To

The Members HMT Limited Bengaluru

Dear Members

The Board of Directors has pleasure in presenting the 69th AnnualReport on the Business & Operations of your Company and Annual Accounts of the Companyfor the year 2021-22 along with the Auditors' Report. The Comments of the Comptroller& Auditor General of India are attached to this Report.

Financial Highlights/Performance of the Company (Standalone)

Rs. in Crore

OPERATING RESULTS

Company's main business portfolios included product range of FoodProcessing Machines. The Food Processing Unit recorded a Production of Rs.

6.53 Crore as against Rs. 15.39 Crore in the previous year and Salesof Rs. 6.82 Crore compared to Rs. 18.91 Crore in the previous year. Auxiliary BusinessDivision Bangalore has registered a Production (Assembly of Watches) of Rs.2.86 Croreduring the FY 2021-22 & registered Sales of Rs.5.76 Crore during the year 2021-22against Rs.4.55 Crore during the previous year this includes the Sale of Watches andtractor spare parts.

The total turnover of the Company for the year 2021-22 stands atRs.12.58 Crore as against Rs.23.46 Crore during 2020-21. The Profit Before Tax during theyear 2021-22 is Rs. 38.35 Crore as against Rs.31.58 Crore in the previous year.

HMT Group along with its Subsidiaries achieved an aggregate productionof Rs. 126.51 Crore. Revenue from the operations reported as Rs. 175.74 Crore for the year2021-22 against Rs. 203.52 Crore of previous year. HMT Group has reported a profit of Rs.534.09 Crore in the current year against a Loss of Rs. 110.03 Crore during the previousyear. The increase in profit during the year is mainly on account of waiver of GoIliabilities to the extent of Rs. 657.14 Crore consequent to dissolution of HMT ChinarWatches Ltd and HMT Bearings Ltd vide orders issued by Hon'ble National Company LawTribunal (NCLT).

Dairy Processing Equipment Market

The Dairy Processing equipment segment from agriculture and alliedsector also witnessed downturn during the Covid 19 pandemic. According a report by NDDBthe average milk collection during pandemic times increased by 7% but sales reduced by2.6% due to restrictions on travelling and distribution thus resulting in cash crunch.

In response the industry clients postponed investments or valueaddition to the Dairy Processing units. Turnkey projects were postponed during thisperiod. According to an estimate the industry had registered a moderate 2% growth during21-22 after registering a compression of 10% during the previous year.

In order to mitigate the effect of COVID 19 impact in Dairy Industryduring June 2021 Government of India approved implementation of a Livestock SectorPackage consisting of several activities by revising and realigning various components ofthe existing schemes in order to have focused development of animal husbandry and dairyingacross the country for next 5 years starting from 2021-22 with the outlay of Rs.9800 croreover a duration of 5 years for leveraging total investment of Rs. 54618 crore for 5years. The Impact of these schemes will be also felt in Dairy Machinery Industry.

India continues to be the largest producer of milk in world. Severalmeasures have been initiated by the Government to increase the productivity of livestockwhich has resulted in increasing milk production significantly. Milk production during2019-20 and 2020-21 is 198.44 million tonnes and 209.96 million tonnes respectivelyshowing an annual growth of 5.81%. The per capita availability of milk is around 427grams/day in 2020-21.

The growth of food processing industry will continue to fuel the demandfor equipment for the sector. The global dairy processing equipment market is expected togrow at a CAGR of 5.4% during period (2022-2032). The market value is projected toincrease from US$ 10.2 Billion in 2022 to US$ 17.2 Billion by 2032. The dairy processingequipment market was valued at US$ 9.7 Billion in 2021 and is anticipated to exhibit Year-on-Year growth of 5.2% in 2022.

To encourage and promote value added products the Ministry of FoodProcessing Division approved the Central Sector Scheme - 'Production Linked IncentiveScheme for Food Processing Industry (PLISFPI)' to support creation of global foodmanufacturing champions commensurate with India's natural resource endowment and supportIndian brands of food products in the international markets with an outlay of Rs.10900crore.

Machine Tools Market

Machine Tools are the bedrock of the manufacturing sector of anEconomy. HMT Since inception in 1953 focused on "providing mother machines to makemachines" to Indian Industry. From that humble beginning today the Machine Toolindustry in India has grown to approximately '25589 Crores before the pandemic struck andnow stands at '13736 Crores. The FY 21-22 is a landmark year as for the first timeproduction at '8031.19 Cr was more than the imports at '6413.02 Cr.

