Mishra Dhatu Nigam Limited
On behalf of the Board of Directors We have pleasure In presenting the 45thAnnual Report on the performance and achievements
of your company for the year ended 31st March 2019 together with theAudited Financials Auditors' Report and Financial highlights.
FY 2018-19 is a landmark year as MIDHANI's shares were listed on 04.04.2018 on both NSEand BSE and this is the first Annual Report of MIDHANI as a listed entity.
1. SIGNIFICANT ACHIEVEMENTS:
Best ever Value of Production (VoP) of ? 8148.32 million for the FY 2018-19registering a growth of 16.79% over the VoP of ? 6976.76 million achieved for FY 2017-18.
Highest ever orders of ? 18440.60 million were secured during the FY 2018-19.Out of the above about ? 1760 million of orders were bagged against open competitionwhich is the highest in MIDHANI's history.
Highest ever Export turnover of ? 80.53 million was recorded during the FY2018-19.
MIDHANI has also incurred highest ever Research and Development expenditure of ?299.71 million and highest ever CSR expenditure of ? 39.35 million in FY 2018-19.
2. HIGHLIGHTS OF OPERATIONS:
New areas of revenue were identified in the areas of Armouring and MIDHANI hassuccessfully completed its first commercial bullet proof vehicles order and handed over 15Bullet Proof Vehicles to Central Armed Police Forces (CAPF) on 30.03.2019 at an eventorganized at MIDHANI. CAPF officer Shri J. K. Sharam Deputy Commandant and Dr. D. K.Likhi C&MD MIDHANI flagged off the vehicles. Considering the business potential ofthe same an Armouring unit at Rohtak Haryana is being set up.
With a focus on Exports MIDHANI signed MoU with M/s TUBACEX a multinationalgroup with headquarters in Alava Spain on 17th January 2019. The MoU wouldallow joint development of advanced materials for the energy sector contemplatingtechnological alliances and the promotion of local manufacturing capacities.
With a focus on cost reduction highest ever plant return scrap of 5663.6 MT wasused for melting during the FY 2018-19 as against 4486 MT during the FY 2017-18. The yearalso saw highest ever procurement and segregation of scrap at about 5472 MT as against3447 MT during the FY 2017-18.
3. FINANCIAL HIGHLIGHTS:
3.1 Your Company achieved a Sales Turnover of ' 7108.46 Million as against ' 6660.78Million in the previous year thereby registering a growth of over 6.72%. Company earnedProfit After Tax of ' 1305.56 Million as against ' 1312.62 Million in the previous year.
3.2 Your Company achieved the following results during FY 2018-19:
|PARTICULARS ||2018-19 ||2017-18 |
|Sales ||7108 ||6661 |
|Other Income ||369 ||292 |
|Value of Production (Excluding ED) ||8148 ||6977 |
|Depreciation ||232 ||196 |
|Interest ||64 ||86 |
|Profit before tax (Excl. comp.inc.) ||1910 ||1983 |
|Profit after tax (Excl. comp. inc.) ||1306 ||1313 |
|Ratios (Percentages) || || |
|Profit Before Tax to Capital employed ||18.10 ||25.26 |
|Profit Before Tax to Sales ||26.88 ||29.76 |
|Profit After Tax to Net Worth ||15.64 ||16.64 |
|Profit After Tax to Paid-up Capital ||69.69 ||70.07 |
|Sales to Capital Employed ||67.36 ||84.85 |
|Sales to Gross Block ||142.34 ||168.31 |
|Per Capita Sales (' in Millions) ||8.99 ||7.84 |
4. DIVIDEND POLICY AND TRANSFER TO GENERAL RESERVE
4.1 Your Company being a Central Public Sector Enterprise (CPSE) follows theGuidelines on Capital Restructuring issued by Department of Investment and Public AssetManagement (DIPAM) vide F. No. 5/2/2016-Policy dated 27th May 2016. TheGuidelines state that 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 theextant legal provisions.
4.2 The Board of Directors recommended a Final Dividend of ? 0.51 per equity share forthe year ended 31.03.2019; this is in addition to the Interim Dividend of ? 1.68 perequity share which was approved by the Board on 16.03.2019.
4.3 The total dividend (including interim dividend) for the FY 2018-19 is ? 2.19 perequity share (par value ? 10/- each) and the Final Dividend is recommended by the Boardfor approval and the interim dividend already paid for confirmation by the Shareholders inthe forthcoming Annual General Meeting of the Company.
4.4 The performance of MIDHANI with respect to the Return on Investment in comparisonto the previous year is as under
|S.No Parameters ||2018-19 ||2017-18 |
|1. Dividend ||410.27 ||393.41 |
|2. PAT ||1305.56 ||1312.62 |
|3. Net Worth* ||8205.67 ||7394.72 |
|4. Dividend/PAT (%) ||31.42 ||30.00 |
|5. PAT/Net Worth (%) ||15.91 ||17.75 |
|6. Dividend/Net Worth (%) ||5.00 ||5.32 |
*Net worth is after considering Dividend for respective periods.
5. PERFORMANCE AGAINST MoU
5.1 For the FY 2018-19 MIDHANI's MoU performance qualifies for an overall "EXCELLENT"rating however the same is subject to evaluation and confirmation by Department ofPublic Enterprises (DPE).
6. INDIGENIZATION AND IMPORT SUBSTITUTION:
6.1 Indigenously developed Automatic Billet Grinder 6T Mobile Grinder and 25T LPGfired Furnace were commissioned for commercial production with a total savings of approx ?10 Cr.
