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HMT Ltd.

BSE: 500191 Sector: Engineering
NSE: HMT ISIN Code: INE262A01018
BSE 00:00 | 24 Apr 2020 HMT Ltd
NSE 05:30 | 01 Jan 1970 HMT Ltd

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OPEN 10.65
PREVIOUS CLOSE 11.14
VOLUME 2331
52-Week high 19.50
52-Week low 7.50
P/E 16.67
Mkt Cap.(Rs cr) 391
Buy Price 10.65
Buy Qty 1.00
Sell Price 11.00
Sell Qty 638.00
OPEN 10.65
CLOSE 11.14
VOLUME 2331
52-Week high 19.50
52-Week low 7.50
P/E 16.67
Mkt Cap.(Rs cr) 391
Buy Price 10.65
Buy Qty 1.00
Sell Price 11.00
Sell Qty 638.00

HMT Ltd. (HMT) - Director Report


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Company director report

To

The Members

HMT Limited

Bangalore

Dear Members

The Board of Directors has pleasure in presenting the 66th Annual Report on theBusiness & Operations of your Company and Annual Accounts of the Company for the year2018-19 along with the Auditors’ Report. The Comments of the Comptroller &Auditor General of India are attached to this Report.

Financial summary or highlights / Performance of the Company (Standalone)

Rs. in Lakhs

Particulars 2018-19 2017-18
Gross Revenue from Continuing Operations 1960 1480
Other Income 2858.68 1729.79
Total Income 4819.03 3209.62
Profit Before Depreciation and Finance Costs 1748 603
Depreciation 25 25
Gross Profit/(Loss) 1723 578
Finance Cost 29 212
Net profit before Exceptional Items and PPA 1694 366
Add : Exceptional Items 872 -
Less : Prior Period Adjustments - -
Net Profit before Tax 2566 366
Provision for Tax - -
Net Profit After Tax 2566 366
Profit/Loss from discontinued operations (841) (1083)
Net Profit/(Loss) for the year 1725 (717)
Other Comprehensive Income (32) 512
Total Comprehensive Income 1693 (205)

BUSINESS SCENARIO:

As per the provisional estimates of national income released by Central StatisticsOffice on 31st May 2019 the growth rate of Gross Domestic Product (GDP) at constant(2011-12) prices for the year 2018-19 is estimated at 6.8 per cent as compared to thegrowth of 7.2 per cent in 2017-18.

The growth in Gross Value Added (GVA) at constant basic prices for the year 2018-19 isestimated at 6.6 per cent as compared to 6.9 per cent in 2017-18. At the sectoral levelthe growth in the ‘agriculture forestry and fishing’ ‘mining &quarrying’ ‘manufacturing’ and ‘trade hotels transportcommunication and services related to broadcasting’ is estimated to be 2.9 percent1.3 percent 6.9 percent and 6.9 percent respectively in 2018-19.

The cumulative growth of Index of Industrial Production (IIP) with base 2011-12 for theperiod April ’18 - March ‘19 over the corresponding period of the previous yearstands at 3.6 percent. The Eight Core Industries comprise 40.27 per cent of the weightageof items included in the Index of Industrial Production (IIP). During 2018-19 theproduction in eight core industries grew by 4.3 per cent as compared to the growth of 4.2per cent in corresponding period of previous year.

The manufacturing sector’s growth during 2018-19 was 3.5 per cent as compared togrowth of 4.6 per cent during 2017-18.

India’s merchandise export achieved its lifetime high at US$ 331.02 Billion duringfiscal 2018-19. Secondly it was the first time when overseas shipment of goods crossed$300 billion mark for two consecutive fiscals and merchandise export growth was back todouble digit in the concluding month of fiscal 2018-19 after crippling for the last fivemonths. During March 2019 exports went up to US$ 32.55 Billion from US$ 29.32 Billion inthe same month in the previous year registering 11.02 percent growth. In rupee termsgrowth was higher at 18.63 percent during the month.