Globally the Indian machine tools industry ranks 1 1 th in theproduction of machine tools and 8th in consumption with approximately 2% share accordingto reports.

Given the importance of the industry the Government of India hasinitiated several measures to buoy up the industry upgrading technology and supportingtechnological collaborations among others for the production of high-end machine tools.The machine tools industry has around 1 000 units in the production of machine toolsaccessories/ attachments subsystems and parts. Of these around 25 in the large scalesector account for about 70 percent of the turnover and the rest are in the MSME sector.Out of the 1000 nearly 50% are part of the supply chain and rest are manufacturers.

The growing prominence of automation across numerous manufacturingprocesses to enhance their productivity and meet quality standards is currently drivingthe India machine tools market. India is set to become a key player in the global machinetools industry and is expected to see substantial increase in high-end machine toolsmanufacturing. The auto sector a major user of machine tools is set to grow 3.5 to 4times from current size of $74 billion to reach about $300 billion by 2026. New emergingsectors such as defence and aerospace consumer durables and green investment in the autosector are likely to enhance demand for machine tools.

The Indian machine tools sector offers several opportunities forinvestment. The current gap between demand and supply can be overcome by adding capacitiesin this sector. The industry is moving towards increasingly sophisticated CNC machinesdriven by demand from key user segments such as automobiles and consumer durablesaerospace etc. Machine tools manufacturers need to develop capabilities to cater to thisdemand and investments in this area could yield long-term benefits.

The machine tool market in India is expected to grow by USD 1.9billion progressing at a CAGR of almost 13% during the forecast period 2022-2027. Theoutbreak of COVID-19 will have a neutral and inferior impact on the growth of the market.The market witnessed a partial or complete shutdown of operations by companies due to theimposition of lockdowns which reduced the demand for machine tools in India. However themarket is expected to gain momentum over the forecast period with the rising popularity ofIndustry 4.0 and the increased adoption of advanced computer-aided manufacturingtechnologies across industries.

"Make in India" initiative introduced by the Government ofIndia has identified automobiles auto- components biotechnology defence railways andtextiles for development. Machine tool industry will be the key enabler in this journey asautomobiles auto- components defence aerospace and railways have been the main users ofmachine tools. It gives great opportunity for the sector to grow at 20-25 percent annuallyto increase its market share. Consumption demand is expected to grow at 15.0 percent andthe domestic production meets less than 50.0 percent of the domestic demand whereas thesmall-scale sector meets the demand of ancillary and other units.

Ministry of Heavy Industries have launched Capital Goods Scheme -Scheme for Enhancement of Competitiveness in Indian Capital Goods Sectors.

IMPACT OF COVID-19 ON HMT LIMITED & SUBSIDIARIES

The Capex expenses have been reduced by the manufacturer. Thepre-pandemic consumption of Machines in India stood at Rs.25589 crores in the FY 2019-20and the same in FY 20-21 was Rs. 13542 crores and FY 21-22 is Rs.13736 crores. Thus themanufacturing industry is yet to recover from the impact related to COVID-19. The Businessvolume in HMT Ltd and its subsidiaries are yet to reach pre pandemic levels. The currentfinancial year may see substantial improvement towards pre COVID level.

Domestic Demand

Highly Capital-intensive industry like Machine Tools manufacturing isyet to recover to pre-covid level due to high gestation / product cycle. During 2019consumption of machine tools industry in India is Rs. 25589 Crore which came down to Rs.13542.17 Crore during the 2020 and recovered to Rs. 13735.70 Crore during the year 2021.

Issues with Imports

The machines manufactured by the Company have an imported content ofaround 40% by value. For items like CNC Controllers and Drives Spindle Bearings LinearMotion Guides etc. there are no domestic manufacturers and have to depend on imports.Supply of imported items got delay. Imports got affected due to Covid-19 as well assemi-conductor chip problem got delayed by 4 to 6 months due to their raw material supplyissues. Inspection of machinery being done through video conference due to Covid-19customers are unable to visit the factory for physical inspection and clearance.Commissioning of machine got delayed due to logistic and transportation problems. Howeverthe same been eased by the end of the financial year.

International Projects

HMT (International) has secured orders for international projects someof which are in the final stages. Due to the restrictions on international travel HMT wasnot able to depute their personnel for completion. Further in some cases customer'srepresentatives are to visit our units for training /pre dispatch inspection which alsodid not happen due to ban on international travel.

