hmt ltd Auditors report

[Issued Consequent to Provisional Comments by Director, Indian Audit and Accounts Department, Office of the Director General of Commercial Audit, Hyderabad, vide No.DGCA/Hyd/A/c Desk/HMT/2022- 23/1.19/172 dated 30.08.2023 and it supersedes our Independent Auditors Report dated 20th July 2023]

To the Members of HMT Limited

Report on Audit of the Standalone Ind AS Financial Statements

Qualified Opinion:

We have audited the Standalone Ind AS financial statements of HMT Limited ("the Company") which comprise of Standalone Balance Sheet as at 31st March, 2023, the Standalone Statement of Profit and Loss, Standalone Statement of Changes in Equity, the Standalone Cash Flow Statement for the year then ended, and notes to Ind AS financial statements including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for effects of the matters described in the Basis of Qualified Opinion section of our report, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Standalone Balance Sheet, of the state of affairs of the Company as at 31st March, 2023 and

(b) in the case of the Standalone Statement of Profit and Loss including Other Comprehensive Income, of the profit for the year ended on that date.

(c) in the case of the Standalone Statement of Change in Equity, the changes for the year ended on that date.

(d) in the case of Standalone Cash Flow Statement, of the flow of cash in the Company for the year ended on that date.

Basis of Qualified Opinion:

1. Food Processing Machinery Unit, Aurangabad:

As per information and explanation given to us with regard to Inventory valuation as stated in Note No. 2 (ii) (j) stock of raw material, it is valued by adopting Weighted Average Cost method. However, in the inventory statement provided for verification purpose, the correctness of stock items rates could not be verified due to absence of sufficient and appropriate audit evidence. Owing to the nature of Companys records and in the absence of sufficient audit evidence, we are unable to ascertain if there is material departure from the Weighted Average Cost Method adopted by the company. We are also unable to ascertain its consequent impact, if any, on the Standalone Ind AS financial statements.

2. Auxiliary Business Division, Bengaluru

Consequent to Non-receipt of confirmation of balances of Debtors and Creditors, the impact on financial statements cannot be quantified.

3. Corporate Head Office and Company as a whole:

a. Non-confirmation of balances of Trade Receivables, Loans and Advances, Trade Payables and Other Current Liabilities and its consequential impact if any on the Standalone Ind AS financial statements cannot be quantified.

b. The Company has not provided status quo of Nigeria Machine Tools Ltd. and Gujarat State Machine Tools Corporation Ltd as on 31st March, 2023. Consequently, we are unableto comment on the impact of the same on Standalone Ind AS financial statements.

c. We draw your attention to Note No.53 wherein the Company has stated that it has no transactions with struck off companies under section 248 of The Companies Act, 2013. However, Company has not provided appropriate audit evidence to establish that they do not have such transactions.

Indian Accounting Standards

d. Company for Impairment on Financial Assets as per Ind-AS 109 has to apply expected credit loss (ECL) model for measurement and recognition of impairment loss. However, as per the information and explanation given to us no ECL matrix was prepared for the period under audit for creating provision for loss allowance. Hence, we are unable to ascertain its impact, if any, on the Standalone Ind AS financial statements.

The effect on revenue on all the above

transactions are not ascertained We conducted our audit in accordance with the Standards on Auditing ("SAs") specified under section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Ind AS financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Material Uncertainty Related to Going Concern:

Attention of the members is invited Note 44 of the Standalone Ind AS financial statements regarding the reasons for preparing these Standalone Ind AS financial Statements of the Company on going concern basis. The appropriateness of the said basis is inter-alia dependent on the Companys ability to realise from sale of non-current assets held for sale, support from Government of India and other business plans. We have relied on the representation of the Company in this respect. Our Opinion is not modified in respect of this matter.

Key Audit Matters:

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the Standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the Standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Ind AS financial statements.