6.2 Indigenous Procurement as percentage (%) of VoP is 62.92% during the FY 2018-19 asagainst 83.89% during FY 2017-18. Indigenous procurement is low due to global increase inraw material prices and percentage of direct import to value of production has increasedfrom 16% to 31% based on customer order requirement.
|Year ||Indigenization (%) |
|2018-19 ||62.92 |
|2017-18 ||83.89 |
6.3 By using alternate input materials (i.e. scrap plant reverts) MIDHANI couldsubstitute ? 27.62 Cr. of imported raw material (Cobalt Nickel Low Carbon FerrochromeMolybdenum Pure Iron Chromium Metal).
7. MODERNISATION EXPANSION & UPGRADATION PROGRAM OF THE COMPANY:
7.1 The up gradation and modernization of the Company over the last decade contributedtowards setting up of additional facilities increase in production tonnage capacity andproduct diversity. The Company has successfully positioned itself to serve existing andnew customers in domestic markets as well as entered into new business areas of strategicand national importance.
7.2 Additions amounting Rs. 1039.60 million to the Gross block was made during the yearunder report.
7.3 Projects for Modernization Expansion and Up-gradation of MIDHANI is as under:
Forge / Heat treatment areas:
90T Re-heating Furnace: A new replacement re-heating furnace of 90Tcapacity is set up in Forge shop for accommodating ingots up to 12 meters in length. Thefurnace has been successfully commissioned in 1st quarter of FY 2018-19.
4T & 6.5T Chargers: Two new chargers of capacity 4T & 6.5T wereprocured for Forge Shop operations. Supply has been completed in 3rd quarterand 4th quarters of FY 2018-19 respectively.
The following are the ongoing Projects in Forge / Heat treatment areas:
Isothermal Forging Unit; For providing end to end solutions of forgedproducts of Super Alloys and other special materials and for manufacture of criticalcomponents to promote indigenization Isothermal forging is being setup at 6000T Forgepress. Procurement action has been initiated. Equipment delivery has started for FOBitems. Commissioning is expected in 2nd quarter of FY 2019-20.
25T Manipulator; A new 25T manipulator is added in 6000T Forge press forforging of long shafts for special applications. Equipment received at site. Commissioningis planned for 1st quarter of the FY 201920.
Plate Leveler: To overcome the production limitations of old leveler ofHRM and to carry out industrial R&D a New Plate Leveler is commissioned in 4thquarter of FY 2018-19 to accommodate the plates of width 650mm to 2000mm and thickness5-15mm in HRM.
The following are the ongoing Projects in Downstream areas:
Auto Billet Grinder: 3 No's of Billet Grinding machines are planned to bemanufactured indigenously and accordingly procurement action has been initiated forHydraulic items VFD fabricated items Electrical equipment's etc. Major equipments havebeen received at site. Infrastructure facility is being made available for Installation ofthe equipment's. Commissioning is expected in 2nd quarter of FY 201920.Indigenous manufacturing and commissioning helps the company achieve significant costreduction.
Cold Draw Bench: For drawing of hot rolled & forged bars from 40mm to70mm a new Cold Draw Bench is being set up at Hot Rolling Mill. Accordingly procurementaction has been initiated in 4th quarter of FY 2018-19 and commissioning isexpected in 4th quarter of the FY 2019-20.
7.4 The following projects for value addition are ongoing at MIDHANI during the yearunder report:
Wide Plate Mill: To ensure self-reliance in production of extra wideplates / sheets of maraging steel & other strategic materials plates armour platesetc. for Ordnance Factory VSSC DRDO DAE and Navy a Wide Plate Mill facility is beingsetup . The project is in advance stage and about 50% of the construction activity iscompleted till 4th quarter of 2018-19. About 45% of equipment delivered by 4thquarter of 2018-19 and balance is under inspection and finishing stage. Procurement actionhas been taken up for balance auxiliary facilities Electrical & Utility systems etc.The complete facility is likely to be commissioned in 1st quarter of FY2020-21. Further for processing of Armoring plates and other special plates TemperingFurnace is procured. Imported supplies were received in 4th quarter of 2018-19.Domestic material supply is under progress. Civil foundation works for Tempering Furnaceare under progress. Project is likely to be commissioned in 4th quarter of201920.
Construction of Spring Manufacturing Plant; For manufacture and supply ofHelical Compression Springs for Railway Wagons Coaches Locomotives a Spring Manufactureunit is being set up. This unit consists of Spring Coiling Machine Walking Beam furnaceTempering Furnace and End Heating Furnace Scragging Machine Load Testing Machine EndGrinding Taper Rolling Machine etc. Major equipments have been received at site andInfrastructure facility is being made available for Installation of the equipment.Commissioning of equipments is expected in 3rd quarter of FY 2019-20.
Development of Armour unit at Rohtak; Considering increasing globalmarket demand for Body Armour Vehicle armouring Bullet Proof Morcha Bullet ResistantJackets etc and to cater to the needs of domestic market a new unit of MIDHANI is beingestablished at Rohtak Haryana. Construction activities are under progress. Procurementaction has been initiated for major line equipment like Water jet cutting machineHydraulic ballistic press water chiller machine CNT electrical and utilities. Plant islikely to come into operation by end of the FY 2019-20
8. LABOUR PRODUCTIVITY:
8.1 The value added per employee during the year was ' 6.60 Million compared to ' 6.45Million in the previous year.
9. SALES AND OPERATIONAL EFFICIENCY:
9.1 Debt collection was taken up as a focus area for the FY 2018-19. Trade receivableas "No. of Days Sales" has come down to 181 days as on 31.03.2019 compared to227 days as on 31.03.2018. High accumulation of Debtors is primarily on account of highersales in the fourth quarter and the budgets getting exhausted at customers' end which areprimarily Government Departments / agencies.
