To

The Members HMT Limited Bengaluru Dear Members,

The Board of Directors have pleasure in presenting the 70th Annual Report on the Business & Operations of your Company and Annual Accounts of the Company for the year 2022-23 along with the Auditors' Report. The Comments of the Comptroller & Auditor General of India are attached to this Report.

Rs. in Crore

The company's main business portfolios included a product range of Food Processing Machines. The Food Processing Unit recorded a Production of Rs.7.00 Crore as against Rs. 6.53 Crore in the previous year, and Sales of Rs. 43.55 Crore (including Revenue from Powder Project Rs.36.80 Cr.) compared to Rs. 6.82 Crore in the previous year. Auxiliary Business Division, Bangalore has registered a Production (Assembly of Watches) of Rs.7.25 Crore during the FY 2022-23 & registered Sales of Rs.8.04 Crore during the year 2022-23 against Rs.2.86 Crore and Rs.5.76 Crores during the previous year respectively and sales includes the Sale of Watches and tractor spare parts. The total turnover of the Company for the year 2022-23 stands at Rs.51.59 Crore as against Rs.12.58 Crore during 2021-22. The Profit Before Tax during the year 2022-23 is Rs. 14.91 Crore as against Rs.38.35 Crore in the previous year. The reduction of profit is mainly on account of bad debts during the year and income accounted for in the previous year in respect of withdrawal of investment provision in HMT Bearings Limited as per the dissolution order issued by NCLT. HMT Group along with its Subsidiaries achieved an aggregate production of Rs. 130.83 Crore. Revenue from the operations reported as Rs. 203.81 Crore for the year 2022-23 against Rs. 175.74 Crore of previous year. HMT Group has reported a loss of Rs. 122.98 Crore in the current year against a profit of Rs. 534.09 Crore during the previous year. The decrease in profit during the year is mainly on account of the waiver of GoI liabilities to the extent of Rs. 657.14 Crore consequent to dissolution of HMT Chinar Watches Limited and HMT Bearings Limited vide orders issued by Hon'ble National Company Law Tribunal (NCLT), accounted in the previous year.

According to a report by IMARC Group, the dairy industry in India is expected to exhibit a CAGR of 13.2% during 2023-2028. The Indian government's National Action Plan for Dairy Development aims to increase organised milk production from the current 20-21% to 50% by 2023-2024. The dairy industry in India is aiming to build a $355 billion industry by 2025.

However, according to a report by Expert Market Research, the Indian dairy market attained a value of USD 203.3 Billion in 2022 and is projected to reach USD 472.7 Billion by 2028. The market growth in Dairy requires support of significant infrastructure investment across processing, chilling, logistics, cattle feed etc.

The dairy machinery industry in India is expected to see steady growth in the coming years. India is the largest milk-producing country in the world, and the demand for dairy products is expected to increase in the future due to population growth, rising incomes, and changing dietary habits.

The Government of India has also taken several initiatives to support the dairy industry, such as promoting the use of modern machinery, providing subsidies to farmers for purchasing dairy equipment, and establishing milk processing plants. The dairy machinery industry in India is also adopting new technologies to improve efficiency and productivity. For example, automated milking systems, advanced milk processing technologies, and IoT-based monitoring systems are being introduced to optimize the production process and reduce costs.

Moreover, the Indian dairy industry is also becoming more organized, with the emergence of large dairy companies and cooperatives. These companies are investing in modern machinery and equipment to improve their processing capacity and meet the growing demand for dairy products. In conclusion, the future outlook of the dairy machinery industry in India looks promising, driven by increasing demand for dairy products, government support, adoption of new technologies and the emergence of organized players in the industry.

India's machine tool market has grown significantly over the past decade, with a compound annual growth rate (CAGR) of over 13% from 2013 to 2019, according to a report by Research and Markets. The market size reached USD 1.4 billion in 2022 and is expected to reach USD 2.5 billion by 2028, growing at a CAGR of around 9.4% during 2023-2028. The growth of the machine tool market in India is primarily driven by the increasing demand for machine tools from various end-use industries such as automotive, aerospace, defense, and medical equipment manufacturing. India's growing population and rising disposable income have also led to an increase in consumer spending on durable goods such as automobiles, which in turn has driven demand for machine tools.