Key audit matters	How our audit addressed the key audit matter
Revenue Recognition from operating leases
Revenue Recognition from operating leases as per Ind AS 116 Leases Reference to Sl.No 2(k)(ii) of notes forming part of the financial statements The Companys total income includes a major portion of income from operating leases	Our Audit Procedures included the following :- • We have verified the Lease agreements on sample basis. • We have verified the journal entries posted with the invoices and assessed their appropriateness. • We have verified the income from operating leases recognized by the Company in accordance with Ind AS 116 Leases. • We conclude that there are no material non compliances in the recognition of income from operating leases.
Transfer of Immovable Property , Legal Cases and Contingent Liabilities of HMT Watches Ltd to the Company
Transferring Immovable Properties, Legal Cases and Contingent Liabilities from HMT Watches Ltd. Reference to Note No. 52 of notes forming part of Standalone Financial Statements.	Our Audit Procedures included the following :- • We have verified the minutes of the board meeting of HMT Limited, dated 10th June, 2022 and dated 28th October, 2022. • We have verified the entries passed in the books of account of the company to give effect to takeover of Immovable assets, Legal cases and contingent liability • We have verified the agreements for transfer of Immovable properties and legal cases and the terms and conditions therein. • We conclude that there are no material non compliances in the above transfer.

Emphasis of Matter Paragraph

1. We draw you attention to Note No. 49 of Standalone Ind AS financial statements for the financial year ended 31st March, 2023 wherein HMT Limited has invested Rs.15 lakh (50% of equity shares) comprising 1,50,000 equity shares of Rs.10 each fully paid up in Sudmo HMT Process Engineers (India) Ltd., Bengaluru (M/s.Sudmo - HMT). M/s.Sudmo-HMT has no operations. The Board of HMT Ltd has approved (February 2020/ July 2021) for closure of the defunct joint venture company (M/s.Sudmo- HMT) and submitted the closure proposal to Administrative Ministry (July 2021) for approval.

2. We draw you attention to Note No. 50 of Standalone Ind AS financial statements for the financial year ended 31st March, 2023 wherein HMT Limited has invested Rs.20.84 lakh (39% of equity shares) comprising 20,84,050 equity shares of Rs.1 each fully paid up in Gujarat State Machine Tools Corporation Ltd., Bhavanagar (M/s.GSMTC). The Board of HMT Ltd gave (March 2021) in principle approved for liquidation of M/s.GSMTC and issued the consent letter to Gujarat Industrial Investment Corporation Limited (GIIC), GIIC approved (September 2021) liquidation of M/s.GSMTC and submitted (October 2021) the proposal to Industries & Mines Department. HMT Ltd submitted (April 2022) the liquidation proposal to Administrative Ministry.

3. We draw you attention to Note No. 51 of Standalone Ind AS financial statements for the financial year ended 31st March, 2023 wherein HMT Limited has invested 30,00,000 equity shares of 1 Naira each fully paid up in Nigeria Mchine Tools Limited, Nigeria (M/s. NMTL). The Board of HMT Ltd gave (February 2020) approval for divestment of stake in M/s. NMTL and sought approval from Administrative Ministry.

4. We draw your attention to Note No. 3C- Additional Information (d)&(e), Note No. 22- Additional Information and Note No. 34 (ii) of Standalone Ind AS financial statements for the financial year ended 31st March, 2023 relating to transfer of land to Raman Research Institute and Government of Uttarakhand (transferee) wherein the Company (transferor) has received entire sale consideration and has given the possession of the land in the earlier years resulting in performance of contract by both the parties and consequently provision for tax has been provided by the Company of Rs. 980 Lakhs. However, the recognition of profit/ loss on transfer of land will be considered in the year of registration of sale deed.

Our opinion on the above matters is not modified.

Other Information ["Information Other than the Standalone Ind AS Financial Statements and Auditors Report Thereon"]

The Companys Board of Directors are responsible for the Other information. The other information comprises the information included in the Companys Annual Report but does not include the Standalone Ind AS financial statements and our Auditors report thereon. The Other information is expected to be made available to us after the date of Auditors report.

Our opinion on the Standalone Ind AS financial statements does not cover the Other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is

a material misstatement of this other information, we are required to report that fact. However, as the Boards Report is not made available to us, we have nothing to report.