9.2 Your company has achieved reduction in liquidated damages by 32.32 % as percentageof turnover over previous year during the year under review indicating improved adherenceto delivery schedules and reduction in delivery cycles.
|Year ||Liquidated Damages (' Million) |
|2018-19 ||46.70 |
|2017-18 ||69.00 |
10. DEVELOPMENT OF NEW PRODUCTS THROUGH R&D EFFORTS:
10.1 Our business requires us to keep abreast with the latest developments in relatedfields of science and technology. To be at par with the global technological progress weplace strong emphasis on technology of products process and equipment. A TechnologyAdvisory Board consisting of eminent personalities of Metal Industry regularly meets toguide and review the R&D activities of MIDHANI.
10.2 R&D department's primary focus areas have been Indigenization New ProductDevelopment and Technology Development; MIDHANI is also targeting new areas such asArtificial Intelligence and Intellectual Property Rights. An expenditure of ? 299.71million which is the best ever has been incurred towards R&D expenses for the FY2018
10.3 The in-house Research and Development team works towards improvement of productquality and process innovation for meeting the expected demands at competitive prices. Wehave entered into collaborations with Indian research Institutes and organizations to gainaccess to the required know-how for developing various technologically advanced products.
10.4 Some of the R&D Initiatives undertaken by our company during the year are asbelow:
New Product Development
Successfully indigenized various grades of steels.
Developed hot erosion resistance alloy superfast 868c castings for Coal BurnerSplitter Plates and Impeller.
Successfully indigenized special steel for Space applications.
Successfully developed Nickel based alloy casting for the first time in thecountry.
Manufacturing and Process Technology Development
Development of test procedure for Fracture Toughness measurement resulting insmooth dispatch of MDN 350.
Cost effective melting process route was successfully developed for Nickel basedSuper Alloy via air melting instead of conventional vacuum melting process aiming atapplications in Oil and Gas sectors.
SuperCo605 rings manufactured through innovative and optimized processingparameters resulting in improvement in yield by more than 10%.
3% yield improvement in 6.5T VIM heats with the use of Insulating Hot Topsagainst the conventional Exothermic Hot Tops.
A dedicated team has been constituted to develop roadmap for ArtificialIntelligence (AI) for alloy development and process optimization. A workshop by industryexperts and academicians on Artificial Intelligence for alloy development and processoptimization was conducted during the year.
10.5 In line with MoU parameters for the year 2018-19 our company successfullydeveloped the following product/ grades:
Development of technology for making Ferrotitanium from scrap.
Development and commercialization of Superalloys (Superni 625/Superni 825) forcommercial sectors.
Development and type approval of special Titanium for naval applications.
11. INTELLECTUAL PROPERTY:
11.1 IPR cell has been created to focus on Intellectual Property Rights Management andTraining programs on IPR were conducted in four batches covering 320 employees with thehelp of National Research Development Corporation (NRDC) New Delhi.
11.2 50 Trademarks/Copy Rights and 9 patents were filed during the year and anInnovation cell under "Center of Excellence- Special Materials" was created topromote Innovation and creativity at MIDHANI.
12. ENERGY CONSERVATION:
12.1 During the year under report MIDHANI's efforts towards energy conservation throughSolar Power Plant energy efficient LPG fired furnaces etc. helped in energy savings. Thefollowing initiatives to improve the reliability of the existing system were successfullycompleted during the year:
Installation of Automatic Power factor Control (APFC) Panels at Melt shop-ITitanium Shop Forge shop and Melt shop III Load Center substations
Successful commissioning of 132KV Second line and Open Access metering facility.
Installation of four new energy efficient LPG Fired reheating furnaces at ForgeShop.
Successful completion of the 11KV Cable laying work at Corporate Office and forthe upcoming loads at Kanchan Amour plant
Augmenting 415V Circuit Breaker panels at Hot Rolling Mills (HRM) substation fornew Leveler Machine
12.2 In MIDHANI earlier the data of LPG and Power Consumption was available only atshop level in the downstream shops During the year 2018-19 power meters and LPG meterswere installed in the re-heating furnaces These new meters will be usefull to analyze thefurnace wise consumption of power/fuel. This data when used in the calculation of actualcost of products will give more accurate results Over a period of time this data willbe used to compare efficiencies of the furnaces.
