68th Annual General Meeting of HMT Limited
My Dear Shareholders
It is my proud privilege and honour to lead the growth initiatives of HMT after takingover the responsibility on 1st August 2021. I take this opportunity to welcomeyou all on my and Board of Directors behalf. I convey my best wishes to you all and prayfor your health and well being.This year was most challenging in the history of HMT as thebusiness was impacted due to onslaught of covid. But now we are already witnessing earlysign of recovery and hope to pick up the momentum and move fast. The big movement invaccinations drive will make the situation better day by day.
The Notice convening AGM the report of the Directors Auditors and the auditedaccounts for the year ended 31st March 2021 has already been provided to all theshareholders of the Company and with your permission I take them as read.
After witnessing the severe impact growth momentum has started picking up in almostall markets. Restrictions are easing in many parts of the world which will enable supplychain to move strongly leading to overall growth. Global manufacturing is also showingsigns of recovery as it witnessed around 2.4 % growth year on year in the fourth quarterof 2020.
Growth Output is projected to grow by 9.4% for the year 2021-22 as the domesticeconomic activities have started normalising with the ending of second wave of the virusand phased reopening of economy.The announcement by government for a special economic andcomprehensive package for Atma Nirbhar Bharat including measures taken by RBI amounting toabout Rs. 27.1 lakhs crore package to combat the impact of covid 19 and to revive theeconomic growth. This type of strong impetus will definitely ensure revival and promoteall-round industry.Further strong push for vaccination will ensure safety and health ofour people and enable the overall growth.
Manufacturing and impact on Future of Indian Economy
The Government of India has identified manufacturing as critical to the future of theeconomy. The world after COVID-19 will be different with structural changes in productionconsumption and work patterns. A lesson learnt from the Covid-19 crisis is thatmanufacturers need to be agile in an ever-changing environment to regain their footingamidst continued volatility in costs and policy decisions. While uncertainty may continuein the foreseeable future the capability of manufacturers to increase resilience in theiroperations based on their core competencies would yield prosperity to the stakeholders.While the second wave is expected to upset economic growth the overall impact is expectedto be moderate as businesses and States have adjusted their businesses and cycles to theCOVID situation prevalent.
Major structural reforms launched by the Government
in agriculture markets labour laws and definition of MSMEs provide unparalleledopportunity for this resilient sector to grow and prosper now and thereby contribute tojob creation in the primary and secondary sectors. The modified definition of MSMEsfacilitates expansion and growth of these enterprises without fearing the loss ofgovernment incentives. The resulting economies of scale can enhance productivity withoutthe MSMEs losing out on several government incentives including interest subventioncollateral-free loans market support export promotion preferential procurement in thepublic sector and enabling of IT ecosystems.
To support this thrust has been provided to digitisation across areas like the supplychain communication marketing sales etc and for mobilizing partnerships withinecosystems to drive targeted business goals.
HMT's contribution to mitigate COVID pandemic
During the Covid-19 period health and safety of employees customers and stakeholdershas been accorded top priority along with the mission of serving the customers' needs.Your Company re-started the manufacturing operations at the Units as per the guidelines ofNational Disaster Management Authority during May 2020 and established standard operatingprocedures for work under the Covid-19 scenario.Your company provided exclusive medicalinsurance for its employees and family members. Covid Care Centre was set up in a separateblock in our existing hospital at Bengaluru to cater to the emergent medical needs duringthis pandemic.
Performance & Business accomplishments
During the year 2020-21 your Company's main business portfolio of Food ProcessingMachinery recorded a decline of 26.68% in production (Rs. 15.39 Crore in 2020-21 asagainst Rs. 20.99 Crore in the previous year) and 14.12% in Sales (Rs. 18.91 Crore in2020-21 as against Rs. 22.02 Crore in the previous year). The total turnover of theCompany for the year 2020-21 stands at Rs.23.46 Crore as against Rs. 26.13 Crore during2019-20. The
Profit Before Tax during 2020-21 is Rs. 31.58 Crore as against Rs. 28.04 Crore in theprevious year. HMT Group of Companies achieved an aggregate Production of Rs. 176.59 Croreand Rs. 203.89 Crore of Revenue from Operations.
The growth of dairy industry is fuelling the demand for equipment in the sector. TheCompany is bringing out new products and equipments to capture the emerging demand.
Initiatives at the Subsidiaries
The Subsidiaries of your Company undertook several initiatives during the year 2020-21.
Machine Tools Business
HMT Machine Tools Limited achieved Sales of Rs.166.19 Crore and Production of Rs.161.20 Crore during the period as compared with Rs. 176.23 Crore and Rs. 213.42 Crorerespectively during the previous year. The Company's net loss registered at Rs. 132.79Crore as against Rs. 98.72 Crore in the previous year. The Company procured orders valuedRs.115.20 Crore against Rs.164.96 Crore in the previous year. The reduction in productionand sales as well as increase in loss was mainly due to the effect of Covid-19. TechnologyTie-ups for technology enhancement and product upgradation are on the anvil.
The other operative subsidiary HMT (International) Limited has achieved a turnover ofRs.19.83 Crore as against Rs. 67.15 Crore recorded in the previous year.
The Company has recorded a Net Profit before Tax of
Rs. 1.20 Crore as against Rs. 3.88 Crore previous year. The subsidiary has signedorders of Rs. 41.59 Crore. Agreements have been signed for execution of various projectsand supplies abroad and completed certain projects abroad. Several machines have alreadybeen supplied under this Agreement and it is expected that the project would be completedduring the current year. Company is working on many fronts in overseas market to enhanceits business.