As the situation now improving and international travel restrictionsare being removed now sending the employees for completion of the projects which will addvalue in the next financial year.

SHARE CAPITAL

The Authorized Equity Share Capital of the Company is Rs.1230 Crore andpaid-up Equity Share Capital is Rs. 355.60 Crore (355601640 Equity Shares of Rs.10/- eachfully paid up).

FIXED DEPOSITS

The Company has not accepted any deposits from the public and hencethere is no violation of Chapter V of Companies Act 2013 and the corresponding rules madethereunder.

DIVIDEND

In view of the operating conditions of the Company the Board hasdecided not to propose any dividend to the Shareholders

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

During the Financial year 2021-22 the Company has not received anycomplaints of Sexual Harassment and no cases are pending.

FRAUD REPORTING

There was no incident of fraud reported during the year under review.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board level CSR Committee was constituted on 12th August 2019. Thecomposition of the CSR

Committee is provided in the Corporate Governance Report. The CSRpolicy is placed on the website of the Company at https://www.hmtindia.com/policies/.

The average net profits of the Company during the three immediatelypreceding financial years is Rs.2051.67 Lakhs as such the Company is required to spendat least two per cent of Rs.2051.67 Lakhs

i.e. Rs.41.03 Lakhs on CSR activities during the FY2021-22 as per theprovisions of section 135 (5) of the Companies Act 2013.

The CSR activities undertaken by the Company during the Financial Year2021-22 is provided as Annexure-1 in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014 and amendments.

ENTERPRISE RISK MANAGEMENT

In terms of section 134 (3) (n) of the Companies Act 2013 & theSEBI (LODR) Regulations 2015 the Company has formulated a 'Risk Management Policy' whichis placed on the Company's website: https://www.hmtindia.com/policies/.

The Board of Directors of the Company has constituted the RiskManagement Committee of the Board on 1 2.07.2021 in line with the SEBI (LODR) Regulations2015. The composition of the Risk Management Committee is provided in the CorporateGovernance Report.

PARTICULARS OF EMPLOYEES

No employees of the Company received remuneration in excess of thelimits prescribed under Section 197 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 during the Financial Year 2021-22.

SUBSIDIARY COMPANIES HMT Machine Tools Limited

The Subsidiary achieved Sales of Rs.152.53 Crore against Rs. 165.82Crore and attained Production of Rs. 117.12 Crore as against Rs. 161.20 Crore in theprevious year. Net loss reported is Rs. 145.73 Crore during the year 2021-22 againstreported loss of Rs. 132.79 Crore in previous year.

HMT (International) Limited

The Subsidiary achieved a turnover of Rs. 10.91 Crore during the year2021-22 as against Rs.19.83 Crore recorded in the previous year 2020-21. The Subsidiaryreported Profit Before Tax (PBT) of Rs. 0.28 Crore against Rs. 1.20 Crore reported inprevious year.

SUBSIDIARIES UNDER CLOSURE

As per the CCEA decision during the year 2016 the operations of thesubsidiaries namely HMT Watches Ltd HMT Chinar Watches Ltd and HMT Bearings Ltd have beenclosed.

Revenue achieved has been on account of sales/ transfer of movableassets of these Subsidiaries. During the year Profit after Tax reported by HMT WatchesLimited is Rs. 1.05 Crore.

DISSOLUTION OF TWO SUBSIDIARY COMPANIES

HMT Bearings Limited and HMT Chinar Watches Limited have reportedprofit of Rs.79.26 Crore and Rs.597.03 Crore respectively during the year mainly onaccount of waiver of GOI liabilities to the extent of Rs. 657.14 Crore consequent todissolution of these subsidiaries vide orders issued by Hon'ble NCLT.

HMT Chinar Watches Limited a wholly owned subsidiary has beenapproved for voluntary liquidation on March 25 2019 under section 59 of Insolvency andBankruptcy code 2016 (IBC 2016). After completion of closure compliances InsolvencyProfessional (IP) appointed for the purpose has remitted the final dividend of Rs. 609.28Lakhs and the Share Capital of Rs. 166.01 Lakhs to HMT Limited. Audited Financials as atAugust 6 2020 along with the petition was submitted before Hon'ble National Company LawTribunal Chandigarh on August 26 2020 for dissolution of M/s. HMT Chinar Watches Limitedin terms of section 59 of the Insolvency and Bankruptcy Code 2016 read with theInsolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulation 2017and Hon'ble National Company Law Tribunal (NCLT)

Chandigarh Bench Chandigarh passed an order for dissolution of HMTChinar Watches Limited in terms of Section 59(8) of the Insolvency & Bankruptcy Code2016 with effect from 10th March 2022.