12.3 The summary of consumption of Electricity and LPG for the FY 2018-19 are as below:
|S. No. ITEM ||UNITS ||2018-19 ||2017-18 |
|1 Total consumption of Electricity: ||KWHr (in Crore) ||480 ||460 |
|2 Total consumption of LPG ||MT ||4160 ||4081 |
|3 Specific Consumptions || || || |
|- Electricity Per MT ||KWHr/MT (Prod.) ||1655 ||1759 |
|of Production: || || || |
|- LPG per MT of Production ||MT(LPG)/MT(Prod) ||012 ||016 |
13. MARKETING & BUSINESS DEVELOPMENT:
13.1 During the year under review MIDHANI booked orders worth ? 18441 Million. Theorder book position as on 01-042019 stood at ? 16600 Million. With this order book andfurther orders in pipeline the Company looks forward for good growth with commensurateprofitability for the FY 2019-20. The sector wise orders booked is as under:
|Sector ||Total value of orders (' million) |
|Defence ||1842 |
|Space ||12802 |
|Energy ||3144 |
|Others ||653 |
|Total ||18441 |
13.2 MIDHANI organized a Customer Meet at Ramoji Film City on 22nd June '18and the event was attended by more than 120 customer delegates
13.3 During the year under review seven new customers were added to MIDHANI'sclientele
13.4 The total orders executed during the year under review were to the tune of Rs7108 million and the sector wise sales executed is as below:
|Sector ||Total value of supplies (' million) |
|Defence ||2159 |
|Space ||3086 |
|Energy ||1359 |
|Others ||504 |
|Total ||7108 |
13.5 Considering current market scenario identification of new business opportunitiesbecomes all the more important to survive and grow in this fast changing economy Theprogress made in Business Development during FY 2018-19 is as under:
New segments/markets like Railways and Coal sector were developed during theyear along with new Vendor base for outsourcing the orders of Railway and Mining sector
Received orders worth ? 80.5 Million from ICF Indian Railways for supply ofBogie Plates; development orders for Spring Steel Rods and Al alloy castings; and AlloySteel Rounds order from NCL (Coal India)
14. EXHIBITIONS/SEMINARS FOR PROMOTION OF COMPANY PRODUCTS/BRAND:
14.1 During the year under review MIDHANI participated in the following exhibitions:
Defexpo India a biennial exhibition on Land Naval and Internal HomelandSecurity Systems held from 11th to 14th April 2018 at Chennai.
Army 2018 an International military-technical forum - Exhibition held from 21stto 26th August Moscow Russia.
International Conference on Advanced Materials and Manufacturing Processes forStrategic Sectors (ICAMPS 2018) during 25th to 27th Oct 2019Trivandrum.
Aero India 2019 International Exhibition organized by Defence ExhibitionOrganisation MoD GoI at Bangalore during 20th to 24th February2019 Bengaluru.
Indian Africa Field Training Exercise (IAFTX 2019) during 26th to 27thMarch 2019 Pune.
15. QUALITY MANAGEMENT ACTIVITIES:
15.1 The surveillance audit of the quality management system for compliance to AS9100-2016 & ISO 9001-2015 in-line with the requirements of IAQG (InternationalAerospace Quality group) was successfully completed by M/s DQS India (Accredited by ANAB)in October 2018.
15.2 For the first time in-house training on ISNT Ultrasonic testing Level - II wasorganised in corporate office and 18 participants from various organizations attended thesame.
15.3 A four day in-house training program on ISO 17025-2017 was conducted inNovember'2018 as a part of Quality month for all the officers of QCL by Confederation ofIndian Industry (CII).
15.4 Aeronautical Type Testing of Titan-44 (Beta-2015) alloy cold rolled sheets for usein Light Combat Aircraft (LCA) was successfully carried out.
15.5 Fracture toughness evaluation for MDN 350 tubes was established by meeting thestringent requirements and the same is above the international specification requirements.
15.6 EDM wire cut machines - 2 Numbers were successfully commissioned in QCL. Thesample extraction / preparation for Fracture Toughness and sheet tensile etc. increasedby 50%.
15.7 Two new X-ray machines 450 KV with digital imaging and 320 kV facilities weresuccessfully installed. With the addition of two new machines our best possible maximumthickness of radiography testing has increased from 40mm to 90mm.
16. SUPPLY CHAIN MANAGEMENT PERFORMANCE:
16.1 MSE Vendor Meet: MIDHANI organized a vendor meet for MSE Entrepreneurs on 9thJune 2018. Representatives from over 50 companies participated in the meet.
16.2 Encouragement to Micro and Small Scale Industries: MIDHANI continues toencourage and develop MSE units by regularly sourcing various goods from them. Percentagevalue of goods/ services procured from MSE units stood at 28.13% of total domestic valueof procurement during FY 2018-19.
16.3 Integrity Pact (IP): To ensure transparency and Integrity in all contactsMIDHANI is signing "Integrity Pact" with respective bidders in all high valueprocurement indents. Presently Shri. R Mukundan is holding the position of Independentexternal Monitor (IEM) at MIDHANI. About 91% of total value of contracts/PoS were coveredunder IP during the FY 2018-19.
16.4 E-Procurement: In order to bring higher transparency in procurementMIDHANI is maximizing procurement through e-procurement process. During 2018-19 about 96%of total procurement other than the Open and Hybrid tenders' cases was done throughe-procurement mode.
17. RISK MANAGEMENT:
17.1 MIDHANI has a Board approved Risk Management Policy and the Risks associated withvarious processes in MIDHANI are also being discussed in the internal Production ReviewMeetings and Corporate Management Committee Meetings. A Risk Management Committee in termsof SEBI (LODR) Regulations 2015 has also been constituted. The identification of the riskelements faced by the company is listed out in Management Discussion and Analysis placedas part of the report.
18. HUMAN RESOURCE DEVELOPMENT:
18.1 Human Resource has been recognized as the most important asset of ourorganization MIDHANI continues to aim at building a motivated committed and satisfiedwork force to achieve its organizational goals. The aim is to align Talent Managementinitiatives with Technology for rapid growth of the Company. MIDHANI recognizes that themost important asset is its employees and that could be a major differentiator in the faceof competition. Keeping in view the current trends several HR Policies have been updatedmodified and introduced.