Action on directions from Government for Closure of subsidiaries and Tractor Division
As per decision of the Government the operations of HMT Watches Limited HMT ChinarWatches Limited HMT Bearings Limited and HMT Tractor Division have been closed and allthe employees have been relieved. HMT Chinar Watches Ltd has been approved for voluntaryliquidation under the provisions of Insolvency and Bankruptcy code 2016 and the Insolvency
Professional appointed to finalise the voluntary liquidation of the Company has filedthe petition with
HMT Bearings Limited has been taken up for closure under section 271 and 272 ofCompanies Act 2013. NCLT Hyderabad has passed order for winding up of HMT BearingsLimited and has also appointed Insolvency professional (IP) to act as Company Liquidatorfor the purpose. The Insolvency professional has initiated the winding up proceeding.
Closure related activities in HMT Watches Limited are under progress while the TractorDivision has been closed and the plant and township is now part of the Auxiliary BusinessDivision (erstwhile Common Services Division) of the Company.
FUTURE OUTLOOK: Food Processing Machinery
The growth of food processing industry is fueling the demand for equipment in thesector. HMT Food Processing Machinery Unit at Aurangabad has planned modernization of itsPlant and Machinery and is also developing and supplying upgraded / new versions of itsproducts like Homogenizers Continuous Butter Making Machines Chillers etc. The Companyis aggressively working on taking turnkey projects for milk processing and milk powderarea to enhance its business.
The machine tool market depends on Capex Plans and investments of its customers. As thesituation is improving the Company envisages increased revenues by focusing on sectorsand customers for customized hi-tech machines with the inherent capability of in-houseR&D Technology Tie-ups Joint Working Arrangements etc.
In view of thrust given by the Government for the Make in India program and monetarystimulus with the aim for ease of doing business increased demand is expected for machinetools during 2021-22.The pending Orders for Machine Tools is over Rs.285.40 Crore as on31.07.2021.
Your Company is pursuing indigenization and technology absorption through In-houseResearch & Development Technology tie-ups and Joint Working Arrangements and newproduct development to meet the needs of Defence Power Aerospace Railways Nuclearsectors etc and reduction in import content in Machine Tools Sector. Further the Companyplans to setup Vocational Training Centres for Machine Tools in Capital Goods Sector aswell as Skill Development Centres R&D Centres Common Facility Centres and IncubationCentres.
The Company is making many new product developments especially in railways nuclear anddefence sector to make strong foothold and enhance business outlook. Machine tools sectorremains bullish as demand in Auto Railway Defence and other areas is increasing. Alsothe focus on Skill Development will bring in many new projects which augur well for thecompany. Focus will be on enhancing the delivery and service performance and spares areaalong with the new development Technology tie-ups and product upgradation.
In this direction the Company has taken up development of Technology Portal viz."SURGE" with assistance from DHI to promote collaboration and sharing ofknowledge expertise and experience amongst Industries R&Ds Academia MSMEsStart-ups Professionals Students etc. along with the policy makers in the Machine ToolSector.
The Company is gearing up to increase its revenues in the coming years by taking upHMT's products and other Engineering Goods to newer destinations and to take up moreturnkey projects in under-developed and developing countries. HMT(I)'s orders pendingstands at Rs. 38.98 Crore as on 31.07.2021.
Your Company will continue to strive for a consistent growth rate to match theexpectations of its stakeholders. While your Company is committed to accelerate growth itwill persevere to achieve best standards of Corporate Governance and Ethical BusinessPractices with emphasis on transparency accountability and professionalism in workingwith the aim of enhancing long term economic value to all stakeholders and society atlarge.
The performance of the Company is measured in terms of the economic environmental andsocietal parameters augurs well to reinforce the image of HMT as a socially responsibleCorporate Entity. Sustainability in HMT is the continuing commitment to behave ethicallyand contribute towards economic development while improving the quality of life of itsemployees their families and the local community and society at large.
Your Company strives constantly in adopting and maintaining the highest standards ofvalues and principles.The Company is complying with Government Guidelines on CorporateGovernance framed by Department of Public Enterprises for CPSEs.
I take this opportunity to express my sincere gratitude for the immense support andguidance received by your Company from the Hon'ble Minister for Heavy IndustriesHon'bleMinister of State for Heavy Industries the Secretary (Heavy Industries) AdditionalSecretary &
Financial Adviser the Joint Secretary and other Officers in the Ministry of HeavyIndustry as well as Ministry of
External Affairs. I am also grateful to the officers in the
Ministry of Finance the Comptroller & Auditor General of India and the StatutoryAuditors etc. for all their support for smooth operations of the Company. I sincerelythank the State Governments concerned Joint Venture Partners Suppliers Banks andFinancial Institutions for their valuable assistance and support. The valued customers ofthe Company both in India and abroad deserve special mention for their continuedpatronage.
I would also like to express my sincere gratitude and appreciation to my esteemedcolleagues 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 support cooperation and forreposing continued confidence in the Company's performance. I am confident that withdedicated and committed resource of employees and valuable support of our esteemedshareholders your Company will deliver its responsibilities and enhance value to itsstakeholders. I thank you all for the continued faith in HMT and its management. As wemove ahead and celebrate India's 75th year of Independence I greet you andyour family members and wish you all the best!
Chairman & Managing Director