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Board of Directors ............................................................................................................................. 2 Peformance Highlights ........................................................................................................................ 3 Directors Report Auditors Report ............................................................................................................................. 4 ........................................................................................................................... 19
Comments of C & AG ........................................................................................................................ 24 Significant Accounting Policies .......................................................................................................... 25 Balance Sheet ........................................................................................................................... 28
Profit & Loss Account ........................................................................................................................ 29 Schedules and Notes Forming Part of the Accounts ......................................................................... 30 Cash Flow Statement ........................................................................................................................ 50 Additional Information as required under Part IV of Schedules VI to the Companies Act, 1956 ......................................................................... 51
HMT MACHINE TOOLS LIMITED
BOARD OF DIRECTORS
Shri G. K. Pillai Shri A. V. Kamat Shri Harbhajan Singh Shri Ashok Gupta Shri P. Ganeshan Shri S. G. Sridhar Shri K. H. Suresh Chairman, (w.e.f. 28-12-2010) Managing Director I/c (w.e.f. 01-01-2011) Chairman (upto 27/12/2010) Director Special Director (BIFR) (w.e.f. 8-12-2010) Special Director (BIFR) (upto 15-9-2010) Director (w.e.f. 05-5-2011) Director (Technology) (upto 12-8-2011)
M/s. A. Raghavendra Rao & Associates Chartered Accountants Bangalore
UCO Bank Punjab National Bank Andhra Bank State Bank of Travancore
HMT BHAVAN 59, Bellary Road Bangalore 560 032
Annual Report 2010-2011
Annual Report 2010-2011
(` in Lakhs)
OPERATING STATISTICS Sales Other Income Materials Employee Costs Other Costs Depreciation Earning Before Interest Interest Earnings /(Loss) Before Tax Taxation Net Earnings FINANCIAL POSITION Net Fixed Assets Current Assets Current Liabilities & Provisions Working Capital Capital Employed Investments Miscellaneous Expenditure Borrowings Net Worth OTHER STATISTICS Capital Expenditure Internal Resources Generated Working Capital Turnover Ratio Current Ratio Return on Capital (%) Employees (Nos) Per capita Sales 988 -8321 -3 1 -1 3652 5.72 2893 -3792 -15.69 0.95 -2.17 3808 5.50 3809 -3152 4.57 1.16 -3.80 3826 5.24 710 -3662 2.14 1.45 -3.95 4188 6.33 625 -14553 2.06 1.43 -0.42 4236 6.06 25 -141 -4.16 0.81 0.07 4386 5.52 46 -6818 -39.10 0.98 -0.26 4531 5.15 72 -11325 -6.61 0.89 -0.18 4714 4.20 316 -9578 -18.59 0.96 -0.80 4604 5.00 226 -6401 3.21 1.37 -1.76 5054 5.23 9382 21672 29570 -7898 1484 4 12675 -11191 9432 25521 26857 -1336 8096 6 9983 -1887 7375 31448 27059 4389 11764 8 9073 2691 4132 40179 27797 12382 16514 643 10740 5773 3038 41236 28771 12465 15503 250 7448 8056 2842 24614 30441 -5827 -2985 13747 56024 -59008 3488 24882 25479 -597 2891 1 16577 64574 -61682 4005 24233 27233 -3000 1005 1 18834 57565 -56559 4530 26287 27524 -1237 3293 1 21653 50764 -47470 4900 30271 22050 8221 13121 19832 48552 -35432 20902 1442 7108 15248 5506 985 -8529 777 -9306 -9306 20962 2346 7602 12410 4942 788 -3,841 739 -4580 -4580 20060 3125 8125 13754 5435 565 -3907 -250 -3657 60 -3717 26521 2012 9001 15901 6704 388 -4380 -387 -3993 57 -4050 25661 6779 9445 25793 6428 425 -11491 3434 -14925 53 -14978 24218 16253 10488 17960 7051 515 5577 6180 -603 53 -656 23343 5686 10539 13627 6957 562 -1424 5956 -7380 -7380 19821 1477 7600 12939 6284 583 -6291 5617 -11908 -11908 22998 2264 7997 13208 6677 627 -5558 4647 -10205 -10205 26409 2892 8962 13614 6476 664 -3017 4048 -7065 -7065
2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02
DIVIDEND In view of the losses incurred during the year, your Directors are unable to recommend any Dividend on the Paid up Equity Share Capital and Preference Share Capital of the Company for the Financial year under review. SHARE CAPITAL The Authorized capital of your Company stood at `800 Cr. divided in to Equity Share Capital for `355 Cr. and Preference Share Capital for `445 Cr. The Issued, Subscribed and Paid up Share Capital of your Company stood at `719,59,91,370/- consisting of 27,65,99,137 Equity Shares of `10/ each and 4,43,00,000 Preference Shares of `100/ - each which is entirely held by HMT Limited, the Holding Company. The Networth of the Company is negative at ` (-) 11191 Lakhs at the end of the year due to accumulated losses. Your Company was to repay `443 Cr. to the Government of India through M/s HMT Limited against redemption of Preference Share Capital by 31st March, 2011 out of sale of identified surplus asset, in line with the revival plan sanctioned by GOI and the rehabilitation scheme sanctioned by the BIFR. The redemption of Preference Share Capital could not take place as the Lands, though vested with the Company vide the Scheme of Arrangement of Government of India in the year 2001, the mutuation in respect of the same has not been recorded in the name of the Company in the revenue records and continue to be in the name of HMT Limited, the Holding Company. The sale of surplus lands of the Company for the purposes of redemption of Preference Share capital is being included in the revival plans of the Holding Company and would be taken up after the approval and sanction of the same by the GoI. The Honble Bench of the BIFR has also been intimated about the status in this regard. Your Company has also requested the Government for extension of period of redemption of Preference Shares upto 31st December 2011. IMPLEMENTATION OF BIFR ORDER Your Company being a Sick Industrial Company registered with Board for Industrial and Financial Reconstruction (BIFR) is in the midst of implementation of the Rehabilitation Scheme sanctioned by BIFR.
Your Directors have pleasure in presenting the Twelfth Annual Report of your Company for the financial year 201011 containing Annual accounts together with the Auditors report and the comments by the Comptroller and Auditor General of India. PERFORMANCE Your Company achieved Sales turnover of `190.90 Cr. during the year 2010-11 which is marginally lower as compared to `193.86 Cr. achieved during the previous year. The production performance was lower for the year under review, at `177.43 Cr. as against `194.19 Cr. achieved during the previous year. The Order Booking during 201011 was significantly higher at `239.71 Cr. as against `177.80 Cr. in the previous year. The Directors of the Company expressed its concern that the performance of the Company requires to be accelerated so as to achieve the breakeven levels in the Financial year 2011-12. FINANCIAL HIGHLIGHTS The operations of your Company resulted in a Net loss of `93.06 Cr. as compared to the Loss of `45.80 Cr. registered in the previous year, the details of which are as follows: (` in Lakhs )
Current Earnings Year 2010-2011 Previous Year 2009-2010
Production Sales Sale value of Production Added Value Gross Profit before Interest & Taxes Interest Net Profit/(Loss) before DRE Def. Revenue Expenditure/VRS Income from NPA Sale Net Profit/ (loss) after tax
17743 19090 17703 10595 -8537 1104 -9306 -9306
Annual Report 2010-2011
19419 19386 18677 11075 -3840 1244 -4580 -4580
Annual Report 2010-2011
The Company has approached the Institutions / Companies and Banks from whom the reliefs and concessions, as sanctioned by BIFR, are to be claimed. While the reliefs are under consideration by some of the Parties, the consortium of Banks have appealed to AAIFR against the BIFR Order which is being contested by the Company. However, the appeal of Central Organization for Modernization of Workshop (COFMOW) and the State Govt. of Haryana had been dismissed by AAIFR. Thereafter COFMOW has approached Committee of Disputes and State Government of Haryana has filed a Writ Petition in the High Court of Punjab and Haryana, which is being contested by the Company. All post merger activities related to Praga Tools Limited merger with your Company has been completed substantially. MARKET SCENARIO AND FUTURE OUTLOOK Indias industrial output grew at its fastest pace year-onyear during 2010-11 signaling a strong recovery in manufacturing sector. The manufacturing sector which constitutes around 80% of industrial output expanded by 18.5% to set the pace of growth. The Index for Industrial Production (IIP) during the year 2010-11 has grown by 7.8% over previous year. Manufacturing Sector, Capital Goods sector and Consumer Durables sector were the major contributors for the growth in IIP during the period. The manufacturing sector grew by 8.1 % during the year 201011, the Capital Goods sector has grown by 9.3% and Consumer Durables grew by 20.9% over previous year. This growth has helped the Machine Tool industry to improve its performance during 2010-11. The Auto & Auto parts industry which is the major consumer of machine tools has recorded a growth rate of 26% over 2009-10. Other user segments of Machine tool industry have also done well during 2010-11. This has triggered good demand for Machine tools. The consumption of machine tools for the year 2010-11 is `9029 Cr., a growth of 41% over previous year. Countrys production for the year 2010-11 is `2416 Cr., a jump of 46% over previous year. The orders booked for machine tools in the country as per IMTMA for the year 2010-11 has witnessed a growth of 57% over corresponding period 200910 to `3064 Cr., The consumption of machine tools is estimated to be around `11000 Cr during the year 2011-12 considering cumulative