HMT Bearings Limited a Subsidiary has submitted petition under section271-272 of the Companies Act 2013 before Hon'ble National Company Law Tribunal Hyderabadon 1 9.06.2020 for voluntary winding up of the Company. Hon'ble NCLT Hyderabad vide itsorder dated 16.12.2020 allowed petition and passed order for winding up of HMT BearingsLimited and also appointed Shri. Sai Ramesh Kanuparthi Insolvency Professional (IP) fromHyderabad to act as Company Liquidator for the purpose. Hon'ble National Company LawTribunal (NCLT) Hyderabad Bench Hyderabad passed an order for dissolution of HMTBearings Limited in terms of Section 302 of the Companies Act 2013 from the date of orderdated 20.04.2022. As per the NCLT order pending legal cases have been taken over by theCompany.

ASSOCIATE /JOINT VENTURE COMPANY SUDMO-HMT Process Engineers (India)Limited

This Joint Venture Company could not transact any business during theyear under review. For the financial year 2021-22 this Company incurred Net Loss of Rs0.61 Lakhs.

Gujarat State Machine Tools Corporation Ltd (GSMTC)

This Associate Company between HMT Ltd and GIIC Ltd has beendiscontinued its operations since long. Now the Board of Directors of GIIC Ltd hasapproved for liquidation of GSMTC which will be subject to approval from Government ofGujarat. The Board of Directors of the Company has also approved In-principal forLiquidation of GSMTC subject to the approval of the Administrative Ministry. Matter isunder process.

Salient features of the financial statement of subsidiaries/associatecompanies/joint ventures are provided in Form AOC-1 as Annexure -2.

INDIAN ACCOUNTING STANDARDS

The Financial Statement have been prepared to comply in all materialaspects with the Indian Accounting Standards ("Ind AS") notified under section133 of the Companies Act 2013 read with Companies (Indian Accounting Standard) Rules2015 and relevant amendment rules issued thereafter as applicable to the Company andother provisions of the Act.

REDUCTION IN SHARE CAPITAL

Hon'ble National Company Law Tribunal (NCLT) vide its Order dated16.10.2018 has confirmed/ approved reduction in share capital of the Company fromRs.1204.09 Crores to Rs.355.60 Crores by reduction of 848490000 Equity Shares of Rs.10/-each held by President of India (as per the Cabinet Approval). Registrar of CompaniesKarnataka (ROC) has registered the NCLT order on 17.11.2018 and issued "Certificateof Registration confirming the Reduction of Share Capital of HMT Ltd". However theprocess of reduction of share capital in the records of Stock Exchanges Depositories ispending for procedural compliances which are under process in consultation with Registrarand Share Transfer Agent ("RTA"). The shareholding of President of India is279566626 of Rs.10/- each equivalent to 78.62% shareholding in the Company as against1128056626 equity share of Rs.10/- each shown as per RTA records. Hence there is adifference between Paid up Share Capital of the Company as per Audited FinancialStatements and Shareholding Pattern provided by RTA.

CONSOLIDATED FINANCIAL STATEMENTS

As required under the Companies Act 2013 and SEBI (LODR) Regulation2015 Consolidated Financial Statements of the Company along with that of the Subsidiariesfor the financial year 2021- 22 conforming to the applicable Accounting Standards areattached to this Report along with the Auditors' Report on the same.

The financial information of each of the subsidiary companies has beenfurnished as part of the Consolidated Balance Sheet of the Company. Separate auditedaccounts of the subsidiary Companies will be made available upon request by any member ofthe Company interested in obtaining the same. The annual accounts and other information ofeach of the subsidiary companies will be available for inspection by any member at theregistered office of the Company & in company's website www.hmtindia.com.

HUMAN CAPITAL

Information in accordance with the Companies Act 201 3 read with theCompanies (Particulars of Employees) Rules 1975 as amended is NIL for the year2021-22.

The employee strength of the Company (HMT Limited) as on March 312022 stood at 64 Nos. comprising of various categories of employees in manufacturingplants and other offices.

The number of employees on the rolls of the Company as on March 312022 in SC/ST Ex- servicemen Physically Handicapped and Women Employee Categories etc.is detailed below:

INDUSTRIAL RELATIONS

The overall Industrial Relations situation in the Company during theyear remained cordial.