OPERATING RESULTS:

Company’s main business portfolio included product range of Food ProcessingMachines. The Company recorded a Production of Rs.17.01 Crore (128 Nos of Food ProcessingMachines) as against Rs. 12.05 Crore (121 Nos of Food Processing Machines) in theprevious year and Sales of Rs. 16.36 Crore (91 Nos of Food Processing Machines) comparedto Rs. 11.32 Crore (107 Nos of Food Processing Machines) in the previous year.

Rs. In Cr.

Year 2018-19 2017-18
Nos. Value Nos. Value
Production 128 17.01 121 12.05
Sales 91 16.36 107 11.32

The total turnover of the Company for the year 2018-19 stands at Rs.19.60 Crore asagainst Rs.14.77 Crore (excluding Excise Duty) during 2017-18. The Profit Before Taxduring the year 2018-19 is Rs.25.66 Crore as against Rs.3.67 Crore in the previous year.

HMT Group along with its Subsidiaries achieved an aggregate production of Rs.255.84Crore. Revenue from the operations reported as Rs. 262.77 Crore for the year 2018-19against Rs. 202.41 Crore of previous year. HMT Group has registered profit of Rs. 143.82Crore against loss of Rs.142.13 Crore during the previous year mainly due to long termcapital gain on account of sale of land of HMT Watches Ltd and HMT Bearings Ltd. The Landsale proceeds of closure subsidiaries has been transferred to Government of India as perthe Cabinet Approval after deduction of taxes.

FUTURE OUTLOOK:

Food Processing Machinery

The Food Processing Industry has emerged as one of the important segment in terms ofits contribution to Indian economy as it contributes 9 % and 11% of GDP in Manufacturingand Agriculture sector respectively.

The contribution of the food processing sector to Gross Value Added (GVA) employmentand investments is significant. It is estimated that the gross value of plant andmachinery deployed in food processing sector by the year 2024-25 will be Rs. 350000Crore approximately.

The growth in the processing equipment market in India is driven mainly by theincreased demand for processed food products. There is a need to adopt new methodstechnology and machinery for the food processing industry with least impact on sensoryqualities such as colour and texture. Technological advancements are necessary for thegrowth of the sector and for the diversification of the existing production capacity ofthe food processing industry.

The Government is encouraging the technological advancements for the industry byproviding specific incentives to the sector in terms of duty reductions duty exemptionsetc. Given this scenario there is an abundant opportunity for various multinationalcompanies to explore the manufacturing of equipment for food processing sector in India.

A Dairy Processing & Infrastructure Development Fund (DIDF) has been set up with anoutlay of USD 1.67 billion during the period from 2017-18 to 2028-29. Out of 1.67 billionsUSD of financial outlay for project components of DIDF 1.23 billions USD shall be loanfrom NABARD to National Dairy Development Board (NDDB) and National Co-operativeDevelopment Cooperation (NCDC). This investment is expected to benefit 9500000 farmersin about 50000 villages.

The sub sector manufacturing dairy products over seven years from 2008-09 to 2014-15had a compounded annual growth rate of 13 per cent in fixed capital and 16 per cent intotal output. This reflects huge capital deployment in the segment as well as growth inthe output for the segment. Projecting the growth of the segment for the next 10 years atthe current growth rate of 13 per cent the investment in fixed capital is estimated to beRs. 66124 Cr. by the year 2024-25.

The growth of food processing industry is fuelling the demand for equipment for thesector. The Indian food processing market has the presence of most of the global equipmentmanufacturing companies. Factoring the growth for gross value of dairy plant and machineryat 81 per cent of fixed capital the expected size of the segment is estimated to be Rs.53566 Cr. by the year 2024-25.

Machine Tools Market in India:

The continued investment by the government in public infrastructure is helping theeconomy to grow. It is expected that India’s economy may improve and strengthen theGovernment of India’s aim of manufacturing sector contributing to around 25% of thecountry’s GDP.

For this the industry needs to tap into various opportunities and forge partnershipswith overseas companies for technology reforms which can pay rich dividends. This wouldalso enable the manufacturing sector to explore possibilities of substituting importmachinery with indigenous ones and meet the strategic needs of various industries. Thereduction in corporate tax for entities with turnover of upto Rs. 250 Cr to 25% is apositive step towards development of MSME sector and enhancing their productioncapacities. India has a significant number of MSMEs and this move is expected to fostertheir development.