The Indian government has also been taking steps to support the growth of the machine tool industry. For instance, the government launched the "Make in India" initiative in 2014 to encourage domestic manufacturing and attract foreign investment. Additionally, the government has implemented various policies to improve the ease of doing business in India, including streamlining the process for obtaining business licenses and permits.

The future of the machine tools market in India looks promising, with several factors contributing to its growth. Here are some key trends that are likely to shape the future of the machine tools market in India:

1. Government Initiatives: The Indian government has been taking several initiatives to promote domestic manufacturing, including the ‘Make in India' program. The government's focus on boosting manufacturing in India is likely to drive demand for machine tools in the coming years.

2. Industry 4.0 and Automation: The global trend towards Industry 4.0 and automation is expected to drive demand for advanced machine tools in India. Companies in various sectors are increasingly adopting automation technologies to improve productivity, reduce costs, and enhance product quality. This is expected to create opportunities for manufacturers of advanced machine tools in India.

3. Emerging Sectors: India is witnessing the emergence of new sectors such as electric vehicles (EVs), renewable energy, and defense manufacturing. These sectors are expected to drive demand for specialized machine tools and create new opportunities for manufacturers in the Indian machine tools market.

4. Increasing Investment: Several global companies have been investing in the Indian machine tools market, either through partnerships or by setting up manufacturing facilities in India. This is expected to drive technology transfer, enhance the capabilities of domestic manufacturers, and boost the competitiveness of the Indian machine tools market.

5. Growing Exports: India has emerged as a major exporter of machine tools, with several Indian companies exporting machine tools to various countries. The government's focus on promoting exports is likely to create new opportunities for Indian machine tool manufacturers and further boost the growth of the industry.

In conclusion, the machine tools market in India is expected to witness robust growth in the coming years, driven by government initiatives, emerging sectors, increasing investment, and growing exports. The industry is likely to continue to evolve, with an increasing focus on automation, Industry 4.0, and specialized machine tools.

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

The Company has not accepted any deposits from the public and hence there is no violation of Chapter V of Companies Act 2013, and the corresponding rules made thereunder.

In view of the operating conditions of the Company, the Board has decided not to propose any dividend to the Shareholders. Dividend Distribution Policy is available at link https://www.hmtindia.com/ policies/.

During the Financial year 2022-23, the Company has not received any complaints of Sexual Harassment and no cases are pending.

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

The Board level CSR Committee was constituted on 12th August, 2019. The composition of the CSR Committee is provided in the Corporate Governance Report. The CSR policy is placed on the website of the Company at https://www. hmtindia.com/policies/.

The average net profits of the Company during the three immediately preceding financial years is Rs.3045.45 Lakhs, as such, the Company is required to spend at least two per cent of Rs.3045.45 Lakhs, i.e., Rs.60.91 Lakhs on CSR activities during the FY2022-23 as per the provisions of section 135 (5) of the Companies Act, 2013.

The CSR Annual report for the FY 2022-23 are provided as Annexure-1 in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 and amendments. Details of the CSR activities undertaken during FY2022-23 are enclosed as Annexure-1A.

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

The Board of Directors of the Company constituted the Risk Management Committee of the Board on 12.07.2021. The composition of the Risk Management Committee is provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

No employees of the Company received remuneration in excess of the limits prescribed under Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 during the Financial Year 2022-23.

The Subsidiary achieved Sales of Rs.142.24 Crore during 2022-23 against Rs. 152.53 Crore in the previous year and registered Production of Rs.116.58 Crore as against Rs. 117.12 Crore in the previous year. Net loss reported is Rs. 131.65 Crore during the year 2022-23 against reported loss of Rs. 145.73 Crore in the previous year.

The Subsidiary achieved a turnover of Rs. 14.15 Crore during the year 2022-23 as against Rs.10.91 Crore recorded in the previous year 2021-22. The Subsidiary reported Profit Before Tax (PBT) of Rs. 0.31 Crore against Rs. 0.28 Crore reported in previous year.