annual growth rate (CAGR) of 20%. About 30% of countrys machine tool consumption is addressed by domestic machine tool manufacturers and the rest is catered by imports. The countrys production is expected to be around `3000 Cr. during 2011-12. There is a huge business of approx. `9000 Cr available for the domestic machine tool manufacturers for increasing their production capacities to address the demand for machine tools in the country. Major manufacturers especially in sectors such as auto & auto ancillary, defence, power, industrial machinery and industrial intermediates have already indicated their investment plans for the year 2011-12. The Company is looking forward to achieve the performance level of `340 Cr. AUDITORS M/s A. Raghavendra Rao & Associates, Chartered Accountants, were appointed as Statutory Auditors of the Company for the year 2010-11 by the Comptroller & Auditor General of India and separate Branch Auditors were also appointed for each of the Unit/Divisions of the Company. Replies to the observations/qualifications made by the Statutory Auditors on the Accounts and on the Comments by the Comptroller and Auditor General of India on the Accounts are given separately. INFORMATION REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under the Companys (Disclosure of particulars in the Report of Board of Directors) Rules, 1998 are annexed to this Report. PERSONNEL The total employee strength of the Company as on 31.3.2011 was 3652. During the Financial Year 2010-11, 373 employees have separated and 217 joined the services of the Company. The details of different categories of personnel in position as on 31.3.2011 are given hereunder: Scheduled Castes Schedule Tribes Other Backward Class Ex-service men Person with Disabilities (PWD) 690 187 929 26 55
III IV DIRECTORS The Board for Industrial and Financial Reconstruction (BIFR) vide Order F. The Directors have prepared the annual accounts on a going concern basis. 31. Various Hindi programmes like Hindi workshop and pakwada were conducted at the Corporate and the Unit level in order to increase the usages of Hindi as Official Language. A Report on Management Discussion & Analysis and a declaration by the Chairman for having 6 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 obtained affirmation of compliance of the Code of Conduct by the Board Members and Senior Management for the year ended March 31. EMPLOYEE RELATIONS Harmonious and cordial Industrial relations prevailed during the year. Ganesan. In the preparation of the Annual Accounts.5-1(3)/2009. With a view to strengthening the Corporate Governance framework. the Department of Public Enterprises. 1956 read with the Companies (Particulars of Employees) Rules.. The Ministry of Heavy Industries and Public Enterprises.P. Pillai.1975.2010 has withdrawn the nomination of Shri P. X dt. 2011) or until further orders vice Shri A. A report on the Corporate Governance is annexed as part of this report along with the Compliance Certificate from the Auditors. Chairman and Managing Director of Heavy Engineering Corporation of India Limited.09. VIGILANCE ACTIVITIES The Vigilance Cell is functioning and keeping watch on the overall vigilance activities of the Company. 1985. the Board of Directors of the Company hereby state and confirm that: I. The Official Language Implementation Committee has been constituted in all the Units of the Company as well as Corporate Office. CORPORATE GOVERNANCE Your Company is committed to maintaining the highest standards of Corporate Governance. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Sub-Section (2AA) of Section 217 of the Companies Act.No. IMPLEMENTATION OF OFFICIAL LANGUAGE The Company continued its thrust for implementation of Official Language in the Company as per the directions and guidelines of the Government. of India. Special Director (BIFR) from the Board of the Company with immediate effect and further vide Order F. 28th December 2010 has appointed Shri G.15.E. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act. GOI has made the Guidelines on Corporate Governance for Central Public Sector Enterprises mandatory from the year 2010-11. Department of Heavy Industry. which meets at regular intervals at every quarter.K. 2011 is also appended to this Report. Policy etc.V. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit/(loss) of the Company for that period. Bangalore for monitoring the Implementation of Official Language Act. 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. II. In . New Delhi vide Presidential Order No.12.16(4)/G-72/2009/BIFR/SD DT.PARTICULARS OF EMPLOYEES Information in accordance with Section 217(2A) of the Companies Act.No. the applicable accounting standards have been followed and there has been no material departures from accounting standards. as amended is NIL for the year 2010-11.e. As your Company is a Government Company. 1956. 16(4)/G-73/ 2010/BIFR/SD dated 8th December 2010. Kamat. Transparency in various areas of Company operations helps to achieve vigilance objectives. Ranchi as Part-Time Chairman of the Company with immediate effect till the date of his retirement ( i.F. Your Company has initiated appropriate action for compliance of the same. nominated Shri Ashok Gupta as Special Director (BIFR) on the Board of the Company with immediate effect under Section 16(4) of the Sick Industrial Companies ( Special Provisions) Act. appointment of Directors as well as fixing of remuneration for Directors are decided by Govt.No. The Vigilance Officers of each of the Units are carrying out surprise checks and inspections in various Departments. Rules.
Director General Supplies & Disposals.No. Ganesan during their respective tenure on the Board of the Company. H.) dt. various State Governments.e.P. despite the difficult situation faced by the Company. ACKNOWLEDGEMENTS The Directors are thankful to HMT Limited. Ministry of Corporate Affairs. HMT Limited as Part-Time Director of the Company with immediate effect until further orders. Department of Heavy Industry. X (Pt.F.No.e. Director.2011 for a period of six months respectively or till a regular incumbent joins the Post or until further orders. New Delhi vide Presidential Order No. F.5(10)/2011.E. 29th December 2010 and Order No.5-1(4)/2009-P. 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Shri V. Shri S.No.Annual Report 2010-2011 accordance with section 260 of the Companies Act. The Directors also wish to sincerely appreciate the contributions made by the employees at all levels in the operations during the year.F. Part Time Chairman of the Company w.E. The Board of Directors recorded appreciation of the valuable contributions made by Shri A.E.K. the Holding Company. Suppliers and Dealers. Pillai.01. For and on behalf of the Board of Directors Place: Bangalore. In terms of provisions of Section 256 of the Companies act. Ministry of Heavy Industries and Public Enterprises. the Consortium of Banks lead by UCO Bank and valued customers of the Company both in India and abroad for their continued co-operation and patronage.K. New Delhi vide Presidential Order No. Hemachandra Babu. 1956 and Article 77 & 83 of the Articles of Association of the Company. Principal DirectorCommercial Audit. Shri Harbhajan Singh. Statutory and Branch Auditors.G. Shri K. 5th May 2011 has appointed Shri S. 01. Director (Operations). particularly the Department of Heavy Industry. 12-08-2011 consequent upon his resignation.f. Department of Heavy Industry. various Departments and Ministries in the Government of India.P. Shri K. 2011 ( G. Ordnance Factories. Hemachandra Babu. Pillai shall hold directorship upto the 12th Annual General Meeting of the Company and is eligible for appointment as Director at the meeting. The Ministry of Heavy Industries and Public Enterprises. whichever is earliest. Comptroller & Auditor General of India. Shri G. H.5-1(4)/2009. The Ministry of Heavy Industries and Public Enterprises. Director (Technology) ceased to be Director of the Company w.e.04.G. In accordance with section 260 of the Companies Act. Sridhar. retires by rotation at the ensuing Annual General Meeting and is eligible for reappointment. 28th July 2011 has also assigned Additional Charge of the post of Managing Director of the Company to Shri G.K. Sridhar shall hold directorship upto the 12th Annual General Meeting of the Company and is eligible for appointment as Director at the meeting..) dt. X dt.X (Pt. consequent upon superannuation of Shri V.f 01. Suresh.2011 for a period of three months and w. 1956 and article 85 of the Articles of Association of the Company. Managing Director of the Company. Kamat.f. Date : 25th August. Suresh and Shri P. PILLAI ) Chairman 7 . its Subsidiaries.V. 1956 and Article 77 & 83 of the Articles of Association of the Company. Director General.
