69th Annual General Meeting of HMT Limited

My Dear Shareholders

It is my proud privilege and honour to lead the growth initiatives ofHMT after taking over the responsibility on 25th August 2022. I take this opportunity towelcome you all on my and Board of Director's behalf. I convey my best wishes to you alland pray for your health and wellbeing. This year also began with challenges related tothe onslaught of COVID however situation turned better towards the fag end. Now we arealready witnessing recovery and hope to pick up the momentum and move fast.

The Notice convening AGM the report of the Directors Auditors and theAudited Accounts for the year ended 31st March 2022 has already been provided to all theshareholders of the Company and with your permission I take them as read.

Global Outlook

As per IMF's World Economic Outlook April 2022 global growth isprojected to slow down from an estimated 6.1 per cent in 2021 to 3.6 per cent in 2022 and2023. However global manufacturing production increased by 9.4 per cent in 2021 afterthe pandemic-related drop of 4.2 per cent in 2020. The reports reveal varying trendsacross industrial sectors. Many of the higher-technology industries have already reachedand exceeded their pre-pandemic production levels. However one exception to this is themanufacturing of motor vehicles. The sector has not been able to return to productionlevels prior to the pandemic level partly due to chip shortages.

Indian Economy

India is estimated to be the fastest growing economy at 8.2% in 2022and 6.9% in 2023 as per IMF estimates. The Indian economy has fully recovered to thepre-pandemic real GDP level of 2019-20 according to the estimates released on May 312022. Real GDP growth in FY 2021-22 stands at 8.7% which is 1.5% higher than the real GDPin FY 2019-20. These figures are associated with stronger growth momentum indicatingincreased economic demand. The investment rate in the last quarter of FY 21-22 increasedto its highest level compared to previous nine quarters. Moreover capacity utilisation inthe manufacturing sector rose in the fourth quarter as against the third quarterimplying a build-up in demand which is consistent with the growth objectives of theIndian economy.

Future capital spending of the government in the Indian economy isexpected to be supported by factors such as tax buoyancy streamlined tax system thoroughassessment and rationalisation of the tariff structure and digitisation of tax filing. Inthe medium term an increase in capital spending on infrastructure and asset-buildingprojects is set to increase growth multipliers. Furthermore revival in monsoon and Kharifsowing helped the agriculture sector gain momentum.

India has emerged as the fastest-growing major economy in the world. Wehave become the fifth largest economy and is expected to be one of the top three economicpowers globally over the next 10-15 years backed by its robust democracy and strongpartnerships.

Manufacturing and impact on Future of Indian Economy

The Government of India has identified manufacturing as critical to thefuture of the economy. The Make in India program has been launched by Government of Indiawith a lofty objective to place India on the world map as a manufacturing hub and giveglobal recognition to the Indian economy. Government aims to create 100 million new jobsin the sector in short term. According to Department for Promotion of Industry andInternal Trade (DPIIT) India received a total foreign direct investment (FDI) inflow ofUS$ 58.77 billion in FY 2021-22. Government has announced Productivity linked Incentiveschemes for 14 sectors with an outlay of approximately Rs 283000 Crores and the schemeshave received tremendous response. The PLI scheme aim to develop capacities in the localsupply chain introduce new downstream operations and incentivize investments intohigh-tech production. Each PLI scheme is applicable for a four to six-year durationperiod depending on the sector. This is expected to give boost to manufacturing sector inIndia.

In July 2021 the Government of India launched six technologyinnovation platforms to develop technologies and thereby boost the manufacturing sectorin India to compete globally. I am glad to inform that HMT is a part of one of theseplatforms 'SURGE' - launched with assistance from MHI to promote collaboration andsharing of knowledge expertise and experience amongst Industries R&Ds AcademiaMSMEs Start-ups Professionals Students etc. along with the policy makers in the MachineTool Sector.

Road Ahead

With the renewed focus on Manufacturing this sector has the potentialto reach Rs 750000 Cr by 2025. Government is also outlined a plan in August 2021 toreach its goal of Rs 7500 Crores in manufactured goods exports. With impetus on developingindustrial corridors and smart cities the Government aims to ensure the manufacturingsector takes its premier place again. Your company is also in the process of taking thebenefit of this initiatives and expand the business.