As per the Cabinet Committee of Economic Affairs (CCEA) decision during the year 2016, the operations of the subsidiaries namely HMT Watches Limited and HMT Bearings Limited have been closed. The revenue achieved has been on account of sales/transfer of movable assets of these Subsidiaries. During the year Profit after Tax reported by HMT Watches Limited is Rs. 1.50 Crore.

Hon'ble National Company Law Tribunal (NCLT), Hyderabad Bench, Hyderabad passed an order for dissolution of HMT Bearings Limited from the date of order dated 20.04.2022 under section 271-272 of the Companies Act, 2013. As per NCLT order,

HMT Limited is in the process of discharge of the obligation relating to the return of capital to the minority shareholders / contributories.

This Joint Venture Company could not transact any business during the year under review. For the financial year 2022-23, this Company incurred Net Loss of Rs 1.57 Lakhs.

This Associate Company between HMT Limited and GIIC Limited has been discontinued its operations since long. Now, the Board of Directors of GIIC Limited has approved for liquidation of GSMTC which will be subject to approval from Government of Gujarat. The Board of Directors of the Company has also approved In-principal for Liquidation of GSMTC subject to the approval of the Administrative Ministry. Matter is under process. Salient features of the financial statement of subsidiaries/associate companies/joint ventures are provided in Form AOC-1 as Annexure -2.

The Financial Statement have been prepared to comply in all material aspects with the Indian Accounting Standards ("Ind AS") notified under section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standard) Rules, 2015 and relevant amendment rules issued thereafter, as applicable to the Company and other provisions of the Act.

REDUCTION IN SHARE CAPITAL

Hon'ble National Company Law Tribunal (NCLT) vide its Order dated 16.10.2018 has confirmed/ approved reduction in share capital of the Company from Rs.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 Companies,

Karnataka (ROC) has registered the NCLT order on 17.11.2018 and issued "Certificate of Registration confirming the Reduction of Share Capital of HMT Ltd". However, the process of reduction of share capital in the records of Stock Exchanges, Depositories is pending for procedural compliances which are under process in consultation with Registrar and Share Transfer Agent ("RTA"). The shareholding of President of India is 279566626 of Rs.10/- each, equivalent to 78.62% shareholding in the Company as against 1128056626 equity share of Rs.10/- each shown as per RTA records. Hence there is a difference between Paid up Share Capital of the Company as per Audited Financial Statements and Shareholding Pattern provided by RTA.

As required under the Companies Act 2013 and SEBI (LODR) Regulation, 2015, Consolidated Financial Statements of the Company along with that of the Subsidiaries for the financial year 2022-23, conforming to the applicable Accounting Standards, are attached to this Report along with the Auditors' Report on the same.

The financial information of each of the subsidiary companies has been furnished as part of the Consolidated Balance Sheet of the Company. Separate audited accounts of the subsidiary Companies will be made available upon request by any member of the Company interested in obtaining the same. The annual accounts and other information of each of the subsidiary companies will be available for inspection by any member at the Registered Office of the Company & on the Company's website www.hmtindia.com.

The employee strength of the Company (HMT Limited) as on March 31, 2023, stood at 63 Nos. comprising of various categories of employees in manufacturing plants and other offices.

The number of employees on the rolls of the

Company as on March 31, 2023 in SC/ST, Ex-servicemen, Physically Handicapped and Women Employee Categories etc. is detailed below:

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

Continuous efforts are being made by the Company towards implementation of the Official Language Act, Rules & Policy as per the directives of the Government to enhance the levels of usage of Official language in the Company. The Official Language Implementation Committee has been constituted in the Units of the Company and its Subsidiaries, including the Corporate Office at Bengaluru to monitor the implementation of the Official Language Act, Rules and Policy in the Company and its Subsidiaries.

In order to propagate the usage of Hindi as the Official Language, "HINDI DIWAS/HINDI WEEK" was observed during the month of September 2022 at all units of the Company. Various competitions in Hindi such as Chitrakatha, Impromptu Speech, Official Language Written Quiz, and Vividha competition were organized during Hindi Week for the employees of HMT Limited and its Subsidiaries working at the Corporate Head Office and participants were awarded prizes during the Grand Hindi Day celebration in the Company. A workshop was also organized during the above period for Hindi Typing. The Hindi Word of the day is displayed in a prominent place in the Company and Hindi Newspapers are being procured on daily basis to propagate the usage of the official Language among employees. The Officers/ employees of the Company regularly take part in the meetings/ programs, Online webinars and Hindi Month Celebration of the Town Official Language Implementation Committee (TOLIC).