18.2 Man Power Position: The manpower strength of MIDHANI as on 31.03.2019 is469 Non-executives 65 NonUnionized Supervisors and 257 Executives as against 509Non-executives 71 Non-Unionized Supervisors and 272 Executives as on 31.03.2018.
18.3 The total manpower strength under Permanent Category of your Company as on 31stMarch 2019 is as under:
|Particulars ||Non Executives ||Non Unionized Supervisors ||Executives ||Total |
|Male ||418 ||64 ||228 ||710 |
|Female ||51 ||01 ||29 ||81 |
|Total ||469 ||65 ||257 ||791 |
18.4 Employee Welfare Initiatives:
Monetary awards were presented to meritorious students/children of MIDHANIemployees of SC ST and OBC categories. MIDHANI also awards scholarship to the children ofemployees for pursuing graduation in Metallurgical Engineering @ ? 1000/-p.m. tillcompletion of the course.
Post-Retirement Medical Benefit Scheme (PRMBS): PRMBS for Executives andNon-Unionised Supervisors retired after 01.01.2007 and Group Medical Insurance Scheme forEmployees retired prior to 01.01.2007 was implemented and medical insurance cards wereissued to the beneficiaries. Post-Retirement Medical Benefit Scheme for Non-Executivesretired on or after 01.01.2007 was implemented from 01.05.2017 as approved by Board.
School: Brahm Prakash DAV School is run by the Company in MIDHANITownship for the benefit of children of MIDHANI employees. Students have brought glory tothe school in Academics Sports & Cultural activities. Reimbursement @ ? 500/- perchild per month is paid by the Company every month (max. 2 children) for the employee'schildren studying in BPDAV.
Township: MIDHANI continues to discharge its social obligations bymaintaining a Township consisting of 87 quarters to cater to the housing needs of theemployees working in essential services of the company.
Education Scholarship for wards of Workmen / employees of MIDHANI Studying inBPDAV School:
As a part of welfare initiative towards employees and to promote education among wardsof employees MIDHANI provides an Education and Merit Scholarships to the wards ofemployees as detailed below:
(a) Education Scholarships (WG-0 to WG-5): The Wards of Workmen are eligible forEducation Scholarship of ? 300/- per month.
(b) Merit Scholarships: Applicable to all Employees of the Company. The ward of theemployee who is studying in a class (1 to X) and stood 1st & 2ndrank in the final examinations in the previous class will be eligible for meritscholarship @ ? 6000/- and ? 3000/- Per annum respectively.
"ON JOB" Training policy for the ward of employees of MIDHANI: Inorder to boost the morale and loyalty of employees towards MIDHANI and also to giveexposure to young graduates MIDHANI under the CSR initiatives operates an IndustrialTraining Programme for the wards of Employees who are on the rolls of the company andwards of the employees who passed away while in service.
18.5 Women Empowerment: MIDHANI is extending all facilities as per the statutesfor the welfare of the women employees. There are a total of 81 women employeescollectively working at par with men towards achieving the Company goals. Women employeesof MIDHANI belonging to Executive Supervisory and Non-Executive cadre are spread outacross all the functions of the company ranging from Material procurement productionmaintenance Dispatches to support services such as Civil Finance HR and Marketing etc.
19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
19.1 In accordance with Ministry of Corporate Affairs notification no. GSR 463(E) datedJune 05 2015 Government Companies are exempt from Section 197 of the Companies Act 2013and its rules thereof.
20. TRAINING & DEVELOPMENT:
20.1 Continuous up gradation of knowledge and skills of the employees throughappropriate training and development programs is one of the focus areas at MIDHANI.Accordingly during the year under report 1931 man days of training was imparted to 597Executives (including Non-Unionized Supervisors) and 305 Non-Executives i.e. 902Employees both in-house and through external training programs. Special emphasis is givento the development of employees under SC ST OBC PWDs and Minority category.
20.2 Quality of Life: Special Training programs for employees along with theirspouses were conducted in two batches for balancing their personal and professional life.The programs were conducted with the help of Central Workers Education Board Hyderabad.
20.3 Plant Visits: Under the Industry-Academia- Interface program 12 plantvisits were organized during the year with participation of about 240 professionals/executives/ employees from various organizations.
20.4 Project Works: 50 Engineering Students from various branches of engineeringfrom reputed Institutions/Govt. Colleges were also permitted to carry outProjects/Internship training as part of their academic curriculum.
20.5 Apprenticeship Training: MIDHANI is committed towards fulfilling itsobligations under Apprentices Act 1961. Under the scheme 30 Sandwich Diploma Engineering(Metallurgy) students from Government Polytechnic Colleges received on job training for aperiod of six months in 2 batches. 85 trade apprentices like Electrician Fitter WelderMachinist and Turner were engaged for on the job training for one year. Likewise 32Graduate Apprentices Trainees (GATs) and 5 Technician Apprentice Trainees (TATs) wereengaged for one year training.
20.6 National Productivity Week Celebrations-2019: The National Productivityweek was celebrated in association with National Productivity Council Hyderabad from 12thto 18th February-2019 with the theme "Circular Economy for Productivityand Sustainability"
21. STATUTORY & SOCIAL OBLIGATIONS:
21.1 CORPORATE SOCIAL RESPONSIBILITY:
The Corporate Social Responsibility and Sustainable Development Policy ofMIDHANI in line with the Companies Act 2013 was approved by the Board of MIDHANI. For theyear under review MIDHANI has incurred its highest ever expenditure of ? 39.35 million forCSR activities against the mandatory requirement of ? 36.49 million. Thus the cumulativeCSR expenditure incurred by MIDHANI over the years is about ? 209 Million.