As per Gardner’s ‘World Machine Tool Output Survey 2018’ India isranked 8th in Consumption and 10th in Production in the global list of world machine toolconsuming and producing countries. The country is set to become a key player in the globalmachine tools industry and is likely to see substantial high end machine toolsmanufacturing.

Machine tool production for FY 2018-19 is estimated to be around Rs. 9000 crores andconsumption is estimated to be around Rs. 17000 crores. Production is estimated to growby around 25% and consumption may also grow by 20% during the period.

The Indian machine tools sector offers several opportunities for investment. Given thecurrent gap between demand and supply there is a clear need for adding capacities in thissector. The industry is moving towards increasingly sophisticated CNC machines driven bydemand from key user segments such as automobiles and consumer durable Aerospace etc.

Domestic consumption is also expected to increase due to revival in rural demand afternormal monsoon and agricultural impetus. Demand for machine tools accrues from themanufacturers of primary goods and intermediate goods. The primary user industries includethe automotive sector capital goods sector and consumer durables sector. Prominent usersof machine tools in the intermediate goods sector include the auto components the balland roller bearings and electronic components and their demand for machine tools areprojected to remain high. The automotive sector is also steadily picking up which isexpected to give fillip to MSMEs in the country. The development of MSME’s is alsoone of the principle objectives of the Government. In view of the thrust given bygovernment for Make in India program an increase in the order flow in mining & metalsand railway sector is expected during 2019-20 in comparison with the previous year.Sectors like defence and industrial intermediates recorded a good growth in turnoverduring 2018-19. This growth in various sectors presents a positive outlook for improvingthe company’s business during 2019-20.

DIVIDEND & PROVISIONS

As your Company still has accumulated losses & keeping in view requirement of fundsfor operations the Directors are not in a position to recommend any dividend to theshareholders.

SHARE CAPITAL

The Authorized Share Capital of the Company is Rs. 2100 Crore and paid up equity ShareCapital is Rs. 355.60 Crore (355601640 equity shares of Rs. 10/- each fully paid up).

FIXED DEPOSITS

The Company has not accepted any deposits from the public and hence there is noviolation of Chapter V of Companies Act 2013 and the corresponding rules made there under

Disclosure as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has adopted a policy on prevention prohibition and redressal of SexualHarassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.During the Financial year 2018-19 the Company has not received any complaints of SexualHarassment and no cases are pending.

FRAUD REPORTING

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

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Every Company having Networth of Rs. 500 Crore or more or turnover of Rs. 1000 Croreor a net profit of Rs. 5 Crore or more during the immediately preceding financial yearshall constitute the CSR Committee of the Board. The Company does not meet any of thesecriteria during immediately preceding financial year. Hence CSR Committee has not beenconstituted during FY2018-19.

ENTERPRISE RISK MANAGEMENT

In order to have a better reporting system on various risk faced by the Company and toassess such risk for taking appropriate action in a timely manner the Company has inplace Guidelines on Risk Management. In terms of section 134 (3) (n) of the Companies Act2013 & the SEBI (LODR) Regulations 2015 the Company has formulated "RiskManagement Policy" on 19.06.2018 and the policy is placed on the Company’swebsite www.hmtindia.com.

PARTICULAR OF EMPLOYEES

No employees of the Company received remuneration in excess of the limits prescribedunder Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.

SUBSIDIARY COMPANIES

HMT Machine Tools Limited

The Subsidiary achieved Sales of Rs.217.41 Crore during the year 2018-19 against Rs.168.83 Crore in the previous year and Production attained is of Rs. 238.83 Crore asagainst Rs. 163.15 Crore in the previous year. Net loss reported is Rs. 63.83 Croreduring the year 2018-19 against reported loss of Rs 129.25 in previous year.