The Chief Vigilance Officer appointed by the Government of India heads the Corporate Vigilance Department of the company. Ministry of Heavy Industry vide its order No. 5(47)/2010-P.E.X (e.3152) dated 18.08.2023 has conveyed the extension of entrustment of additional charge of the post of Chief Vigilance Officer, HMT Limited to Ms. Kalyani Sethuraman, IRAS (94), CVO, Hindustan Aeronautics Ltd. (HAL), Bengaluru for a further period of one-year w.e.f. 04.04.2023 to 03.04.2024 or till the appointment of a regular CVO or until further order, whichever is the earliest. The Corporate Vigilance Department carries out vigilance function in the Holding Company as well as Subsidiary Companies. Vigilance functions in the Manufacturing Units and Marketing Offices are looked after by Vigilance Officers, under the guidance of Chief Vigilance Officer.

All the Unit Vigilance Officers send their monthly Vigilance/Inspection Reports and Surprise Inspection reports to CVO. Reports so received are scrutinized at CVO Office for further action. Unit Vigilance Officers also verify Annual Property Returns submitted by the employees of the Unit. Apart from regular inspections by Unit Vigilance Officers, CVO conducts CTE (Chief Technical Examiner at CVC) type surprise and regular inspections of high value purchase/contracts and systems by visiting various subsidiaries and Units. Violations of rules and procedures observed during the inspection of files by CVO/DCVO/ Unit VOs were recorded and depending upon the seriousness of the deviations further actions are taken. Unit Vigilance Officers are advised to discuss deviations noticed by them during their inspection; in the quarterly Vigilance Workshop and advice the concerned officers that the violations of rules and procedures pointed out by the Vigilance Department should not be repeated.

Emphasis was laid on preventive vigilance by striving towards strict adherence 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 in www.eprocure.gov.in.

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

3. Application form for vendor registration along with list of items required by different Units of HMT Limited and Subsidiaries are made available on Company Website to enable the interested vendors to download the application form and submit the same to the Unit of their choice.

4. Registered with ‘TREDS' (Trade Receivables Discounting Systems) for better MSME payment process.

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

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

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

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

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

10. Quarterly vigilance workshops were organized at all manufacturing units to enhance the level of vigilance awareness among the employees and other stakeholders. 11. Efforts are made for effective implementation and usage of ‘GEM' by Training and Awareness to the departments.

12. Awareness initiatives on Vigilance to fight corruption in the organization have been uncalculated efficiently. 13. Vigilance Awareness Week 2022, Preventive Vigilance Measures cum housekeeping activities was campaigned for 3 months from 16th Aug 2022 to 15th Nov 2022 as a precursor to VAW with the theme "Corruption free India for a developed Nation" ``P???C??U Q??? P??UI?-?U?M??X?I? P??UI?'' was observed in all Units and Offices of HMT Limited and Subsidiary Companies as per the guidelines of CVC. The number of inspections including surprise inspections carried out by CVC and Unit Vigilance Officers along with the number of property returns scrutinized between April 2022 to March 2023 is tabulated below:-

A Report on Management Discussion and Analysis is appended to this Report separately as Annexure-3.

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

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under the Companies (Accounts) Rules, 2014 are appended as Annexure-6 DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(C) of the Companies Act, 2013: v that in the preparation of the annual financial statements for the year ended 31.03.2023, the applicable accounting standards has been followed along with proper explanation relating to material departures; v that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the year ended on that date; v that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; v that the annual financial statements have been prepared on a going concern basis; v that proper internal financial controls were in place and are adequate and were operating effectively; v that proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively; v Since the overall performance of the Company is evaluated against the annual MoU targets set by the Department of Public Enterprises (DPE), no specific criteria is laid down for the evaluation of Board and of its Committees and the individual 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 other CPSEs. Accordingly, your Company has not formulated any separate policy in respect of appointment or evaluation of senior management and key managerial personnel.