IMPLEMENTATION OF OFFICIAL LANGUAGE

Continuous efforts are being made by the Company towards implementationof the Official Language Act Rules & Policy as per the directives of the Governmentto enhance the levels of usage of Official language in the Company. The Official

Language Implementation Committee has been constituted in the Units ofthe Company and its Subsidiaries including the Corporate Office at Bengaluru to monitorthe implementation of the Official Language Act Rules and Policy in the Company and itsSubsidiaries.

In order to propagate the usage of Hindi as the Official Language"HINDI DIWAS/HINDI WEEK" was observed during the month of September 2021 at allunits of the Company. Various competitions in Hindi such as Chitrakatha Impromptu SpeechOfficial Language Written Quiz and Vividha competition were organized during Hindi Weekfor the employees of HMT Limited and its Subsidiaries working at the Corporate head officeand participants were awarded prizes during the Grand Hindi Day celebration in theCompany. A workshop was also organized during the above period for Hindi Typing. The HindiWord of the day is displayed in a prominent place in the Company and Hindi Newspapers arebeing procured on daily basis to propagate the usage of the official Language amongemployees. The Officers/ employees of the Company regularly take part in the meetings/programs Online webinars and Hindi Month Celebration of the Town Official LanguageImplementation Committee (TOLIC). The Employees of the Company participated in the JointHindi Month Celebrated of TOLIC during August 2021and also contributed by their PoemArticle in the Deepika Hindi Magazine Published by the TOLIC (Undertaking) Bengaluru. TheCompany has organized different functions Under TOLIC (Undertaking) Bengaluru like"Chitrakatha Competition" on 11th August 2021 and Webinar on "Hindi Dasha& Disha" on 23 rd November 2021 for the employees of TOLIC (Undertaking)Bengaluru during 2021-22 to propagate the official language. Reporting on the progress ofHindi proliferation in the Company is being done periodically on the Rajabhasha Vibhagportal.

Ministry of Heavy Industries Govt. of India vide resolution No. F.No.E. 11014/3/2014-Hindi dated 17th March 2022 appointed the Chairman & ManagingDirector of the Company as Official member of Hindi Salahkar Samiti of the Ministry ofHeavy Industries for a period of 3 years. Shri A.K. Jain C&MD has attended the 6thmeeting of the Hindi Salahkar Samiti held on 15.05.2022 under the Chairmanship of theHon'ble Minister of Heavy Industries and apprised the Hindi advisory Committee about theImplementation of the official language in the Company.

VIGILANCE ACTIVITIES

The Chief Vigilance Officer appointed by the government of India headsthe Corporate Vigilance Department of the company. Ministry of Heavy Industry vide itsorder No. 5(47)/2010-P.E.X dated 29.09.2021 has assigned the charge of CVO HMT Limited toMs. Kalyani Sethuraman IRAS (94) CVO Hindustan Aeronautics Ltd. (HAL) Bengaluru for aperiod of Six months from date of assumption of charge or till the appointment of aregular CVO or until further order whichever is earlier and is further extended w.e.f.04.04.2022 to 03.04.2023. Ms. Kalyani Sethuraman IRAS assumed charge of CVO HMT Ltdw.e.f. 04.10.2021.

The Corporate Vigilance Department carries out vigilance function inthe Holding Company as well as Subsidiary Companies. Vigilance function in themanufacturing Units and Marketing Offices are looked after by Vigilance Officers underthe guidance of Chief Vigilance Officer.

All the Unit Vigilance Officers send their monthly Vigilance/InspectionReports and Surprise Inspection reports to CVO. Reports so received are scrutinized at CVOOffice for further action. Unit Vigilance Officers also verify Annual Property Returnssubmitted by the employees of the Unit.

Apart from regular inspections by Unit Vigilance Officers CVO conductsCTE (Chief Technical Examiner at CVC) type surprise and regular inspections of high valuepurchase/contracts and systems by visiting various subsidiaries and Units.

Violations of rules and procedures observed during the inspection offiles by CVO/DCVO/ Unit VOs were recorded and depending upon the seriousness of thedeviations further actions are taken. Unit Vigilance Officers are advised to discussdeviations noticed by them during their inspection; in the quarterly Vigilance Workshopand advice the concerned officers that the violations of rules and procedures pointed outby the Vigilance Department should not be repeated.