An annual report on the CSR activities of the company including the compositionof the CSR Committee in MIDHANI as mandated under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is also placed at ANNEXURE - II.
The projects taken up for CSR activities by your company during the year underreport fall under below mentioned areas:
(i) Promotion of Health Care and Sanitation
(ii) Promotion of Education
(iii) Skill Development
(i) Promotion of Health Care and Sanitation:
(a) Construction of Toilets: Toilets were constructed in Government School atCPS Jillelguda and Khammam District with a Total Project Expenditure of approx. ? 4.68million. The same is expected to benefit 2000 students including boys and girls.
(b) Annual maintenance of Toilets constructed by MIDHANI under Swachh Bharat:
To ensure regular use and to promote sanitation MIDHANI has ensured maintenance andregular upkeep of 45 toilet Blocks in various Government schools at an expenditure of ?2.44 million the same has benefitted approximately 7000 students.
(c) Sanitary Vending Machines and Incinerators: MIDHANI installed SanitaryVending Machines and Incinerators at Government Schools and at schools near MIDHANI at anexpenditure of ? 0.75 million.
(d) Charitable Health Care Centre: MIDHANI has set up a Charitable Health CareCentre for the poor families staying in and around MIDHANI. Basic checkup and medicinesare provided at free of cost to the patients. Expenditure incurred in hiring of Doctor andMedicines is ? 0.301 Million.
(e) Lift facility at Medical College: MIDHANI sponsored passenger Lift toRangaraya Medical College Kakinada for the benefit of senior faculty members physicallychallenged students and most importantly the patients particularly pregnant ladiespatients suffering from orthopedic and neurological problems having difficulty in climbingstaircase. An expenditure of ? 0.73 million was incurred in this regard.
(ii) Promotion of Education:
(a) Mid-day meal to Government Schools: MIDHANI sponsored mid-day meal toapprox. 455 students of Government Schools at Kothagudem through M/s Akshya PatraFoundation at an expenditure of ? 0.5 Million.
(b) School Beautification: MIDHANI took up the painting and repair works atnearby schools and incurred an expenditure of ? 4.24 million in this regard.
(iii) Skill Development:
Adoption of ITI Alwal: As per the scope of MoU signed with ITI AlwalMIDHANI is to provide assistance for various civil works such as construction of compoundwall and toilets up-gradation of computer lab civil renovation of hostel buildingworkshops furniture for class rooms setting up of library furniture fans and tubelights financial assistance for employment of teaching staff etc. The execution is stillunder progress and expenditure of ? 3.03 Million was incurred during the year.
Construction of Center of Excellence: Following the instructions ofMinistry of Defence Govt. of India MIDHANI under its Corporate Social Responsibility& Sustainable Development Policy is setting up a state-of-the-art Skill DevelopmentCentre in accordance with Schedule VII of Companies Act. Accordingly construction andinfrastructure work at Centre of Excellence has been taken up and expenditure of ? 20.82Million was incurred during the year.
Promoting Innovation: MIDHANI contributed a sum of ? 1 Million to Centrefor Innovation Incubation & Entrepreneurship (CIIE) at Indian Institute of Management(IIM) Ahmedabad for promotion of Innovations for Defence Excellence (iDEX) an initiativeof the Government of India launched by the Hon'ble PM.
Joy of Giving: As part of MIDHANI's commitment towards New DevelopmentModel for the country a camp was organized at "Thakur Hari Prasad Institute ofResearch And Rehabilitation For The Mentally Handicapped (THPI)" under the title"Joy of Giving" at an expenditure of ? 0.1 Million.
(iv) Others: Other CSR expenditure during 2018-19 stood at ? 0.56 Million.
21.2 DISCLOSURE UNDER SEXUAL HARRASEMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
Your company has always believed in providing a safe and harassment freeworkplace for every individual working in the company and women in particular. Anenvironment 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 ofcomplaints related to sexual harassment and follows the guidelines provided in the policy.During the year under review the Internal Complaints Committee (ICC) did not receive anycomplaint pertaining to sexual harassment.
21.3 CONTRIBUTION TO EXCHEQUER:
Your Company contributed an amount of ' 1627.22 Million in the form of DividendDuties and taxes during the FY 2018-19 as compared to ' 1449.23 Million in the previousyear.
21.4 EXTRACT OF ANNUAL RETURN:
The extract of Annual Return as provided under sub-section (3) of section 92 ofCompanies Act 2013 is enclosed at ANNEXURE - III
21.5 REPORT ON CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
Report on conservation of Energy Technology Absorption and Foreign Exchangeearnings and outgo is enclosed at ANNEXURE - IV
21.6 BUSINESS RESPONSIBILITY REPORT:
The Securities and Exchange Board of India (SEBI) has mandated inclusion ofBusiness Responsibility Report ("BR report") as part of the Annual Report for500 listed entities based on market capitalization. Your Company has prepared acomprehensive policy framework for BR report after studying the SEBI (LODR) Regulations2015 requirements and keeping in view the Business and Governance environment in whichMIDHANI operates. The Company's BR report for the year is attached to this report as ANNEXURE-V.
21.7 IMPLEMENTATION OF RTI ACT 2005:
MIDHANI as a Public Authority under RTI Act 2005 continued to discharge itsobligations. The number of information seekers has gone up considerably during the year.Inorder to have access to information to the Citizens and also as a part of company'sphilosophy and corporate governance MIDHANI's web site is updated on continuous basis byuploading the company's news and developments.