CHANDRAYAAN-2: HMT Machine Tools Ltd. the Subsidiary of HMT Limited has associatedwith the recent successful launch of Chandrayaan by ISRO project through supply ofproducts and services to meet the exacting standards of ISRO. HMT’s connection withthe project included the twin associations as detailed below:

The Solid Rocket Motors of Chandrayaan-2 launch vehicle were machined on the 3-Axis CNCVertical Facing Mill Machine supplied by HMT’s Hyderabad Unit while HMT’s KochiUnit was associated in assembly of GSLV Vehicle Control System Components at ISRO’sGOCO Centre. HMT Machine Tools Limited Hyderabad Unit has designed developedmanufactured and assembled the 3-Axis CNC Vertical Facing Mill for supply to ISRO’sSatish Dhawan Space Centre Sriharikota (SDSC SHAR) for machining of solid rocket motors.The machine is with state-of-the-art technology with various sub-systems remote CNCcontrolled system to machine extremely hazardous solid propellant and high speed machiningfor motor insulation. All parameters of the machine were validated during the pre-dispatchinspection thus confirming the entity’s strength to build such high-end machines.Apart from this HMT’s Kalamassery Unit has assembled the GSLV Vehicle Control SystemComponents in their manufacturing plant ISRO’s GOCO Centre which was used inChandrayaan-2

HMT (International) Limited

The Subsidiary achieved a turnover of Rs. 57.07 Crore during the year 2018-19 asagainst Rs. 24.95 Crore recorded in the previous year 2017-18. New Order procurementduring the year is Rs. 122.54 Crore. Continuing the trend of achieving profits Subsidiaryreported Profit Before Tax (PBT) of Rs. 2.02 Crore against Rs. 0.01 Crore reported inprevious year. The Subsidiary has maintained its consistent dividend payment record andhas recommended a dividend of 20% on its Paid-up equity share capital for the year2018-19.

SUBSIDIARIES UNDER CLOSURE:

As per the CCEA decision the operations of the subsidiaries namely HMT Watches LtdHMT Chinar Watches Ltd and HMT Bearings Ltd have been closed. There has been no productionduring the year. Revenue achieved has been on account of sales/transfer of movable assetsof these Subsidiaries. During the year Profit after Tax reported by HMT Watches Limited isRs. 121.28 Crore and by HMT Bearings Limited is Rs. 79.23 Crore after considering incomefrom sale of land Rs.165.06 Crore and Rs.105.12 Crore respectively. HMT Chinar WatchesLimited has incurred a net loss of Rs. 0.82 Lakhs.

The shareholders of HMT Chinar Watches Limited (i.e. HMT Limited) in the Extra OrdinaryGeneral Meeting held on March 25 2019 have approved the Voluntary Liquidation of theCompany and appointed Mr. Akhilesh Kumar Gupta Insolvency Professional as liquidator andthe same has also been approved by the creditors in the meeting held on March 25 2019.

The voluntary liquidation proceedings in respect of HMT Chinar Watches Limitedcommenced from the date of shareholders’ approval i.e. March 25 2019.

ASSOCIATE /JOINT VENTURE COMPANY

SUDMO-HMT Process Engineers (India) Limited

This Joint Venture Company could not transact any business during the year underreview. For the financial year 2018-19 this Company incurred Net Loss of Rs 1.50 Lakhs.

Gujarat State Machine Tools Corporation Ltd

This Joint Venture Company between HMT and GIIC Ltd has discontinued its operationssince long. It is therefore proposed to divest from this Associate Company jointly withthe JV Partner. The process of disinvestment from this Company is under consideration bythe Company in consultation with the JV Partner.

Salient features of the financial statement of subsidiaries/ associate companies/jointventures are provided in Form AOC-1 as annexure.

INDIAN ACCOUNTING STANDARDS

As required under Companies (Indian Accounting Standard) Rules 2015 (Notification No.111(E) dated 16.02.2015 issued by Ministry of corporate affairs) the Company has preparedthe financial statements in accordance with Indian Accounting Standards(Ind AS) witheffect from Financial year 2016-17.