Managements Responsibility for Standalone Ind AS Financial Statements:

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act, with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Ind AS financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements:

Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Ind AS financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism through the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone Ind AS financial statements, including the disclosures and whether the Standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters:

i) We did not audit the financial statements/ information of Food Processing Machinery Unit, Aurangabad included in these Standalone Ind AS financial statements of the Company whose financial statements/financial information reflect total assets of Rs. 3,242.56 lakhs as at March 31, 2023 and total revenues of Rs. 4,386.89 lakhs for the year ended on that date. The financial statements/ information of this branch has been audited by the branch auditor M/s V D Abhyankar & Associates, Chartered Accountants, Aurangabad whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this unit, are based solely on the report of such branch auditor.

ii) The physical share certificates for 26,08,99,037 equity shares and 4,43,00,000 preference shares of HMT Machine Tools Ltd whose costs is Rs.26,089.90 Lakhs and Rs.44,300.00 lakhs respectively are not in the possession of the Company as at March 31,2023.

Report on Other Legal & Regulatory Requirements:

1. As required by the Companies (Auditors Report) Order, 2020 (the Order), issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give inthe "Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by the section 143(3) of the Act, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b. except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c. the Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with books of account.

d. except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid Standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. the company is a Government Company and in terms of Notification reference No.G.S.R 463(E) dated 05th June, 2015 issued by Ministry of Corporate Affairs for Government Companies, the provision of Section 164 (2) of the Companies Act, 2013 regarding disqualifications of directors is not applicable. Hence our comment on the same does not arise.

f. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g. the company is a Government Company and in terms of Notification reference No.G.S.R 463(E) dated 05th June, 2015 issued by Ministry of Corporate Affairs for Government Companies, the provision of Section 197 of the Companies Act, 2013 is not applicable. Hence our comment on the same does not arise.

h. With respect to other matters to be included in the Auditors report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us,

i) The Company has disclosed its pending litigations which would impact its financial position in note 33 of the Standalone Ind AS financial statements.

ii) The Company did not have any long-term contracts as required under the applicable law or accounting standards and also not entered into any derivative contracts, accordingly no provision is required to be made in respect of material foreseeable losses.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv) (1) The Management has represented that,

to the best of its knowledge and belief, as disclosed in the note 56 to the Notes to financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of

the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(2) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the note 57 to the Notes to financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(3) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub clause (i) and (ii) of Rule 11(e) contain any material mis-statement as stated above.

v) The company has not declared or paid dividend during the year under Audit.

3. As required by Section 143 (5) of the Act, our submissions are as under:

We give in the "Annexure-C", a statement on the compliance to Directions issued by the Comptroller and Audit General of India.

4. Pursuant to Ministry of Corporate Affairs notification dated 24.03.2021 read with notification dated 31.03.2022 requirement of reporting by the auditor on use of accounting software for maintaining its books of account with audit trial (edit log) is applicable for the Company only w.e.f 01.04.2023. Hence reporting on this clause is not applicable.

For SSB & Associates Chartered Accountants Firms Regn.No. :010372S

K. Balaji Partner

Membership Number: 207783 UDIN: 23207783BGTEVK1744

Place: Bengaluru Date : 04.09.2023

ANNEXURE-A REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF HMT LIMITED.

i) a) (A) The Company has maintained proper records showing full particulars including quantitative details and situation of Property, Plant & Equipment.

(B) The company does not have intangible assets. Hence, our comment on the same does not arise.

b) Based on the information and explanation given to us by the Company, physical verification of Property, Plant & Equipmentis carried out once in 3 years and is reasonable considering size of the company.

However, in Auxiliary Business Division- the fixed assets of Auxiliary Business Division have been physically verified as per the policy by the management during the Financial year 2022-23. However, physical verification of the Property, Plant & Equipment of the erstwhile Tractor division merged with Auxiliary Business Division was carried out during financial year 201617. In our opinion, the division has to make arrangements for physical verification of

assets belonging to Tractor division merged with Auxiliary Business Division. Further, no material discrepancies were noticed in the case of Property, Plant & Equipment of Auxiliary Business Division but since we do not have latest physical verification report of Tractor Division, we are unable to comment on the discrepancy if any, on Property, Plant & Equipment of Tractor division.

c) According to the information and explanation given to us by the Company, read with foot note to note 3B and foot notes to note 3C of the Standalone Ind AS financial statements, title deed of all immovable properties are held in the name of the Company except:

(i) The Branch Auditor has reported that the following property held by Food Processing Machinery Unit of the company is under dispute, as the land has been encroached upon. The matter is pending with the Honourable High Court as stated in Note No. 3A of the Standalone Ind AS Financial Statements.