Performance & Business accomplishments

During the year 2021-22 HMT Ltd has generated a total income of Rs81.74 Crores. However the company focussed on getting more turnkey project orders duringthis period and succeeded procured an order for 30MTPD milk powder making plant order. TheProfit Before Tax during 2021-22 is Rs. 38.35 Crore as against Rs. 31.58 Crore in theprevious year a growth of 21.4%.

HMT Group of Companies which includes HMT Machine Tools Ltd andHMT(International) Ltd has achieved an aggregate Production of Rs. 126.51 Crore andrevenue of Rs. 175.74 Crore from operations during 2021-22.

The growth of dairy industry is fuelling the demand for dairyprocessing equipment in the sector. The Company is bringing out new products andequipments to capture the emerging demand. The company has also launched AMRUT series ofHMT Watches on the occasion of 75th Independence Day to commemorate "Azadi Ka AmrutMahotsav". These watches have been well received by the market.

Initiatives at the Subsidiaries

The Subsidiaries of your Company undertook several initiatives duringthe year 2021-22.

Machine Tools Business

HMT Machine Tools Limited achieved Sales of Rs.152.53 Crore andProduction of Rs. 117.12 Crore during the period as compared with Rs. 165.82 Crore and Rs.161.20 Crore respectively during the previous year. The Company' net loss registered atRs. 145.73 Crore as against Rs.132.79 Crore in the previous year. The Company procuredorders valued Rs.88.75 Crore against Rs.115.20 Crore in the previous year. The reductionin production and sales as well as increase in loss was mainly due to the effect ofCovid-19. Technology Tie-ups for technology enhancement and product upgradation are on theanvil.

Our Machine Tools Factory Ajmer has indigenously developed a Twin HeadCNC Heavy Duty Grinding Machine during the year for Indian Railways for grinding axels.This machine grinds both end diameters of axels simultaneously in one cycle thusincreasing productivity. This machine is an initiative under the "Atma NirbharBharat" and was developed as an import substitution machine which was earlierimported from Spain. The cost of the machine is half of the imported machine. The companyexpects to get more orders for this machine.

Our Machine tool Unit at Kalamassery has developed and supplied onesurface wheel lathe. This is again an import substitute product and saves 30% costcompared to the existing single supplier. Application of Surface Wheel Lathe is forprofiling and re-profiling of both the wheels simultaneously in one cycle thus increasingproductivity

Exports

The other operative subsidiary HMT (International) Limited hasachieved a turnover of Rs. 10.91 Crore as against Rs. 19.83 Crore recorded in the previousyear. The Company has recorded a Net Profit before Tax of Rs. 0.28 Crore as against Rs.1.20 Crore previous year.

The subsidiary has signed order of Rs. 10 Crore. Agreements have beensigned for execution of various projects and supplies abroad and completed certainprojects abroad. Several machines have already been supplied under these Agreements and itis expected that the project would be completed during the current year. Company isworking on many fronts in overseas market to enhance its business.

Action on directions from Government for Closure of subsidiaries andTractor Division

As per decision of the Government the operations of HMT WatchesLimited HMT Chinar Watches Limited HMT Bearings Limited and HMT Tractor Division havebeen closed and all the employees have been relieved.

HMT Chinar Watches Ltd was taken up for voluntary winding up undersection 59 of IBC Code. After due procedures Hon'ble NCLT Chandigarh has passed thefinal order for dissolution of the Company on 10th March 2022.

HMT Bearings Limited has been taken up for closure under section 271and 272 of the Companies Act 2013. Hon'ble NCLT Hyderabad has passed the final order fordissolution of the Company on 20th April 2022.

Closure related activities in HMT Watches Limited are under progresswhile the Tractor Division has been closed and the plant and township now part of theAuxiliary Business Division (erstwhile Common Services Division) of the Company.

Food Processing Machinery

Your company expects good growth in Dairy Processing equipment sector.Growing consumption of dairy products increasing urbanisation increasing disposableincome and development of cold chain facilities are the key driver for growth in thedairy processing equipment market. The machines are used to improve the shelf life ofdairy goods fill and package milk before shipping and reduce carb and fat content.

