It gives me immense pleasure to welcome you all for the 47th Annual General Meeting of MIDHANI. As we reflect on the year passed, we are predominantly proud of achievements, resilience of team MIDHANI and the inherent strength of our technology as well as innovation. FY 2020-21 was the year when the vicious effect of COVID-19 pandemic and the challenges faced thereby on humanity affected us. On account of the COVID-19 pandemic, the world has faced unprecedented challenges. With loss of lives, livelihoods and stress on global supply chains, the economic crisis world over has significantly increased.
We all got a good amount of change during the course of FY 2020-21, whether it was working from home, virtual interactions, or staying indoors for days at a time, we had to adapt to something completely new. At MIDHANI, we managed to adapt challenges and in these challenging times, MIDHANI has recorded its highest ever Sales turnover of ₹ 81,323.08 Lakh. We continued to leverage our operational and technological capabilities to tide through difficulties. We are also keen to capitalise on emerging opportunities arising from the governments emphasis on ‘Make in India’ products. As an indigenous manufacturer, we are also poised to fulfil l the country’s vision of ‘Aatmanirbhar Bharat’.
Performance highlights FY 2020-21:
For MIDHANI, FY 2020-21 has been a year of excellent performance and I am delighted to share with you our progress during the year. We recorded highest ever revenues of ₹ 81,323.08 lakh, despite the disruptions caused by the pandemic, registering y-o-y growth of 14.08 % in comparison to ₹ 71,287.57 lakh in the previous fiscal. For FY 2020-21, MIDHANI has achieved highest ever operating profit of ₹ 20,626.27 Lakh for FY 2020-21 vis-à-vis ₹ 16,564.99 Lakh for FY 2019-20, registering y-o-y growth of 24.52%, Profit Before Tax (PBT) at ₹ 22,609.39 Lakh vis-à-vis PBT of ₹20,208.62 Lakh for FY 2019-20, registering y-o-y growth of 11.87% and the highest ever Profit After Tax (PAT) of ₹ 16,629.15 Lakh vis-à-vis ₹ 15,973.38 Lakh achieved for FY 2019-20, registering y-o-y growth of 4.11%. Highest ever export turnover of ₹ 1,942.47 Lakh was also recorded during the FY 2020-21 vis-à-vis ₹ 1,042.04 Lakh for FY 2019-20, registering y-o-y growth of 86.41%.
In the beginning of the FY 2020-21, our Business operations were shut down for 45 days due to COVID-19 pandemic induced lockdown. The ideology of ‘Extraordinary time’s call for extraordinary efforts’ adopted by our workforce during challenging times helped us pave out a recoup plan, and within 15 days of reopening, our plant operations were brought in order. This indomitable spirit of our workforce is what helped us surmount the odds and record our best ever performance. Post lockdown, process optimization, managing capital expenditure, working capital requirements were key factors that were addressed by Management. These efforts, cumulatively have shaped FY 2020-21 as a best ever in terms of Sales, Operating Profit, Profit Before Tax (PBT) & Profit After Tax (PAT).
When compared to the previous fiscal year, the Value of Production (VoP) has decreased by 20.4% to ₹ 77,164.22 Lakh in FY21. Owing to our operational efficiency, our EBITDA margins also recorded an impressive 24.06 % y-o-y growth. EPS for the year stood at ₹ 8.88 and our Company recommended/ declared Dividend of ₹ 2.78 per equity share @27.80% for FY 2020-21
As at April 1, 2021 MIDHANI had an order book of ₹ 1,37,200 Lakh, out of which Company booked order worth ₹ 50,480 Lakh during FY 2020-21.
Leveraging our core strength:
During the year, MIDHANI has dispatched its first consignment of high temperature alloy for the ‘Kaveri Dry Engine Program’, for powering Unmanned Combat Aerial Vehicle (UCAV) which shall be used for various Class I and Class II components of the engine. We have also developed spider casting, fulfilling stringent Aerospace requirements for ‘Semi CryoEngine of Satellite Launch Vehicle’. Our indigenously manufactured impellers, made of Nickel based Super Alloy were delivered to customers and we have also delivered first ever consignment of Superfer 800 (Alloy 800) SG Tubes to BHEL, Trichy, for its application in power reactors
The strength of our operation stems from innovation in our production processes, combined with increased efficiency and resource utilisation. We aim to leverage our design, engineering and manufacturing capabilities to widen our offerings in defence and aerospace markets. Moreover, we are making concerted efforts to enter new markets of oil and gas, mining, power, railways, chemicals and fertilizers. With continued focus on growth and modernisation, improvement of R&D capacities and the strength of our human resources, we strive to fulfil our ambitious plans. To successfully accomplish our goals, we have collaborated with Indian and multinational research institutions to gain access to the necessary know-how for producing critically advanced technology products.
Contributing to the vision of ‘Aatmanirbhar Bharat’:
Government of India laid down the foundation of “AatmanirbharBharat” on the premise of “आपदा को अवसर” wherein list of 101 items for embargo on the imports were notified in August, 2020. Subsequently, a ‘Second Positive Indigenisation List’ consisting of 108 items were also notified in May, 2021 to further boost indigenisation with active participation of public and private sector for fulfilling the twin objectives of achieving self-reliance and promoting defence exports. These initiatives by Govt. of India will nourish India’s overall Defence manufacturing ecosystem. MIDHANI has taken number of initiatives in diversification and modernization of business and operation activities. During FY 2020-21, MIDHANI has spent ₹ 15,825.79 Lakh towards capital expenditure. With key projects like ‘Wide Plate Mill’ and “Springs” to be commissioned soon along with the facility at Rohtak, Haryana dedicated for armour solutions, MIDHANI is well poised to play a pivotal role to facilitate self-reliance in Defence as envisaged by Govt. of India.