Emphasis was laid on preventive vigilance by striving towards strictadherence to all rules and procedures and all norms of transparency in tendering process.Some of the systems put in place by the company are:

1. Open tenders and high value limited tenders are uploaded inwww.eprocure.gov.in.

2. Publishing details regarding all purchase orders /contractsconcluded during the month and above the threshold value (presently Rs 5.00 lakhs). Thisis generally implemented by all units.

3. Application form for vendor registration along with list of itemsrequired by different Units of HMT Limited and Subsidiaries are made available on CompanyWebsite so as to enable the interested vendors to download the application form and submitthe same to the Unit of their choice.

4. Registered with 'Treds' (Trade Receivables Dis counting Systems) forbetter MSME payment process.

5. Initiative of tech platform to enhance technical expertise andcapability through exchange of knowledge experience for overall techno economic propose.

6. Efforts are being made to adopt E- Procurement process ofprocurement.

7. Emphasis is made towards adopting E payment mode for release ofpayment to suppliers and contractors. Necessary direction is issued to achieve compliancelevel of 80%. Presently in many units the compliance level is more than 40%.

8. Management is being persuaded to adopt integrity Pact. The matterwas taken up in the 326th meeting of Board of Directors of HMTL held on 8.6.2017 and thedecision of the board was "Adoption of Integrity pact in HMT Limited andsubsidiary companies and authorized the Chairman and Managing Director of the company todecide the basis for adoption of integrity pact and to do necessary acts and things as maybe required for implementation of integrity pact and to inform the Board"

9. Recommended on Allotment of township quarters to be made online andimplementation is in progress.

10. Quarterly vigilance workshops were organized at all manufacturingunits to enhance the level of vigilance awareness among the employees and otherstakeholders.

11. Efforts are made for effective implementation and usage of 'GEM' byTraining and Awareness to the departments.

12. Awareness initiatives on Vigilance to fight corruption in theorganization have been uncalculated efficiently.

13. Vigilance Awareness Week 2021 with the theme

"Independent India @ 75: Self Reliance with Integrity"''Xdd'?mKd @ 75: AUfTftpfcTT

was observed in all Units and Offices of HMT Limited and SubsidiaryCompanies as per the guidelines of CVC.

The number of inspections including surprise inspections carried out byCVC and Unit Vigilance Officers along with the number of property returns scrutinizedbetween April 2021 to March 2022 is tabulated below:-

MANAGEMENT DISCUSSION AND ANALYSIS

A Report on Management Discussion & Analysis is appended to thisReport separately as Annexure-3.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the SEBI (LODR) Regulation 2015 a Reporton the Corporate Governance is appended as Annexure-4 to this Report along with theCompliance Certificate from the Auditor as Annexure-5.

INFORMATION REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTIONAND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars in respect of conservation of energy technology absorptionand foreign exchange earnings and outgo as required under the Companies (Disclosures ofParticulars) Rules 1988 are appended as Annexure-6.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(C) of the Companies Act 2013:

• that in the preparation of the annual financial statementsfor the year ended 31 .03.2022 the applicable accounting standards has been followedalong with proper explanation relating to material departures;

• that such accounting policies have been selected and appliedconsistently and judgments and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for the year ended on that date;

• that proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

• that the annual financial statements have been prepared on agoing concern basis;

• that proper internal financial controls were in place and areadequate and were operating effectively;

• that proper systems to ensure compliance with the provisions ofall applicable laws were in place and were adequate and operating effectively;

• Since the overall performance of the Company is evaluatedagainst the annual MoU targets set by the Department of Public Enterprises (DPE) nospecific criteria is laid down for the evaluation of Board and of its Committees and theindividual Directors. Since your Company being a Central Public Sector Enterprise (CPSE)the personnel policies and guidelines issued by DPE are being adopted in line with otherCPSEs. Accordingly your Company has not formulated any separate policy in respect ofappointment or evaluation of senior management and key managerial personnel.

ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act201 3 the Company has placed a copy of the Annual Return as at March 31 2022 on itswebsite at https://www.hmtindia.com/ investor-relation/ar/.

AUDITORS

M/s. S.S.B & Associates Chartered Accountant Bengaluru wereappointed as Statutory Auditors of the Company for the year 2021-22 by the Comptroller& Auditor General of India. M/s. Modi & Agrawal Chartered Accountant was alsoappointed as Branch Auditor for the Food Processing Machinery Division Aurangabad of theCompany.

