offerings.

• Efforts to increase business in Super Alloys and Titanium Alloys have been successful, with highest ever year on year growth of revenue. This growth was primarily driven by supplies to the Defence, Aerospace, and Energy sectors, along with exports. Enhanced capacity in Vacuum Induction Melting has been key to achieving higher sales of super alloys.

• Growing domestic and international demand for Superalloys and Titanium Alloys in the aerospace sector will be met by the expanded melting capacity of Vacuum Induction Melting and Vacuum Arc Remelting Furnaces.

• MIDHANI is at the forefront of indigenizing raw materials for aircraft and helicopter spares, sub-assemblies, and Line Replaceable Units (LRU).

• MIDHANI is closely collaborating with Original Equipment Manufacturers (OEMs) to establish itself as a long-term supplier of Super Alloy products. This will necessitate further investments to increase capacity of melting, forging, and allied facilities’ over the next five years.

• The demand for superalloy cast sticks and isothermally forged discs will be addressed in the coming years to

serve both foreign OEMs and domestic customers. Further, MIDHANI anticipates a significant increase in export volumes due to recognition from OEMs and efforts to obtain certifications like NADCAP during FY 2024-25.

• FY 2024-25 will see the commercial establishment of new facilities for aerospace fasteners, Titanium castings, railway springs, and axles. Our primary goal is to obtain final certifications for these products and meet strategic requirements.

14.5 Information Technology (IT):

• In FY 2023-24, significant progress was made in the development of ERP systems, including the creation of a planning and scheduling application for production up to the HRM shop. This included dashboards for monitoring order-wise sales, Work-In-Progress, Grade-wise Yield, Raw Material consumption, and production, providing valuable insights for operational efficiency. Additionally, digital solutions were implemented for employee pension management, vigilance disciplinary tracking, FAC in/ outpatient systems, and purchase enhancements, ensuring smoother work-flows.

• The Armour Unit underwent full digital transformation, incorporating ERP-based business transactions, attendance systems, and visitor pass management. IT infrastructure was also upgraded with outdoor LED displays, the installation of 65 production CCTV cameras, and interactive displays at the conference hall to improve security and communication across the organization.

• Website enhancements were also completed to included new features like Online Vigilance Complaints, Bill Tracking, Customer Order Tracking, and Ex-Employee Pension access, integrated with real-time ERP data. Your company also successfully completed Cyber VAPT, NIC, and IB Industrial Inspection Audits with zero non-compliance issues

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

15.1 Shri T. Muthukumar, Director (Production and Marketing) represented MIDHANI at the Aeroshow held in Dubai from November 13 to 15, 2023 to explore significant business opportunities, partnership and collaborations.

15.2 MIDHANI participated in Humanitarian Assistance and Disaster Relief (HADR) exercise Chakrawat-2023 organised by MoD at INS Hansa, Goa Indian Navy from 9^th to 11^th October 2023.

15.3 MIDHANI participated in Aeromart 2024 held at the Hyderabad International Convention Centre (HICC) Novotel from 1^st to 3^rd July, 2024.

16. QUALITY MANAGEMENT ACTIVITIES:

16.1 During FY 2023-24, MIDHANI successfully completed testing and inspection activities of 800 tensile samples, 120 low cycle fatigue samples and 300 creep test samples.

16.2 MIDHANI successfully installed and commissioned NADACAP NDT equipment, enabled the NDT division to meet NADACAP NDT requirements in FPT and MPT inspection. Successfully commissioned a Rotating Bend Fatigue machine and also enabled high cycle fatigue testing up to 900°C.

16.3 MIDHANI has supplied and obtained clearance for 4000 indigenously produced and tested SF800H extruded tubes/ hollows. Apart from that, MIDHANI also conducted ultrasonic testing using a modified 30-year-old 4-channel machine.

16.4 MIDHANI has successfully prepared and tested over

42,000 samples along with analysing more than 15,295 micro samples and 4,000 Ferritoscope samples by metallography.

16.5 MIDHANI has operated 40 creep/stress rupture machines simultaneously for the first time and performed stress rupture testing of BZL 12Y grade samples at 975°C.

17. SUPPLY CHAIN MANAGEMENT PERFORMANCE:

17.1 Vendor Meet: MIDHANI organized a Vendor Meet on September 3, 2023, to facilitate direct interaction among its vendors. This event provided a platform to showcase MIDHANI’s recent developments and product profiles, while also addressing any issues faced by our vendors. Additionally, on March 30, 2024, MIDHANI held a webinar on the Srijan Portal with MSME vendors. During the webinar, participants were introduced to the portal’s key features, objectives, and various categories of items uploaded by DPSUs for indigenization, with a special emphasis on items uploaded by MIDHANI.

17.2 Encouragement to Micro and Small-Scale Industries:

• MIDHANI is dedicated to promoting and supporting Micro and Small Enterprises (MSEs) by sourcing a diverse range of goods and services from them. In the fiscal year 2023-24, an impressive 51% of the

total domestic procurement value came from MSE units. This commitment underscores our support for small businesses and our role in fostering their growth and development.

• MIDHANI also organized an MSME Conclave on “Indigenization” in association with MSME DFO in Nagpur from January 27 to January 29, 2024 where Shri Nitin Gadkari Ji, Hon’ble Minister of Road Transport and Highways of India, and Shri Devendra Fadnavis, Deputy Chief Minister of Maharashtra graced the occasion.

• Additionally, MIDHANI actively participated and coordinated the arrangements for the MSME Defence Conclave, titled “Opportunities for MSMEs in Defence Manufacturing & Technology Supply Chain,” organized by the Department of Defence Production (DDP), Ministry of Defence (MoD), in association with PHDCCI and MIDHANI at Rohtak, Haryana on January 31,2024.

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 2023-24, approximately 80% 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-Marketplace (GeM): MIDHANI is

dedicated to enhancing procurement processes through the Government e-Marketplace (GeM) platform. During FY 2023-24, MIDHANI issued purchase orders totaling H12,400 Lakh via GeM. This active engagement underscores MIDHANI’s commitment to adopting digital technologies and supporting government initiatives, fostering a more seamless, efficient, transparent, and robust procurement ecosystem.

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 is enumerated. This ensures transparency and allows stakeholders to have a comprehensive understanding of the risks involved in MIDHANI’s 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 Developing human resources is essential for organizational success. Human Resource Development (HRD) at MIDHANI involves a range of initiatives including employee training, career progression, performance management, coaching, mentoring, and succession planning. The goal is to enhance employee skills, knowledge, and abilities to meet the organization’s objectives.

19.2 MIDHANI values its human resources highly and is dedicated to cultivating a motivated and committed team. HRD has significantly bolstered the organization, resulting in a stronger workforce, improved relationships, and increased productivity. At MIDHANI, employees are seen as the most valuable asset and prides itself on its highly skilled and motivated employees.

19.3 At MIDHANI, training and development programs are offered to employees to continually enhance their knowledge and skills, with a special focus on employees from SC, ST, OBC, and differently-abled categories.

19.4 Manpower Position: The manpower strength of MIDHANI as on March 31, 2024 stands at 473 Non-Executives, 23 NonUnionized Supervisors and 274 Executives compared with 478 Non-Executives, 25 Non-Unionized Supervisors and 248 Executives as on March 31,2023.

19.5 The total manpower strength under permanent category of your Company as on March 31,2024 is as under:

Particulars	Non-Executives	Non-Unionized Supervisors	Executives	Total
Male	431	20	236	687
Female	42	3	38	83
Total	473	23	274	770

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

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

SC	ST	OBC	Others	Total
89	44	209	131	473

19.6 Employee Welfare Initiatives: The various employee welfare initiative taken during FY 2023-24 are as below:

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

• Social obligations/welfare programs: Monetary awards were presented on August 15, 2023 to meritorious students/children of our employees of SC, ST and OBC categories @ t 1000/- per child in each category for scoring highest % of marks

and @ t 500/- each to all the students of above categories who scored 75% and above marks in X class Board examination or equivalent held in March/ April. t1,000/- per month scholarship to the children of employees pursuing graduation in Metallurgical Engineering till completion of the course.

• Post-Retirement Medical Benefit Scheme (PRMBS): The Post-Retirement Medical Benefit Scheme (PRMBS) is currently in place for Executives, Non-Unionized Supervisors, and Non-Executives who retired after January 1, 2007. Additionally, the Group Medical Insurance Scheme is operational for employees who retired before January 1, 2007.

• Education Scholarship for wards of Workmen / employees of MIDHANI Studying in BPDAV School: Merit Scholarships are awarded to the children of employees who are studying in classes 1 to X and have secured the 1^st or 2^nd rank in their previous year’s final examinations. The scholarship provides ?6,000/- per annum for 1^st rank achievers and ?3,000/- per annum for 2^nd rank achievers. Additionally, children of workmen in grades WG-0 to WG-5 who successfully advance to the next grade (classes I to X) are eligible for an Education Scholarship of ?300/- per month.

• School Activities: Brahm Prakash D.A.V. School, located within MIDHANI Township, is managed by the company for the children of MIDHANI employees and students from the neighboring areas. The students have consistently excelled in academics, athletics, and cultural pursuits, bringing honor and distinction to the school.

• Township: MIDHANI has provided housing facilities to its essential services employees through a Township comprising of 87 quarters.

19.7 Women Empowerment:

• MIDHANI fosters an environment where women employees can excel and contribute to the company’s goals. With 83 women in executive and non-executive roles, they play vital roles across various departments. The management supports their growth through targeted training programs and ensures their wellbeing in line with regulatory standards. To enhance technical skills and overall professional development of women employees, the management nominates women employees for both in-house and external training programs.

• Every year on 8^th March, MIDHANI celebrates International Women’s Day. The event includes teambuilding activities and games, which are met with great enthusiasm by all the women employees.

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 remains steadfast in its commitment to preserving and enhancing the ecological balance in and around its factory premises. This dedication is evident through the establishment and

maintenance of an extensive and diverse plantation. The green belt at MIDHANI, with its thousands of plants, creates a lush canopy of greenery. This initiative not only reduces air and dust pollution but also provides a thriving habitat for various bird species.

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 the FY 2023-24, Training & Development Department achieved 3,456 person days of training, an increase from 2,855 person days in the previous year. The training programs included internal and external training programs, plant visits, and skill development training for apprentices and internships.

21.2 MIDHANI is fully committed to its responsibilities under the Apprentice Act 1961. In alignment with this commitment, we have engaged approximately 120 Trade Apprentices in various trades such as Electrician, Fitter, Welder, Machinist, Turner, and COPA for one year of on-the-job training. To foster strong institution-industry relations, we offered internships to 38 engineering students from across India and permitted around 400 visitors for plant tours during FY 2023-24.

21.3 Beyond on-the-job training for apprentices, MIDHANI organized various skill development programs. These programs included knowledge transfer sessions and motivational workshops conducted by both internal and external faculty, totaling 531 person days.

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 ? 455.02 Lakh for CSR activities against the mandatory requirement of ? 454.68 Lakh. Thus, the cumulative CSR expenditure incurred by

MIDHANI over the years has crossed t 4,169.04 Lakh. The unspent amount of t 22 Lakh pertaining to an ongoing project of FY 2022-23 has also been spent during FY 2023-24. In terms of Rule 7(3) of The Companies (Corporate Social Responsibility Policy) Rules, 2014 the excess CSR amount of t 34,000/-spent during FY 2023-24 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://midhani-india.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 which is catering relentless medical

services to the needy patients by extending Out Patient consultation, Eye Camps, cataract surgeries, Cardiac Camps in MPHCC and other places. Incurred an expenditure of t 110 Lakh.

ii) Sponsored t 20 Lakh to Samskruti Foundation for promoting Satvic Aahaar as Nutrient Dense, Therapeutic Diet for the Physical, Mental, Emotional and Spiritual well-being.

iii) Sponsored 6000 Nutritional Kits to TB

patients in Hyderabad and incurred an

expenditure of t 44.38 Lakh.

iv) Sponsored t 20 Lakh to Mamta Charitable Trust for organizing Health Awareness campaign.

v) Sponsored Advance Cardiac Life Support Ambulance to Osmania General Hospital. Expenditure incurred t 30.98 Lakh.

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

(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 LKG and the entire fee shall be borne by MIDHANI till they complete 10^th Class. This year Company has sponsored free education to 31 children at an expenditure of H 6.90 Lakh.

(b) Sponsored School Bus to Bharateeya Vidyanikethan to provide transport facility to help Tribal students reach the school. Expenditure incurred H 20 Lakh.

(c) Sponsored H 25 Lakh to Sri Saraswati Vidyapeetham for constructing additional classrooms in Sri Saraswati Sisu Mandir.

(d) Sponsored H 20.75 lakh towards School Bus and other infrastructural development activities to BPDAV School.

(iii) Skill Development:

(a) Every year MIDHANI is inducting apprentices to help students have exposure to the real time environment and gain knowledge from the experienced professionals. As part of the stipend paid to the apprentices an amount of H 26.65 Lakh is accounted under CSR as per the guidelines.

(b) Sponsored Grameena Vikas Sangham H35 Lakh for construction of Two Halls for conducting free tuition and tailoring centers.

(c) Entered in to MoU with District Collector Kumarambheem Asifabad (Aspirational District) for Bamboo Handicraft Development Project to train 400 candidates.

> Actual CSR expenditure incurred during FY 2023-24 was t 477.02 Lakh (which includes CSR expenditure of t 22 Lakh for an ongoing project pertaining to FY 2022-23) against mandatory expenditure of t 454.68 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:

• At our company, we are dedicated to providing a safe and inclusive workplace for all employees, with a particular focus on the safety and well-being of women. To uphold this commitment, we have established an Internal Complaints Committee (ICC) specifically tasked with addressing and resolving issues related to sexual harassment. The ICC operates under a policy designed to protect and support all parties involved, adhering to strict guidelines to ensure fairness and confidentiality.

• During the review period, we are pleased to report that the ICC did not receive any complaints regarding sexual harassment. Furthermore, as of the end of FY 2023-24, there are no outstanding complaints on this matter. This reflects our ongoing efforts to maintain a safe and respectful work environment for everyone.

22.3 CONTRIBUTION TO EXCHEQUER:

During FY 2023-24, your Company contributed an amount of t30,826.54 Lakh in the form of Dividend, Duties and Taxes vis-a-vis t 26,027.52 Lakh during FY 2022-23.

22.4 COPY OF ANNUAL RETURN:

The Annual Return as provided under sub-section (3) of Section 92 of The Companies Act 2013 is available at website of the Company 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 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. MIDHANI’s website is regularly updated to keep its stakeholders informed about news and developments. During FY 2023-24, 175 RTI applications were received and 173 applications were disposed of, including those from the previous period and as on March 31, 2024, 7 RTI application were pending. Additionally, 11 RTI appeals were raised during FY 2023-24 and 10 RTI appeals were disposed of within the year. MIDHANI submits quarterly returns to the authorities in accordance with the regulations.

22.8 RAJBHASHA IMPLEMENTATION:

• MIDHANI has adhered to the Government directives and regulations for promoting the use of Hindi in official work. Quarterly meetings of the Official Language Implementation Committee, were chaired by the Chairman & Managing Director. Progress reports were regularly submitted to the Ministry of Defence (MoD), the Ministry of Home Affairs (MHA), and the Town Official Language Implementation Committee - Undertaking (TOLIC-U). Four quarterly meetings of the Official Language Implementation Committee were held to ensure compliance and progress in this initiative.