REDUCTION IN SHARE CAPITAL

Hon’ble National Company Law Tribunal (NCLT) vide its Order dated 16.10.2018 hasconfirmed/ approved reduction in share capital of the Company from Rs.1204.09 Crores toRs.355.60 Crores by reduction of 848490000 Equity Shares of Rs.10/- each held by Presidentof India (as per the Cabinet Approval). Registrar of Companies Karnataka (ROC) hasregistered the NCLT order on 17.11.2018 and issued "Certificate of Registrationconfirming the Reduction of Share Capital of HMT Ltd". However the process ofreduction of share capital in the records of Ministry Corporate Affairs portal("MCA") Stock Exchanges Depositories are pending for procedural complianceswhich have been already taken up in consultation with Registrar and Share Transfer Agent("RTA"). Hence there is a difference between Paid up Share Capital of theCompany as per Audited Financial Statements and Shareholding Pattern provided by RTA.

CONSOLIDATED FINANCIAL STATEMENTS

As required under the Companies Act 2013 and SEBI (LODR) Regulation 2015 ConsolidatedFinancial Statements of the Company along with that of the Subsidiaries for the financialyear 2018-19 conforming to the applicable Accounting Standards are attached to thisReport along with the Auditors’ Report on the same.

The financial information of each of the subsidiary companies has been furnished aspart of the Consolidated Balance Sheet of the Company. Separate audited accounts of thesubsidiary Companies will be made available upon request by any member of the Companyinterested in obtaining the same. The annual accounts and other information of each of thesubsidiary companies will be available for inspection by any member at the registeredoffice of the Company & also available at company’s website www.hmtindia.com.

HUMAN CAPITAL

Information in accordance with the Companies Act 2013 read with the Companies(Particulars of Employees) Rules 1975 as amended is NIL for the year 2018-19.

The employee strength of the Company as on March 31 2019 stood at 101 Nos comprisingof various categories of employees in manufacturing plants and other offices in technicaland other professional areas.

The number of employees on the rolls of the Company as on March 31 2019 in SC/STEx-servicemen Physically Handicapped and Women Employee Categories etc. is detailedbelow:

Scheduled Castes 16
Scheduled Tribes 03
Other Backward Classes 18
Ex-Servicemen 01
Persons with Disabilities 03
Women employees 18
Minorities 06

INDUSTRIAL RELATIONS

The overall Industrial Relations situation in the Company during the year remainedcordial.

IMPLEMENTATION OF OFFICIAL LANGUAGE

Continuous efforts are being made by the Company towards implementation of OfficialLanguage Act Rules & Policy as per the directives of the Government to enhance thelevels of usage. The Official Language Implementation Committee have been constituted inall the Units of the Company and its Subsidiaries including the Corporate Office atBangalore to monitor implementation of Official Language Act Rules Policy etc. whichmeets at regular intervals in every quarter.

In order to propagate the usage of Hindi as Official Language "HINDI DIWAS/HINDIFORTNIGHT" was observed during the month of September. Various competitions in Hindisuch as Hindi Story narration Hindi News Paper Reading Hindi Quiz Hindi ConversationHindi Antakshari etc. were organized and participants were awarded prizes. A workshopwas organised during the above period. The Hindi Magazines/

Newspapers are being procured to propagate the usage of Hindi among employees. Theconcerned Officers of the Company regularly take part in the meetings of the Town OfficialLanguage Implementation Committee.

Reporting on progress of Hindi proliferation in the Company is being done periodicallyon Rajabhasha Vibhag portal.

VIGILANCE ACTIVITIES

Chief Vigilance Officer (CVO) appointed by the Government of India heads the CorporateVigilance Department of the Company. Presently CVO Engineering Projects India Limited(EPIL) has been assigned with the additional charge of CVO HMT Limited.

The Corporate Vigilance Department carries out vigilance function in the HoldingCompany as well as Subsidiary Companies. Vigilance function in the manufacturing Units andMarketing Offices are looked after by Vigilance Officers under the guidance of ChiefVigilance Officer.

All the Unit Vigilance Officers send their monthly Vigilance/ Inspection Reports andSurprise Inspection reports to CVO. Reports so received are scrutinized at CVO Office forfurther action. Unit Vigilance Officers also verify Annual Property Returns submitted bythe employees of the Unit.