Innovation, Research & Development (R&D):
The product requirements of our customers changes and evolves regularly, and we invest substantial amounts in research and development efforts to pursue advancements in a wide range of technologies and products. At present, there are hundreds of grades that MIDHANI manufactures, and each grade has unique specification which makes R&D as an inevitable part of our process and procedures. As a testament to our efforts in R&D, we were granted two (2) patents during the year.
Our emphasis on research and development enables us to adopt advanced technologies that aid the production of superior quality alloys and other products. It also allows us to achieve cost efficiencies and expand the scope of our operations across sectors. During the year under review, we have invested around ₹ 574.31 Lakh for R&D.
Sustainability & creating value:
During FY 2020-21, as the society was reeling against pandemic, it was important for our Company to reach out to the society through various initiatives including health, sanitation, education, skill development etc. We consider it our responsibility to serve the communities in which we operate and create value for all our stakeholders. During FY21, the company undertook various CSR initiatives under health, sanitation, education, sports and skill development, spending around ₹ 350.92 Lakhs for various activities.
During the COVID-19 outbreak, MIDHANI has set up shelter and beds for COVID+ patients and distributed ration kits to families and people in need. For treatment of COVID affected patient our Company has provided immediate medical relief and also provided an emergency helpline no. which were helpful to address emergencies. A state of art Primary Health Care Centre is also being set up to cater to the medical needs of public living in and around MIDHANI.
To minimise the impact of our operations on the environment and atmosphere, we strive to reduce our emission and discharge effectively. Due to our compliance with EHS norms, MIDHANI was awarded ISO 14000:2015 (EMS) Certification for Environmental management and ISO 45001:2018 (OHSMS) Certification for Occupational Health and Safety Assessment during the year. At sustainability front, MIDHANI has devised ways to conserve energy, During FY 2020- 21 MIDHANI has been certified with ISO 14001:2015 (Environmental Management System).
Building a people-centric organisation:
At MIDHANI, we attribute our success to our employees; the value added per employee was highest during FY 2020-21. Therefore, we diligently focus on creating conducive working environment for our people, offering them opportunities for personal as well as professional growth. We organised skill development programmes and trainings to improve their careers, enhance their expertise and boost future-ready managerial talents.
Our constant emphasis on the health and well-being of our people enabled us to formulate a COVID response mechanism, immediately after outbreak of the COVID-19 pandemic. Post COVID-19 outbreak, MIDHANI took pre-emptive initiatives to ‘break the chain of transmission’ such as, distribution of face masks, face shields, extensive sanitization, thermal screening, social distancing and distribution of immunity booster kits. MIDHANI also facilitated COVID-19 testing by tying up with laboratories; no deduction were made in salaries of employees during lockdown period; including salaries to casual employees.
At the onset of pandemic, Human Resource department of MIDHANI, was in constant touch with employees who were impacted with COVID. MIDHANI has also made ex-gratia payments, tweaked employee welfare scheme to minimise the financial distress laid on families/ individuals due to COVID-19. Even with our best efforts and all the preventive measures, we lost four of our employees to the pandemic. We at MIDHANI, stand in solidarity with their families and will forever be grateful to their contributions and efforts.
To ensure transparency and accountability across organisational processes, the Company abides by ethical policies that ensure good governance. Our Board and Senior Management confirm adherence to the code of conduct on annual basis and we continuously evaluate and upgrade policies and procedures to keep the organisational integrity intact and uphold values. MIDHANI continues to follow in both letter and spirit, the guidelines issued by the Department of Public Enterprises from time to time. We are happy to report that, your Company scored 100% as per the revised grading norms for CPSEs, conducted by the DPE on compliance of guidelines on Corporate Governance issued by them.
Further, we have been bestowed with various awards during the FY 2020-21 including Excellence in Industrial Productivity, Excellence in Research & Development, at FTCCI Excellence Awards, Certification of Appreciation presented from DRDO, SKOCH Order of Merit and SKOCH Gold Award for “Modernization and Diversification of Product & Process at MIDHANI” under “Corporate Excellence”, and Certificate of Commitment for ‘4-star rating’ in EHS practice, to name a few.
Moving forward, we remain optimistic about our future endeavours. Our continuous success in indigenisation of subassemblies for Aero, Naval and Energy applications coupled with Government initiatives in this regard has opened new avenues of success in the Indian defence sector. Resilience and innovation will continue to remain constants in MIDHANI’s future growth plans and I hope that MIDHANI scale greater heights in the coming years.
On behalf of the Board, I want to express my deepest gratitude to everyone who engaged themselves in the battle against COVID-19. I would also like to thank all our valued shareholders for your constant support and belief in our abilities. I am grateful to my colleagues on the Board for their valuable guidance, and acknowledge the immense contribution and dedication of our employees towards the organisation. I also acknowledge the enormous amount of goodwill and support that we have received from our customers, the Department of Defence Production and all Government agencies particularly the Government at the Centre, State and local bodies who have provided valuable guidance and support in Company’s Management.
Dr. Sanjay Kumar Jha
Chairman & Managing Director