• To support employees in performing their daily official work in Hindi, eight Hindi Awareness Workshops were conducted for approximately 141 employees. MIDHANI employees won four prizes in competitions organized by TOLIC (U) and MIDHANI continues to promote Hindi as the Official Language by regularly conducting Hindi language and typing training classes.

• During the review year, 32 employees completed the Prabodh course, 44 employees completed Praveen, 35 employees completed Parangat, and 40 employees received training under the Hindi Teaching Scheme.

• As part of the directives from the Ministry of Home Affairs, “Hindi Fortnight” was celebrated on a large scale from September 11 to 25, 2023, to promote the use of Hindi.

• 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 2023-24.

• 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 Company’s ‘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 Company’s website at https:// midhani-india.in/policies/

23 VIGILANCE ACTIVITIES:

23.1 The Vigilance Department of the Company is led by Dr. Upender Vennam, an IPoS officer, serving as the Chief Vigilance Officer (CVO). In this capacity, Dr. Vennam advises 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).

23.2 During the year, Vigilance Department suggested seventeen (17) systemic improvements and good practices in areas such as Human Resources, Scrap Management, Stores, and Procurement/Contracts. These recommendations were considered and implemented by the Management. Additionally, the online system for bill tracking by contractors, previously introduced, was reactivated for vendors at the initiative of the Vigilance Department.

23.3 Vigilance Awareness Week 2023 was observed from October 30 to November 5, 2023, focusing on the CVC theme “Say no to corruption; commit to the Nation”. As part of preventive vigilance, a compendium booklet compiling all CVC Circulars and OMs issued since January 1, 2019, was prepared and released by the Secretary (CVC) during his visit to MIDHANI Hyderabad plant on October 18, 2023. During the three-month campaign leading up to Vigilance Awareness Week (from August 16, 2023, to November 15, 2023), a total of 293 MIDHANI executives were trained by both external and internal faculties on various topics.

24.1 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). This policy provides a mechanism for individuals to report complaints and seek protection against any retaliation for whistleblowing.

24.2 The Whistleblower policy established by the company is to encourage employees to report any unfair or unethical activities within the organization. The Board level Audit Committee periodically reviews the functioning of the vigil mechanism and addresses any whistleblower complaints received.

24.3 The Whistleblower Policy - 2018 serves as MIDHANI’s Vigil Mechanism and enables stakeholders to report any issues that may have an impact on the organization. The policy is readily accessible on the company’s website. at https:// midhani-india.in/department vigilance/role-functions-of-vigilance-department/

25 AWARDS AND RECOGNITION:

25.1 At the 37^th National Convention on Quality Concepts (NCQC) held from 4^th to 7^th January 2024 by the Quality Circle Forum of India, all five participant teams of MIDHANI secured more than 80% score which helped MIDHANI to secure the highest honor of ‘Par Excellence Award’ ‘Par Excellence Award’.

25.2 On October 27, 2023, MIDHANI was honored with the Rajbhasha Cup for best Official Language Implementation and Best E-House Journal for its Rajbhasha e-House Journal - Sankalp.

26. COMPANY PERFORMANCE AND FUTURE OUTLOOK:

The Annual Report includes Management Discussion and Analysis, providing a comprehensive analysis of the Company’s 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 company’s 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 2023-24 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 company’s 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 company’s 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 in-house 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 2023-24 comprised of Six (6) Directors i.e. Three (3) Functional Directors, One (1) Government Nominee Director and Two (2) Independent Directors, 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, the following appointment/ re-employment of Directors were observed:

• Department of Defence Production, Ministry of Defence

vide Office Memorandum No. 8(32)/2019-D-(Coord/ DDP) dated December 8, 2023 appointed

Shri Shalabh Tyagi, (Joint Secretary - Personnel & Coordination ) (JS-P&C) (DIN:10042888) as Govt. Nominee Director in place of Shri Surendra Prasad Yadav (DIN: 02267582) w.e.f. December 8, 2023. In accordance with Regulation 17(1C) of the SEBI Listing Regulations, the approval of the members of the Company for appointment of Shri Shalabh Tyagi, (JS - P&C) through an Ordinary Resolution will be sought at 50^th Annual General Meeting.

• Department of Defence Production, Ministry of Defence vide letter No. 5/1(2)/2018/D(NS) dated February 26, 2024 conveyed the approval of competent authority for re-employment of Dr. Sanjay Kumar Jha as Chairman & Managing Director of MIDHANI (DIN: 07533036) on contract basis for a period of Ten (10) months beyond the age of his superannuation i.e. w.e.f. March 1, 2024 upto December 31, 2024 or till regular incumbent joins the post or until further orders, whichever is the earliest. In accordance with Regulation 17(1C) of the SEBI Listing Regulations, the approval of the members of the Company for re-employment of Dr. Sanjay Kumar Jha as Chairman

& Managing Director through an Ordinary Resolution will be sought at 50^th Annual General Meeting.

29.4 In accordance with provisions of the Companies Act, 2013, Shri T. Muthukumar, Director (Production and Marketing) (DIN:09636771) retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered himself for re-appointment.

29.5 The Notice of the 50^th 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.

29.6 Performance Evaluation: The appointment/

reappointment of Independent Directors in the Company, being a Government Company, 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 MIDHANI’s 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 Company’s 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 2023-24, one (1) meeting of the Independent Directors was conducted on March 28, 2024, 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, 2024, 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 31,2024; and of the Profit of the Company for the year ending on March 31,2024;

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, 2024 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: C&AG of India appointed M/s Gandhi & Gandhi, Chartered Accountants, Hyderabad, [Firm Registration No.000849S] as Statutory Auditors of the

Company for conducting audit of accounts for the year ended March 31, 2024. The Auditors Report of Statutory Auditors on the Financial Statements for the financial year ended on March 31, 2024, 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 2023- 24 in terms of Section 148 of Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

33.3 Secretarial Auditor: In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 your Company appointed D. Hanumanta Raju & Co, Company Secretaries Hyderabad as Secretarial Auditors of the Company for the FY 2023-24. The Secretarial Audit Report forms part of Annual Report as Annexure - VIII along with management’s reply to the observations therein.

33.4 Internal Auditor: Your Company engaged Sagar & Associates. [Firm Registration No. 003510S] to conduct Internal Audit for FY 2023-24.

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, 2024 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, 2024, the Board met eight (8) times on May 25, 2023, July 18, 2023, August 8, 2023, October 18, 2023, November 7, 2023, January 10, 2024, February 9, 2024 and March 14, 2024. 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 Committee’s, 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 2023-24 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 Company’s 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).

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. 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.

37.2 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.

37.3 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

Sd/-

Dr. Sanjay Kumar Jha

Chairman & Managing Director Place: Hyderabad DIN: 07533036

Date : August 9, 2024

1

Facility for Production of Helical Springs: For

manufacturing and supply of Helical Compression Springs for Railway Wagons, Coaches, Locomotives, a Spring Manufacture Unit was set up. The project has been successfully commissioned. All furnaces are in production ready state and Research Designs & Standards Organisation

---

Mar 31, 2023

Your Directors take great pleasure in presenting the 49^th Annual Board''s Report, highlighting the performance and achievements of your Company, along with the Audited Financial Statements (Standalone & Consolidated) for the FY ended on March 31, 2023.

1. SIGNIFICANT ACHIEVEMENTS:

• Achieved highest ever revenue of H 87,194.14 Lakh for FY 2022-23 registering a Year-on-Year (Y-o-Y) growth of 1.45% vis-a-vis revenue of H 85,949.02 Lakh achieved for FY 2021-22.

• Achieved highest ever Value of Production (VoP) of H 1,10,026.63 Lakh for FY 2022-23 registering a Y-o-Y growth of 8.55 % vis-a-vis VoP of H 1,01,358.59 Lakh achieved for FY 2021-22.

2. HIGHLIGHTS OF OPERATIONS:

• MIDHANI has achieved a significant milestone by successfully manufacturing Titan 31 plate for the qualification of the Wide Plate Mill, specifically catering to the requirements of VSSC (Vikram Sarabhai Space Centre) - ISRO for the prestigious Gaganyaan Mission. This successful endeavor marks the first-time production of Titan 31 plate, showcasing MIDHANI''s technical expertise and its crucial role in supporting India''s ambitious space exploration program.

• MIDHANI has successfully manufactured Superni C-276 (Haste Alloy), a corrosion-resistant nickel-based alloy. This alloy was specifically produced to meet the requirements of BHEL (Bharat Heavy Electricals Limited) for their Flue Gas Desulphurization (FGD) application, aimed at controlling SO₂ emissions.

• MIDHANI has successfully supplied feedstock and mill forms of high-temperature alloys for the prestigious Kaveri dry engine program. These alloys play a critical role in the development of advanced propulsion systems and are specifically designed to withstand extreme temperatures and harsh operating conditions.

• MIDHANI completed development and certification of Superni 115 LPT blade blank for aeroengines. Additionally, MIDHANI completed development and certification of Titan 26M, a Titanium alloy capable of withstanding temperatures up to 520°C under creep conditions as against the previously limited temperature threshold of 450°C for the alloy.

• The newly established armour unit at Rohtak, Haryana has commenced production and successfully delivered 15 bulletproof vehicles of the Isuzu Shaurya model to the J&K police. Additionally, 47 MIDHANI Twarit model vehicles were dispatched to the J&K police. The unit has also supplied composites for mine-proof vehicles to AVNL’s- (Armoured Vehicle Nigam Limited), Vehicle Factory, Jabalpur.

3. FINANCIAL HIGHLIGHTS:

3.1 Your Company achieved a revenue of H 87,194.14 Lakh for FY 2022-23 vis-a-vis revenue of H 85,949.02 Lakh achieved for FY 2021-22. Company achieved Operating Profit of H 17,876.78 Lakh for the FY 2022-23 vis-a-vis Operating Profit of H 20,781.36 Lakh achieved for FY 2021-22.

3.2 Profit Before Tax (PBT) for FY 2022-23 of your company was H 21,654.92 Lakh vis-a-vis PBT of H 23,911.98 Lakh for FY 2021-22 and Profit After Tax (PAT) of H 15,587.61 Lakh for the FY 2022-23, vis-a-vis H 17,630.77 Lakh achieved for FY 2021-22. The reduction in profit for FY 2022-23 is mainly attributable to increase in depreciation cost as projects like Wide Plate Mill, 8T VIM & Rohtak facility were capitalized.

3.3 Your Company achieved the following results during FY 2022-23:

(Figures in H Lakh)
Particulars	FY 2022-23	FY 2021-22
Revenue from Operations	87,194.14	85,949.02
Other Income	3,778.14	3,130.62
Total income	90,972.28	89,079.64
Less: Operating Expenditure	61,443.70	59,718.16
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense	29,528.58	29,361.48
Less: Depreciation/ Amortization/ Impairment	5,300.45	3,299.53
Profit before Finance Costs, Exceptional items and Tax Expense	24,228.13	26,061.95
Less: Finance Costs	2,573.21	2,149.97
Profit before Exceptional items and Tax Expense	21,654.92	23,911.98
Add/(less): Exceptional items	-	-
Profit before Tax Expense	21,654.92	23,911.98
Less: Tax Expense (Current & Deferred)	6,067.31	6,281.21
Profit for the year (1)	15,587.61	17,630.77
Other Comprehensive Income/(loss) (2)	(774)	60.62
Total Comprehensive Income (1 2)	15,579.87	17,691.39
Ratios (Percentages)
Profit Before Tax to Capital employed	16.00	19.62
Profit Before Tax to Revenue from operations	24.84	27.82
Profit After Tax to Net Worth	12.12	14.81
Profit After Tax to Paid-up Share Capital	83.20	94.11
Sales to Capital Employed	64.42	70.54
Sales to Gross Block	71.00	78.26
Per Capita Sales (H in Lakh)	116.10	111.62

4. DIVIDEND POLICY:

4.1 The Board of Directors of your Company are pleased to recommend a final dividend of H 1.67 per equity share of the face value of H 10/- each i.e., @ 16.70%, for the financial year ended on March 31, 2023 and seek your approval for the same. The proposed final dividend, will be payable to those shareholders whose names appear in the Register of Members as on the ‘Record Date’ i.e. September 22, 2023.

4.2 Further, during the year under review, the Board of Directors of the Company in their Meeting held on March 15, 2023 has declared and paid interim Dividend of H 1.68 per equity share of the face value of H 10/- each i.e. @ 16.80%. The interim Dividend was paid to the eligible shareholders on March 29, 2023.

4.3 Cumulatively, the Board of Directors of your Company has declared / recommended a total Dividend of H 3.35 per

equity share of the face value of H 10/- each i.e. @ 33.50% for the year ended on March 31, 2023. At 40.26% of Profit After Tax (PAT) this is the highest dividend pay-out by the Company.

4.4 Your Company, being a Central Public Sector Enterprise (CPSE), adheres to the Guidelines on Capital Restructuring issued by the Department of Investment and Public Asset Management (DIPAM) under F. No. 5/2/2016-Policy, dated May 27, 2016. These guidelines mandate that every CPSE must pay a minimum annual dividend of 30% of Profit After Tax (PAT) or 5% of the Net Worth, whichever is higher, subject to the maximum dividend permitted under the prevailing legal provisions. The Company''s comprehensive dividend distribution policy forms part of Annual Report as "Annexure - I" and is also accessible on the official website of the Company at https://midhani-india.in/policies/."

4.5 The performance of MIDHANI with respect to the Return on Investment in comparison to the previous year is as under:

(H in Lakh unless otherwise stated)
S. No	Parameters	FY 2022-23	FY 2021-22
1.	Dividend	6,275.89	5,807.54
2.	Profit After Tax (PAT)	15,587.61	17,630.77
3.	Net Worth1	1,25,405.13	1,16,093.41
4.	Dividend/PAT (%)	40.26	32.94
5.	PAT/Net Worth (%)	12.43	15.19
6.	Dividend/Net Worth (%)	5	5
*Net worth is after considering Dividend for respective periods.

5. TRANSFER TO GENERAL RESERVE:

Your Company has transferred H 10,000 Lakh to General Reserve for the FY 2022-23.

6. PERFORMANCE AGAINST MoU:

For FY 2022-23, MIDHANI’s MoU performance is expected to qualify for an overall ‘Very Good’ rating, however, the same is subject to evaluation and confirmation by Department of Public Enterprises (DPE).

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

7.1 Over the past years, the Company''s continued focus on upgradation and modernization has resulted in the establishment of additional facilities, increased production tonnage capacity, and enhanced product diversity. As a result, MIDHANI has effectively positioned itself to cater to the needs of both existing and new customers in domestic and global markets, while also venturing into new strategic and nationally significant business areas.

7.2 The following projects pertaining to the modernization, expansion, and upgradation of MIDHANI''s production activities were successfully commissioned during the year ended on March 31, 2023:

• Development of Armour unit at Rohtak:

• To meet the growing demand for body armor, vehicle armor, bulletproof Morcha, and bullet-resistant jackets, MIDHANI has established a state-of-the-art unit in Rohtak, Haryana. The completion of the major construction activities in Phase-I and Phase-II marks a significant milestone in the unit''s development.