HMT Food Processing Machinery Unit at Aurangabad has plannedmodernization of its Plant and Machinery and is also developing and supplying upgraded /new versions of its products like Homogenizers Continuous Butter Making MachinesChillers etc.

The Company is aggressively working on taking turnkey projects for milkprocessing and milk powder area to enhance its business. As a result during Sept 2021the Food Processing Unit Aurangabad has procured an order valued at Rs 67 Crores forsetting up 30 MTPD Milk Powder Making Plant at Indore Dugdh Sangh at Indore. The projecthas to be completed within 24 Months.

Machine Tools

The machine tool market depends on Capex Plans and investments of itscustomers. As the situation is improving the Company envisages increased revenues byfocusing on sectors and customers for customized hi-tech machines with the inherentcapability of in-house R&D Technology Tie-ups Joint Working Arrangements etc.

In view of thrust given by the Government for the Make in Indiaprogram Atma Nirbhar Bharath and also PLI schemes the demand is further expected formachine tools during 2022-23. The pending Orders for Machine Tools is over Rs.218.76 Croreas on 31.07.2022.

As already mentioned your company has developed Surface wheel lathefor the railways as an import substitute and the company expects a good order for thismachine in the years to come. The Twin Head CNC Heavy duty Grinding machine developed byAjmer Unit is also a commendable product. The company has also supplied a 3 Piece RoboManipulator to BARC Mumbai which is being used in nuclear plants. In order to dispose thespent fuel of Nuclear plant the company has developed a spent fuel chopper.

With these initiatives and product developments the company felt aneed to consolidate the existing products like Radial Drills and Lathes. The company is inthe process of ensuring production of sufficient quantity of these machines to expeditethe delivery time.

Export Business

The Company is gearing up to increase its revenues in the coming yearsby taking up HMT's products and other Engineering Goods to newer destinations and to takeup more turnkey projects in under-developed and developing countries. HMT(I)'s orderspending stands at Rs. 23.04 Crore as on 31.07.2022.

Corporate Governance

Your Company strives constantly in adopting and maintaining the higheststandards of values and principles. The Company is complying with Government Guidelines onCorporate Governance framed by Department of Public Enterprises for CPSEs.

Your Company will continue to strive for a consistent growth rate tomatch the expectations of its stakeholders. While your Company is committed to accelerategrowth it will persevere to achieve best standards of Corporate Governance and EthicalBusiness Practices with emphasis on transparency accountability and professionalism inworking with the aim of enhancing long term economic value to all stakeholders andsociety at large.

Acknowledgement

I take this opportunity to express my sincere gratitude for the immensesupport and guidance received by your Company from the Hon'ble Minister for HeavyIndustries Hon'ble Minister of State for Heavy Industries the Secretary (HeavyIndustries) Special Secretary & Financial Adviser the Joint Secretary and otherOfficers in the Ministry of Heavy Industries as well as Ministry of External Affairs. I amalso grateful to the officers in the Ministry of Finance the Comptroller & AuditorGeneral of India and the Statutory Auditors etc. for all their support for smoothoperations of the Company. I sincerely thank the State Governments concerned JointVenture Partners Suppliers Banks and Financial Institutions for their valuableassistance and support. The valued customers of the Company both in India and abroaddeserve special mention for their continued patronage.

I would also like to express my sincere gratitude and appreciation tomy esteemed colleagues on the Board and to all HMTians for unswerving commitmentconfidence and continued support for maintaining cordial relations during the extremelychallenging year.

I express my thanks to all our esteemed customers in India and abroadfor their continual support and patronage and assure them of our commitment to meet theirexpectations.

I also thank all the other stakeholders for their valuable supportcooperation and for reposing continued confidence in the Company's performance. I amconfident that with dedicated and committed resource of employees and valuable support ofour esteemed shareholders your Company will deliver its responsibilities and enhancevalue to its stakeholders.

I thank you all for the continued faith in HMT and its management. Aswe move ahead and celebrate India's 76th year of Independence I greet you and your familymembers and wish you all the best!