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Company has placed a copy of the Annual Return as at March 31, 2023 on its website at https://www.hmtindia.com/ investor-relation/ar/.

M/s. S.S.B & Associates, Chartered Accountants, Bengaluru were appointed as Statutory Auditors of the Company for the year 2022-23 by the Comptroller

& Auditor General of India. M/s. V D Abhyankar

& Associates, Chartered Accountants, was also appointed as Branch Auditor for the Food Processing Machinery Division, Aurangabad of the Company.

Replies to the observations by the Statutory Auditors in their Report are 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 made thereunder, the Company has appointed Shri D. Venkateswarlu, Practicing Company Secretary, to undertake the Secretarial Audit of the Company for the year 2022-23. The report of the Secretarial Auditor is appended as Annexure-8 to this report. The reply to observations of Secretarial Auditor is attached as addendum to Director's report as Annexure-9. SECRETARIAL AUDIT REPORT OF UNLISTED MATERIAL SUBSIDIARY

Pursuant to the provisions of Regulation 24A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Secretarial Audit Report for the Financial Year 2022-23 of HMT Machine Tools Limited & HMT (International) Limited, an Unlisted Material Subsidiaries of the Company along with replies to observations are appended as

Annexure-10, 11, 12 & 13 to this report.

The Company's Business Responsibility & Sustainability Report for the year 2022-23 is appended as Annexure-14 to this report.

During the financial year, Ten Board meetings were held and the details are given in Corporate Governance Report.

Shri. Vijay Mittal, Joint Secretary, Ministry of Heavy Industries was appointed as Part time Official Director on the Board of HMT Limited with effect from 25th March 2022, until further orders vice Shri. Jeetendra Singh, Joint Secretary, Ministry of Heavy Industries.

Shri. A.K. Jain, Executive Director, M/s. Bharat Heavy Electricals Limited has been entrusted with the additional charge of the post of Chairman

& Managing Director & Director (Finance), HMT Limited upto 24th August, 2022. Shri. Pankaj Gupta, Executive Director, M/s. Bharat Heavy Electricals Limited has been entrusted with the additional charge of the post of Chairman & Managing Director, HMT Limited w.e.f. 25th August, 2022 to 24th November 2023, or till the joining of a regular incumbent, or until further order, whichever is earlier., by the Ministry of Heavy Industries. Dr. Renuka Mishra, Economic Advisor, Ministry of Heavy Industries was appointed as Government Nominee Director on the Board of HMT Limited with effect from 12th September 2022, until further orders vice Shri. Vijay Mittal, Joint Secretary, Ministry of Heavy Industries.

Shri. Ramji Lal and Shri. Vishweshwar Bhat ceased to be Independent Directors in view of completion of term of three years on close of business hours on 26th January 2023.

Ms. Arti Bhatnagar, Additional Secretary & Financial Adviser, Ministry of Heavy Industries was appointed as Government Nominee Director on the Board of HMT Limited with effect from 14th February 2023, until further orders vice Shri. Shashank Priya, ex-Special Secretary & Financial Adviser, Ministry of Heavy Industries.

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

Subsequent to the financial year, Ministry of Heavy Industries, Government of India, vide its Order No. 1-05/7/2019-PE-X (e-19281) dated 24th August, 2023, has entrusted the additional charge of the post of Director (Finance), HMT Limited, Bengaluru to Ms. Rita Saxena, General Manager (Internal Audit), BHEL, Bengaluru for a period upto 24.05.2024 or till the appointment of a regular incumbent or till further orders, whichever is the earliest, subject to the approval of Appointments Committee of the Cabinet (ACC). Ms. Rita Saxena (DIN: 10294769), General Manager (Internal Audit), BHEL, Bengaluru has assumed the additional charge of the post of Director (Finance), HMT Limited, Bengaluru on 25th August, 2023.

Further, Ms. Mukta Shekhar (DIN: 10118859), Joint Secretary, Ministry of Heavy Industries was appointed as Government Nominee Director on the Board of HMT Limited with effect from 4th September 2023, until further orders vice Dr. Renuka Mishra, Economic Advisor, Ministry of Heavy Industries.