• During FY 2022-23, MIDHANI''s Armor Unit achieved remarkable success, generating revenue of H 2,998.28 Lakh. This performance is a testament to the unit''s dedication to quality and its ability to meet the market demands effectively.

• The establishment of this new unit in Rohtak not only strengthens MIDHANI''s presence in the armor industry but also contributes to the local economy by creating job opportunities and fostering growth in the region. MIDHANI''s Armour unit is well-positioned to capitalize on the increasing demand for body armor and armor related products in the domestic and international markets.

• New 8T capacity Vacuum Induction Melting Furnace (8T VIM): Melt Shop-III has state-of-the-art addition to its infrastructure - an advanced 8T Capacity Vacuum Induction Melting Furnace (8T VIM). The successful commissioning of this cutting-edge facility marks a significant milestone for the company, as it not only enhances production capabilities but also reduces dependency on the older VIM, which had been in continuous use. Addition of this furnace is expected to reduce delivery timelines, thereby allowing MIDHANI to meet customer''s demand for superalloy more effectively.

• 300 Kg Vacuum Arc Skull Melting Furnace: Installation and commissioning of 300Kg Skull Melting Furnace was successfully completed. Commissioning of 300Kg Skull Melting Furnace has replaced an old 60 kg capacity furnace. This upgradation will help MIDHANI in meeting the demand for higher weight Titanium castings, which the old furnace was unable to fulfill.

7.3 Ongoing projects related to Modernization, Expansion and Up-gradation of MIDHANI’s production activities which will be commissioned during FY 2023-24 are as under:

• Establishment of new Titanium Shop: MIDHANI is undertaking establishment of a dedicated Titanium melting facility to cater rising demand for Titanium alloys in naval, space, missile, and export sectors. This facility will enable MIDHANI to add 500T of Titanium alloys to its annual supply. The facility comprises a 10T Capacity Vacuum Arc Re-melting Furnace, an indigenously developed Plasma Welding Machine, and essential infrastructure such as cooling towers, power distribution, and storage. The facility is undergoing advanced testing, and commissioning is scheduled for the second quarter of FY 2023-24.

• New 20T & 12T Fixed Hearth Furnace for Forge Shop: MIDHANI is undertaking significant upgrades in its Forge shop by installing new furnaces to replace the old fixed hearth reheating furnace. The supply of equipment and erection work for a 20T furnace has been completed and is undergoing testing. Additionally, the erection process for a 12T furnace has commenced, with commissioning planned for the third quarter of FY 2023-24. The introduction of these modern furnaces will greatly enhance MIDHANI''s re-heating capabilities, specifically for smaller size billets. By replacing the old furnace with higher capacity alternatives, MIDHANI aims to improve efficiency, productivity, and overall performance of Forge Shop. ¹

of this facility will be the production of Titanium and Nickel alloy powders tailored specifically for metal additive manufacturing applications. Industries such as automotive, aerospace, and bio-medicals will greatly benefit from these high-quality powders. Currently, there is a heavy reliance on imported Titanium and Superalloy powders to meet the market demand.

• Compacting press for Titanium sponge: MIDHANI plans to procure an 8000-tonne capacity hydraulic compacting press along with auxiliary facilities, molds, electrical and PLC systems, and stacking devices. This press will play a crucial role in compacting titanium sponge with master alloys, facilitating the production of titanium electrodes for primary and secondary melting in the Vacuum Arc Remelting furnace. The estimated timeline for the supply, erection, and commissioning of this equipment is approximately 20 months. This press will lead to significant enhancement of MIDHANI''s Titanium processing capabilities.

• Augmentation of Bar & Wire drawing facility: To

enhance the capacity and capabilities of the existing Bar & Wire drawing facility, MIDHANI has undertaken a project for augmentation. The project includes the procurement of essential equipment such as two 0760 MM heavy-duty bull blocks for coil build-up, two straight line machines with six heads for wire drawing from 10 mm to 6 mm, a wet drawing machine for 3 mm to 1.2 mm, and pointing machines to cater to various wire diameter ranges. Once completed, the upgraded facility will enable MIDHANI to meet growing demand, improve productivity, and better service its customers in the bar and wire drawing segment.

• Additional supporting facility for Wide Plate Mill:

To meet the market requirements and enhance the production capabilities of the Wide Plate Mill, MIDHANI is undertaking setup of additional operations. This includes, procurement of a One Shot Blasting Machine, One Side Trimmer for Sheets/Plates for edge cutting and preparation, and a Plasma cutting machine for cutting plates to desired lengths. To accommodate these new facilities, an extension of the existing DE and EF bay of the Wide Plate Mill is planned. Additionally, MIDHANI will install a facility for grinding Work Roll and Back Up Roll. These initiatives will enable MIDHANI to process different grades of Stainless Steel, Super Alloys, Titanium Alloys, and other high-grade materials.

8. LABOUR PRODUCTIVITY:

The value added per employee during the year was H 94.42 Lakh, vis-a-vis to H 86.84 Lakh in the previous year.

9. SALES AND OPERATIONAL EFFICIENCY:

The trade receivable, measured in terms of ''No. of Days Sales,'' stood at 132 days as of March 31, 2023, compared to 130 days as of March 31, 2022. The accumulation of high debtors primarily stems from budget exhaustion at our customers'' end, predominantly PSU''s, Government Departments/agencies.

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

10.1 The foundation of every successful product development lies in Research and Development (R&D). However, the role of MIDHANI''S R&D department goes beyond innovation, as it encompasses a broader spectrum of business strategy, including marketing, cost management, and product enhancement. R&D plays a pivotal role in creating new products and upgrading existing ones. At MIDHANI, we highly prioritize and value the significance of R&D in driving our growth and success.

10.2 An expenditure of H 2,026.78 Lakh has been incurred towards R&D during FY 2022-23. In addition to overseeing the research and development of new products, the R&D department at MIDHANI is entrusted with the crucial responsibilities of planning, team management, and deployment of technical infrastructure and manpower to support specific processes.

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

• Indigenous Product Developments:

• Superfer 909 Hot rolled bars: Superfer 909 is an age

hardenable iron-based superalloy, containing Nickel, Cobalt, Niobium, and Titanium as alloying elements. With its high strength-to-weight ratio and precise dimensional control at elevated temperatures, this alloy is exceptionally well-suited for aerospace and land-based gas turbine engines. It finds its application in rocket engine thrust chambers, gas turbine engine components such as vanes, casings, and shafts, as well as in medical care applications. Consequently, it holds significant export market potential. MIDHANI, as a strategic material developer and supplier, has successfully indigenized this material for both domestic usage and export purposes.

• Monel K 500 forged and hot rolled bars for Gaganyaan Program: Development efforts were prioritized with utmost urgency to design components for the cabin pressurization and control system of the Gaganyaan Crew Module. These components were specifically engineered to exhibit exceptional resistance to ignition, especially in the presence of high-pressure oxygen.

• SNI C 276 plates/ Sheets: Alloy C 276 is a nickel-molybdenum-chromium alloy solid solution, fortified with a small amount of tungsten. Renowned for its exceptional corrosion resistance, it stands as one of the top choices for process industries. Alloy C 276 poses significant challenges in processing. However, MIDHANI has achieved a remarkable feat in successfully developing and manufacturing this material which was earlier imported.

• Development of new products:

• Heavy forgings slabs of SNI 718 (127 X 590 X900 mm): MIDHANI has achieved a significant milestone by successfully developing and supplying heavy forging slabs measuring 127 (T) x 590 (W) x 900 (L) mm to the export market for the first time.

• Development of Hastelloy X (SNI 76) forged bars: Hastelloy-X is known for its exceptional high temperature oxidation resistance, making it a preferred choice for various industrial furnace applications. Additionally, this alloy finds extensive usage in the manufacturing of critical aircraft components. MIDHANI has successfully fulfilled an export order by supplying forged bars of Hastelloy-X. This accomplishment highlights our commitment to delivering superior quality products to meet the stringent requirements of global customers.

• Development of Ni-Cr-Mo-Ti alloy (MDN 10003) forged & hot Rolled bars: In collaboration with BARC (Bhabha Atomic Research Centre), MIDHANI has successfully developed a high-performance alloy, comprising Nickel- Chromium- Molybdenum-Titanium, specifically designed for the Indian Molten Salt Breeder Reactor (IMSBR). This achievement showcases our commitment towards ensuring the development of materials that meet the stringent requirements of critical applications.

• Development of new products:

• Development and supply of superalloy and

titanium alloy for Adour engine:

o Nickel base superalloy-Superni 115A low pressure turbine blade blank: SUPERNI 115A, a wrought Nickel-based superalloy, serves as a low-pressure turbine blade in the Adour engine, operating at temperatures up to 980°C. The manufacturing process for this highly alloyed and narrow working range alloy was developed meticulously from the initial stages, encompassing melting and hot working techniques. Two batches comprising 100 blanks were supplied, accompanied by airworthiness certification. The ongoing execution of the remaining 5000 blanks order has mitigated the risk of single source dependency on imports.

o Near alpha Titanium alloy-Titan 26A high pressure compressor Disc Forgings:

MIDHANI successfully achieved indigenous bulk production of High-Pressure Compressor (HPC) discs using Titanium alloy TITAN26A. These HPC discs are critical rotating components in military aero gas turbine engines. Through a Licensing Agreement for Transfer of Technology (LAToT) with the Defence Metallurgical Research Laboratory (DMRL) and collaboration with airworthiness agencies, MIDHANI established the indigenous production of HPC discs (stage I to V) for the Adour aero engine. During the Transfer of Technology (ToT) phase, optimization of near isothermal forging and heat treatment processes was carried out to meet the 450°C creep property requirement.

o Near alpha Titanium alloy-Titan 22A HPC

Blade Feedstock: The Ti-8Al-1Mo-1V alloy is a near-alpha alloy extensively employed in compressor parts of turbine engines. This alloy features an alpha phase stabilized by aluminum, while the control over thermomechanical processing and mechanical properties is achieved through the addition of molybdenum and vanadium. The forging process has been meticulously optimized to prevent cracks during the manufacturing process. As a result, hot rolled bars of 2.5T

material, accompanied by airworthiness certification, have been supplied as feedstock to produce compressor blades.

• Development and supply of Titanium alloy

for airframe application of Advanced Medium

Combat Aircraft (AMCA):

o Titan 31A 120 thick wide slab forging for bulkhead frame: MIDHANI successfully developed and supplied Centre for Military Airworthiness & Certification (CEMILAC) CEMILAC certified Titan 31A slabs, measuring 120mm x 1200mm x 1300mm, for the bulkhead frame of AMCA (Advanced Medium Combat Aircraft). The processing of this material involved triple melting in VAR (Vacuum Arc Remelting), ingot breakdown, and multiple upsetting and draw-down operations, with intermediate process annealing. The material meets stringent Ultrasonic Testing (UT) requirements of class A1 and fatigue requirements for such wide plates.

o Beta Titanium alloy-Ti5553A forged slabs of 200/300mm thick under developmental stage for airframes: The Ti-5Al-5Mo-5V-3Cr-0.3Fe Beta alloy, with its elevated levels of alloying elements, is susceptible to segregation during the melting process. This alloy exhibits superior strength and hardenability compared to the Ti1023 alloy. MIDHANI has embarked on the development of this grade in response to an order from DMRL (Defence Metallurgical Research Laboratory). Our ongoing efforts involve optimizing the properties through a combination of thermo-mechanical processing and heat treatment techniques.

o Development and supply of material for Kaveri Dry Engine (KDE) programme of UCAV: MIDHANI successfully produced and supplied 42 tons of feedstock for forging, along with 27.5 tons of mill forms, comprising high-temperature alloys such as Titanium alloy and Nickel-based superalloy. These materials were manufactured with strict adherence to stringent quality criteria, and they obtained airworthiness certification from CEMILAC. These supplies were specifically intended for the Kaveri Dry Engine (KDE) program of UCAV (Unmanned Combat Aerial Vehicle).

o Development and supply of titanium alloys for airborne missiles: MIDHANI developed and certified heats of Titanium alloy grades i.e. Titan 15A, Titan 31 ELI, and Titan 31A for airborne missiles. Notably, the development of Titan 31A thin sheets (1.5mm thickness) for airborne missile wings was a pioneering achievement in India, with only a few manufacturers worldwide capable of producing this product. Manufacturing Titan 31A (Ti-6Al-4V) sheets <4mm posed challenges due to mill limitations in hot rolling and the frequent annealing required in cold rolling. To overcome these limitations, a multi-stage pack rolling process was adopted.

o Development & Supply of Titanium grades for Advanced Light Helicopter (ALH) engine:

MIDHANI successfully developed and type-certified Titan 31A forged feedstock for the rotating parts of the ALH engine. This achievement was accomplished by utilizing the cost-effective double melting method instead of the more expensive triple melting route. Through the optimum design of thermomechanical processing routes and strict control over melt parameters, we were able to achieve fatigue properties comparable to those of the triple-melted grade.

• Artificial Intelligence (AI):

• An AI framework has been established for the purpose of designing new alloys. As a case study, the framework was implemented to consider the low thermal coefficient target for the H13 alloy. The results obtained from this implementation have shown promising progress in the development of H13.

• AI framework can also be extended to other alloys, including Super alloys and Titanium alloys, to cater for specific applications requiring stringent properties. By utilizing this AI framework, MIDHANI will significantly reduce the time required for alloy design and development compared to traditional methods.

• As part of AI roadmap, MIDHANI has taken up

new projects such as:

• Prediction of microstructure of alloys (grain size and phase fraction) through AI’s Computer Vision algorithms,

• Prediction of mechanical properties based on chemistry and microstructure using artificial neural networks and

• AI enabled Quality Improvement System for Maraging Steel Melting Process to improve Product UT quality and yield of the final product.

11. INTELLECTUAL PROPERTY:

11.1 The company developed new products to meet the growing market demand, achieving significant advancements in R&D activities. This progress is evident through the expansion of the company''s intellectual property assets. The products manufactured by MIDHANI are unique, and to protect against infringement, there was a strong emphasis on encouraging the application of Intellectual Property Rights (IPRs).

11.2 To foster innovation, a mission-driven initiative was launched to motivate employees to file patents for their inventions. As a result of this drive 28 patent applications were filed during FY 2022-23, focusing on product and process improvements.

11.3 Recognizing the crucial role of IPR knowledge in identifying potential patents during the development phase, our R&D team collaborated with the Training and Development department to organize comprehensive training sessions. These sessions were conducted both in-person and online, aiming to educate employees about the importance of IPR and equip them with the necessary understanding and skills.

12. ENERGY CONSERVATION:

12.1 Throughout the reporting year, MIDHANI remained steadfast in its efforts towards energy conservation. Our commitment to developing, implementing, and advocating for sustainable energy solutions remains unwavering. The following are the energy-saving measures implemented by MIDHANI during FY 2022-23:

• MIDHANI procured dynamic reactive power compensation panels and transformers to improve the power factor at the MRSS (Material and Reheating Sub-

Station) for the 20T Arc furnace. This implementation is projected to result in significant electricity bill savings of approximately H 10 Lakh per month.