recognizing its revenue on sales when "LR/GR obtained and endorsed in favour of customer" though the significant risk and rewards is not transferred to buyer. creditors and advances.24 lakhs and understatement of loss by `27. this has not resulted in overstatement of sale by `376. We draw attention to note no 9 of schedule 10 "Sanctioned Rehabilitation Scheme from BIFR" regarding non recognizing of various sanctions. 2011 and whose ownership is still lying with the Company are recognized as sales for the financial year 2010-11.1 & 4. Hyderabad have been adequately disclosed in the fixed assets 8 6. pending confirmation from the respective stakeholders and the statutory formalities which are to be complied with. Accordingly the customer has inspected and accepted the machine and given clearance for despatch of machines before 31st March 2011. There is no deviation in the accountal of sales as far as the significant risks and ownership of goods stands transferred to the buyer based on the physical despatch and GC note has been made in the name of customer. b) 6. Companys Reply The Company Accounting Policy is in line with AS-9 and has been followed consistently in the past. vested under the Scheme of arrangement approved by the Govt. 2.ADDENDUM TO DIRECTORS REPORT FOR THE YEAR 2010-11 IN RESPECT OF OBSERVATIONS MADE BY THE STATUTORY AUDITORS ON THE ACCOUNTS OF HMT MACHINE TOOLS LIMITED FOR THE YEAR ENDED 31ST MARCH 2011 Sl.24 lakhs and understatement of loss by `27. 4.10 forming part of Annual Accounts for the year 2010-11.3 in the Fixed Asset Schedule forming part of accounts.1 and 4. Efforts are being made to get the confirmations from the concerned parties.03.3 where the titles or lease deed of land is not in the name of the Company and Note no. Moreover. Note 2. the consequential effect on the financial statements is not ascertainable. of India for which mutation of title deed is yet to be done in the revenue record. in case of FOR Destination Contracts. No. Statutory Auditors Observation Accounting Standard-9 (Revenue Recognition). a) Non-confirmation of debtors.41 lakhs. waivers and exemptions from Central/State Government agencies and Banks.4 where a portion of land admeasuring approximately 39 acres is not in possession of the company. an appeal by certain stakeholders against the BIFR. waivers and exemptions from various government agencies and banks as the stakeholders filed an appeal before Appellate Authority for Industrial and Financial Reconstruction against the order of Board for Industrial & Financial Reconstruction.2011. The BIFR has sanctioned Rehabilitation Package for the company envisaging various sanctions. no recognition has been given for the reliefs. 14 under schedule No. the machine should not be despatched/delivered without getting the same inspected and issue of inspection notes by the Quality Assurance Officer nominated in the contract. 4. the Sales which are in Transit as on March 31. However. 4. c) We draw attention to Schedule 3 "Fixed Assets". as per the terms and conditions of contract. The fact of non-possession of 39 acres of land by the Company in respect of Praga Tools Division. concessions and exemptions in the accounts for the period ended 31. where the company is. fresh Lease Deed in respect of Lease Hold Lands pending and conversion of Revenue land for industrial use at Machine Tools Unit Ajmer. 6.41lakhs. This has resulted in overstatement of sales by `376. Consequently. Proper disclosure has been made vide point No. 4. the value of such land included in Fixed Assets is not 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 . pending finalization of rates by the Govt. Therefore necessary disclosure has been made to this effect under notes to the accounts. In view of the above. of Rajasthan have been disclosed vide point no. The fact that Fixed Assets include immovable properties.
Ajmeer Branch and Hyderabad Branch (MTH) for the liability. of India to State Bank of Hyderabad on behalf of company and Note no. As the Unit/Company is facing acute financial crunch due to lower level of turnover. necessary disclosure has been made vide point No.58 lakhs in respect of Praga Tools Division. As per the information and explanation provided. on account of these lands. d) We draw attention to Schedule 10. The matter is being pursued with the concerned authority for settlement. the penal damages of `349.4. 6. Consequently loss has been understated by `447. Could not be ascertained.13. these are with held by buyers due to delay in supply in accordance with agreement with the parties.3. 2006.67 lakhs. there is no overstatement of Sundry Debtors and understatement of loss to the extent of `621. Note no.6 lakhs and an amount of `104.27 lakhs.Annual Report 2010-2011 Sl. Small and Medium Enterprise Development Act. g) 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Companys Reply schedule forming part of accounts vide Point No.3 "No provision towards penal interest on un paid contributions under Employees Family Pension Scheme" of `349. 4. Act. However. Statutory Auditors Observation ascertained.2 "No provision towards Government Counter Guarantee Fee" of `98.13.2 "Amount withheld towards liquidated damages and interest on advances claimed/if claimed on delayed supplies".41 lakhs on the guarantee extended by the Govt.1 a) (i) . As such.2 &13. Note no 11. The non-provisioning of LD's outstanding less than 3 years and debtors less than 5 is in line with the uniform accounting practice consistently being followed in the Company. 1956 and provision not having been ascertained and 6. We draw attention to Schedule 10.99 lakhs during the year.58 lakhs towards Family Pension contribution is to be waived off by the PF Authorities and accordingly the same has not been provided in the Books. The impact on non-provision of such interest on the financial result cannot be quantified. Loss. which resulted in overstatement of Sundry Debtors and understatement of loss by `104.(ii) & b) under notes forming part of Annual Accounts of the company for the year 2010-11. However. provision has been made towards the interest payable under Micro. the necessary disclosure has been made to the above effect in the notes forming part of annual accounts of the company vide point No.41 lakhs in respect of Praga Tools Division. However. 13. Small and Medium Enterprises Development Act. if any. in compliance to internal accounting guidelines of the Company vide letter No. provident fund dues aggregating `605. e) "No provision is made by Bangalore Branch (MBX). The Provident Fund Trust has been formed and governed by Board of Trustees of the Unit/Company under the provisions of Employees Provident Fund and Misc. there is an outstanding payment of PF dues.13. As such there is no understatement of loss of `447. the loss suffered by the 9 .84 lakhs. The company has submitted proposal to the Govt. In respect of Pinjore Branch.504/98 dated 3rd May. 2007 in respect of Praga Tools Division. GGM (F) dated 07.99 lakhs. 2006 in the absence of confirmation from the vendor. 1952.2004. 6. No. f) 6. of India.67 lakhs being interest on advances with held by a customer has not been included. as per BIFR order vide case No. and accordingly the same has not been provided in the books. not having remitted to the authorities and the consequent noncompliance with the provisions of sub section (4) of Section 418 of the Companies Act.06. towards the interest payable under Micro. Further. To the extent of information available with the Company. This resulted in overstatement of sundry debtors and understatement of loss by `516. Department of Heavy Industries for waiver of Guarantee fee amounting to `98.
there is no understatement of loss for the year.952 acres belonging to the company was sold by HMT Limited and profit on sale amounting to `36. As such there is no understatement of prior period income and overstatement of cumulative loss by `36. equivalent land value will be transferred to HMT Machine Tools Limited. equivalent land value will be transferred to HMT Machine Tools Limited.55 Crores has not been accounted by the company resulting in understatement of prior period income by `36.Sl. 6. Pillai) Chairman . For and on behalf of the Board of Directors (G. 6. the land admeasuring 26. K. After considering understatement of Loss. As per the MOU with the Holding company. as referred in Paragraph4. vide Memorandum of Understanding between the Company and HMT Limited. No.55 Crores. paragraph 6(d) and 6(f). as referred in para 6(h). Necessary provisions have been made wherever required and as such. Statutory Auditors Observation made in respect of penalty and damages arising out of non-remittance of Provident Fund dues to the authorities and the consequent effect on the account not being ascertainable.08. As such there is no understatement of prior period income and overstatement of cumulative loss by `36. the aggregate loss for the year has been understated by `1096. h) During the year 2002-03 and 2003-04. the holding company.55 Crores. Prior Period income. i) Place : Bangalore Date : 25.2011 10 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 Companys Reply PF Trust consequent to delay in remittance of PF dues has been made good by the Unit/Company by providing 12. As per the MOU with the Holding company. has been understated by `3655 lakhs and Accumulated losses has been overstated by `2558 lakhs.55 Crores and overstatement of cumulative loss by `36.5% interest on such belated payments.67 lakhs.55 Crores.