Ms. Arti Bhatnagar (DIN: 10065528), Ms. Rita Saxena (DIN: 10294769) and Ms. Mukta Shekhar (DIN: 10118859) are proposed for appointment as Director in terms of Article 67(4) of the Article of Association of the Company read with Section 160 of the Companies Act, 2013 in the ensuing Annual General Meeting. The Nomination and Remuneration Committee and Board of Directors has recommended their appointments.

Shri. Pankaj Gupta, Chairman and Managing Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Board recommends his reappointment.

Shri. Pankaj Gupta, Chairman and Managing Director (Additional Charge), Smt. Kamna Mehta, Chief Financial Officer and Shri. Kishor Kumar S, Company Secretary are the KMP's as defined under Section 2(51) of the Companies Act, 2013 as on 31.03.2023.

As per section 149(7) of the Companies Act, 2013, during FY2022-23, the Company has received declaration from Shri. R. Vishweshwar Bhat & Shri. Ramji Lal, Independent Directors of the Company. Regarding proficiency, the Company has adopted requisite steps towards the inclusion of the names of all Independent Directors in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar (‘IICA'). Accordingly, all the Independent Directors of the Company have registered themselves with IICA for the said purpose. 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 18.12.2020, since Independent Directors of the Company have served as Directors for a period of less than three (3) years on the Board of Listed Company as on the date of inclusion of their names in the database, they are required to undertake online proficiency self-assessment test unless exempted. Independent Directors have informed the Company that they will undertake the online assessment test before the due date unless exempted from the test.

A declaration by the Chairman & Managing Director for having obtained affirmation of compliance of the Code of Conduct by the Board Member (s) and Senior Management for the year ended March 31, 2023 is appended to this report as Annexure-15.

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

There are no Material changes and commitments affecting the financial position of the company which occurred between 31st March 2023 and date of signing of this Report.

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

All Related Party Transactions entered into during the year were in Ordinary Course of the Business and at Arm's Length basis. No Material Related Party Transactions, i.e., transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statement, were entered into during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 is not applicable.

However, Board has approved to transfer the Immovable assets (Book value Rs.296.06 lakhs), accept all the legal cases and uncrystallized Contingent Liabilities upto Rs.80 crores from HMT Watches Limited, wholly owned subsidiary Company under closure, consequent to administrative approval of Ministry of Heavy Industries. Approval from the Shareholders of the Company obtained on 18th December 2022. Necessary disclosures have been made in the note to the Financial Statements. Further, Company shall continue with the activity of disposal of immovable assets of HMT Watches Limited and transfer the sale proceeds received in this regard to Administrative Ministry/Government of India as per the Cabinet Committee of Economic Affairs ("CCEA") approval dated 13.01.2016 after deducting the applicable taxes and related expenses thereon.

During FY2022-23, there were no instances of providing Guarantees and making Investments covered under the provisions of Section 186 of the Companies Act, 2013. Details of Loans covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements

There are no instances of one-time settlement during the financial year 2022-23.

There are no applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year 2022-23

The Register of Members and Share Transfer records both in respect of the shares held in physical and depository form are maintained by M/s. KFin Technologies Limited, 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 in future. As on 31st March 2023, no amount is required to be transferred to Investor Education and Protection Fund (IEPF).

During FY2022-23, maintenance of cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013 is not applicable to the Company.

Your Directors gratefully acknowledge and are thankful to the various Departments and Ministries in the Government of India, particularly the Ministry of Heavy Industry, Ministry of Corporate Affairs, Comptroller and Auditor General of India, Principal Director-Commercial Audit, Statutory and Branch Auditors, various State Governments, Foreign Collaborators, the Subsidiary Companies, Suppliers, Reserve Bank of India, UCO Bank and the valued Customers of the Company both in India and abroad for their continued co-operation and patronage. Your Directors' would also like to take this opportunity to express their appreciation for the hard work and sincere contributions and commitment of all the HMT employees and look forward to their continued services in pursuit of building a world class HMT.

1. Brief Outline on CSR Policy of the Company: CSR Vision: To contribute the sustainable development and inclusive growth while taking care of People, Planet and organizational goals / growth.