• Furthermore, the overall power factor has been enhanced from 0.92 to 0.96 through the deployment of DPFC (Dynamic Power Factor Correction) panels and transformers, with an approximate value of H 300 Lakh. These initiatives underline our commitment to optimizing energy consumption and reducing costs.

• MIDHANI has established a state-of-the-art solar power plant and entered into open access agreements with TSSPDCL (Telangana State Southern Power Distribution Company Limited) and TSTRANSCO (Telangana State Transmission Corporation Limited) to utilize the generated energy from the 4 MW solar power plant. This year, the solar power plants have successfully generated solar energy valued at H 258 Lakh. These initiatives reflect our dedication to harnessing sustainable and renewable energy sources, contributing to both environmental conservation and cost efficiency.

The summary of consumption of LPG is as under:

Description	Unit	FY 2022- 23	FY 2021- 22
Annual Consumption of LPG	MT	5636.24	5,473.53
Specific consumption of LPG in production	MT (LPG)/ MT (Prod.)	0.14	0.18
The summary of consumption of Electricity is as under:
Description	Unit	FY 2022- 23	FY 2021- 22
Annual Consumption of Electricity	KWHr (in Crore)	6.52	5.40
Specific consumption of Electricity in production	Kwh/T	1,565.32	1,762.89

13. MARKETING & BUSINESS DEVELOPMENT:

13.1 During FY 2022-23, MIDHANI has booked orders worth H 91,700 Lakh. The open order book position as on April 1, 2023 stood at H 1,33,104 Lakh. With the current order book and considering the future orders in pipeline, MIDHANI looks forward to steady growth in the upcoming years.

The sector wise order booked during FY 2022-23 are as under: J Lakh)
Sector	Total value of orders
Defence	70,382.00
Space	3,351.00
Energy	10,306.00
Others	7,661.00
Total	91,700.00
13.2 Sector-wise Performance: The total orders executed during the year under review were H 87,194.14 Lakh and the sector wise sales executed is as below: J Lakh)
Sector	Total value of supplies
Defence	37,204.61
Space	35,083.33
Energy	6,968.87
Others	7,937.33
Total	87,194.14

13.3 Business Development:

• In line with its growth strategy, MIDHANI has made strategic investments in new facilities, including an Armour unit in Rohtak, Haryana, and a state-of-the-art Wide plate cum sheet mill. These expansions aim to diversify MIDHANI''s customer base beyond the Defense & Space sector, targeting industries such as railways, inland security, oil and gas pipelines, and the power sector. These initiatives align with the Government of India''s ''Aatma Nirbhar Bharat Abhiyaan,'' promoting indigenous production and offering domestic alternatives for advanced materials, supporting selfreliance and import substitution.

• Over the years, MIDHANI has been strategically focusing its exports on Titanium alloys and Superalloys, primarily to stockiest and dealers. However, the company''s consistent efforts in the past three years have yielded positive results by expanding its customer base to include end-use customers in Europe for Special Steel, Superalloy, and Titanium Alloys.

• The efforts to obtain industry-specific certifications and client approvals are expected to have a significant impact on MIDHANI''s export performance in the upcoming years. With the enhanced credibility and recognition gained through these certifications, MIDHANI aims to experience a substantial leap in its export volumes, further strengthening its position in the global market.

13.4 Information Technology (IT):

• Continued efforts were made to strengthen the Cyber Security framework through a Cyber Security Vulnerability Assessment and Penetration Testing (VAPT) Audit conducted by a Cert-In empaneled agency. Additionally, a ‘Cyber Jagrookta Diwas’ was organized to raise cyber awareness among employees. These initiatives demonstrate our commitment to ensuring a robust Cyber Security system within the organization.

• MIDHANI successfully implemented an ERP Online Daily Production reporting application, enabling accurate day-wise production volume tracking across various shops. This system also provides cumulative monthly and yearly production tonnage data. Additionally, a ''Material Tracking System'' was implemented to track dispatchable materials across the shops, as well as monitor the online tracking of inbound and outbound materials to and from MIDHANI. These systems enhance operational efficiency and streamline material management processes within the organization.

• During the year under review, the Disaster Recovery (DR) site setup was made operational at Rohtak Plant and the visitor management system and Hospital Management systems was also implemented.

• MIDHANI responsibly managed and disposed of approximately 1000 kilograms of IT electronics scrap as e-waste, contributing to a cleaner environment and sustainable waste management practices.

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

14.1 During FY 2022-23, MIDHANI participated in two significant exhibitions: Defexpo 2022, held at Gandhinagar, Gujarat from October 18 to 22, 2022, and AeroIndia 2023, held at Bangalore, Karnataka from February 13 to 17, 2023. These exhibitions provided valuable platforms for showcasing MIDHANI''s capabilities and engaging with industry leaders, stakeholders, and potential customers on a global scale.

14.2 MIDHANI hosted a panel discussion on ''Aeronautical Materials'' at Hotel The Park, Hyderabad on December 7, 2022. Dr. G Satheesh Reddy, Scientific Adviser to Raksha Mantri was chief guest for the event. The panel discussion witnessed the participation of 75 Aeronautical customers and inspection agencies from prominent organizations such as Hindustan Aeronautics Limited, Gas Turbine Research Establishment, Aeronautical Development Agency, National Aerospace

Laboratories, Defence Metallurgical Research Laboratory, Centre for Military Airworthiness & Certification, Directorate General of Aeronautical Quality Assurance, among others. This event served as a platform for insightful discussions and fruitful interactions on the subject of aeronautical materials.

14.3 On December 27, 2022, the Wide Plate Mill was inaugurated by the Hon''ble President of India, Smt. Droupadi Murmu. The inauguration ceremony included an exhibition featuring Defence products, with participation from esteemed organizations like Defence Research and Development Organisation, Bharat Dynamics Limited, Hindustan Aeronautics Limited, Bharat Electronics Limited, Armoured Vehicles Nigam Limited, and six start-up companies. The exhibition was also accesible to the general public on December 28, 2022.

15. QUALITY MANAGEMENT ACTIVITIES:

15.1 During FY 2022-23, MIDHANI successfully completed the preparation and testing of approximately 38,000 various samples for mechanical testing purposes. Additionally, the company conducted testing on over 15,000 micro samples. These extensive testing efforts demonstrate our commitment to ensuring the quality and reliability of our products.

15.2 In August 2022, MIDHANI successfully completed the Surveillance Assessment for the Certification of its Quality Management System. The assessment was conducted to ensure compliance with the AS9100:2016 and ISO 9001:2015 standards.

15.3 MIDHANI successfully completed audit for Metrology as a calibration lab, resulting in the grant of accreditation. Additionally, the renewal audit of Chemical, Mechanical, and Metallography laboratories was carried out successfully, leading to the renewal of accreditation by NABL (National Accreditation Board for Testing and Calibration Laboratories) in March 2023.

15.4 MIDHANI successfully obtained the ISI mark license for the supply of 300 series stainless steel plates, affirming its adherence to national quality standards. Additionally, MIDHANI made remarkable progress by establishing the Immersion Ultrasonic Testing of SF800H Extruded Tubes for the first time.

15.5 MIDHANI successfully demonstrated and established Immersion Ultrasonic Testing for 0.4mm FBH acceptance criteria in collaboration with DMRL for DMR-SN-742 grade material, marking a significant milestone as the first of its kind in the country.

15.6 MIDHANI conducted the inspection and testing of 38 MDN250 plates within a month. Throughout the FY 202223, a total of approximately 209 plates underwent rigorous testing, inspection, and received clearance.

16. SUPPLY CHAIN MANAGEMENT PERFORMANCE:

16.1 Vendor Meet: MIDHANI organized a Vendor Meet on November 3, 2022, with the aim of facilitating direct interaction with our vendors. The event served as a platform to showcase the recent developments and product profiles of MIDHANI, while also providing an opportunity to address any issues faced by the vendors. This collaborative approach was undertaken to enhance the overall procurement process and foster stronger partnerships with our valued vendors.

16.2 Encouragement to Micro and Small-Scale Industries:

• MIDHANI remains committed to promoting and supporting Micro and Small Enterprises (MSE) by actively engaging in sourcing a diverse range of goods and services from them. In the fiscal year 2022-23, the percentage value of goods and services procured from MSE units accounted for an impressive 45.02% of the total domestic value of procurement. This highlights our dedication to fostering the growth and development of MSE units, as well as our commitment to inclusive and sustainable business practices.

• MIDHANI actively engaged in fostering collaborations with prominent organizations like FICCI and MSME Development Institute, Hyderabad to expand our vendor base and include more Micro and Small Enterprises. Furthermore, we actively participated in MSME exhibitions held at Kota and Hyderabad, which served as important platforms for networking, knowledge sharing, and exploring potential partnerships with MSEs. These initiatives highlight our commitment to promoting MSEs and nurturing their growth within the industry.

16.3 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 Anand Deep IRS (Retd.) and Shri Mallikarjuna Rao, IFS (Retd.) act as our Independent External Monitors (IEM) to ensure compliance and adherence to ethical standards. During FY 2022-23, approximately 85.55% 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.

16.4 eProcurement: To enhance transparency in our procurement processes, MIDHANI has made significant efforts to maximize the use of eProcurement. We are proud to report that during the reporting period, approximately 92.4% of our total procurement, excluding the exempted category, was conducted through the eProcurement mode. This demonstrates our commitment for leveraging technology for streamlined and efficient procurement practices, ensuring fairness, competitiveness, and transparency in the procurement process. By embracing eProcurement, MIDHANI continues to promote a culture of transparency, accountability, and efficiency in its procurement operations.

16.5 Government e Marketplace (GeM): MIDHANI has made significant strides in maximizing its procurement through the Government e Marketplace (GeM) platform. During FY2022-23, MIDHANI released purchase orders amounting to H 12,591 Lakh showcasing a multifold increase compared to the GeM procurement value of H 2,660 Lakh during FY 2021-22. This highlights our commitment to leveraging the GeM platform to streamline our procurement processes, enhance efficiency, and promote transparency in the acquisition of goods and services. By actively engaging with GeM, MIDHANI is reinforcing its dedication to embracing digital technologies and government initiatives for a more seamless and robust procurement ecosystem.

17. RISK MANAGEMENT:

17.1 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 and Corporate Management Committee Meetings. In compliance with Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements Regulations, 2015), MIDHANI has established a dedicated Risk Management Committee.

17.2 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 is enumerated. This ensures transparency and allows stakeholders to have a comprehensive understanding of the risks involved in MIDHANI''s 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.

18. HUMAN RESOURCE DEVELOPMENT:

18.1. Human Resource Development (HRD) encompasses various initiatives such as employee training, career development, performance management, coaching, mentoring, and succession planning. The aim of HRD at MIDHANI is to enhance the skills, knowledge, and abilities of employees to achieve organizational goals.

18.2. Development of human resources is crucial for organizational growth. By creating a conducive environment, organizations can tap into the unlimited potential capabilities of their workforce. MIDHANI recognizes the significance of its human resources and strives to build a motivated and committed workforce. HR management has evolved into a strategic function from a traditional support role.

18.3. Human Resource Development has greatly contributed to the organization''s well-being, leading to a stronger workforce, improved relations, and higher productivity and profitability. At MIDHANI, Employees are considered as most valuable asset, and their talent management is aligned with technology to drive company''s growth.

18.4. The Company values its highly skilled and self-motivated employees. Continuous training and development modules are provided to upgrade their knowledge and skills, with special emphasis on the development of employees from SC, ST, OBC, and Differently abled categories.

18.5. Manpower Position: The manpower strength of MIDHANI as on March 31, 2023 stands at 478 Non-Executives, 25 NonUnionized Supervisors and 248 Executives compared with 486 Non-Executives, 36 Non-Unionized Supervisors and 248 Executives as on March 31, 2022.

18.6.The total manpower strength under permanent category of your Company as on March 31, 2023 is as under:

Particulars	Non-Executives	Non-Unionized Supervisors		Executives		Total
Male	434	23	218		675
Female	44	2	30		76
Total	478	25	248		751
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
87		46	210	135		478

18.7. Employee Welfare Initiatives: The various employee welfare initiative taken during FY 2022-23 are as below:

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

• Social obligations/welfare programs: Monetary awards were presented on August 15, 2022 to meritorious students/children of our employees of SC, ST and OBC

categories @ H 1000/- per child in each category for scoring highest % of marks and @ H 500/- each to all the students of above categories who scored 75% and above marks in X class Board examination or equivalent held in March/April.

• Post-Retirement Medical Benefit Scheme (PRMBS):

The PRMBS (Post-Retirement Medical Benefit Scheme) for Executives and Non-Unionised Supervisors who retired after January 1, 2007 along with the Group Medical Insurance Scheme for Employees retired prior

to January 1, 2007 have been successfully implemented. Medical insurance cards have been issued to the beneficiaries, including Executives, Non-Unionised Supervisors, and Non-Executives. Additionally, the PRMBS for Non-Executives retired on or after January 1, 2007 was implemented from May 1, 2015 as approved by the Board. These schemes are currently operational.

• Education Scholarship for wards of Workmen / employees of MIDHANI Studying in BPDAV School:

Merit Scholarships are awarded to the children of employees who are studying in classes 1 to X and have achieved the 1^st and 2^nd ranks in their previous class''s final examinations. The recipients of the scholarship will receive H 6,000/- and H 3,000/- per annum, respectively. Additionally, children of workmen in WG-0 to WG-5 who pass their previous class (I to X) and move on to the next grade are eligible for an Education Scholarship of H 300/- per month.

• School Activities: Brahm Prakash D A V School, located in MIDHANI Township, is managed by the Company for the benefit of MIDHANI employees'' children and for students located nearby MIDHANI. The school focuses on the holistic development of students, encouraging their participation in extracurricular activities such as sports, and Scouts & Guides. The students have achieved great success in academics, sports, and cultural activities, bringing pride to the school.

• Township: MIDHANI has provided housing facilities to its essential services employees through a Township comprising of 87 quarters.

18.8.Women Empowerment:

• MIDHANI provides a platform for women employees to excel and contribute to organizational goals. With 76 women employees in executive and non-executive roles, they are involved in various departments across the company. Management supports their development through training programs and ensures their welfare in compliance with regulations.

• To encourage women employees to strengthen their technical skills and overall grooming, Management nominates women employees for in-house as well as external training programs.

• MIDHANI celebrates International Women’s Day program every year on 8^th March. As part of celebrations on March 8, 2023, the theme was “DigitALL: Innovation and technology for gender equality”. As part of this

program, we have conducted outbound training session for women employees on “Corporate Well-being by Conscious Living”.

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

18.10.Environment management: MIDHANI persistently prioritized the preservation and enhancement of ecological balance within and around its factory premises through the establishment and upkeep of a diverse and extensive plantation. The green belt at MIDHANI, comprising thousands of plants, forms a dense canopy of greenery. This endeavor effectively mitigates air and dust pollution while also providing a conducive habitat for various bird species.