Description of the Property	Gross Carrying Value	Held in the name of	Whether promoter, director or their relative or employee	Period held- indicate range, where appropriate	Reason for not being held in name of company
Leasehold land from CIDCO	Rs.5 Lakhs	HMT Limited	No		Title deeds are in the name of the Company, whereas the said land has been encroached and the matter is pending with the Honourable High Court.

d) Company has not revalued its Property, Plant and Equipment (including Right of Use assets) during the year, however company does not have any intangible assets. Hence, our comment on the same does not arise.

e) As per the information and explanation given to us by the company, there are no proceedings

initiated or pending against the company for holding any benami property under Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Hence our comment on the same does not arise. ii) (a) The management during the year has physically verified the inventory at reasonable intervals at respective units. The discrepancies that were noticed during the physical verification of Inventory were not material and the same has been properly adjusted in the respective unit books of account. However, the physical verification of inventories belonging to erstwhile

Tractor Division merged with Auxiliary Business Division was not conducted and hence we are unable to comment on the discrepancies if any and its impact on Standalone Ind AS Financial statements.

(b) According to the information and explanation given to us, during the year the company has not taken any working capital loan. Hence, our comment on the same does not arise. iii) (a) During the year, the Company has granted unsecured loans/ advances/ provided security to its subsidiaries as given below:

(Rs. in Lakhs)

Particulars	Loans	Advances in the nature of Loans	Security/ Guarantee
Aggregate amount granted/ provided during the year	1,515.00	141.41
- Subsidiaries
HMT Machine Tools Ltd	1,515.00	80.84
HMT (International) Ltd	-	56.70
- Joint Venture
SUDMO HMT Process Engineers (India) Ltd	-	3.87
Balance outstanding as at balance sheet date in respect of above cases
N=LEFT>- Subsidiaries
HMT Machine Tools Ltd	26,088.58	7,952.00	9,454.00
HMT (International) Ltd	-	246.92
- Joint Venture
SUDMO HMT Process Engineers (India) Ltd	-	8.70

(b) According to the information and explanations given to us and based on the audit procedures conducted by us, we are of the opinion that the terms and conditions of the loans given are prima facie not prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in the case of loans given, the repayment of principal is not due as on 31st March, 2023 whereas payment of interest is not regular. The details of which are as follows:-

(Rs. in Lakhs)

Name of the Entity	Amount	Due date	Extent of Delay	Remarks, if any
HMT Machine Tools Limited	Rs. 556.99	31-03-2019	1462 Days	-
HMT Machine Tools Limited	Rs. 1,345.47	31-03-2020	1096 Days	-
HMT Machine Tools Limited	Rs. 1,640.73	31-03-2021	731 Days	-
HMT Machine Tools Limited	Rs.1,828.65	31-03-2022	365 Days	-

Further, the Company has accounted Bad Debts under other expenses, amounting to Rs. 1,398.11 lakhs being unrealisable interest income for the year on the loans given to HMT Machine Tools Limited, pursuant to Board of Directors approval.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is an overdue amount for more than ninety days in respect of loans given to its subsidiary HMT Machine Tools Limited.

(Rs. In Lakhs)

No. of Cases	Principal Amount Overdue	Interest Overdue	Total Overdue	Remarks, if any
Single Case	Rs. 6,591.66	Rs. 5,371.84	Rs. 11,963.50	-

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no loan given falling due during the year, which has been renewed or extended or fresh loans given to settle the overdue of existing loans given to the same party.

(f) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has given advances in the nature of loans without specifying any terms or period of repayment.