Replies to the observations by the Statutory Auditors in their Reportare given by way of an addendum to this Report as Annexure-7

SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s. S. Kedarnath & Associates

Practicing Company Secretary to undertake the Secretarial Audit of theCompany for the year 2021-22. The report of the Secretarial Auditor is appended as Annexure-8to this report. The reply to observations of Secretarial Auditor is attached asaddendum to Director's report as Annexure-9.

SECRETARIAL AUDIT REPORT OF UNLISTED MATERIAL SUBSIDIARY

Pursuant to the provisions of Regulation 24A of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Secretarial Audit Report for the Financial Year 2021-22 of HMT Machine ToolsLimited along with reply to observations and HMT (International) Limited an UnlistedMaterial Subsidiaries of the Company is appended as Annexure-10 10A & 11 tothis report.

BUSINESS RESPONSIBILITY REPORT

The Company's Business Responsibility Report for the year 2021-22 isappended as Annexure-12 to this report.

BOARD MEETINGS AND CHANGE IN DIRECTORS /KEY MANAGERIAL PERSONNEL

During the financial year Six Board meetings were held and the detailsare given in Corporate Governance Report.

Shri. Jeetendra Singh Joint Secretary Ministry of Heavy Industrieswas appointed as Part time Official Director on the Board of HMT Limited with effect from18th June 2021 until further orders vice Smt. Sujata Sharma Sr. Economic AdviserMinistry of Heavy Industries.

Shri. S. Girish Kumar ceases to be Chairman & Managing Director ofthe Company upon attaining the age of superannuation w.e.f. 31.07.2021. Shri. S. GirishKumar Chairman & Managing Director of the Company was holding the Additional Chargeof the post of Director (Finance) HMT Limited upto 31.07.2021.

Shri A.K. Jain Executive Director M/s. Bharat Heavy ElectricalsLimited has been entrusted with the additional charge of the post of Chairman &Managing Director HMT Limited w.e.f. 01.08.2021 to 31.01.2022 or until further orderwhichever is earlier by the Ministry of Heavy Industries and is further extended upto24.08.2022.

Shri. A.K. Jain has also been entrusted with the additional charge ofthe post of Director (Finance) HMT Limited w.e.f. 13.09.2021 to 31.01.2022 or untilfurther order whichever is earlier by the Ministry of Heavy Industries and is furtherextended upto 24.08.2022.

Smt. Neera Tomar ceased to be Independent Director in view ofcompletion of term of three years on close of business hours on 17th February 2022.

Shri. Vijay Mittal Joint Secretary Ministry of Heavy Industries wasappointed as Part time Official Director on the Board of HMT Limited with effect from 25thMarch 2022 until further orders vice Shri. Jeetendra Singh Joint Secretary Ministry ofHeavy Industries.

Except as stated above there are no other changes to the compositionof Board of Directors of the Company during the financial year.

Subsequent to the financial year Shri. A.K. Jain ceases to be Chairman& Managing Director of the Company on completion of term on 24.08.2022. Shri. A.K.Jain Chairman & Managing Director of the Company was holding the Additional Charge ofthe post of Director (Finance) HMT Limited upto 24.08.2022.

Ministry of Heavy Industries vide its order No.1-05/14/2019-P.E.10/CPSE I dated 24th August 2022 has entrusted the additional charge ofthe post of Chairman & Managing Director of HMT Limited to Shri. Pankaj GuptaExecutive Director Bharat Heavy Electricals Limited Electronic Division Bengaluru for aperiod w.e.f. 25.08.2022 to 24.11.2023 or till the joining of a regular incumbent oruntil further order whichever is earlier.

Shri. Pankaj Gupta (DIN: 09716028) is proposed for appointment asDirector in terms of Article 67(4) of the Article of Association of the Company read withSection 160 of the Companies Act 2013 in the ensuing Annual General Meeting for which anotice has been received from the Member.

Shri. Shashank Priya Director retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for reappointment. The Boardrecommends his re-appointment.

Shri. A.K. Jain Chairman and Managing Director (Additional Charge)Ms. Kamna Mehta Chief Financial Officer and Shri. Kishor Kumar S Company Secretary arethe KMP's as defined under Section 2 (51) of the Companies Act 2013 as on 31.03.2022.