19. DIRECTORS, EMPLOYEES AND RELATED DISCLOSURES:

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

20. TRAINING & DEVELOPMENT:

20.1 During the FY 2022-23, the Training & Development Department significantly increased its training man days from 1236 to 2855. This was achieved through various training programs, including 18 In-House Training programs for Casuals/FTC''s, Executives, NUS & Non-Executives, as well as 17 External programs for Executives, NUS & Non-Executives. Additionally, as part of the industry-academia interface program, eight plant visits were organized throughout the year.

20.2 MIDHANI is fully committed to fulfilling its obligations under the Apprentice Act 1961. As part of this commitment, we have engaged approximately 187 Trade Apprentices in various trades such as Electrician, Fitter, Welder, Machinist, and Turner for one-year on-the-job training. Additionally, under the Board of Apprenticeship Training (BOAT) Scheme, we have provided on-the-job training to 6 Graduate Apprentices (GATs), 10 Technician Apprentices (TATs), and 6 Sandwich Diploma Engineering (Metallurgy) students from Govt. Polytechnic. These initiatives reflect our committment for nurturing and developing skilled professionals in the industry.

20.3 In addition to on-the-job training for apprentices, MIDHANI has organized various skill development training programs.

These programs include knowledge transformation sessions and motivational sessions conducted by the Assistant Director of Regional Director of Apprenticeship Training (RDAT), covering a total of 664 man-days. These initiatives aim to enhance the skills and motivation of our workforce, ensuring their continuous growth and development.

21. STATUTORY & SOCIAL OBLIGATIONS:

21.1 CORPORATE SOCIAL RESPONSIBILITY (CSR):

• 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 H 393.42 Lakh for CSR activities against the mandatory requirement of H 414.33 Lakh after setting off excess CSR expenditure of H 29.08 Lakh during previous year. Thus, the cumulative CSR expenditure incurred by MIDHANI over the years has crossed H 3,714.02 Lakh. The unspent amount of H 22 Lakh pertaining to an ongoing project has been transferred to unspent CSR Account in line with Section 135 (6) of the Companies Act, 2013.

• 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://midhani-india.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 Primary Health Care Centre’ was set up through ‘MIDHANI Primary Health Care Trust’ to cater to the medical needs of

the public living in and around MIDHANI. An amount of H 133.54 Lakh was spent towards Medicines and Administrative Cost.

ii) Basic checkup and medicines are provided free of cost to the needy patients at MIDHANI Primary Health Care Centre.

iii) Sponsored Anesthesia Work Station and Patient Bed Lift through Seva Bharathi - NGO amounting to H 20 Lakh.

iv) Sponsored Mobile Ambulance to ABV Foundation amounting to H 20 Lakh.

v) Sponsored health awareness campaign at remote areas of Lucknow, Uttar Pradesh through Mamta Charitable Trust amounting to H 20 Lakh.

vi) Sponsored ESG Machines (10 no’s) to DHMO Office, Hyderabad for Bhasti Dawakhanas.

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

i) Location: Public Toilet constructed around MIDHANI.

ii) Total Project Expenditure: H 0.25 Lakh.

iii) No of beneficiaries: 100-150 per day.

(ii) Promotion of Education:

(a) 7 Children belonging to SC/ST category whose parents fall in lower income group were given admission in to LKG and the entire fee shall be borne by MIDHANI till they complete 10^th Class.

(b) Sponsored Dual Desks to various Government Schools of Kothagudem (Aspirational Dist) at an expenditure of H 45.34 Lakh.

(iii) Skill Development:

(a) Every year MIDHANI is inducting more than 10% apprentices to help students have exposure to the real time environment and gain knowledge from the experienced professionals. As part of the stipend paid to the apprentices, an amount of H 80.40 Lakh is accounted under CSR as per the guidelines.

• Actual Expenditure incurred in FY 2022-23 is

H 3,93,41,715/- against mandatory expenditure of

H 4,43,41,000/- and Company has set-off H 29,08,000/-pertaining to excess expenditure during FY 2021-22. The Annual Report on CSR forms part as Annexure - III of this Annual Report. The unspent amount of H 22,00,000 pertaining to an on-going project has been transferred to unspent CSR account.

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

• At our Company, we are committed to provide a safe and inclusive workplace environment for all employees, with special emphasis on the safety and well-being of women. To ensure this, we have established an Internal Complaints Committee (ICC) dedicated to addressing and resolving complaints related to sexual harassment. The ICC operates in accordance with our policy, following guidelines that prioritize the protection and support of all individuals involved.

• During the review period, we are pleased to report that the Internal Complaints Committee (ICC) did not receive any complaints regarding sexual harassment. Furthermore, as of the end of FY 2022-23, there are no pending complaints related to sexual harassment. This signifies our continuous efforts in providing a safe and respectful work environment for all employees.

21.3 CONTRIBUTION TO EXCHEQUER:

During FY 2022-23, your Company contributed an amount of H 26,027.52 Lakh in the form of Dividend, Duties and Taxes vis-a-vis H 22,363.05 Lakh during FY 2021-22.

21.4 COPY OF ANNUAL RETURN:

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

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

The Report on conservation of Energy, Technology Absorption and foreign exchange earnings and outgo forms part of Annual Report as Annexure - IV.

21.6 BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR):

• 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.

21.7 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 CPIO to ensure compliance with the Act. 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. The company''s website is regularly updated to keep stakeholders informed about news and developments. During FY 2022-23, 165 RTI applications were received and 173 applications were disposed of, including those from the previous period. Additionally, 11 RTI appeals were raised and resolved within the same year. MIDHANI submits quarterly returns to the authorities in accordance with the regulations.

21.8 RAJBHASHA IMPLEMENTATION:

• MIDHANI diligently complied with the directives and regulations set by Government of India for promoting use of Hindi in official work. Regular quarterly meetings of the Official Language Implementation Committee were held, chaired by the Chairman & Managing Director, and progress reports were submitted to the Ministry of Defence (MoD) and Ministry of Home Affairs (MHA) and to Town Official Language Implementation Committee - Undertaking (TOLIC-U).

• As a recognition ofyour company’s excellent performance in official language implementation, MIDHANI received the Rajbhasha Award and was notified in the Gazette of India for achieving 80% proficiency in Hindi. To further encourage the usage of Hindi, MIDHANI provided Hindi training courses to employees. Hindi awareness workshops were organized for employees to facilitate their day-to-day official work in Hindi.

• In compliance with the Ministry of Home Affairs'' directives, "HINDI FORTNIGHT" celebrations were conducted. MIDHANI also celebrated "WORLD HINDI DAY" by conducting various programs. Additionally, the company published the 25^th and 26^th issues of its inhouse Rajbhasha House Journal ''Sankalp'' as an e-Magazine during the FY 2022-23.

21.9 RELATED PARTY TRANSACTION:

• Disclosure of related party transactions as per Ind AS-24, issued by the Institute of Chartered Accountants of India, is provided at note no. 40 of the Notes forming part of Annual Accounts for FY 2022-23.

• 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 Company’s ‘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 Company’s website viz. https://midhani-india.in/policies/

22. VIGILANCE ACTIVITIES:

22.1 The company''s Vigilance Department is led by Dr. Upender Vennam, an IPoS officer, as the Chief Vigilance Officer (CVO). In this role, the CVO acts as an advisor to the Chairman & Managing Director (C&MD) on all vigilance-related matters and serves as a liaison between the organization and the Central Vigilance Commission (CVC).

22.2 During the concluded financial year, the Vigilance Department focused on preventive vigilance, aiming to eliminate favoritism and arbitrariness through the standardization of rules and procedures. Regular inspections, both planned and surprise, were conducted on procurement contracts, sub-contracts, and other processes.

22.3 Chief Technical Examination (CTE) inspections were carried out in areas such as procurement, civil works, and consumption of high-speed diesel, with reports submitted to the management. Four structured meetings between the Chairman & Managing Director and the Chief Vigilance Officer were held during FY 2022-23. Additionally, the Vigilance Department suggested fifteen systemic improvements and good practices in various areas, including human resources, IT, security, and procurement/contracts. These suggestions were considered by the management and made available on the company website.

22.4 During the year, the Vigilance Department in MIDHANI focused on promoting transparency, fairness, and ethicality in company transactions and processes through awareness campaigns and training programs. Vigilance Awareness Week 2022 was observed in MIDHANI from October 31 to November 6, 2022 focusing on CVC theme of “Corruption free India for a developed Nation. The 10^th issue of the inhouse vigilance magazine "JAGRUTI" was also published and made available to all MIDHANI employees.

23. VIGIL MECHANISM:

23.1 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). This policy provides a mechanism for individuals to report complaints and seek protection against any retaliation for whistleblowing.

23.2 The Whistleblower policy established by the company is to encourage employees to report any unfair or unethical activities within the organization. The Board level Audit Committee periodically reviews the functioning of the vigil mechanism and addresses any whistleblower complaints received.

23.3 The Whistleblower Policy - 2018 serves as MIDHANI''s Vigil Mechanism and enables stakeholders to report any issues that may have an impact on the organization. The policy is readily accessible on the company''s website. viz. https:// midhani-india.in/department_vigilance/rolefunctions-of-vigilance-department/

24. AWARDS AND RECOGNITION:

MIDHANI was honored with Rajbhasha Puraskar for excellent implementation of Official Language in the 56^th half yearly meeting of Town Official Language Implementation Committee (Undertaking), Hyderabad-Secunderabad held on October 28, 2022 at BDL, Kanchanbagh, Hyderabad.

25. COMPANY PERFORMANCE AND FUTURE OUTLOOK:

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

26. CORPORATE GOVERNANCE:

26.1 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.

26.2 The Annual Report includes a comprehensive report on Corporate Governance, providing detailed information on the company''s 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.

26.3 I n line with the Revised Grading norms for CPSEs, your Company has achieved a perfect score of 100% for the FY 2022-23 in terms of compliance with the Guidelines on Corporate Governance issued by the Department of Public Enterprises (DPE).

27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

27.1 MIDHANI has implemented a robust framework for internal controls, which is designed to align with the company''s 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 company''s operations.

27.2 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.

27.3 The Company engaged the services of external audit firm Eswar & Co. to conduct the internal audit during the year, with a focus on assessing the adequacy of systems and

controls. The audit reports prepared by Eswar & Co. were thoroughly reviewed by the Audit Committee. Additionally, the in-house 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.

27.4 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 Act.

28. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

28.1 The Board of your Company at the beginning of FY 202223 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. Subsequently, Smt. Vallikkat Thanayankizhil Rema (DIN: 09561611) was appointed as Independent Director w.e.f. April, 5, 2022 and Shri T. Muthukumar was appointed as Director (P&M) w.e.f. June 23, 2022.

28.2 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.

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

• Smt. Vallikkat Thanayankizhil Rema (DIN: 09561611) was appointed as the Woman Independent Director on the Board of Mishra Dhatu Nigam Limited by the Ministry of Defence, vide letter No. 11(70)/2021/Misc./D(NS) dated March 25, 2022, effective from April 5, 2022, for a period of 3 years or until further order by the Ministry. The appointment was approved by the Members of the Company through a Special Resolution passed on June 30, 2022, via the Postal ballot process, in accordance with Regulation 17(1C) & 25(2A) of SEBI (Listing Obligations and Disclosure Requirements ) , Regulations 2015 (SEBI Listing Regulation).

• Cmde Siddharth Mishra, former C&MD of Bharat Dynamics Limited (BDL), was entrusted with the additional charge of the post of Director (P&M) vide letter no: 2(13)/2015/MDN/D(NS-I) dated May 27, 2022 by the Administrative Ministry. The appointment was effective from May 11, 2022, for a period of 6 months. However, Cmde Siddharth Mishra did not assume the charge.

• Shri Thulasiraman Muthukumar (DIN:09636771) was appointed as Director (Production & Marketing) (pay scale of H 1,60,000 - 2,90,000 (IDA)) on the Board of Mishra Dhatu Nigam Limited by the Ministry of Defence vide letter No. 5/1(1)/2020/D(NS) dated June 9, 2022. Shri T. Muthukumar assumed charge of the post on June 23, 2022. The members of the Company approved his appointment through an Ordinary Resolution passed via postal ballot on August 03, 2022, in accordance with Regulation 17(1C) of the SEBI Listing Regulations. His appointment is effective until June 30, 2025, or until further orders by the Ministry of Defence.

• Shri Surendra Prasad Yadav, (JS - LS) (DIN:02267582) was appointed as Govt. Nominee Director in place of Shri Anurag Bajpai (DIN: 08948155) w.e.f. November 10, 2022. The members of the Company approved appointment of Shri Surendra Prasad Yadav, (JS - LS) through an Ordinary Resolution passed via postal ballot on January 27, 2023, in accordance with Regulation 17(1C) of the SEBI Listing Regulations.

28.4 In accordance with provisions of the Companies Act, 2013, Dr. Sanjay Kumar Jha, Chairman & Managing Director (DIN: 07533036) retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered himself for re-appointment.

28.5 The Notice of the 49^th 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.

28.6 Performance Evaluation: The appointment/reappointment of Independent Directors in the Company, being a Government Company, 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.

29. REMUNERATION POLICY:

29.1 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 MIDHANI''s 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.

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

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

30. DECLARATION AND MEETING OF INDEPENDENT DIRECTORS:

30.1 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.

30.2 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.

30.3 During FY 2022-23, one (1) meeting of the Independent Directors was conducted on March 15, 2023, in accordance with the provisions of the Companies Act, 2013, and SEBI Listing Regulations.

31. DIRECTORS’ RESPONSIBILITY STATEMENT:

31.1 Pursuant to Section 134(5) of the Companies Act, 2013, your Directors state that:

a. in the preparation of the Annual Accounts for the financial year ended March 31, 2023, 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, 2023; and of the Profit of the Company for the year ending on March 31, 2023;

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

d. the Directors have prepared the accounts for the financial year ended on March 31, 2023 on a ‘going concern’ basis;

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

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

32. AUDITORS:

32.1 Statutory Auditors: C&AG of India appointed M/s Sarath & Associates, Chartered Accountants, Hyderabad, [Firm Registration No. 005120S] as Statutory Auditors of the Company for conducting audit of accounts for the year ended March 31, 2023. The Auditors Report of Statutory Auditors on the Financial Statements for the financial year ended on March 31, 2023, is an unmodified opinion i.e., it does not contain any qualification, reservation or adverse remark.

32.2 Cost Auditor: Your company is required to maintain cost records as specified by Central Government under section 148(1) of the Companies Act, 2013. Your Company appointed BVR & Associates, Cost Accountants, Hyderabad, [Firm Registration No 000453] as Cost Auditors for the FY 202223 in terms of Section 148 of Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

32.3 Secretarial Auditor: In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 your Company appointed C V Reddy K & Associates, Hyderabad [FRN: S2010AN130900] as Secretarial Auditors of the Company for the FY 2022-23. The Secretarial Audit Report forms part of Annual Report as Annexure - VIII along with management reply to the observations therein.

32.4 Internal Auditor: Your Company engaged Eswar & Co. [Firm Registration No. 007288C] to conduct Internal Audit for FY 2022-23.

33. 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, 2023 is placed in Annual Report after Statutory Auditors Report.

34. DISCLOSURES UNDER COMPANIES ACT, 2013:

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

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

34.3 Board Meetings: During the financial year ended on March 31, 2023, the Board met seven (7) times on June 26, 2022, July 27, 2022, October 3, 2022, November 14, 2022, December 19, 2022, February 8, 2023 and March 15, 2023. For further details of these meetings, Members may please refer ‘Report on Corporate Governance’ which forms part of this Annual Report.