(Rs. In Lakhs)

Particulars	All Parties	Promoters	Related Parties
Aggregate amount of advances in the nature of loans
- Repayable on demand (A)	Rs.2,835.77	-	Rs.2,835.77
- Agreement does not specify any terms or period of repayment (B)	-	-	-
Total (A+B)	Rs.2,835.77	-	Rs.2,835.77
Percentage of loans/ advances in the nature of loans to the total loans	8.27%	-	8.27%

iv) In our opinion and according to information and explanation furnished to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to loans and investment made.

v) The Company has not accepted any deposits from the public. Hence our comment on the compliance of provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder does not arise.

The Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal has not passed any order and hence our comment on the same does not arise

vi) In our opinion and according to information and explanations furnished to us, in our opinion the Central Government has not prescribed maintenance of cost records under subsection(1) of section 148 of Companies Act, 2013 in respect of companys products.

vii) a) According to the information and explanations provided to us Custom Duty and Excise duty does not apply to this company for the year under review.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including income tax, GST have generally been regularly deposited by the Company with the appropriate authorities though there has been a slight delay in few cases.

As per our verification and according to the information and explanation given to us, there are no undisputed statutory dues except the following statutory dues which remained outstanding as at 31st March, 2023 for a period more than six months from the date they became payable:

(Rs. in Lakh)

Sl. No. Nature of the Statute	Nature of Dues	Amount
In respect of Corporate Head Office:
1. Greater Hyderabad Municipal Corporation	Property tax	597.44
In respect of Auxiliary Business Division:
2 Employee State Insurance	Employee State Insurance	2.34
3 VAT/CST	Interest on VAT/CST	1.24

b) According to the information and explanation given to us by the Company, there are no dues outstanding on account of any disputes I respect of statutory dues as at 31st March, 2023 except the following:

(Rs. in Lakh)

Name of the Statute	Nature of Dues	Amount (Rs. in lakhs)	Amount paid under protest (Rs. in lakhs)	Period to which the amount relates	Forum where dispute is pending
Haryana Local Area Development Tax Ordinance, 2000	Haryana Local Area Development Tax	486.18	Nil	From 2005 to 2015	Honourable High Court of Punjab and Haryana
Central Sales Tax Act, 1956	Appeal	53.00	NIL	FY 2013-14	DY. Commissioner of Sales Tax (Appeals)
Employee Provident Fund Act,1952	EPF Dues	1,681.81	NIL	Various Years	Employee Provident Fund Appellate Tribunal

viii)The company does not have any transactions not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

ix) (a) According to the records of the company examined by us and as per the information and explanation given to us, the company has not issued debentures and also not availed loans from financial institutions / banks during the year other than loan from Government of India which was taken and defaulted as reported below:

Nature of Borrowing [Interest Free]	Name of the lender	Amount of instalment and period of default	No of Days Delay or Unpaid
i) Government of India Loan [Interest Free] dated 21.01.2017	Government of India	a) Rs.6,073.60 Lakhs due since 21.01.2018.	1,895
		b) Rs.6,073.60 Lakhs due since 21.01.2019.	1,530
		c) Rs.6,073.60 Lakhs due since 21.01.2020.	1,165
		d) Rs.6,073.60 Lakhs due since 21.01.2021.	799
		e) Rs.6,073.60 Lakhs due since 21.01.2022.	434
ii) Government of India Loan [Interest Free] dated 16.02.2017	Government of India	a) Rs.4,800.00 Lakhs due since 16.02.2018.	1,869
		b) Rs.4,800.00 Lakhs due since 16.02.2019.	1,504
		c) Rs.4,800.00 Lakhs due since 16.02.2020.	1,139
		d) Rs.4,800.00 Lakhs due since 16.02.2021.	773
		e) Rs.4,800.00 Lakhs due since 16.02.2022.	408
iii) Government of India Loan [Interest Free] dated 29.04.2017	Government of India	a) Rs.1958.00 Lakhs due since 29.04.2018.	1,797
		b) Rs.1958.00 Lakhs due since 29.04.2019.	1,432
		c) Rs.1958.00 Lakhs due since 29.04.2020.	1,067
		d) Rs.1958.00 Lakhs due since 29.04.2021.	701
		e) Rs.1958.00 Lakhs due since 29.04.2022	336

(b) The Company is not declared wilful defaulter by any bank or financial institution or other lender.