Proven experience in offering component-oriented Special Purpose Machines built to international standards C F Highly qualified. Key metal cutting tools include turning centres. ten major Indian companies constitute almost 70 per cent of the total production. Project Engineering. Time taken to commercialize new products is high. While the large organised players cater to Indias heavy and medium industries. limited CNC products. low market potential of conventional machines. Further. B Strength and Weakness Strengths: F F F F Strong brand image. Old plant and machinery resulting in low productivity levels with quality problems. Growth in power. CNC turning centres. accounting for nearly 81 per cent of the total machine tools production in India. Based on technology. The increasing domestic demand which is not currently met by domestic production indicates the vast business potential available within the country for machine tools. which are highly productive and cost effective. which account for 51 per cent share. the gap of `6613 Cr. Sales Engineering etc. Ageing employee profile not in keeping with industry standards. Huge infrastructure for in house manufacturing of critical components. machining centres and grinding centres are the biggest segments. 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 F F F Weakness: F Inadequate number of engineers in key departments like Design & developments . High potential available for Exports 11 F . CNC machine tools. out of which contribution from domestic production is around `2416 Cr. Focus group for strategic segments Well equipped sales and service network spread throughout length and breadth of the country. Low employee morale due to very low salary structure not in line with industry norms. comprise nearly 70 per cent of machine tools. experienced engineers and technicians to meet the high technology needs of users. Wide range of quality machine tools established indigenously through renowned collaborations and CNC machine tools established through in-house R&D. CNC and special purpose machines. is addressed by imports which is around 73% of total consumption. Metal forming is dominated by presses. based on the type of operation. Market potential available for state-oftheart Machines presently being met by imports. machine tools can be classified into CNC (Computerised Numerically Controlled) and conventional tools.Annual Report 2010-2011 MANAGEMENT DISCUSSION & ANALYSIS A Industry Structure and Development The Indian machine tool industry consists of about 750 manufacturing units of which approximately 400 units fall under the organised category. which account for nearly two-thirds of the total metal-cutting production. Metal cutting accounts for 87 per cent of the total output of machine tools in India. During 2010-11. F F F F F F Opportunities and Threats Opportunities: F F F Huge investment envisaged in strategic sectors will fuel demand for Machine Tools. Too wide product range. Application Engineering. Aerospace and Wind Energy sectors will fuel huge demand for Machine Tools. Of these.. countrys consumption of machine tools was `9029 Cr. nuclear power. High overheads and manpower costs. machining centres and grinding centres. The machine tools industry can be broadly classified into metal-cutting and metal-forming tools.. the small scale sector meets the demand of ancillary and other units. Large basket of products conventional.
increase in exchange parity. User preference for supply from source as per collaborators recommendation. Most segments of the Indian automotive. Decline in demand for conventional machines due to technology shift and obsolescence. the ball and roller bearings and electronic components. Import of machines tools from China/ Taiwan/ Korea F F F F D Segment wise or Product wise Performance Segment wise Performance: Segment wise sales for the year 2010-11 of the Company is as underSector Auto & Auto Ancillary Railways Defence Val. Influx of second hand / reconditioned imported machines at cheaper prices. consumer durable. capital goods. Over `3500 Cr. investment intentions in various user sectors will enhance demand for Machine tools. Taiwan etc F F F F . Impetus being given for growth in manufacturing sector. ` Lakhs 3465 583 2970 12 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 Agricultural Machinery Mining & Metals Industrial Machinery Industrial Intermediates Power Consumer Durables Others Total Outlook 939 1047 300 2154 2554 134 4944 19090 Demand for machine tools accrues from the manufacturers of primary goods and intermediate goods. This growth in various sectors presents a positive outlook for improving the companys business during 2011-12. power shortage resulting in erosion of profitability. Increased competition even from small/ medium scale manufacturers Customers choice of technology. F Risks and Concerns F F F Shortage of working capital Attrition of experienced professionals and skilled manpower in key areas Low order flow from private sector (less advances) and no advances for orders received from government and defence sectors Salaries not in line with the industry standards Unable to induct professionals and skilled manpower due to low pay scales Low morale among employees due to low pay scales Imports of machine tools both new and second hand machines especially from countries like China. as well as intermediate goods sectors recorded a good growth in turnover during 2010-2011. Korea. Prominent users of machine tools in the intermediate goods sector includes the auto components. Trend in shift from stand alone machines to manufacturing systems. Increased input costs. Global hub for manufacturing components E F F F Threats: F F F F F Inland competitors strengthening their capabilities through technical tie-up with overseas majors Severe competition from reputed overseas players Low duty structures have made imported machines extremely competitive for domestic buyers.F The Gap between domestic consumption and production provides potential for increasing domestic production. capital goods sector and consumer durables sector. The primary user industries includes the automotive sector.
the Company incurred a loss of `93.90 Cr. GOI as applicable to Government Companies and as per the applicable provisions of the Companies act. During the year 2010-11. G Internal Control System and Their Adequacy The Company has in place adequate systems of Internal Control commensurate with its size and nature of its operations. procedures/policies laid down by the Company and suggests meaningful and useful improvements. H Financial Performance The Turnover of the Company during the year 201011 is `190. September 24.06 Cr. The Company is making its best efforts to retain the skilled and professionally qualified personnel despite the constraints faced in implementing the revised pay scales (1997) in the Company. CORPORATE GOVERNANCE In compliance with the Guidelines on Corporate Governance for Central Public Sector Enterprises framed by the Department of Public Enterprises. Independent Directors are vacant. Director (Technology). Currently the position of one Managing Director and two part-time NON Official i. June 29. evaluates and appraises the various systems.e.2011. 1956.2011 is 3652 .Annual Report 2010-2011 F High cost of inputs such as CNC system. incurred during the previous year. Training and Retraining as per the sanctioned Revival plan of the Company was provided to the employees during the year.03. The Company is committed to maintain the highest standards of Corporate Governance and initiated appropriate action for compliance of the Guidelines on Corporate Governance.03. one Whole Time Director i. in the calendar year 2010 and on January 11 & March 23 in the calendar year 2011. five Board Meetings were held on May 29. The composition of Directors and their attendance at the Board Meetings and at the 13 . one part -time Official Director and one Nominee Director of BIFR. Schools and Playgrounds at various Manufacturing Units for the benefit of employees and the local community. Process for formulating and reviewing annual and long term business plans have been laid down. 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 The borrowings of the Company as on 31.80 Cr. I Human Resources The manpower strength of the Company as on 31. Bearings. and ensuring that the transactions are authorized. Compliance with laws and regulations. recorded and reported correctly. the Board of Directors comprised of part-time Chairman (also holding additional charge of Managing Director). Board of Directors As on 31. reporting and Corporate Governance.03. accessories etc. J Corporate Social Responsibility HMT Group has set up Hospitals. as compared to `193. your Company hereby submit the report on Corporate Governance.2011 is `126. The Internal Audit Department of the Company along with external firms appointed for carrying out internal audits of Units/Divisions reviews.75 Crores.86 Cr. Safeguarding assets against unauthorized use or losses or disposition. due to high duties and taxes. as against a Net Loss of `45. The salient features of internal control system are: Clear delegation of power with authority limits for incurring capital and revenue expenditure. Detailed Annual budget giving further break up of monthly targets under various heads. Internal Audit Department coordinates with the Units/ Divisions of the Company for ensuring coverage of all areas of operations in order to bring a transparency in the whole spectrum of the Company.e. During the year. Well laid down corporate policies for accounting. of the previous year.
General Meetings during the year are: Name Category Attendance Particulars Board Meetings G. of other Directorships and Committee Member/ Chairmanship held Directorship Committee Membership Chairmanship 1 - C&NENI : Part-time Chairman. Delhi University and had completed Chartered Accountancy from ICAI during Nov 1980 with 4th Rank in All India. 31.10 C&N ENI C&N ENI NENI ENI ENI NEI NEI 2 3 5 3 5 2 General Meeting NA Yes Yes Yes NA No.f.Kamat Ceased w. Mr Pillai has been a very active sportsman of repute having played Hockey at the National level. He is a special invitee Member to the Fiscal laws Committee/ Direct Taxes Committee of the ICAI since 2005.12. He is very active in various professional bodies. 27.2001.Industrial Excellence Award from the Indian Nuclear Society for development of special nuclear grade steel.09.f.K. He served as a Director on the Board of Indian Bank from 10th May 2002 to 9th May 2005 which was the most crucial . Right from the day he joined HEC. He is the Chairman of CIIJharkhand State Council. he joined the private sector and worked in a US Multinational Joint Venture in India at Chennai.12.Ranchi and is also the Executive Member of the SCOPE.e.Pillai Shri G. Recognising its performance. Mr Pillai was selected to head the prestigious organisation of the Country.f.BIFR Nominee Appointed w. HEC has also received another award. NA : Not Applicable Brief Resume of Directors appointed during the year 2010-11 Shri G.V.f.12. Suresh Ashok Gupta. Pilani in 1973 joined Instrumentation Ltd.the first time in 14 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 1 8 1 - India. He is Practising Chartered Accountant for the last 30 years as a partner of Ashok Praveen & Company. Palakkad.e.10 A.e.e. Dr. is a graduate from Shri Ram College of Commerce. in Ranchi on 28th May 2007.K. After having a successful stint in both Public Sector and Private Sector Industry. After a successful carrier there for 21 years. Apart from having a successful professional career. Pillai.10 K.e. NEI : Non Executive & Independent. the Prime Minister of India.10 Harbhajan Singh V.K.BIFR Nominee Ceased w.E. Mr Pillai was also awarded the Turn Around Leader Award at the Asia Pacific HRMM Congress at Bangalore in September 2010. Ganesan. NENI : Non Executive & Non Independent. He was Co-opted Member to the Corporate Laws committee of the ICAI during the year 2004-05. 15. Mr Pillai has been working in right earnest in bringing HEC back to the national mainstream with business and profitability growth.Pillai Appointed w. Hemachandra Babu Ceased w.H. Manmohan Singh on the 15th October 2009 at Delhi.10 P.f. 28. Shri Ashok Gupta Shri Ashok Gupta. ENI : Executive & Non Independent. 08. after completing his BE(Hons) from BITS.12. President of the Project Management Associate.HEC at Ranchi as the Chairman cum Managing Director.namely Fisher Sanmar Ltd as Vice President and rose to become the Chief Executive of the Company. He was a Member of Committee in Income Tax Department (Ministry of Finance) Member of the Quality council under the charge of the Commissioner of Income Tax New Delhi during the year 1999. HEC was awarded the prestigious SCOPE Award for excellence in Management and Turnaround 2007-08 by H. a Government of India Enterprises in Kerala.
