We have audited the standalone financial statements of HMT Limited ("the Company"), which comprise the Balance Sheet as at 31^st March 2024, and the Statement of Profit and Loss (including Other Comprehensive Income) for the year then ended 31 March 2024, the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and notes to the standalone 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 the basis of Qualified Opinion section of our report, the aforesaid standalone 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, in the case of

(a) Standalone Balance Sheet, of the state of affairs of the standalone as at 31^st March, 2024 and

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

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

(d) Standalone Cash flow statement of the flow of cash in the Company for year ended on that date.

Basis for Qualified Opinion:

1. Food Processing Machinery Unit,

Aurangabad

(a) 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 and therefore, cost could not be verified due to absence of sufficient and appropriate audit evidence. Owing to the nature of Company's 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.

b) The revenue as per the Statement of profit and loss for the year ended March 2024 is Rs 3604.75 lakhs. This includes a sum of Rs 105.88 lakhs being the value of sales invoices accounted in the month of March 2024 (F.Y 2023-24), raised by HMT Limited food processing machinery unit Aurangabad, on its customers. However as per the records, the said invoices were raised during the period, but dispatches were made after 31-3-2024. The customer therefore has not got control of the assets before 313-24. This is in contravention of revenue recognition as per Ind As 115, resulting in

the overstatement of revenue by Rs 105.88 lakhs, with consequent overstatement of profit and understatement of finished goods.

2. Auxiliary Business Division, Bengaluru

(a) Non - receipt of balance Confirmations with regard to Trade Receivables, Trade Payables, Other Current Assets and Other Current liabilities and hence, impact of the same on the standalone financial statements cannot be quantified.

(b) The Company records rental income generated from the buildings situated on the land which is not recorded in the books of accounts of the Company. On examination of records produced for verification, the status of the land and it's ownership is in the name of HMT Limited.

(c) Ind AS 40 requires the Company to obtain a fair valuation report of the investment properties from a registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. However, we observe that the Company has not complied with the above requirement as prescribed by Ind AS-40.

3. Corporate Head Office and Company as a

whole

(a) Non - receipt of balance Confirmations with regard to Trade Receivables, Trade Payables, Other Current Assets and Other Current liabilities and hence, impact of the same on the standalone financial statements cannot be quantified.

(b) IND AS 40 defines Investment Property as property held to earn rentals or for capital appreciation or both. It is observed that Corporate Head Office derives rental income partly from building (owned by the entity) which is not classified as Investment property in the standalone financial statements.

(c) Ind AS 40 requires the Company to obtain a fair valuation report of the investment properties from a registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. However, we observe that the Company has not complied with the above requirement as prescribed by Ind AS-40.

(d) Ind-AS 109 requires an entity 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.

(e) As per Ind AS-109, the Company has to recognize loss allowance for expected credit losses on a financial asset. In the instant case, we observe that the Company has long outstanding receivable from HMT Machine Tools Limited in respect of which the Company has not recorded any expected credit losses. In our opinion as HMT Machine Tools Ltd is incurring continuous losses and has a negative net worth, the ability of the Company to recover the amount receivable from HMT Machine Tools Limited remains doubtful.

(f) As per Schedule III of Companies Act, 2013, trade payables include all amounts due on account of purchase of goods and services received in the normal course of business. In the instant case, we observe that an amount of Rs 1510.99 lacs which is presently disclosed as Accrued expenses under the head Other Current Liabilities must be disclosed under Trade Payables. Further, the Company must provide ageing analysis for the amount disclosed under the head Accrued Expenses.

(g) 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.

We conducted our audit in accordance with the Standards on Auditing (SA's) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Standalone 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 financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, 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 opinion.

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements for the financial year ended 31^st March 2024. These matters were addressed in the context of our audit of the standalone financial statements, and in forming our opinion thereon, and we do not provide a separate 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 Auditor's responsibilities for the audit of the standalone 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 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 financial statements.

(a) We draw you attention to Note No. 49 of Standalone Ind AS financial statements for the financial year ended 31^st March, 2024 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.

(b) We draw you attention to Note No. 50 of Standalone Ind AS financial statements for the financial year ended 31^st March, 2024 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.

(c) We draw you attention to Note No. 51 of Standalone Ind AS financial statements for the financial year ended 31^st March, 2024 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.

(d) 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 31^st March, 2024 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. The Company had made a provision for taxation of Rs. 980 lakhs which has been reversed in the current year. 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 Matters

1. The previous year figures in the financial statements of the company were audited by SSB & Associates whose report has been furnished to us in which the auditor have provided a qualified opinion on the Standalone Financial Statements as on 31-03-2024. The Qualified opinion given by the previous auditor is given as "Annexure A".

2. 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. 2440.32 lakhs as at March 31, 2024 and total revenues of Rs. 3,682.11 lakhs for the year ended on that date. The financial statements/ information of this standalone has been audited by the branch auditor M/s R.K. Muley & Co, 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 standalone auditor.

3. The physical share certificates of 26,08,99,037 equity shares and 4,43,00,000 preference shares of HMT Machine Tools Limited whose cost is Rs.26,089.90 lakhs and Rs.44,300.00 lakhs respectively are not in possession of the Company as at 31^st March 2024.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report but does not include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone 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 and, in doing so, consider whether the other information is materially inconsistent with the standalone 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. We have nothing to report in this regard.

Responsibilities of Management for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company's 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 company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's 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 financial statements.

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

• Identify and assess the risks of material misstatement of the standalone 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 Companies Act, 2013, 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 management's 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 company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone 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 auditor's 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 financial statements, including the disclosures, and whether the standalone 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by 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 purposes of our audit.

b. In our opinion, except for 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 Balance Sheet, the Statement of Profit and Loss, dealt with by this Report are in agreement with the books of account.

d. In our opinion, except for the matter described in the Basis for Qualified opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. The entity is a government entity and in the terms of notification reference No.G.S.R. 463(E) dated 05th June 2015 issued by Ministry of Corporate Affairs for Government

Companies, sub-section (2) of Section 164 of Companies Act, 2013 regarding disqualification for appointment of director is not applicable. Hence, 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 C".

g. With respect to the other matters to be included in the Auditor's 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 the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 32 to the 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 to 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. a) The Management of the company has represented that, to the best of their knowledge and belief, that the Company has not advanced or loaned or invested any funds (either from borrowed funds or share premium or any other sources or kind of funds) 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, whether, 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.

b) The Management of the company has represented that, to the best of their knowledge and belief, other than that as disclosed in the notes to the accounts, that the Company has not received any funds 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, whether, 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.

c) Based on audit procedures 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 (e), as provided under (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended 31st March 2024, and therefore, compliance with section 123 of the Companies Act, 2013 is not applicable.

vi. Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has not been operated throughout the year for all relevant transactions recorded in the software.

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

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

for N S V M & Associates

Chartered Accountants

Firm registration number: 010072S

G C S Mani

Partner

Membership No: 036508 UDIN: 24036508BKDEVL5456

Place: Bengaluru Date: 20-09-2024