(c) According to the information and explanations given to us and based on our examination of the records of the company, the Company has not obtained any term loan during the year and hence our comment on application of term loans funds does not arise.

(d) The Company has not raised any funds on short term or long term basis, hence our comment on utilization of the same does not arise.

(e) The Company has not taken any funds from any entity or person to meet the obligations of its subsidiaries, associates or joint ventures, Hence our comment on the same does not arise.

(f) The Company has not raised any loans during the year on the pledge of securities held in subsidiaries. Hence our comment on the same does not arise.

x) (a) In our opinion based on the information

and explanation given to us, the Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year. Hence, comment on the same does not arise.

(b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partially or optionally convertible debentures during the year. Hence our comment on the same does not arise.

xi) (a) Based upon the audit procedures

performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company, by its officers or employees has been noticed or reported during the course of our audit.

(b) No report has been filed by the Company Auditors in Form ADT-4 as per Section 143(12) of the Act since there were no instances of fraud by the company or any fraud on the company has been noticed or reported during the year.

(c) No Whistle-blower complaints were received during the year by the auditor and hence our comment on the same does not arise.

xii) The Company is not a Nidhi Company and hence our comment on matters mentioned in sub clause (a) to (c) of clause (xii) of the order does not arise.

xiii) In our opinion and according to the information and explanation given to us and as represented to us by the management, all transactions with the related parties are in compliance with section 177 and 188 of the Act and the details have been disclosed in the Standalone Ind AS financial statements as required by the applicable Indian accounting standards.

xiv) (a) The Company has a formal internal audit

system which is commensurate with the size of the company and nature of its Business which needs to be more effective.

(b) We have considered the Internal Auditors reports which has been submitted for the period under audit.

xv) According to the information and explanations given to us and based on our examination of the records of the Company, it has not entered into any non-cash transactions with its directors or persons connected with them during the

year and hence the compliance of provisions of section 192 of Companies Act, 2013 on this matter does not arise.

xvi) As the Company is not carrying on the business of Non-Banking Finance, the company is not required to be registered under section 45-IA of Reserve Bank of India Act, 1934.Hence, our comment on clauses (b) to (d) of the order does not arise.

xvii) The company has not incurred any cash losses in the financial year but in the immediately preceding financial year the company has incurred cash losses.

xviii) There has been no resignation of Companys Statutory Auditors during the financial year. Hence, our comment on the same does not arise.

xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.

xx) (a) The Company does not have unspent amount in respect of other than ongoing projects in compliance with second proviso sub-section (6) of section 135 of the said Act. Hence, our comment on the same does not arise.

(b) According to the information and explanation given to us, the Company has transferred the remaining amount unspent relating to an ongoing project in compliance with the provision of subsection (6) of section 135 of the said Act.

xxi) The reporting under clause (xxi) is not applicable to Standalone Financial Statements.

For SSB & Associates Chartered Accountants Firms Regn.No. :010372S

K. Balaji Partner

Membership Number: 207783 UDIN: 23207783BGTEVK1744

Place: Bengaluru Date : 04.09.2023

ANNEXURE-B REFERRED TO IN PARAGRAPH 2 (f) UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF HMT LIMITED.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act"):

We have audited the internal financial controls over financial reporting of HMT Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date. Managements Responsibility for Internal Financial Controls:

The Companys management is responsible for establishing and maintaining internal financial controls based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India". These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 ("the Act").

Auditors Responsibility:

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to

an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting:

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the Standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting:

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Qualified Opinion:

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2023, based on internal financial control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India except:

Company as a Whole:

1. The company did not have adequate appropriate internal controls for reconciling inventories and obtaining balance confirmation from sundry debtors, sundry creditors and other parties. This could potentially result a material weakness, in financial reporting process of debtors, creditors and other parties.