Bangalore560 032 period for the Bank as it was recovering from its critical financial crisis. during the last three years. He is also associated with Delhi District Cricket Association. The Company has not established a Whistle Blower Policy for the employees.linked incentive except amount payable as per the productivity linked incentive scheme of the Company.2009 11. the Holding Company.10 K. Bellary Road.09.2008 4. Govt. Annual results are also updated on the Companys website www. Company has also informed ROC Bangalore about non filing of Statutory Returns due to technical problem being faced by the Company. Ranjana Kumar. none of the employee has been denied the access up to the senior level management.09. General Body Meetings The last three Annual General Meetings of the Company were held as under: 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Financial Date Year 2007-08 26.12. Rajasthan Ratnakar. Suresh An amount of `1. New Delhi.2010 11. Company submits financial results periodically to M/s HMT Limited.M. He represented ICAI in IDW Congress in Berlin (Germany) in 1991.f 31. New Delhi.Hemachandra Babu Ceased w. Disclosures There were no transactions of material nature with its Promoters. Committees of the Board The Audit Committee of the Company has to be reconstituted and the Remuneration Committee of the Company to be constituted after the induction of the Independent Directors on the Board of the Company by the Government. However. the Directors or the Management or their relatives which may have the potential conflict with the interest of the Company at large. He contributed an Essay Views of Directors Indian Bank The Magic of Turnaround in the book entitled A New Beginning The Turnaround story of Indian Bank which was authored by Smt. 15 378123 458136 .com.59. There are outstanding Statutory Dues payable by some of the units of the Company which have approached/ are approaching the Provident Fund Authorities for settlement in monthly installments.500/. Bhagwati Devi Sarup Singh Charitable Trust (NGO whose primary domain is Education). The Company has requested to the Administrative Ministry for the same.09. penalties.Annual Report 2010-2011 Time Venue Registered Office at No.e.2008. Central Vigilance Commission. Govt. As above One special resolution for increase in the Authorized Share Capital of the Company was passed in the General meeting held on 26. Audit Board. of India. The salary of whole time Directors does not include performance . There were no other instances of non-compliance by the Company. Means of Communication Being a wholly owned subsidiary.30 A.00 P.H. or any matter related to any guidelines issued by Government. He is a Faculty for the workshops organized by the Indian Audit & Accounts Department of the Principal Director of Commercial Audit & Ex-Office Member.is payable only to Independent / BIFR Nominee Directors for attending each meetings of the Board and Committees. Annual General Meeting for the current year is scheduled to be held in the month of September 2011 at the Registered Office of the Company. Government of Karnataka had exempted 50% Stamp Duty against 100% and the Company has reapproached them for 100% exemption . He has contributed articles in the journal of the ICAI The Chartered Accountant. Remuneration of Directors The details of remuneration of whole time Directors are given below: Name of Director Salary Other (`) Benefits (`) 280479 349638 97644 108498 Total (`) V. strictures imposed on the Company by any statutory authority. The Company has not filed the statutory returns for the year 2009-10 with the Ministry of Corporate Affairs/ ROC.09.hmtmachinetools. Former Vigilance Commissioner. of India.M. As above 07.00 A. Bangalore due to non updation of the increased Authorized Share Capital in the records of MCA pending 100 % exemption from the payment of Stamp Duty on increased Authorized Share capital from the Government of Karnataka in terms of the BIFR sanctioned Rehabilitation Scheme of the Company. 2008-09 2009-10 25.M.
e. Use of Energy Efficient Lighting systems like mercury vapour lamps. Water is heated for cooking purpose through solar water heating panels. if any being implemented for reduction of energy consumption: § § § § § § § Providing energy saving lighting equipments in place of florescent lights and bulbs Usage of sodium vapour lamps for yard lighting Installation of timer switches for yard light control Providing of graphite layer on salt bath furnace to reduce heat dissipation. high power sodium vapour lamps and fluorescent tube lamps Centralised Control of coolers and shop lighting Use of transparent roof sheets wherever possible and cleaning of glass in sheds periodically to make an effective use of natural lighting. b) § § § Utilization of Foundry Furnace during night and holidays to save power tariff. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO a) Energy Conservation measures taken: The Company has given major emphasis for Conservation of Energy. Power savings by using AC Motor with Low power in place of DC Motors in High Power Machine. The energy conservation measures taken during the year 2010-2011 include: § Switching off Machines/equipment when not in use and switching off lights in areas not having adequate activity. The energy utilization in our manufacturing Units are being monitored constantly in order to achieve effective conservation of energy. 1988 A. . Replacement of existing electric geysers with solar. Water leakage plugged and defective taps replaced to reduce water wastage and consumption which conserves power. Replacement of old system and drives with new energy efficient systems in CNC machines. as the Company is not covered in the list of specified industries. § § § § § § § § 16 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 § Additional investments and proposals. Replacement of motor generator sets with new AC drives in conventional machines. CONSERVATION OF ENERGY. by ensuring furnace friendly compatible load for optimal utilization. while refurbishing. Switching off main Air Compressor during lunch breaks and running portable Air Compressor during C Shift instead of Main Compressor Monitoring of utilization of energy in lighting and other auxillary equipments Use of power capacitors to improve the power factor Creating awareness among employees about the necessity of energy conservation by observing energy conservation week. Continuous running of Furnace ensured by checking the holding time between consecutive charges i. c) Impact on cost of production of goods: § d) Total energy consumption and energy consumption per unit of production § Not applicable. 1956 Companys (Disclosure of particulars in the Report of the Board of Directors) Rules.Annexure to the Directors report Section 217(1) (e) of the Companies Act. The above mentioned measures have resulted in reduced consumption of electrical energy at various load centers and helped in curtailing the energy costs.
Foreign Exchange earned Outgo of Foreign Exchange Expenditure in Foreign Currencies on account of Royalty. 17 . 2. C. Specific areas in which R & D carried out by the Company: The Company has its own R&D facilities at its manufacturing units to meet its needs.82 Lakhs 1. initiatives taken to increase export markets for products and services and plans: Exports of the Companys products are managed by HMT (International) Limited. upgrading the existing products with additional features. 3. The focus of R&D is to progressively achieve self-reliance in product technology. FOREIGN EXCHANGE EARNING AND OUTGO Activities relating to exports. Interest and other matters.94 Lakhs Total R & D Expenditure 0. adaptation and innovation: (i) Efforts in brief towards technology absorption and innovation and 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 (ii) Benefit derived as a result of the above efforts There has been a consistent effort to design. This approach has resulted in development of the following products during 2010-11: 2. After successful implementation in Bangalore Unit. CNC Precision Turning Centre PTC 200 Drill Machine Centre DMC 400 Centreless Grinding Machine CLG 310 Three Station Bridge Type Tappet Machine with Picoco Benefits derived as a result of the above R&D The development of the new products will enable the Company to meet the emerging competition (both indigenous and foreign) and also meet the market demand for technologically competitive products and automation requirements of the user sectors for improved productivity. Total Foreign Exchange used and earned: PARTICULARS (` in Lakhs) ` 4. Know-how/Professional Consultation Fees. The Technology Development Plans facilitate reducing the cost of production by value engineering (redesigning / up gradation of products) and thereby helps reduction in import substitution. ERP will be implemented in rest of the Units as well as the Regional/ Zonal Marketing Offices and the Head Office of the Company. Blue print is being drawn to suit the requirement of Company. the wholly-owned subsidiary of HMT Limited. Expenditure on R & D Particulars a) b) (` in Lakhs) Capital Recurring ` 209. develop and manufacture new products of technologies in vogue and Special Purpose Machines which are state-of-the-art and technology centric. Enterprise Resource Planning (ERP) package is in the process of commissioning at Machine Tools Bangalore Unit on trial basis. 3. TECHNOLOGY ABSORPTION FORM B Research and Development ( R & D ) 1. Training for the Head of Departments is completed.01 As % of Turnover 5.Annual Report 2010-2011 B. 4.94 Lakhs Total ` 209. the Holding Company. Technology absorption. Future Plans of action: R&D is a continuous process and is closely linked with the various operations of the Company.