Apart from regular inspections by Unit Vigilance Officers CVO conducts CTE (ChiefTechnical 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 of files byCVO/Dy.CVO/Unit VOs were recorded and depending upon the seriousness of the deviationsFurther actions are taken. Unit Vigilance Officers are advised to discuss deviationsnoticed by them during their inspection in the quarterly Vigilance workshop and advicethe concerned officers that the violations of rules and procedures pointed out by theVigilance Department should not be repeated and all the concerned officers should complywith CVC and Company Purchase Manual guidelines.

Emphasis was laid on preventive vigilance by striving towards strict adherence to allrules and procedure and all norms of transparency in tendering process. Based onCVC’s guidelines for ‘Improving Vigilance administration by leveragingtechnology and increasing transparency through effective use of website’ necessarydirection were given by CVO for implementation of the same. Some of the systems put inplace by the Company are:

1. The Quarterly Vigilance/Annual report is switched over to online method from manualcopy as per the direction from CVC.

2. Publishing details regarding all purchase orders/ contracts concluded during themonth of and above the threshold value (presently Rs 5.00lakhs). This is generallyfollowed by all manufacturing Units.

3. HMT Limited has registered under GEM and the procurements are being made on periodicbasis based on the requirements.

4. The Management has been asked to implement the e-procurement & Integrity Pact asper GOI Guidelines.

5. In many of the units/subsidiary e payment mode to suppliers is adopted andcompliances level is 40 to 85%.

6. Quarterly vigilance workshops were organized at all manufacturing units to enhancethe level of vigilance awareness among the employees.

7. Vigilance Awareness Week 2018 with the theme "Eradicate Corruption-Build a NewIndia" was observed in all Units and Offices of HMT Limited and Subsidiary Companiesas per the guidelines of CVC.

8. Number of inspections including surprise inspections carried out by Unit VigilanceOfficers and number of Annual property returns scrutinized between April 2018 to March2019 is tabulated below:-

Inspection Total carried out between April 2018-March 2019 (by Unit Vigilance Officers)
Periodic Inspection of purchase files 1238
Surprise Inspection 258
Scrutiny of Annual Property Returns 577

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the SEBI (LODR) Regulation 2015 a Report on theCorporate Governance is annexed as part of this Report along with the ComplianceCertificate from the Auditor & Certificate regarding disclosures pertaining todisqualification of Directors pursuant to SEBI(LODR) Amendment Regulations2018-Schedule V(C) (10) (i) from Company Secretary in Practice. A Report on Management Discussion andAnalysis is also appended to this Report separately. Further a declaration by theChairman & Managing Director for having obtained affirmation of compliance of the Codeof Conduct by the Board Member (s) and Senior Management for the year ended March 312019 is also appended.

The Register of Members and Share Transfer Records both in respect of the shares heldin physical and depository form are maintained by Karvy Fintech Private Limited theRegistrars & Share Transfer Agents of the Company.

INFORMATION REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO

Particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under the Companies (Disclosures of Particulars)Rules 1988 are annexed to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(C) of the Companies Act 2013:

• that in the preparation of the annual financial statements for the year ended31.03.2019 the applicable accounting standards has been followed along with properexplanation relating to material departures;

• that such accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit and loss of the Company for the year ended on that date;

• that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

• that the annual financial statements have been prepared on a going concernbasis;

• that proper internal financial controls were in place and are adequate and wereoperating effectively;

• that proper systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively;

• Since the overall performance of the Company is evaluated against the annual MoUtargets set by the Department of Public Enterprises (DPE) no specific criteria is laiddown for the evaluation of Board and of its Committees and the individual Directors. Sinceyour Company being a Central Public Sector Enterprise (CPSE) the personnel policies andguidelines issued by DPE are being adopted in line with other CPSEs. Accordingly yourCompany has not formulated any separate policy in respect of appointment or evaluation ofsenior management and key managerial personnel.

EXTRACT OF ANNUAL RETURN

In terms of Section 92(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 an extract of the Annual Return in theprescribed form are placed as annexure MGT-9 to this Report.

AUDITORS

M/s. B. K. Ramadhyani & Co. LLP were appointed as Statutory Auditors of theCompany for the year 2018-19 by the Comptroller & Auditor General of India. Two firmsof Chartered Accountants were also appointed as Branch Auditors for the otherUnits/Divisions of the Company.