DECLARATION FROM INDEPENDENT DIRECTOR & REGISTRATION IN THE DATABANK MAINTAINED BY IICA

As per section 149(7) of the Companies Act 2013 During the FY2021-22the Company has received declaration from Smt. Neera Tomar Shri. R. Vishweshwar Bhat& Shri. Ramji Lal Independent Directors of the Company. Independent Directors of theCompany have registered themselves with Independent Directors data bank in compliance withCompanies (Creation and Maintenance of database of Independent Directors) Rules 2019 andCompanies (Appointment and Qualification of Directors) Fifth Amendment Rules 2019.

Regarding proficiency the Company has adopted requisite steps towardsthe inclusion of the names of all Independent Directors in the data bank maintained withthe Indian Institute of Corporate Affairs Manesar ('IICA'). Accordingly all theIndependent Directors of the Company have registered themselves with IICA for the saidpurpose. In terms of Section 150 of the Act read with the Companies (Appointment &Qualification of Directors) Rules 2014 as amended vide Notification No. GSR.774(E)dated 1 8.1 2.2020 since all the Independent Directors of the Company have served asDirectors for a period of less than three (3) years on the Board of Listed Company as onthe date of inclusion of their names in the database they are required to undertakeonline proficiency self-assessment test. All the Independent Directors have informed theCompany that they will undertake the online assessment test before due date.

CODE OF CONDUCT

A declaration by the Chairman & Managing Director for havingobtained affirmation of compliance of the Code of Conduct by the Board Member (s) andSenior Management for the year ended March 31 2022 is appended to this report as Annexure-13.

INTERNAL FINANCIAL CONTROLS

With reference to financial statements the Company has in placeadequate internal financial controls. A detailed note with respect to Internal Financialcontrols is given in the Management Discussion and Analysis Report.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

Hon'ble National Company Law Tribunal (NCLT) Hyderabad BenchHyderabad passed an order for dissolution of HMT Bearings Limited Subsidiary of HMTLimited in terms of Section 302 of the Companies Act 2013 from the date of order dated

20.04.2022. Based on the Balance Sheet submitted by the Liquidator on03.03.2022 the financials have been considered in the Consolidated Financial Statementsas on 31 .03.2022 and the balances become Nil on that date.

Except above there are no Material changes and commitments affectingthe financial position of the company which have occurred between 31st March 2022 and dateof signing of this Report.

RELATED PARTY TRANSACTIONS

The details of related party transactions are given in the notes to theFinancial Statements.

All Related Party Transactions entered into during the year were inOrdinary Course of the Business and at Arm's Length basis. No Material Related PartyTransactions i.e. transactions exceeding 10% of the annual consolidated turnover as perthe last audited financial statement were entered into during the year by your Company.Accordingly the disclosure of Related Party Transactions as required under Section134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable.

PARTICULARS OF LOANS GUARANTEES & INVESTMENTS

The Board of Directors have not approved any Guarantees and Investmentscovered under the provisions of Section 186 of the Companies Act 2013 during the FY2021-22. Details of Loans covered under the provisions of Section 186 of the CompaniesAct 2013 are given in the notes to the Financial Statements.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIMEOF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS ORFINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

There are no instances of one-time settlement during the financial year2021-22.

STATUS ON COMPLIANCE WITH THE INSOLVENCY AND BANKRUPTCY CODE 2016

There are no applications made or any proceeding pending against theCompany under Insolvency and Bankruptcy Code 2016 (31 of 2016) during the financial year2021-22.

OTHER DISCLOSURES

The Register of Members and Share Transfer records both in respect ofthe shares held in physical and depository form are maintained by M/s. KFin TechnologiesLtd the Registrars & Share Transfer Agents of the Company.

No significant and material orders have been passed by any Regulator(s)or Court(s) or Tribunal(s) impacting the going concern status and Company's operations infuture.

As on 31st March 2022 no amount is required to be transferred toInvestor Education and Protection Fund (IEPF).

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge and are thankful to the variousDepartments and Ministries in the Government of India particularly the Ministry of HeavyIndustry Ministry of Corporate Affairs Comptroller and Auditor General of IndiaPrincipal Director-Commercial Audit Statutory and Branch Auditors various StateGovernments Foreign Collaborators the Subsidiary Companies Suppliers Reserve Bank ofIndia UCO Bank and the valued Customers of the Company both in India and abroad for theircontinued co-operation and patronage.

Your Directors' would also like to take this opportunity to expresstheir appreciation for the hard work and sincere contributions and commitment of all theHMT employees and look forward to their continued services in pursuit of building a worldclass HMT.