and the Senior Management Personnel have affirmed compliance of the said Code of Conduct. 214976 Date: June 28th. we certify that the Company has complied in all material respects with the conditions of Corporate Governance as stipulated in the above mentioned Guidelines. K.CERTIFICATE ON CORPORATE GOVERNANCE T o The Members of HMT Machine Tools Limited. 003324S Sd/Latha S Koppal Partner Membership No. as stipulated in Guidelines on Corporate Governance for Central Public Sector Enterprises. (G. Pillai) Chairman Place: Bangalore Date: 13th June. in our opinion and to the best of our information and according to the explanations given to us. It is neither an audit nor an expression of opinion on the financial statements of the company.4. adopted by the company for ensuring the compliance of the conditions of Corporate Governance.4. Raghavendra Rao & Associates Chartered Accountants FR No. 2011 Place: Bangalore Sub: Code of Conduct .2 This is to certify that: In pursuance of the provisions of Clause 3. For A. for the year ended March 31. Subject to the above.Declaration under Clause 3. a Code of Conduct for the Board Members and Senior Management Personnel is in place. All Board Members. We have examined the compliance of conditions of Corporate Governance by HMT Machine Tools Limited (the Company). The compliance of conditions of Corporate Governance is the responsibility of the management. for the year ended on 31st March 2011. 2011 18 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 DECLARATION BY THE CHAIRMAN . Our examination was limited to procedures and implementation thereof. and.2 of Corporate Governance Guidelines of DPE. The full complements of Independent Directors as required under Corporate Governance Guidelines have not been fulfilled. The said Code of Conduct has been uploaded on the website of the Company and has also been circulated to the Board Members and the Senior Management Personnel of the Company. 2011. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
The Balance Sheet. In the light of C&AG's observations under section 619(4) of the companies Act. we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. which are audited by Branch auditors appointed under section 619(2) of the companies Act. Consequently. 2011 and whose ownership is still lying with the company are recognized as sales for the financial year 2010-11. the Profit and Loss account of the company and the Cash Flow statement of the Company for the year ended on that date. The provisions of Section 274 (1) (g) of the Companies Act. 6 (f). 2011. issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act. We conducted our audit in accordance with the auditing standards generally accepted in India. proper books of account as required by law have been kept by the company so far as appears from our examination of those books. the Balance Sheet.24 Lakhs and understatement of loss by `27. As required by the Companies (Auditor's Report) Order. We believe that our audit provides a reasonable basis for our opinion. where the company is. 5. In our opinion. Praga Tools Hyderabad Branch. this report is in substitution of our earlier report dated June 28th. . evidence supporting the amounts and disclosures in the financial statements. 2011 with respect to para 6 (e). in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India. 829 (E) issued by Department of companies affairs in exercise of powers conferred by Section 620(1)(a) of Companies Act. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. 6 (h) and 6 (i) of the report and with respect para 4. An audit also includes assessing the accounting principles used and significant estimates made by the Management. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. This resulted in overstatement of sales by `376. 2011. the Profit and Loss account and the Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act. 9 and 10 of the Annexure. Hyderabad Branch. where the consequential effect on the financial statement is not ascertainable. Kalamassery Branch. In preparation of this report. Further to our comments in the Annexure referred to above. b) 2. Ajmeer Branch. 1956 ('the Act'). Our responsibility is to express an opinion on these financial statements based on our audit. as amended. we have considered the Branch Auditor's Report of Bangalore Complex (MBX) Branch. An audit includes examining. 1956 is not applicable to Government companies vide Notification GSR No. These financial statements are the responsibility of the company's management. on a test basis. except deviation with respect to : Accounting Standard-9 (Revenue Recognition). the Sales which are in Transit as on March 31. as well as evaluating the overall financial statement presentation. 4. In our opinion. 2003 ('the Order').Annual Report 2010-2011 AUDITORS REPORT T o the members of HMT MACHINE TOOLS LIMITED We have audited the attached Balance Sheet of HMT Machines Tools Limited as at March 31st. 9 of Schedule 10 "Sanctioned Rehabilitation Scheme from BIFR" regarding non recognizing of various 19 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 3. 6. subject to: a) Non-confirmation of Debtors. Pinjore Branch. in Case of FOR Destination Contracts. 6. In our opinion and to the best of our information and according to the explanations given to us. we report that: 1. We draw attention to Note No. the said accounts give the information required by the Act. recognizing its revenue on sales when "LR/GR obtained and endorsed in favour of customer" though the significant risk and rewards is not transferred to buyer. annexed thereto. the Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account.41 Lakhs. Creditors and Advances. 1956 and Marketing division audited by us for the year ending March 31st.
1956 and provision not having been ascertained and made in respect of penalty and damages arising out of non-remittance of Provident Fund dues to the authorities and the consequent effect on the account not being ascertainable. has been understated by `3655 Lakhs and Accumulated Losses has been overstated by `2558 Lakhs.Raghavendra Rao & Associates Chartered Accountants FR No: 003324S Latha S Koppal Partner Membership No. 2011. on account of these lands. vide Memorandum of Understanding between the Company and HMT Limited.3 where the titles or lease deed of land is not in the name of the company and Note no. 2011 Place: Bangalore 20 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 Lakhs and an amount of `104.952 acres belonging to the company was sold by HMT Limited and Profit on sale amounting to `36. the holding company.84 lakhs. 13. We draw attention to Schedule 10. Consequently loss has been understated by `447. 11.67 Lakhs being interest on advances with held by a customer has not been included. In the case of the Balance Sheet.99 Lakhs during the year. Prior Period income. c) We draw attention to Schedule 3 "Fixed Assets".2 "Amount withheld towards liquidated damages and interest on advances claimed/if claimed on delayed supplies".2 "No provision towards Government Counter Guarantee fee" of `98. of the cash flows of the Company for the year ended on that date. of the state of affairs of the Company as at 31 March. the land admeasuring 26. paragraph 6 (d) and 6 (f).67 Lakhs.67 Lakhs. As per the information and explanation provided. g) In respect of Pinjore Branch. which resulted in overstatement of Sundry Debtors and understatement of loss by 104. 4. of the loss of the Company for the year ended on that date.1 and 4.55 Crores and overstatement of Cumulative loss by `36. For A. Loss. This resulted in overstatement of Sundry Debtors and understatement of loss by ` 516. these are with held by buyers due to delay in supply in accordance with agreement with the parties. After considering understatement of loss as referred in paragraph 4. Small and Medium Enterprise Development Act.58 Lakhs in respect of Praga Tools Division. resulting in understatement of prior period income by `36. towards the interest payable under Micro. The impact on non provision of such interest on the financial result cannot be quantified. could not be ascertained. and In the case of the Cash Flow statement.3 "No provision towards penal interest on un paid contributions under Employees Family Pension Scheme" of `349. In the case of the Profit and Loss account.55 Crores. Note no. not having remitted to the authorities and the consequent non compliance with the provisions of section 418(4) of Companies Act. waivers and exemptions from various government agencies and banks as the stake holders filed an appeal before Appellate Authority for Industrial and Financial Reconstruction against the order of Board for Industrial & Financial Reconstruction. provident fund dues aggregating `605. ii. 2006 in the absence of confirmation from the vendor. note no.4 where a portion of land admeasuring approximately 39 acres is not in possession of the company. No provision is made by Bangalore Branch(MBX). During the year 2002-03 and 2003-04. i. We draw attention to Schedule 10. 4. Ajmeer Branch and Hyderabad Branch(MTH) for the liability. 13.: 214976 h) i) iii.55 Crores has not been accounted by the Company.sanctions. if any.41 Lakhs on the guarantee extended by the Government of India to State Bank of Hyderabad on behalf of company and Note no. the value of such land included in Fixed Assets is not ascertained. Note 2. . the aggregate loss for the year has been understated by `1096.6 d) e) f) Date: August 24th. as referred in para 6(h).