Replies to the observations by the Statutory Auditors in their Report are given by wayof an addendum to this Report.

SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Companies Act 2013 and Rules made thereunder Mr. S.Viswanathan Practicing Company Secretary has been appointed as Secretarial Auditor of theCompany. The report of the Secretarial Auditors is enclosed as Annexure to this reportalong with replies. The report is self-explanatory and do not call for any furthercomments.

BOARD MEETINGS AND CHANGE IN DIRECTORS/KEY MANAGERIAL PERSONNEL

During the financial year Five Board meetings were held and the details are given inCorporate Governance Report.

Shri. Pravin Agrawal Joint Secretary Department of Heavy Industry Ministry of HeavyIndustries & Public Enterprises was appointed as Part time Official Director on theBoard of HMT Limited with effect from 15th March 2019 in place of Shri. Vishvajit SahayDirector Joint Secretary Department of Heavy Industries.

Smt. Neera Tomar was appointed as Non-official Independent Director on the Board of HMTLimited for a period of three years with effect from 27.03.2019.

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

Shri. Pravin Agrawal & Smt. Neera Tomar are proposed for appointment as Directorsin terms of Article 67(4) of the Article of Association of the Company read with Section160 of the Companies Act 2013 in the ensuing Annual General Meeting for which a noticehas been received from the Member.

Shri. S. Girish Kumar Chairman & Managing Director retires by rotation at theensuing Annual General Meeting and being eligible offers himself for reappointment.

Shri. Bhaskara Gowdar Assistant General Manager –Corporate Finance of the Companywas designated as Chief Financial Officer of the Company with effect from 29.08.2017 wasretired on superannuation on 31.07.2018. The Company appointed Shri CA. Hitesh GoyalDeputy Manager (Finance) as Chief Financial Officer of the Company with effect from01.07.2018 in place of Shri. Bhaskara Gowdar. Subsequently Shri CA. Hitesh Goyal relievedfrom the services of the Company on 06.11.2018 on his resignation.

Ms. Kamna Mehta Officer (Accounts) of the Company was designated as the ChiefFinancial Officer (CFO) of the Company with effect from 12th February 2019

Shri. S Girish Kumar Chairman and Managing Director Smt. Shashi B SrivastavaDirector Finance Ms. Kamna Mehta Chief Financial Officer and Shri. Kishor Kumar SCompany Secretary are the KMP’s as defined under the Section 2 (51) of the CompaniesAct 2013 as on 31.03.2019.

Subsequent to the financial year Smt. Shashi B. Srivastava IDAS (1989) Director(Finance) was repatriated to parent cadre/ relieved from HMT Limited on 31.5.2019 (AN)and Dr. Subhash Chandra Pandey SSFA ceased to be Government Nominee Director w.e.f.30.06.2019.

DECLARATION FROM INDEPENDENT DIRECTOR

As per section 149(7) of the Companies Act 2013 the Company has received declarationfrom Shri. Ravindra Singh & Smt. Neera Tomar Independent Directors of the Company.

INTERNAL FINANCIAL CONTROLS

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

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There are no Material changes and commitments affecting the financial position of thecompany which have occurred between 31st March 2019 and date of signing of this Report.

RELATED PARTY TRANSACTIONS

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

All Related Party Transactions entered during the year were in Ordinary Course of theBusiness 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 auditedfinancial statement were entered during the year by your Company. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC-2 is not applicable.

PARTICULARS OF LOANS GUARANTEES & INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements

ACKNOWLEDGEMENTS

Your Directors are thankful to the various Departments and Ministries in the Governmentof India particularly the Department of Heavy Industry Ministry of Corporate Affairs

Comptroller and Auditor General of India Principal Director-Commercial AuditStatutory and Branch Auditors various State Governments Foreign Collaborators theSubsidiary Companies Suppliers Reserve Bank of India the Consortium of Banks lead byUCO 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 express their appreciationfor the contributions made by the Company’s employees and look forward to theircontinued services in pursuit of building a world class Indian Company.

For and on behalf of the Board of Directors

(S.Girish Kumar)

Chairman & Managing Director

Place: Bangalore

Date: 12-08-2019


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