21.8 RAJBHASHA IMPLEMENTATION:
Govt. of India directives the Official Language Act 1963 the Official LanguageRules 1976 made there under and the orders issued by Government of India from time to timefor promoting the use of Hindi for Official purpose are complied by MIDHANI withoutdeviation. Four (4) quarterly meeting of Official Language Implementation Committee wereheld under the Chairmanship of Chairman & Managing Director of the Company during theyear under report.
MIDHANI continues to encourage usage of Hindi as the Official Language and inorder to encourage daily usage of official language to carry out day-to-day official workFive (5 nos.) Hindi Awareness Workshops were organized for the employees during the yearunder report. Prabodh Praveen and Pragya Hindi training courses were also conducted forthe employees during the year under report.
"HINDI MAHOTSAV" was organized for the propagation of Hindi at largescale in the month of September 2019. 'HINDI DIWAS' was celebrated on 8thOctober 2019 and "Vishwa HINDI Diwas" celebrated on 10th January2019. Inspection of Official Language Implementation was conducted on 13thNovember 2018 by a team of Jt. Director Rajbhasha and Sr. Hindi Translator DDP and theefforts taken by MIDHANI Management to propagate OL were appreciated.
21.9 RELATED PARTY TRANSACTION:
Disclosure of related party transactions as per Ind AS-24 issued by the Institute ofChartered Accountants of India is given at note no 42 of the Notes forming part of AnnualAccounts for 2018-19. Transactions if any covered under related party transactions werefair transparent and at arms' length and were pre-approved by competent authoritynominated for this purpose. The deviation from Ind AS if any has been explained by theDirectors in their report to shareholders.
22. VIGILANCE ACTIVITIES:
22.1 The company's vigilance set up is headed by a Chief Vigilance Officer. PreventiveVigilance has been the thrust area of the Vigilance department and Vigilance departmentexamines major procurements/contracts conducts regular and surprise inspections. CTE typeinspections and structured meetings between C&MD and CVO continued to be regularactivities of Vigilance.
22.2 In line with the CVC guidelines on Leveraging Technology and to ensureTransparency through effective use of Technology tools like e-Procurement e-PaymentOn-line Vendor registrations etc. are made operational through the company's website andalso details of contracts awarded above ? 0.50 Million are being posted in the companywebsite.
22.3 Some of the key activities that have been carried out during the year are;
Organized Vigilance Awareness Week form 26th October to 03rdNovember 2018 with theme "Eradicate Corruption - Build a New India". Sixth issueof the In-house Vigilance magazine "JAGRUTI" was released during the week. Otheractivities during the week long awareness programs included competitions involvingemployees students of local Govt. schools and Junior colleges technical sessions byexperts etc. to create awareness and sensitize citizens towards the impact of corruption.
Implemented a dedicated On-line Vigilance Clearance module and vigilanceclearances are being accorded through online mode only.
To increase the competency levels of employees they were deputed to differenttraining programs and workshops on subjects like "Workshop on PreventiveVigilance" "Corporate Governance" "Advanced leadershipprogram" "Risk mitigation through Forensic Examination" etc.
23. VIGIL MECHANISM:
23.1 The Whistle Blower Policy was initially adopted by the Board of Directors at its206th Meeting held on January 23 2013. The same was subsequently amended inline with the latest "PIDPI" guidelines by Vigilance department and the WhistleBlower Policy - 2018. The updated policy works as Vigil Mechanism of MIDHANI. The WhistleBlower Policy of MIDHANI is available at the linkwww.midhani-india.in/doc/MDN-WHISTLEBLOWER-POLICY-2015.pdf
24. AWARDS AND RECOGNITION:
24.1 At the 56th National Metallurgists Day (NMD) organized at Kolkata on14.11.2018 Dr Dinesh Kumar Likhi C&MD MIDHANI was bestowed with Tata Gold Medal inrecognition of his Outstanding Contribution to Metallurgical Industries in India.
24.2 MIDHANI was awarded HR-Excellence Award for Value Growth in the Non-financialcategory on 17.01.2019 at the Governance Now 6th PSU Award.
25. VISITS AND INTERACTIONS WITH DISTINGUISHED GUESTS:
25.1 Dr. Ajay Kumar Secretary (DP) visited MIDHANI on 21st July' 18 andinaugurated the 4MW Solar Power Plant.
25.2 Shri. S Somanath Director VSSC visited MIDHANI on 30th July'18
25.3 Dr. V Narayanan Director LPSC visited MIDHANI on 1st Nov'18
26. CORPORATE GOVERNANCE:
26.1 The basic principles and philosophy of Corporate Governance is followed in letterand spirit in every aspect of Company's decision making in tune with the contemporarydemand for good Corporate Governance and adherence to guidelines issued by Department ofPublic Enterprises from time to time. A Code of Business Conduct and Ethics applicable toall Board Members and Senior Management has been implemented in the Company. Theadherence to the code is confirmed by respective members on an annual basis. A declarationto this effect by Chief Executive is made part of this report.
26.2 A detailed report on Corporate Governance and a report on the ManagementDiscussion & Analysis are part of this report. Certificate for adherence to theguidelines issued by DPE in this regard and SEBI LODR Regulations 2015 duly signed by apracticing Company Secretary is also made a part of this report.