no material discrepancies were noticed on such verification as compared with the book records. there are adequate internal control procedures commensurate with the size and the nature of the business of the Company with regards to the purchase of fixed assets. 8. In our opinion and according to the information and explanation given to us. Kalamassery Branch. 6. As informed to us. 2011. During the year physical verification has been conducted for Hyderabad Branch. 1975 with regard to unsecured loans. We report that : 1. the Company has complied with the directives issued by Reserve Bank of India and the provisions of Section 58A and 58AA of the Act and the companies (Acceptance of Deposits) Rules. In our opinion and as per the information given. secured or unsecured to/from companies. including quantitative details and situation of fixed assets. Hence. Praga Tools Hyderabad Branch. is reasonable having regard to the size of the Company and nature of its assets. In our opinion and according to the information and explanations given to us. parties covered in the register maintained under section 301 of the Act. falling within the definition of deposits accepted from the public. Pinjore Branch. clauses (a) to (g) of the said order are not applicable. a Bond Holder. The company has neither granted nor taken any loans. As informed to us. Based on the audit procedures applied by us and according to the information and explanations provided by the management. the 21 b) c) 2. the Company is maintaining proper records of inventory. in our opinion. no major weakness has been noticed in the internal controls. Based on the information. except in the case of M/s Nainital Bank. the Company has an internal audit system commensurate with the size and the nature of the business. explanation provided by the management and considering the Branch auditor report. 4.Annual Report 2010-2011 ANNEXURE TO AUDITORS REPORT The Annexure referred to in our report to the members of M/s. who has gone on litigation and the case is pending before Debt Recovery Appellate Tribunal. we are of the opinion that there are no transactions that need to be entered in the register maintained under Section 301 of the Companies act 1956. we are of the opinion that. In our opinion and according to the information and explanations given to us. firms or other 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 5. Based on audit procedures and information & explanations given to us there has not been substantial disposal of fixed assets and hence there is no effect on the going concern status of the Company. During the course of our audit. The discrepancies noticed on verification between the physical stocks and the book records were not material. which. the books of account maintained by the company in respect of materials. the Inventory has been physically verified during the year by the management. HMT MACHINE TOOLS LIMITED for the year ended March 31st. a) The Company has maintained proper records showing full particulars. In our opinion. Ajmeer Branch and for Bangalore Branch physical verification carried during the year 200809. the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. . the frequency of verification is reasonable. a) b) c) 3. physical verification of fixed assets was conducted by the management once in three years. labour and other items of cost maintained by the company pursuant to the rules made by the central government of India for the maintenance of cost records under Section 209 (1) (d) of the companies act and we are of the opinion that prima facie. In our opinion and according to the information and explanations given to us. inventory and the sale of goods & Services. 7.
705. and `3792. are as follows : Amount in ` (lakhs) Particulars Nature of dues Cenvat Credit Amount (` in Lakhs) 221. 1944 Central Excise Act.17 75. there are dues of income tax. The company has incurred cash losses of `8320. . sales tax. Raj Urban ESI Dues employees ESI Dues employees Modvat Credit 1. Praga Tools Branch and Pinjore Branch. custom duty. income tax. Hyderabad Collector. were in arrears. Bangalore 10.15 According to the information and explanation provided to us and based on the records of the Company. we have not made detailed examination of the records with a view to determine whether they are accurate or complete. (Appeals) Hyderabad CESTAT 1. custom duty. Ajmer Collector & District magistrate. However.26 DIG office Ajmer BBMP. 1948 The employees state insurance Act.13 Modvat Credit Modvat Credit Property tax Land Conv. excise duty. sales tax. the company is generally regular in depositing the undisputed statutory dues including provident fund. 2011 for a period of more than six months from the date of they became payable except the followings: Nature of Dues Provident Fund Sales Tax Pension Contribution CST Service Tax Total Amount ` (in lakhs) 1. Charges 1. Hyderabad Asst Comm. of Central Excise. Consequently the company has filed application with BIFR during November 2005 as per the provision of Sick Industrial companies (Special Provisions) Act. 1944 Quathbullapur muncipality Raj. 1948 Central Excise Act.prescribed accounts and records have been made and maintained. cess and other material statutory dues.09 0.39 Land & 40. Based on the audit procedures performed and information and explanations given to us.42 0. 1944. sales tax. wealth tax. 1944 Central Excise Act. Bangalore Property Tax BBMP. Government of India has sanctioned a revival plan envisaging infusion of funds by way of preferential and equity capital.51 Building tax Including Interest Land Tax (06-07) (07-08) (08-09) 3. Hyderabad ESIC Court. Also during the year 2007-08. 412.81 221. as at March 31st.79 6. cess.70 1. no undisputed amounts payable in respect of income tax. According to the information and explanations given to us. The accumulated losses of the company have exceeded its net worth.17 Forum where dispute is pending CESAT Central Excise Act. Land Conv.91 lakhs during the year. cess which have not been deposited on account of any dispute. Cenvat Rules 22 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 The employees state insurance Act. Though the appeals before AAFIR against BIFR sanctions pending disposal. Ajmer. act Land & Building Act.03 Availment of Excise Duty Exemption under 10/97 Commissioner GHMC. however with respect to Bangalore Branch.01 2.48 160. excise duty.39 6. provident fund has not been regularly deposited with the appropriate authorities within the due date and with respect to Hyderabad Brach not regular in depositing undisputed dues in respect to Provident fund and Employees State Insurance. conversion of long term loan into equity capital and waiver of interest to address the negative net worth of the Company.31 Lakhs for the previous year. 2008. 9. considering the revival plan of the company and the BIFR sanctioned rehabilitation Scheme. the accounting continues to be prepared on Going concern basis.40 2.16 ESIC Court. excise duty.79 1052.405. customs duty. 1985 and the sanction is received on June 13th.
the company has not availed any term loan during the year. 12. we are of the opinion that. the company is not a dealer or trader in shares. Based on the audit procedures performed and information and explanation given to us by the management. according to information. explanation provided to us. explanation provided. 20.Annual Report 2010-2011 11. based on the information. no fraud on or by the company has been noticed or reported during the course of our audit. we are of the opinion that. Hence creation of securities for the same does not arise. 19. which have been used for long term investment. company has not given any guarantees for loans taken by others from banks or financial institutions during the year. 13. The company has not debenture outstanding at the year end. 15. The company has not raised any money by way of public issue during the year. explanations provided. 14. The provisions of any special statute applicable to chit fund/Nidhi/Mutual fund/societies are not applicable to the company. 18. we are of the opinion that. 2011 Place: Bangalore th 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 16. the company has not granted any loans and advances on the basis of security by way of pledge of shares. debentures and other securities. there are no funds raised on a short term basis. the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. Based on the information. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the act during the year. According to information. Date: August 24 . 21. In our opinion. For A. securities. debentures and other investments. According to the information and explanation provided to us and based on our verification of records provided to us.: 214976 23 .Raghavendra Rao & Associates Chartered Accountants FR No: 003324S Latha S Koppal Partner Membership No. 17. explanation provided to us. we are of the opinion that. In our opinion. On the basis of information and explanation provided.
This is stated to have been done by them vide their Audit Report dated 28. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the Statutory Auditors and Company personnel and a selective examination of some of the accounting records. I.A. 6(f). 1956 based on independent audit in accordance with the auditing and assurance standards prescribed by their professional body the Institute of Chartered Accountants of India. H.2011 and their revised report dated 24. under Section 619(4) of the Companies Act. I on behalf of the Comptroller and Auditor General of India have conducted a supplementary audit under Section 619(3)(b) of the Companies Act. 1956 ON THE ACCOUNTS OF M/S. HMT MACHINE TOOLS LIMITED for the year ended 31st March 2011 in accordance with the financial reporting framework prescribed under the Companies Act.6.S) Pr. 1956 is the responsibility of the management of the Company. 1956. Bangalore Dated : 25 August.08. I have no further comments to offer upon or supplement to the Statutory Auditors Report. 6(h) and 6(i) and modification in paras 4.6. The statutory auditor appointed by the Comptroller and Auditor General of India under Section 619(2) of the Companies Act.9 and 10 thereof as a result of my audit observations highlighted during supplementary audit. 1956 of the financial statements of M/s HMT MACHINE TOOLS LIMITED for the year ended 31st March 2011. Audit Board.2011.COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT. . The preparation of financial statements of M/s. Kharshiing. In view of the revision made in Auditors Report vide Para 6(e). Director of Commercial Audit & Ex-officio Member. Bangalore.A. 1956 is responsible for expressing opinion on these financial statements under Section 227 of the Companies Act. HMT MACHINE TOOLS LTD FOR THE YEAR ENDED 31st MARCH 2011. 2011 24 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 For and on the behalf of the Comptroller & Auditor General of India (C.