In case of Food Processing Machinery Unit, Aurangabad the branch auditor has reported in the following manner:

2. There is no appropriate internal control system of internal control system for inventory as there is no integration between financial accounting module and inventory module. The valuation of inventory is done in inventory module.

It has been explained that Company is in the process of integrating the Finance accounting module and inventory module and currently it is in the final stage.

As explanation given by the management, stock is valued by adopting Weighted Average Cost method. However, the details related to inventory valuation were not provided for our verification. Hence, we could not verify the rates considered in Inventory Valuation. Further, the overhead cost was also not identified and allocated. These could potentially result in the material misstatement in the Companys Consumption, Inventory and Expense account balances.

For SSB & Associates Chartered Accountants Firms Regn.No. :010372S

K. Balaji Partner

Membership Number: 207783 UDIN: 23207783BGTEVK1744

Place: Bengaluru Date : 04.09.2023

ANNEXURE - C REFERRED TO IN PARAGRAPH 3 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT DIRECTIONS INDICATING THE AREARS TO BE EXAMINED BY STATUTORY AUDITORS DURING THE COURSE OF AUDIT OF ANNUAL ACCOUNTS OF HMT LIMITED FOR THE FINANCIAL YEAR 2022-23 ISSUED BY THE COMPTROLLER & AUDITOR GENERAL OF INDIA ("C&AG") UNDER SECTION 143 (5) OF THE COMPANIES ACT, 2013

Sl. No. Directions	Audit Observations
1. Whether the Company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with financial implications, if any, may be stated.	Based on the information and explanation provided to us by the Company, it has system in place where all the accounting vouchers are manually prepared and entered into IT systems after proper authorization. We are of the opinion that there is no material financial implications on the Company.
2 Whether there is any restructuring of an existing loan or cases of waiver/ write off of debts/ loans/interest etc. made by a lender to the Company due to the Companys inability to repay the loan? If yes, the financial impact may be stated. Whether such cases are properly accounted for? (In case, lender is a Government company, then this direction is also applicable to statutory auditor of lenders company).	Based on the information and explanation furnished to us by the Company, there is no restructuring of loan/ waiver off of debts/ loans/ interest etc from its lenders.
3 Whether funds (grants/subsidy etc.) received/ receivable for specific schemes from central/ state Government or its agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation.	Based on the information and explanation furnished to us by the Company, it has received an amount of Rs.13.74 Lakhs from Department of Heavy Industries towards reimbursement expenses incurred by the Company for Financial & Strategic Review of Consolidation & Restructuring Plan of the Company paid to IIM, Bangalore. Since the communication from Department of Heavy Industries states as onetime interest free loan the same has been treated as current liabilities. Management has informed that it is in process of getting ratification for same. Accordingly, we are unable to comment whether it is loan or grant given by the Central Government. Further, the Company has an unspent balance of Rs.28.50 crores as on 31.03.2023 out of the Loan received from GOI of Rs. 641.58 crores.

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT,2013 ON THE STANDALONE FINANCIAL STATEMENTS OF HMT LIMITED FOR THE YEAR ENDED 31 MARCH 2023

The preparation of financial statements of HMT Limited for the year ended 31 March 2023 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of lndia under Section 139 (5) of the Act are responsible for expressing opinion on the financial statenrents under Section 143 of the Act based on independent audit in accordance with the Standards on Auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Revised Audit Report dated 04 September 2023 which supersedes their earlier Audit Report dated 20 July 2023.

l, on behalf of the Comptroller and Auditor General of lndia, have conducted a supplementary audit of the Standalone financial statements of HMT Limited for the year ended 31 March 2023 under Section 143(6)(a) of the Act. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is iimited primarily to inquiries of the Statutory Auditors and Company personnel and a selective examination of some of the accounting records.

ln view of the revision made in the Statutory Auditors Report to give effect to some of my audit observations raised during supplementary audit, I have no further comments to offer upon or supplement to the Statutory Auditors Report under Section 143(6)(b) of the Act.

For and on behalf of the Comptroller and Auditor General of India

(M.S. Subrahmanyam) Director General of Commercial Audit

Hyderabad

Place: Hyderabad Date: 06 September 2023