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

34.5 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.

35. GENERAL AFFIRMATIONS AND DISCLOSURES:

35.1 Your Directors’ state that no disclosure is required in respect of the following matters, as there were no transactions/ events in relation thereto, during the year under review:

a) Details relating to deposits covered under Chapter V of the Companies Act, 2013.

b) Issue of equity shares with differential rights as to dividend, voting or otherwise.

c) Issue of shares (including sweat equity shares) to employees of the Company under any scheme of the Company.

35.2 Your Directors’ further state that:

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

b) no material changes/commitments of the Company have occurred after the end of the FY 2022-23 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 Company’s operations in future.

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

36. ACKNOWLEDGEMENT:

36.1 The Board of Directors extends their heartfelt gratitude for the unwavering support and assistance received from various Government agencies, particularly the Ministry of Defence, establishments under DRDO, and other Central and

State Government agencies. The Directors also express their sincere appreciation to the customers, vendors, bankers, C&AG, statutory/internal auditors, Chairperson of the Audit Committee, Chairperson of other sub-Committees of the Board, advisers, consultants, and stakeholders associated with the Company for their continuous support and guidance throughout the year.

36.2 The Directors would like to express their sincere appreciation for the significant contributions and exceptional cooperation provided by all the employees of the Company.

36.3 The Directors would also like to extend their gratitude and appreciation to all the shareholders and investors for their unwavering trust and confidence in the Company. The Directors eagerly anticipate their continued support, which will propel the Company towards even greater accomplishments in the future.

For and on behalf of the Board of Directors

Sd/-

Dr. Sanjay Kumar Jha

Place: Hyderabad Chairman & Managing Director

Date : July 18, 2023 DIN: 07533036

1

Fasteners Plant: MIDHANI is actively addressing the demand for smaller size fasteners in the aerospace sector by acquiring specialized equipment dedicated to aerospace fastener manufacturing. This procurement includes, hot heading equipment and warm thread rolling machines, both vital additions to our manufacturing capabilities. These new equipment acquisitions empower us to effectively serve the domestic aerospace fasteners market, fulfilling the specific requirements of indigenous projects like LCA-Tejas and HAL-IAF Repair & Maintenance of aircraft. We aim to deliver high-quality fasteners that meet the stringent standards set by the aerospace & defence industry.

7.4 Other new projects planned in next two years:

• Metal Powder: MIDHANI is making significant strides towards achieving self-sufficiency in metal powder production with the establishment of a Metal Powder Production Unit boasting a capacity of 50 tonne per annum. The successful completion of the procurement process for the necessary main equipment marks a major milestone in this endeavor. The primary focus

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Mar 31, 2018

DIRECTORS'' REPORT

The Members Mishra Dhatu Nigam Limited,

Dear Members,

On behalf of the Board of Directors, We have pleasure in presenting the 44^th Annual Report on the performance and achievements of your company for the year ended 31^st March, 2018 together with the Audited Statements of Accounts, Auditors'' Report and

Financial highlights.

The FY 2017-18 has been a major milestone in the history of the Company as the Company converted itself from a Private limited Company to a Public Limited Company and the Government of India divesting 26% of its stake in our Company.

1. SIGNIFICANT ACHIEVEMENTS:

- HIGHEST VALUE OF PRODUCTION of '' 6976.76 Million for the FY 2017-18 over the VoP of '' 6956.40 Million achieved last year.

- HIGHEST PROFIT BEFORE TAX (PBT) for the FY 2017-18 at '' 1982.51 Million as against '' 1863.53 Million last year, registering an increase of 6.38 % and best ever Operating Profit of '' 1626.69 Million.

2. HIGHLIGHTS OF PRODUCTION & SUPPLIES:

- In a first of its kind, under "Make in India" program, MIDHANI handed over a fully Armoured Bus and Bullet Proof Jacket to DG, CRPF in the august presence of Shri Rajnath Singh, Hon''ble Minister of Home Affairs, Smt Nirmala Sitharaman, Hon''ble Minister of Defence, Dr. Subhash Bhamre, Hon''ble Minister of State, Defence at a function organized at DRDO Bhawan, New Delhi.

- MIDHANI was successful in producing Nickel-Titanium Shape Memory Alloy in various mill forms under the Transfer of Technology Agreement with National Aerospace Laboratories (CSIR-NAL), Bangalore. First batch of commercial production & dispatch was completed successfully and MIDHANI joined the band of select few manufacturers of Shape Memory Alloy in the world.

3. FINANCIAL HIGHLIGHTS:

3.1 Your Company earned a Profit after Tax of Rs, 1312.62 Million as against Rs, 1263.13 Million in the previous year. The Sales Turnover, however, was lower at Rs, 6661 Million due to non-availability of critical equipments, 1500T Forge Press and Furnaces on account of planned major revamping.

3.2 Your Company achieved the following results during FY 2017-18:

(Figures in Rs, Millions)

PARTICULARS	2017-18	2016-17
Sales	6661	8097
Other Income	292	234
Value of Production (Excluding ED)	6977	6956
Depreciation	196	177
Interest	86	47
Profit before tax (Excl. comp.inc.)	1983	1864
Profit after tax (Excl. comp. inc.)	1313	1263
Ratios (Percentages)
Profit Before Tax to Capital employed	25.26	23.12
Profit Before Tax to Sales	29.76	23.01
Profit After Tax to Net Worth	16.64	17.93
Profit After Tax to Paid-up Capital	70.07	67.42
Sales to Capital Employed	84.85	100.46
Sales to Gross Block	168.31	225.47
Per Capita Sales (Rs, in Millions)	7.84	10.77

4. DIVIDEND POLICY AND TRANSFER TO GENERAL RESERVE

4.1 Your Company, being a Central Public Sector Undertaking, follows the Guidelines on Capital Restructuring issued by Department of Investment and Public Asset Management (DIPAM).

4.2 Directors are pleased to recommend a Final Dividend @ 30% on the PAT amounting to Rs, 393.79 Million. Further an amount of Rs, 80.94 Million will be paid as Dividend Tax including surcharge. The rate of Dividend works out to Rs, 2.10/- per Equity Share of Rs, 10/- on 18,73,40,000 Equity Shares, being the highest ever paid by MIDHANI.

4.3 The Directors are happy to inform that a sum of Rs, 900 Million is being transferred to General Reserves of the Company, thereby accumulating the Reserve and Surplus to the tune of Rs, 6017 Million including Other Comprehensive Income.

4.4 The performance of MIDHANI with respect to the Return on Investment in comparison to the previous year is as under

(Rs, in Million unless otherwise stated)

S.	No Parameters	2017-18	2016-17
1.	Dividend	393.79	378.94
2.	PAT	1312.62	1263.13
3.	Net Worth*	7415.62	6587.36
4.	Dividend/PAT (%)	30.00	30.00
5.	PAT/Net Worth (%)	17.70	19.17
6.	Dividend/Net Worth (%)	5.31	5.75
*Net worth is after considering Dividend for respective periods.

5. PERFORMANCE AGAINST MoU

5.1 For the F/Y 2016-17, MIDHANI has been awarded an "EXCELLENT" MoU rating with a score of 90.92%.

5.2 For the year 2017-18 MIDHANI''s performance qualifies for an overall "VERY GOOD" rating in respect of MoU signed with the Department of Defence Production. Excellent rating could not be achieved during the year due to decline in Sales turnover coupled with delay in collection from customers.

6. DISINVESTMENT OF GOVERNMENT HOLDING AND LISTING:

6.1 To facilitate the IPO of MIDHANI shares, in line with the disinvestment programme of Government of India, our Company, earlier a Private Limited Company converted itself into a ''Public Limited Company'' with effect from November 13, 2017 and a fresh Certificate of Incorporation has been issued by the Registrar of Companies (RoC).

6.2 Cabinet Committee on Economic Affairs (CCEA) conveyed its approval for listing of MIDHANI on 12^th April 2017. Subsequently the President of India, acting through the Ministry of Defence approved the Offer for Sale of Company''s shares.

6.3 The Public offer consisted of 4,87,08,400 Equity Shares (up to 26% of Government Holding) of face value of ''10 each through an offer for sale by the President of India acting through the Ministry of Defence for cash at a price of '' 90 per equity share including a reservation of up to 18,73,400 equity shares for subscription by eligible employees. A discount of '' 3 per Equity Share on the offer price was offered to eligible employees and Retail Individual Bidders.

6.4 The public issue opened for subscription on 21^st March 2018 and closed on 23^rd March 2018. The issue was subscribed

1.21 times. The details of basis of allotment, finalized on 31^st March 2018, are as under:

Category	No. of shares allotted	Issue Price Per Share	Amount Realized ('')
Qualified Institutional Buyers (QIB)	3,67,28,200	90	330,55,38,000
Non Institutional Investors (NII)	7,87,800	90	7,09,02,000
Retail Individual Investors (RII)	1,08,36,150	87	94,27,45,050
Employees	3,56,250	87	3,09,93,750
Total	4,87,08,400	-	435,01,78,800

6.5 The Company''s Shares were admitted into both the depositories'' i.e. National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) and are traded under International Securities Identification Number (ISIN) - INE099Z01011. The entire Equity Capital of the Company is in electronic form except Six (6) shares held by the nominees of President of India, the same are in the process of being converted to Dematerialized form.

6.6 The shares of the company were listed on both the stock exchanges i.e. BSE and NSE on the 04.04.2018. M/s. Alankit Assignments Limited are the Registrar & Transfer Agents in respect of these equity shares.

7. GST IMPLEMENTATION AND ERP UPGRADATION:

7.1 The Goods and Services Tax (GST), one of the biggest reforms in indirect taxes, was rolled out by the Government of India from 01.07.2017. Your company ensured smooth transition to GST environment from 01.07.2017. ERP Application is duly upgraded to make it GST compliant.

7.2 ERP hardware and software were upgraded during FY 2017-18 and there has been a seamless migration from old environment to new environment.

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

8.1 The upgradation and modernization program of the Company spread over the last decade contributed towards setting up of additional facilities and increase in production capacity and augmented product diversity.

8.2 Phase 1 Modernization of MIDHANI at a Capital Outlay of around '' 400 Cr. was successfully completed by revamping /upgrading/enhancing production capacities. Prominent among them are new 6000 T Forge Press with 20 T Manipulator, Radial Axial Ring Rolling Mill, Establishment of a New Fastener Plant, R&D Building, Installation of 20 Ton Electric Arc Furnace with Vacuum Degassing (VD) / Vacuum Oxygen Decarburizing (VOD) and Ladle Refining Furnace (LRF). Phase 2 of Modernization pegged at around '' 1000 Cr. is currently underway. Your company has thus successfully positioned itself to serve existing and new customers in domestic markets.

8.3 Completed Projects:

- Reheating Furnaces and Heat Treatment Furnaces: Commissioning of new additional furnaces for improved utilization of new forge press and Ring Rolling Mill facility; Replacement of old furnaces that have outlived their life was executed during the year. In total, commissioning of 4 No''s of LPG fired Bogie hearth furnaces of latest technology have been successfully completed, of these 3 were commissioned during the year and one furnace is commissioned in the first quarter of 2018-19.

- Revamping of 1500T Forge Press: The 1500T Forge Press is about 30 years old and due to heavy usage the equipment’s needed revamping. The OEM took up the work of revamping of 1500T forge press by replacement of identified equipment’s and the revamping work has been successfully completed.

- 4 MW Grid Connected Solar Power Plant: A 4 MW Solar Power plant, established near MIDHANI township, has been successfully Commissioned on 22^nd March'' 2018. The power generated by the Solar power plant is grid connected to the distribution company. The 4 MW Solar power plant is capable of generating about 20,000 KWh of power per day. Apart from this your company has also commissioned a 60 KW Roof Top Solar Power Plant in Sep'' 2017. With the above additions your company is expected to meet around 15% of its power requirements from renewable sources.

8.4 Ongoing Projects:

(a) Wide Plate Mill: The Wide Plate Mill facility shall be the biggest capacity balancer in the downstream area to consume increased melting capacity. The facility is being established under "Make in India" programme in two phases (Phase-1 & Phase-2 being executed simultaneously). This mill would create in-house capability to manufacture heavy plates of various special alloys for strategic requirements of Ordnance Factories, Naval, Missile, Aerospace, Atomic Energy sectors etc. including manufacturing of any special grade plates. The complete facility is scheduled to be operational by March 2020.

(b) Construction of Spring Manufacturing Plant: For manufacture and supply of Helical Compression Springs for Railway Wagons, Coaches, Locomotives, Earth Moving Equipment’s etc. a Spring Manufacturing unit is being set up. This unit consists of Spring Coiling Machine, Walking Beam furnace, Tempering Furnace & End Heating Furnace etc. The complete facility is planned to be established by end of 2019.

9. LABOUR PRODUCTIVITY:

9.1 The value added per employee during the year was '' 6.45 Million, compared to '' 7.16 Million in the previous year.

10. OPERATIONAL EFFICIENCY:

10.1 Trade receivables as a percentage of revenue from primarily stood at 62.07% as on 31.03.2018. The lag in collection of debts is primarily on account of higher sales in the fourth quarter and the budgets getting exhausted at customers'' end, which are primarily Government Departments / agencies. Your company has taken debt collection as a focus area for significant improvement in the coming years.

10.2 Indigenous Procurement as percentage (%) of VoP has increased from 81.58% in FY 2016-17 to 83.87% in FY 2017-18. Your company has achieved an increase of 2.81% in indigenization over previous year.

Year	Indigenization (%)
2017-18	83.87
2016-17	81.58

10.3 Your company has achieved reduction in liquidated damages by 15.75% as percentage of turnover over previous year during the year under review, indicating improved adherence to delivery schedules and reduction in delivery cycles.

Year	Liquidated Damages ('' Million)
2017-18	69.00
2016-17	99.56

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

11.1 Our business requires us to keep abreast with the latest developments in related fields of science and technology. To be at par with the global technological progress, we place strong emphasis on technology of products, technology of process and technology of equipment. A Technology Advisory Board consisting of eminent personalities in Metal Industry regularly meets to guide and review the R&D activities of MIDHANI.

11.2 MIDHANI''s R&D initiatives are focused in developing new grades and Products for its customers, Process development and modification and Yield improvement. An expenditure of '' 154.63 Million was incurred towards R&D for Financial Year 2017-18.

11.3 The in-house research and development team works towards improvement of product quality and process innovation for meeting the expected demands at competitive prices. We have entered into collaborations with Indian and international research institutions and organizations to gain access to the required know-how for developing various key advanced technology products.

11.4 Some of the R&D initiatives undertaken by your company during the year are as mentioned below:

- Process technology for the production of 1200mm dia Electro slag remelted ingots of high strength steels has been developed for the first time in the country.

- Superni 625 Forged bars for Oil & Gas and other Commercial Sectors.

- Titanium products type certification for Naval Applications.

11.6 As per the MoU parameters for the year 2017-18, your company has successfully developed and obtained approval

for the following products/grades:

- Development and approval of weld consumables for naval application (Completed by 28.09.17.)