CSR Mission a) To become socially responsible corporate entity committed to improving the quality of life of the society at large. b) To create and develop facilities for the communities we engage with. c) To balance economic, environmental and welfare development objectives through collective and unified effort of all stakeholders. Objective: The policy is framed with the objective(s) stated herein below: a) To provide framework for carrying out the CSR projects or programs or activities including the modalities of execution and transparent monitoring mechanism for its implementation undertaken by the Company which is within the scope of the Companies Act 2013 and the rules made therein; the DPE Guidelines, as amended from time to time; b) To create awareness on CSR practices across all the levels in the Company, operate its business in an economically, socially & environmentally sustainable manner, while recognizing the interests of all its stakeholders. c) Through its CSR Initiatives, generate community goodwill and help reinforce a positive & socially responsible image for HMT.

Main Features of the Policy a) This policy broadly covers all relevant clause(s)/ sections of the Companies Act, 2013, the Companies Amendment Rules, 2014 and the DPE Guidelines. b) This Policy relates to the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act and the expenditure thereon, excluding activities undertaken in pursuance of normal course of business of the Company. c) The CSR projects or programs or activities that benefit only the employees of the company and their families shall not be considered as CSR activities in accordance with section 135 of the Act. d) The CSR and Sustainability budget expenditure shall be fixed in accordance with the provisions of the Act, Rules and the Guidelines. e) The Company will endeavor at all times to build and develop the skills of its CSR team and enhance level of CSR awareness within the organization. f) Execution of CSR projects can be taken up generally by in-house teams or through suitable partnerships with State Governments, PSUs, NGOs, Private Companies. As far as possible, HMT's manpower should be committed only for monitoring and supervision. g) To assist and take up CSR activities forward, the Corporate CSR Committee & Unit CSR Committee (on need basis) has been constituted.

2. Composition of CSR Committee:

1. Ceased to be Chairman w.e.f. 24.08.2022

2. Appointed as Chairman w.e.f. 25.08.2022

3. Ceased to be Member w.e.f. 26.01.2023

4. Ceased to be Member w.e.f. 26.01.2023

5. Appointed as Member w.e.f. 27.01.2023

6. Appointed as Member w.e.f. 27.01.2023 and Ceased to be Member w.e.f. 14.02.2023

7. Appointed as Member w.e.f. 14.02.2023

3. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company.

Committee Composition: https://www.hmtindia.com/investor-relation/share-holder-information/ CSR Policy: https://www.hmtindia.com/policies/ CSR Projects: https://www.hmtindia.com/investor-relation/share-holder-information/

4. Provide the executive summary along with web-link(s) of Impact Assessment of CSR Projects carried out in pursuance of sub-rule (3) of rule 8, if applicable.

Not applicable

5. (a) Average net profit of the company as per sub-section (5) of section 135: Rs. 304545017/- (b) Two percent of average net profit of the company as per sub-section (5) of section 135: Rs.6090900/-

(c) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: NIL# # Funds to be spent as part of on-going CSR projects of previous financial years are detailed in Table No.7. below.

(d) Amount required to be set off for the financial year, if any: NIL (e) Total CSR obligation for the financial year [(b)+(c)-(d)]: Rs. 60,90,000/-

6. (a) Amount spent on CSR Projects (both Ongoing Project and other than Ongoing Project):

Rs. 6040919/-

(b) Amount spent in Administrative Overheads: Rs. 49,981/-

(c) Amount spent on Impact Assessment, if applicable: Not Applicable (d) Total amount spent for the Financial Year [(a)+(b)+(c)]: Rs. 60,90,900/-^@

@ Total CSR amount earmarked during the reporting FY2022-23.

(e) CSR amount spent or unspent for the Financial Year:

8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: No Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year:

9. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per subsection (5) of section 135: N/A

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

(Information in respect of each subsidiary to be presented with amounts Rs in Lakhs)

1. Names of subsidiaries which are yet to commence operations - NIL

2. *Names of subsidiaries which have been liquidated or sold during the year–One

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Venture

(Rs in Lakhs)

1. Names of Associates which are yet to commence operations - NIL

2. Names of Associates which have been liquidated during the year - NIL