26.3 In accordance with Revised Grading norms for CPSEs in the matter of compliance ofGuidelines on Corporate Governance issued by DPE your Company has scored 100% for the FY2018-19.
27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
27.1 The company has put in place necessary Internal Controls and Systems to meet allthe canons of financial propriety. We believe that internal control and risk managementare necessary pre-requisites for implementing the principle of governance. We have aneffective Internal Control System which ensures that all our assets are safeguarded andprotected against loss.
27.2 External Audit firm M/s. Pary & Co. were engaged to carry out Internal Auditduring the year under report. This helped ensure adequacy of systems and controls. Theirreports thereon were further reviewed by the Audit Committee appointed by Board. Inaddition the In-house Internal Audit team also regularly carries out audits of specificprocesses. Internal Audit Reports along with corrective actions initiated are discussedwith the Management and are reviewed by the Audit Committee of the Board. The AuditCommittee also reviews the adequacy and effectiveness of internal controls.
27.3 No cases of fraud were reported by the Auditors during the year under report.
28. BOARD OF DIRECTORS:
28.1 The Board of your company comprises of Eight (8) Directors i.e. Three (3)Functional Directors One (1) Government Nominee Director and Four (4) Non-OfficialPart-Time (Independent) Directors all eminent personalities with vast experience fromdiverse fields.
28.2 In line with orders received from Administrative Ministry vide MoD Letter No.8(80)/2015-D (Coord/DDP) dated 30.05.2018 Shri Sanjay Jaju (DIN: 01671018) was appointedas Government Nominee Director on the Board of MIDHANI w.e.f 30.05.2018. A brief profileof Shri Sanjay Jaju is enclosed at ANNEXURE-VI
28.3 Presidential Orders were received vide MoD Letter PC.No 11(57)/2017/MDN/D(NS)dated 22nd November2018 for re-appointment of Shri I.V Sarma Dr. JyotiMukhopadhyay and Dr. Usha Ramachandra as part-time Non- Official Directors on the Board ofMishra Dhatu Nigam Limited (MIDHANI) for a period of one year from the date of completionof their existing tenure in MIDHANI.
28.4 Performance Evaluation: The Company is a Government Company and IndependentDirectors are appointed / reappointed by the President of India through AdministrativeMinistry. The evaluation of the performance of the Independent Directors and theirfulfillment of Independence criteria as specified in the Regulations are being carriedout by the Government of India as per its own processes and the Board of the Company hasno role to play in this regard.
28.5 The company is a Government Company and Directors are appointed/ re-appointed bythe President of India through the Administrative Ministry.
29. DECLARATION AND MEETING OF INDEPENDENT DIRECTORS:
29.1 The Company has received declarations from all the Independent Directors of theCompany confirming that they meet the criteria of independence as prescribed under theCompanies Act 2013. A separate meeting of Independent Directors in line with thestatutory provisions was held on March 16th 2019 wherein all the IndependentDirectors were present.
30. DIRECTORS' RESPONSIBILITY STATEMENT:
30.1 Requirement under Section 134 (3) (c) of the Companies Act 2013 with respect toDirectors' Responsibility Statement is confirmed as under:
a. That in the preparation of the Annual Accounts for the financial year ended 31stMarch 2019 the applicable Accounting Standards have been followed along with properexplanations on the material departures;
b. That the Directors have selected such Accounting Policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year i.e. 31st March 2019 and of the Profit or Loss of the Companyfor the year ending on that date;
c. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013as amended from time to time for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
d. That the Directors have prepared the accounts for the financial year ended on 31stMarch 2019 on a 'going concern' basis.
e. That the Directors have laid down Internal Financial Controls to be followed by thecompany and that such internal controls are adequate and are operating effectively; and
f. That the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
31.1 Statutory Auditors: C&AG of India appointed M/s. Basha &Narasimhan Chartered Accountants Hyderabad as Statutory Auditors of the Company forconducting audit of accounts for the year ended 31st March 2019.
31.2 Cost Auditor: Your Company appointed M/s. Sandeep Zanwar & AssociatesCost Accountants Hyderabad as Cost Auditors for the year 2018-19 in terms of Section 148of Companies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014.
31.3 Secretarial Auditor: In terms of Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014your Company appointed M/s R&A Associates Hyderabad as Secretarial Auditors of theCompany for the FY 2018-19. The Secretarial Audit report is placed at ANNEXURE - VII.
31.4 Internal Auditor: Your Company engaged M/s. Pary & Co. to conductInternal Audit for the financial year 2018-19.
32. COMMENTS OF COMPTROLLER & AUDITOR GENERAL OF INDIA:
32.1 The comments on the Accounts by the Comptroller and Auditor General of India forthe year ended 31st March 2019 are placed in this report after the report ofthe Statutory Auditors.
33.1 The Board of Directors are extremely thankful for the continued patronage andgratefully acknowledge the valuable support and assistance received from all Governmentagencies particularly from Ministry of Defence all establishments under DRDO and otheragencies of Central and State Government. Your Directors also place on record sincerethanks to vendors Bankers C&AG Statutory /Internal Auditors Chairperson - AuditCommittee Chairman of other Sub Committees of the Board Advisers Consultants etc. ofthe Company for their continued support and guidance during the year.
33.2 Your Directors take this opportunity to place on record their deep appreciationfor the valuable contribution made and excellent co-operation rendered by all theemployees.
33.3 Your Directors express their appreciation and gratitude to all theshareholders/investors for the trust and confidence reposed in the Company and lookforward 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 : 29.05.2019 || |