- Development and approval of Cupro Nickel tubes for Naval application (Completed by 24.11.17.)

- Development and approval of Armor Steel for Defence Application (Completed by 31.01.18.)

12. ENERGY CONSERVATION:

12.1 Due importance is given to energy conservation measures in MIDHANI and efforts in this direction have continued

during the year under report. The measures introduced to save energy during the year are as follows:

- Committed demand enhancement from 16000KVA to 20000KVA implemented, resulting in savings ? 17 Million in Electricity bills.

- Procurement has been initiated for installing APFC Panels for Melt 3, Titanium and Forge LCSS at a cost of about ? 2.3 Million for improving power factor. APFC Panels Procured and installed in Melt 1 LCSS at a cost of ? 0.97 Million for improving power factor. Expected Savings from Melt shop-1 LCSS is ? 0.6 Million per year.

- 4MW Solar PV power plant commissioned to generate around 7000 MWHr/year of electricity (saving : ? 50 Million/year and reduction of 5600 Tons of C0₂ /Year)

- 60 KW rooftop Solar power plant commissioned to generate around 79 MWHr/year (saving : 0.564 Million/ year and reduction of 63 Tons of C02 /Year)

- Replacement of air conditioners older than 10 years or more in a phased manner with new energy efficient air conditioners resulting in reduced energy consumption.

- Replacement of Conventional street lights & Bay lights with LED lights in phased manner. This is expected to reduce energy required for lighting loads considerably. LED Lights were changed in Phase III and Phase IV during the year under review with an expenditure of? 9.65 Million resulting in savings of 2175 Kw/hrs.

12.2 The summary of consumption of Electricity and LPG for the financial year 2017-18 are as below:

S. No	ITEM	UNITS	2017-18	2016-17
1.	Total consumption of Electricity:	KWHr (in Crore)	4.60	4.54
2.	Total consumption of LPG	MT	4081	4049
3.	Specific Consumptions -
	- Electricity Per MT	KWHr/T (Prod.)	17591	1530
	of Production:
	- LPG per MT of Production.	MT(LPG)/MT(Prod.)	0.16*	0.14

^Reasons for increase in Specific Consumptions:

1. During the FY 2017-18 MIDHANI manufactured higher proportion of Titanium products resulting in lower tonnage (Density of Titanium being approximately 55% to that of Steel) but better value/sales.

2. Due to non-availability of 1500T Forge Press for more than 5 months on account of planned revamping, smaller products otherwise manufactured through this press were taken up through the bigger press i.e. 6000T Forge press.

13. MARKETING & BUSINESS DEVELOPMENT:

13.1 During the year under review, MIDHANI secured orders worth Rs, 6357 Million. The sector wise breakup of orders booked is as under:

(Rs, in Million)

Sector	Total value of the orders
Defence	3847
Space	1135
Energy	776
Others	599
Total	6357

13.2 During the year, seven new customers were added to MIDHANI clientele.

13.3 The total orders executed during the year under review were to the tune of Rs. 6661 Million and the sector wise sales executed is as below:

( Rs, in Million)

SECTOR	Total value of the supplies
Defence	3896
Space	1985
Energy	304
Others	476
Total	6661

13.4 The progress made in Business Development during FY 2017-18 is as under:

- MIDHANI participated in International Railway Equipment Exhibition 2017 and also registered some of its products with RDSO. MIDHANI is now a development source for Bogie Plates, Steel Plates & Spring Steel Rounds for Railways.

- MIDHANI also secured orders from the Mining Sector for Alloy Steel Rounds valued at Rs, 13.2 Million for Forged and Hot Rolled Products.

- Orders worth Rs, 7.7 Million were secured from Oil and Gas Sector and development orders were secured from automobiles sector for tool steel products

- During the year 2017-18, MIDHANI secured and successfully executed a trial Export Order of Rs, 1.47 Million from M/s Scholler Blackmann, (Tubacex Group), Austria for Super Alloys Forged Bars.

- To enable MIDHANI to explore export markets such as Oil & Gas Sector etc., MIDHANI appointed four export agents for marketing its products in India and abroad.

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

14.1 MIDHANI participated in various International Defence Exhibitions in India and abroad to interact with various

foreign companies for identifying potential customers for its products.

14.2 During DEFEXPO 2018, MIDHANI entered into two MoUs with Ukraine and USA based companies to explore feasibility

of exports of our products.

14.3 During the year under review MIDHANI participated in the following exhibitions:

14.3.1 International Police Expo organized by Nexgen Exhibitions Pvt. Ltd. at New Delhi during 18-19 May, 2017 to showcase Central Armed Police Forces and State Police products.

14.3.2 DSEi 2017, an International Defence Exhibition held at London during 12-15 Sept, 2017 to exhibit Super Alloys, future materials and Armoured products.

14.3.3 Exhibition organized on 22-23 Sept. 2017 at DRDO Bhavan, New Delhi to demonstrate our potential in Naval Material Technology and products.

14.3.4 Maritime Business Event held at Hai Phong, Vietnam on 25^th Sept, 2017 on potential of Emerging Material Technology in Naval application.

14.3.5 Defence and Security International Exhibition 2017 held at Bangkok, Thailand during 6-9 Nov., 2017 to explore opportunities with South Asian countries.

14.3.6 Defence Industry Vendor Development Meet held at Chennai during 18-19 Jan, 2018 to exhibit products that can be undertaken by MSMEs/SMEs and thus act as strategic partner.

15. QUALITY CONTROL & ASSURANCE:

15.1 During the FY 2017-18 MIDHANI has successfully completed transition recertification audit of QMS for conformance to the revised requirements of AS 9100:2016 & ISO 9001:2015. Audit was carried out by M/s DQS India (Accredited by ANAB) in October 2017.

15.2 During the FY 2017-18, MIDHANI has successfully completed Renewal audit of the Laboratory Management systems of Chemical and Mechanical testing laboratories of MIDHANI for conformance to ISO 17025:2005 requirements. Audit was carried out by National Accreditation Board for Testing and Calibration Laboratories (NABL) in February 2018.

15.3 MIDHANI has been granted continuation of approval from Directorate General of Aeronautical Quality Assurance (DGAQA) for compliance to Approved Firm and its Quality Management System (AFQMS) requirements.

15.4 MIDHANI successfully completed Aeronautical Type Testing activity of Special alloy forged bars intended for the forgings employed in ALH, LUH programme of HAL (Foundry & Forge).

15.5 MIDHANI successfully completed Aeronautical Type Testing activity of TITAN31A forged bars intended for various closed forgings of HAL (Foundry & Forge).

15.6 MIDHANI successfully completed Aeronautical Type Testing activity of Titanium alloys forged & hot rolled bars intended for various closed forgings of LCA Programme.

16. SUPPLY CHAIN MANAGEMENT PERFORMANCE:

16.1 Reverse Auction: Reverse auction concept was initiated during the year. This has had a significant impact in reducing the procurement costs.

16.2 E-Procurement: In order to bring higher transparency in procurements, MIDHANI is maximizing procurement through e-procurement process. During FY 2017-18, about 93% of total procurement was done through e-procurement mode.

16.3 Vendor Meet: MIDHANI participated in vendor meet during 18-19^th January 2018 organized by all DPSUs at Chennai. Around 16 products for outsourcing and 18 products for indigenization were showcased during the meet. During the meet around 300 vendors visited MIDHANI''s stall and interactions were held with the interested vendors. Our core business activities were explained and prospective vendors were appraised about various products earmarked by MIDHANI for outsourcing and indigenization as part of Make in India Programme.

16.4 Integrity Pact: To ensure transparency and integrity in all contracts, MIDHANI is signing "Integrity Pact" with respective bidders in all procurements of estimated value exceeding Rs, 4 Million. Presently Shri R. Mukundan is holding the position of Independent External Monitor (IEM) of MIDHANI. During the FY 2017-18, threshold limit for signing Integrity pact has been reduced from Rs,5 Million to Rs,4 Million. About 138 Integrity Pact contracts were signed and 91% of total value of contract /Purchase Orders was covered under Integrity Pact during FY 2017-18. No complaints were received by the IEM during this period.

16.5 Encouragement to small scale/ancillary industries: MIDHANI continues to encourage and develop MSMEs by regularly sourcing various goods and services from them. The guidelines issued under Public Procurement policy (PPP) for Micro & Small Enterprises (MSEs) Order, 2012 have been complied and MIDHANI has extended the benefits like exemption of Earnest Money Deposit (EMD) payment, Tender fee etc. to MSE vendors. Value of goods/services procured from MSE units stands at Rs, 578 Million during FY 2017-18 which is 23.37% of total indigenous procurement. The value of goods/services procured from SC/ST MSEs stands at Rs, 13.8 Million out of total procurement from MSEs during FY 2017-18.

16.6 Startup India Programme: Under the Start-up India Programme, list of items identified and reserved for procurement from Micro and Small Enterprises is published in the website of the company. In addition, MIDHANI also provides relaxation on prior turnover and prior experience criteria for the startup organizations.

17. RISK MANAGEMENT:

17.1 MIDHANI has a Board approved Risk Management Policy and the Risks associated with various processes in MIDHANI are also being discussed in the internal Production Review Meetings and Corporate Management Committee Meetings. The identification of the risk elements faced by the company is listed out in Management Discussion and Analysis placed as part of the report.

18. HUMAN RESOURCE DEVELOPMENT:

18.1 Our human capital contributes significantly to our business operations and we believe that our employees are our invaluable assets essential for our success. As we build our human resource systems and processes, we intend to continue to focus on improving health, safety and environment for our employees and have in place various programs and benefits for their well being and skill enhancement.

18.2 The total manpower strength under Permanent Category of your Company as on 31^st March 2018 is as under:

Particulars	Non Executives	Non-Unionized Supervisors	Executives	Total
Male	453	69	243	765
Female	54	02	29	85
Total	507	71	272	850

Statement showing the representation of SC/ST/OBC/PH and their recruitment etc., are placed at ANNEXURE: I

18.3 Emphasis is placed on continuous up-gradation of employee''s knowledge and skills through appropriate training and development modules. We intend to develop entrepreneurship skills and further strengthen our workforce through more comprehensive and relevant training programs, creating a core of skilled workers for our future growth by providing them with a conducive, safe and healthy working environment.

18.4 During the year under review, special emphasis was given for development of SC, ST, OBC, PWD employees.

18.5 The industrial relations scenario 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. The management provides proactive, compassionate human relations by creating an atmosphere of mutual trust and participative management.

18.6 Dr. Sanak Mishra, former Managing Director, Rourkela Steel Plant has been appointed as Senior Advisor for supporting MIDHANI on issues of Technology intervention, Business opportunities, Strategy collaborations / Partnerships etc. He has also conducted Leadership Development Programmes for all employees as a part of Change Management Initiative to usher in a cultural change amongst employees.

18.7 Employee Welfare Initiatives:

- As a part of welfare initiative for employees and to promote education among the wards of employees, MIDHANI awards Education and Merit Scholarships to the wards of employees.

- A fully operational Creche facility with required infrastructure is provided at MIDHANI for the benefit of its employees. Your Company also provides free medicines to employees suffering from chronic diseases.

- In order to boost the morale and loyalty of employees towards MIDHANI and also to give exposure to young graduates, MIDHANI has introduced "On Job Training" policy for the wards of employees of MIDHANI who are on the rolls of the Company and the wards of the employees who passed away while in service, as a CSR initiative.

- During the year under review, monetary awards were presented to meritorious students/children of employees of SC, ST and OBC categories @ '' 1000/- per child in each category who scored highest percentage of marks and @ '' 500/- each to all the students of above categories who scored 75% and above marks in class X Board examination or equivalent held in March/April 2017. The awards were presented on 15^th August 2017.

- As per the Company''s Scheme, a Scholarship to the children of employees for pursuing graduation in Metallurgical Engineering is granted @ '' 1,000/- p.m., till completion of the course.

18.8 Women Empowerment:

- MIDHANI is extending all facilities as per the statutes for the welfare of all its women employees. MIDHANI is providing the necessary platform for women employees to realize their potential, take personal responsibility for performing the job with commitment and take pride in what they do and contribute to achieve the organizational goals. International Women''s Day is celebrated by women employees every year in MIDHANI.

- There are a total of 85 women employees collectively working at par with men employees towards achieving the Company goals as against 71 women employees last year. Women employees of MIDHANI belonging to Executive, Supervisory and Non-Executive cadre are spread out across various functions of the Company right from Material procurement, Production, Maintenance, Dispatches to support services such as Civil, Finance, HR, Marketing etc.

19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

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

20. TRAINING & DEVELOPMENT:

20.1 During the year under report, 2566 man days of training programs were organized for 346 Executives (including Non-Unionized Supervisors) and 504 Non-executives i.e. 850 Employees, for both in-house and external training programs, Seminars, Conferences, Symposiums and Workshops. Special Training programme for employees along with their spouse were conducted in two batches for balancing their personal and official life. The programme was conducted with the help of Central Workers Education Board, Hyderabad.

20.2 Induction of SOTs / JOTs - 2017-18 Batch: 36 Diploma Engineering SOTs & 43 ITI Trades JOTs in various discipline / trades were inducted during the year.

20.3 Induction of Management Trainees - 2017-18 Batch: 18 Engineering Trainees and 5 Finance professionals were inducted as Management Trainees during the year.

20.4 MIDHANI is committed towards fulfilling its obligations under Apprentice Act 1961. Under the scheme 30 Sandwich Diploma Engineering (Metallurgy) students from Government Polytechnics received on job Training for a period of six months in 2 batches; 85 trade apprentices are Electrician, Fitter Welder, Machinist & Turner were engaged for on job Training for one year. Likewise 40 Graduates Apprentices (GATs) and 2 Technician Apprentices (TATs) under the scheme of Board of Apprenticeship Training (BOAT), Chennai were engaged for one year training.

20.5 In association with National Productivity Council, Hyderabad, National Productivity week was celebrated from 12^th to 18^th Feb., 2018. The Theme of this year was "Industry 4.0, Leapfrog Opportunity for India". Various competitions were also conducted.

21. STATUTORY & SOCIAL OBLIGATIONS:

21.1 CORPORATE SOCIAL RESPONSIBILITY:

- Corporate Social Responsibility (CSR) at MIDHANI is viewed as a way of conducting business, which enables the creation and distribution of wealth for the betterment of its stakeholders, through the implementation and integration of ethical systems and sustainable management practices.

- The Corporate Social Responsibility and Sustainable Development Policy of MIDHANI, in line with the Companies Act 2013, is approved by the Board of MIDHANI.

- For the year under review, MIDHANI spent '' 32.83 Million towards CSR activities highest since inception. The cumulative amount spent towards CSR by MIDHANI over the years is '' 170 Million.

- An annual report on the CSR activities of the company, including the composition of the CSR Committee in MIDHANI, as mandated under the Companies (Corporate Social Responsibility Policy) Rules, 2014, is also placed at ANNEXURE - II.

- The projects taken up for CSR activities by your company during the year under report are as under:

(i) Promotion of Health Care and Sanitation (3 Projects)

(ii) Promotion of Education (2 Projects)

(iii) Skill Development (2 Projects)

(iv) Others

(i) Promotion of Health Care and Sanitation:

- Improvement of sanitation at Govt. Schools: Under the Swachh Bharat initiative, construction of 24 toilets was undertaken by MIDHANI and the same is expected to benefit approx. 3000 students, both boys and girls. Expenditure of about '' 5.82 Million has been incurred on this project.

- Annual maintenance of Toilets: To ensure regular use and to promote sanitation, MIDHANI has ensured maintenance and regular upkeep of 35 No''s of toilets in various Government Schools at an expenditure of '' 1.71 Million. The same has benefitted approx 5000 students.

- Promotion of Health care: A Charitable Health Care Centre for the poor families, staying in and around MIDHANI, is set up and basic checkup facilities and medicines are provided free of cost to the patients. Expenditure incurred during the year in running the centre is '' 0.35 Million.

(ii) Promotion of Education:

- Sponsored Dual Desks: 630 No''s of Dual Desks were sponsored by MIDHANI for Government School children of Chouttuppal Mandal and Suryapet at an expenditure of '' 2.1 Million.

- Mid-day meal to Government School: MIDHANI sponsored Mid-day meal to approx. 1579 Children of 12 Government Schools of Medak Dist through M/s Akshaya Patra Foundation. Expenditure of '' 1.5 Million was incurred towards the same during the year.

(iii) Skill Development:

- Adoption of ITI, Alwal: As per the scope of the MoU signed with ITI Alwal, MIDHANI is to provide assistance for various civil works such as construction of compound wall & toilets, up-gradation of computer lab, civil renovation of hostel building, workshops, furniture for class rooms, setting up of library furniture, fans & tube lights, financial assistance for employment of teaching staff, etc. The project is still under implementation. Expenditure in 2017-18 is '' 5.19 Million.

- Construction of Training Centre: As envisaged in CSR-policy of MIDHANI, your company is in the process of setting up a Skill Development Centre. Accordingly Construction work of Skill Development Centre cum Centre of Excellence has been taken up. Expenditure for 2017-18 is '' 14.50 Million. The construction work is in progress.

(iv) Others: Other CSR expenditure during 2017-18 is '' 1.65 Million.

21.2 DISCLOSURE UNDER SEXUAL HARRASEMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION

AND REDRESSAL) ACT, 2013:

- Your company has always believed in providing a safe and harassment free workplace for every individual working in the company and women in particular, with an environment that is free from discrimination and harassment including sexual harassment. Company has in place a robust policy on prevention of sexual harassment at workplace. 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.

21.3 CONTRIBUTION TO EXCHEQUER:

- Your Company contributed an amount of '' 1449.23 Million in the form of Dividend, Duties and taxes during the year 2017-18 as compared to '' 1664.10 Million in the previous year.

21.4 EXTRACT OF ANNUAL RETURN:

- The extract of Annual Return as provided under sub-section (3) of section 92 of Companies Act 2013 is enclosed at ANNEXURE - III

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

- Report on conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo is enclosed at ANNEXURE - IV

21.6 IMPLEMENTATION OF RTI ACT 2005:

- MIDHANI, as a Public Authority under RTI Act 2005 continues to discharge its obligations. MIDHANI received 67 RTI applications including online applications during the year 2017-18. All the RTI applications and the appeals received, both on line and off line, during the year 2017-18 have been processed and information was provided in a time bound manner as stipulated in the Act.

- In order to have access to information for the Citizens and also as a part of company''s philosophy and Corporate Governance, MIDHANI''s web site is updated on regular basis by uploading company''s news and developments.

21.7 RAJBHASHA IMPLEMENTATION:

- Govt. of India directives, the Official Language Act 1963, the Official Language Rules 1976 made there under and the orders issued by Government of India from time to time for promoting the use of Hindi for Official purpose are complied by MIDHANI without deviation.

- The quarterly meetings of Official Language Implementation Committee (4 nos. in the financial year 2017-18) were held regularly under the Chairmanship of Chairman & Managing Director of the Company. To encourage the use of Hindi in day-to-day official work, a total of 6 employees in Prabodh, 26 employees in Praveen and 26 employees in Pragya Courses were trained. Four (4) Hindi Awareness Workshops were also organized for 67 employees.

- On the occasion of ''HINDI DIWAS'' in the month of Sept 2018, "HINDI MAHOTSAV" was organized. A Guest Lecture was also organized on 14^th Sept. 2017 as per the direction of Ministry of Home Affairs (MHA) on "Hindi Bhasha ka Mahatva". Further, "Vishwa HINDI Diwas" was celebrated on 10^th Jan 2018 to propagate Official Language in the organization and on this occasion "Hasya Kavi Sammelan" was also organized.

22. INTELLECTUAL PROPERTY:

22.1 During the year under report your Company''s Logo has been registered as a "Word Mark and Label" under Class 6 and 35. Your company has been issued the trademark registration certificate on May 18, 2017 in respect of advertising, business, administration, office, functions, demonstration of goods, dissemination of advertising matter publicity services, promotional services, all being in relation to special metals and alloys and on May 26, 2017 in respect of common metals and their alloys, design, development and equipment made out of special metals and alloy sheets.

23. VIGILANCE ACTIVITIES:

23.1 During the year under review, a workshop-cum-Interactive session was organized on 06.10.2017 at MIDHANI on improving Vigilance Administration. Shri K. V. Chowdary, Central Vigilance Commissioner (CVC) chaired the workshop and shared his ideas on Preventive Vigilance and Integrity issues during the session.

23.2 Vigilance Awareness Week was conducted from 31^st October to 4^th November 2017 with the theme "My Vision-Corruption Free India". On the occasion, the fifth issue of the In-house Vigilance magazine "JAGRUTI" was also released.

23.3 Vigilance Department also released the Seventh edition of CVC Vigilance Manual-2017 and the same was distributed to employees as a quick reference and guide for decision making.

23.4 During the FY 2017-18, under the initiative of the Vigilance Department, "Online submission of Property return" is implemented.

24. VIGIL MECHANISM:

24.1 The Whistle Blower Policy adopted by the Board of Directors at its 206^th Meeting held on January 23, 2013 is functioning as Vigil Mechanism of MIDHANI. The Whistle Blower Policy of MIDHANI is available at the link www.midhani-india.in/doc/MDN-WHISTLEBLOWER-POLICY-2015.pdf

25. AWARDS AND RECOGNITION:

25.1 During the year 2017-18, MIDHANI was awarded Raksha Mantri''s Award for Excellence for the year 2014-15 under the category of innovation. The award was given for development of Nuclear Application Steel Plate. The award was presented by then Raksha Mantri, Shri Arun Jaitley to a cross-functional team of MIDHANI on 30^th May 2017.

26. VISITS AND INTERACTIONS WITH DISTINGUISHED GUESTS:

26.1 Shri K. K. Roy Kurian, Managing Director, Kerala Minerals and Metals Limited (KMML) and G Kalyanakrishnan, Distinguished Scientist, Chairman and Chief Executive, Nuclear Fuel Complex (NFC) visited MIDHANI on 09.05.2017.

26.2 RAdm L. V. Sarat Babu, NM, IN(Retd), C&MD, Hindustan Shipyard Limited (HSL) visited MIDHANI on 01.06.2017.

26.3 Shri Ashok Kumar Gupta, IAS, Secretary (Defence Production) visited MIDHANI on 28.06.2017 to review performance of MIDHANI and inaugurated the in-house indigenously developed 20T Electro Slag Refining Furnace and 10T Vacuum Arc Re-melting Furnace and dedicated the same to the Nation.

26.4 Shri TVSN Prasad, JS (Police Modernisation), Ministry of Home Affairs (MHA), and Members from other Paramilitary Forces visited MIDHANI on 30.06.2017 to explore supply of armor products to Para Military Forces.

26.5 To review the progress of MIDHANI w.r.t. disinvestment initiative, Shri Neeraj Kumar Gupta, Secretary (DIPAM) visited MIDHANI on 07.07.2017 and also inaugurated the Research and Development Centre at MIDHANI.

26.6 Shri S. Somanath, Director LPSC and Team visited MIDHANI on 19.08.2017 for enhanced focus of MIDHANI towards space sector.

26.7 Then Hon''ble Minister of Defence, Finance & Corporate Affairs Shri. Arun Jaitley visited MIDHANI on 27.08.2017 and dedicated the newly commissioned facilities of Phase 1 modernization at MIDHANI to the nation. He also conducted the Ground Breaking Ceremony of Phase 2 of modernization at MIDHANI.

26.8 Hon''ble Raksha Rajya Mantri Dr. Subhash Ramrao Bhamre visited MIDHANI on 22.09.2017 and inaugurated the "Welding Electrode Plant".

26.9 Shri K. V. Chowdary, Central Vigilance Commissioner visited MIDHANI on 06.10.2017 to create awareness on "Preventive Vigilance".

26.10 Shri Santosh Sharma, C&MD, Hindustan Copper Limited (HCL) visited MIDHANI on 14.10.2017 to explore areas of cooperation between HCL and MIDHANI.

26.11 Shri Apurva Chandra, IAS, Additional Secretary (Defence Production) visited MIDHANI on 27.10.2017 to review the performance and activities of MIDHANI.

26.12 Shri K. N. Vyas, Director BARC and Member Atomic Energy Commission visited MIDHANI on 17.01.2018 to review and discuss on areas of cooperation between Department of Atomic Energy and MIDHANI.

26.13 Mr. Jesus Esmoris CEO Tubacex Group visited MIDHANI on 17.01.2018 to explore areas of collaboration between Tubacex and MIDHANI.

27. CORPORATE GOVERNANCE:

27.1 The basic principles and philosophy of Corporate Governance is followed in letter and spirit in every aspect of Company''s decision making in tune with the contemporary demand for good Corporate Governance and adherence to guidelines issued by Department of Public Enterprises from time to time. A Code of Business Conduct and Ethics, applicable to all Board Members and Senior Management, has been implemented in the Company. The adherence to the code is confirmed by respective members on an annual basis. A certificate to this effect from Chief Executive is made part of this report.

27.2 A detailed report on Corporate Governance and a report on the Management Discussion & Analysis are part of this report. Certificate for adherence to the guidelines issued by DPE in this regard, duly signed by a practicing Company Secretary, is made part of this report.

27.3 In accordance with Revised Grading norms for CPSEs, in the matter of compliance of Guidelines on Corporate Governance issued by DPE, your Company has scored 99.44% for the FY 2017-18.

28. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

28.1 The company has put in place necessary Internal Controls and Systems to meet all the canons of financial propriety. We believe that internal control and risk management are necessary pre-requisites for implementing the principle of governance. We have an effective Internal Control System, which ensures that all our assets are safeguarded and protected against loss.

28.2 External Audit firm M/s. Ernst & Young were engaged to carry out Internal Audit during the year under report. This helped ensure adequacy of systems and controls. Their reports thereon were further reviewed by Audit Committee appointed by 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 are reviewed by the Audit Committee of the Board. The Audit Committee also reviews the adequacy and effectiveness of internal controls.

28.3 No cases of fraud were reported by the Auditors during the year under report.

29. BOARD OF DIRECTORS:

29.1 The Board of your company comprised of seven (7) Directors i.e. 3 Functional Directors and 4 Non-Official PartTime (Independent) Directors, all eminent personalities with vast experience from diverse fields.

29.2 Presidential Orders were received and Shri Surendra Sinh (DIN: 07960634) was appointed as Part Time NonOfficial Director on the Board of MIDHANI w.e.f. 09.10.2017. A brief profile of Shri Surendra Sinh is enclosed at ANNEXURE- V

29.3 Shri. Sanjay Garg, Joint Secretary (DIP) and Government Nominee Director on the Board of MIDHANI ceased to be a Director on the Board of MIDHANI w.e.f. the date of notification of the same by Administrative Ministry i.e. from 06.12.2017. We place on record our appreciation for the contribution made by Shri Sanjay Garg.

30. DECLARATION AND MEETING OF INDEPENDENT DIRECTORS:

30.1 The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013. A separate meeting of Independent Directors in line with the statutory provisions was held on March 8, 2018 wherein all the Independent Directors were present.

31. DIRECTORS'' RESPONSIBILITY STATEMENT:

31.1 Requirement under Section 134 (3) (c) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, is confirmed as under:

a. That in the preparation of the Annual Accounts for the financial year ended 31^st March, 2018, the applicable Accounting Standards have been followed along with proper explanations on the material departures;

b. That the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates 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. 31^st March, 2018 and of the Profit or Loss of the Company for the year ending on that date;

c. That 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. That the Directors have prepared the accounts for the financial year ended on 31^st March, 2018 on a ''going concern'' basis.

e. That the Directors have laid down Internal Financial Controls to be followed by the company, and that such internal controls are adequate and are operating effectively; and

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

32. AUDITORS:

32.1 Statutory Auditors: C&AG of India appointed M/s. Basha & Narasimhan, Chartered Accountants, Hyderabad, as Statutory Auditors of the Company for conducting audit of accounts for the year ended 31^st March, 2018.

32.2 Cost Auditor: Your Company appointed M/s. Sandeep Zanwar & Associates, Cost Accountants, Hyderabad, as Cost Auditors for the year 2017-18 in terms of Section 148 of Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

32.3 Secretarial Auditor: In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 your Company appointed M/s Puttaparthi Jagannatham and Co, Company Secretaries, Hyderabad as Secretarial Auditors of the Company for the FY 2017-18. The Secretarial Audit report is placed at ANNEXURE - VI.

32.4 Internal Auditor: Your Company engaged M/s. Ernst & Young to conduct Internal Audit for the financial year

2017-18.

33. COMMENTS OF COMPTROLLER & AUDITOR GENERAL OF INDIA:

33.1 The comments on the Accounts by the Comptroller & Auditor General of India for the year ended 31^st March, 2018 are placed in this report after the report of the Statutory Auditors.

34. FUTURE OUTLOOK:

34.1 We believe that innovation in our production processes coupled with enhanced efficiency and utilization of resources is the key to reduce production costs. We intend to leverage our Design, Engineering and Manufacturing capabilities to improve our focus on advanced technology products. We will continue to pursue new collaborations that allow us to add to our product portfolio.

34.2 MIDHANI will also focus on new process based technologies such as Closed-Die Forgings, Investment Castings, Isothermal Forging and using special alloys to further improve existing products and add new products to existing product portfolio. Such new products include Carbon Fiber, Tungsten Powder and Armour products that find use in strategic sectors.

34.3 With a view to expand existing business and to also enter into new areas of business, thrust is placed on Business Development. The new sectors being identified and explored by MIDHANI as part of Business Development are the Railways Sector, Oil & Gas Sector, Automobile Sector and Coal Fields etc.

35. ACKNOWLEDGEMENT:

35.1 The Board of Directors are extremely thankful for the continued patronage and gratefully acknowledge the valuable support and assistance received from all Government agencies particularly from Ministry of Defence, all establishments under DRDO and other agencies of Central and State Government. Your Directors also place on record sincere thanks to vendors, Bankers, C&AG, Statutory/Internal Auditors, Chairperson - Audit Committee, Chairman of other sub Committees of the Board, Advisers, Consultants etc., of the Company for their continued support and guidance during the year.

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

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

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/-

Dr. D. K. LIKHI

CHAIRMAN & MANAGING DIRECTOR

Place: Hyderabad

Date : 30.05.2018