Assets taken on Finance Lease are capitalised at fair value / NPV / contracted price. and Adoption of new production processes enabling a substantial reduction in previously assessed operating costs. net of Cenvat credit.per asset which is written off to `1/. Gain or loss is recognized in the year of sale. Expenditure incurred on Reconditioning of plant. Expenditure on development of land is included in the cost of land. Depreciation on the same is charged at the rate applicable to similar type of fixed assets as per Accounting Policy on Depreciation. machinery and equipment which increases the future benefits from the existing asset beyond its previously assessed standard of performance is included in the Gross Book Value which results in: (a) Modification of an item of plant to extend its useful life. on accrual basis of accounting and in accordance with the provisions of the Companies Act. Investments Investments are either classified as current or long-term. 2006. which have been retired from active use. 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 The cost of an addition or extension to an existing asset which is of a capital nature and which becomes an integral part of the existing asset is added to its gross block value. (b) (c) Upgrading machine parts to achieve a substantial improvement in the quality of out-put. Current investments are carried at lower of cost and fair value. are disclosed at lower of book value or net realizable value and shown separately in the Fixed Assets Schedule. Premium for leasehold land is amortized equally over the period of lease. in the carrying value of each investment. Lease payments made for assets taken on Operating Lease are recognised as expense over the lease period. Fixed Assets Fixed Assets are stated at cost of acquisition or construction. 1956 and comply with the mandatory Accounting Standards prescribed under Companies (Accounting Standards) Rules. machinery & equipment which do not increase the future benefits from the existing asset beyond the previously assessed standard of the performance based on the technical assessment. less accumulated depreciation to date. If the lease assets are returnable to the lessor on expiry of lease period. whichever is shorter. The expenditure on Reconditioning of plant. Long-term investments are carried at cost and provisions recorded to recognize any decline.Annual Report 2010-2011 SIGNIFICANT ACCOUNTING POLICIES Basis of preparation of financial statements The financial statements are prepared as of a going concern. including increase in its capacity.in the year of purchase. Depreciation on fixed assets is calculated on a pro-rata basis from the date of such addition or as the case may be up to the date on which such asset is sold. Lease payments made are apportioned between finance charges and reduction of outstanding liability in relation to assets taken on lease. 1956. to the extent applicable. pro-rata with reference to the date of addition or deletion except assets costing less than `5000/. under the historical cost convention. Land received free of cost from the State Governments has been nominally valued and incidental expenditure incurred thereon has been capitalized. Items of Capital Assets with WDV of `1 lakh and above. Cost includes direct costs and financing costs related to borrowing attributable to acquisition that are capitalized until the assets are ready for use. discarded or destroyed. Depreciation Depreciation on fixed assets is provided on straight-line method. at the rates prescribed in Schedule XIV to the Companies Act. 25 . is charged off to Revenue. the same is depreciated over its useful life or lease period. other than temporary.
Inventories Inventories are valued at the lower of cost and net realizable value. Deferred Revenue Expenditure Technical Assistance fees (including fees for technical documentation and exchange fluctuation difference) paid/ payable under foreign collaboration agreements are amortized equally over the duration/balance duration of the relevant agreement. The balance provision is being retained in the books to meet any additional liability accruing thereon for payment of Gratuity. the pre-production revenue expenditure (including depreciation) is collated under the head Development and Commissioning Expenditure and charged to revenue over four financial years as follows: (a) In the year of commencement of commercial production. in case of FOR destination contracts. in case of ex-works contracts. gate pass. Borrowing costs Borrowing costs are charged to revenue except those which are incurred on acquisition or construction of a qualifying asset that necessarily takes substantial time to be ready and until intended use of the said asset. Annual contributions are made. Warranty Warranty provision for contractual obligations in respect of machines sold is set up based on the past experience and is provided in the year of sale. Current assets and liabilities are restated at the rates prevailing at the yearend or at the forward contract rate(s) wherever applicable. Gratuity. The contributions are made to the Trust administered by the company. under a defined benefit scheme. The cost of materials is ascertained by adopting Weighted Average Cost Method. Leave encashment is provided for under a defined benefit scheme based on actuarial valuation. .000/. duly supported by invoice. one-fourth of the development and commissioning expenditure on a pro-rata basis for the period of production in that year: and (b) The balance equally over the next three financial years immediately following. Pension is provided for under a defined benefit scheme. Earned Leave encashment.per eligible employee. to cover the eligible employees. to cover the eligible employees. delivery voucher and LR / GR. Gratuity is provided for. Sales include Excise Duty but are net of trade discount and exclude sales tax. Settlement allowance is provided for. Exchange difference arising on restatement of liabilities in foreign currency relating to fixed assets is recognized as Income or Expenditure in the statement of Profit & Loss account. to a trust constituted and administered by the Life Insurance Corporation of India under which the coverage is limited to `50. and the difference is recognized as income or expenditure in the profit and loss account. l l Foreign currency transactions Transactions in foreign currency are recorded at the 26 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 exchange rate(s) prevailing on the date of transaction or at the forward contract rate(s) wherever applicable. under a defined benefit scheme. Retirement Benefits Provident Fund is provided for. such costs are capitalized. under a defined benefit scheme. to the extent required. liability being determined on actuarial valuation. liability being determined on actuarial valuation. Settlement Allowance and Lump sum Compensation paid to employees under Voluntary Retirement Scheme shall be fully written off in the year of disbursement. contributions are made to the Pension Fund administered by the Government. LR/GR obtained and endorsed in favour of customer (consignee self). Revenue recognition Sales are set up based on: l Physical delivery of goods to the customer / customers carrier /common carrier. excise duty paid challan. Development & Commissioning In respect of new projects.
Annual Report 2010-2011 Special Tools Expenditure on manufactured and bought out special tools are amortized equally over a five year period or earlier. The provision at the yearend for ELE and SA is restated as per the actuarial valuation done at the year-end. Others The amount of `50000/.are written off fully in the initial year of acquisition / manufacture. Income Tax Taxes are determined following the tax effect accounting method and a provision thereof is recognized. Settlement Allowance (SA) is debited to the respective provision accounts. 27 . if scrapped. Capital expenditure is recorded as addition to fixed assets and depreciated over the estimated life of the related assets. Prototypes developed are carried as items of inventory at the lower of cost or net realizable value until sale/transfer/ scrapping. In respect of employees who are separated other than under Voluntary Retirement Scheme. A deferred 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 tax asset or deferred tax liability is recorded to recognize the tax effect on timing differences arising on reconciliation of profit/loss as per financial statements and profit/loss as per taxation Earnings per share Basic earnings per share is determined by considering the net profit after tax. any short or excess provision is charged as expenditure or treated as provision no longer required. inclusive of the post tax effect on extraordinary items. Prototypes remaining undisposed for a period of five financial years are provisioned for obsolescence in the sixth year. Individual items costing less than `750/. the Gratuity paid in excess of `50000/-. and the number of shares outstanding on a weighted average basis. In case of ELE and SA. Contribution to sponsored Research and Development are amortised equally over the duration/balance duration of the programme. if any.per head received/receivable from LIC on account of gratuity claims in respect of employees separated under Voluntary Retirement Scheme during the year is accounted as Other Income. Earned Leave Encashment (ELE). Research and Development Costs Revenue expenditure is charged to profit and loss account under natural heads.
72.5 78.78.20 220.127.116.11 39.11.25 229. As at 31.BALANCE SHEET AS AT 31ST MARCH 2011 Sch.05 46.26 83.82 18.104.22.168.20. No.79 722.214.171.124 For A.03.34. 214976 As per our Report of Even date .2010 1.88 141.59 -126.96.36.199 29.83 255. Raghavendra Rao & Associates Chartered Accountants FRN : 003324S K.06.97 75.64.3 5. K.91 22.17.1 7.00.14.70.71 70.50 719.83.64 7.17 46.2011 SOURCES OF FUNDS SHAREHOLDERS FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loans APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital Work-in-Progress Machinery & Equipment in transit and under inspection/erection INVESTMENTS CURRENT ASSETS. 2011 28 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 (` in thousands) As at 31.13 295.36 10.43.23 64. Ramadoss General Manager (F) Vikas Goel Company Secretary Latha S.1 2.35.05.37 6.91 22.22 313.55.58 842.59. Pillai Chairman K.95.47 869.16.67 2.52 2188.8.131.52 141.97. H.2 10 3.70.82 126.75.2 5.LOANS AND ADVANCES Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less: CURRENT LIABILITIES AND PROVISIONS Current Liabilities Provisions Net Current Assets MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) PROFIT AND LOSS ACCOUNTS NOTES TO ACCOUNTS Accounting Policies form part of the Accounts For and on behalf of the Board G.69.1 5. Koppal Partner M.49 842.32 184.108.40.206 869.30 50. Suresh Director Technology (M) Place : Bangalore Date : 28th June.06.59.4 5.66 5.53.89 2.2 154.02 3 329.01 -78.45.67 854.03.2 51.2 2.75.07 126.78 719.52.20 95.19 238.10 90.92 4 5.41 46.1 1.1 6.09 69.59.56 62.92.
33 -3.86 16. Koppal Partner M. Finished Stock & Scrap Less: OUTGOINGS Materials Personnel Depreciation Other Expenses Interest (Net) VRS Compensation Less: Jobs done for Internal use Profit/(Loss) Before Tax.80.80.6 9.Annual Report 2010-2011 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2011 (` in Thousands) Sch.87. 214976 29 As per our Report of Even date .05 -1.26 -6.77 242.65584 8.3 9.03.48. Year ended 31.05 -45.in -Progress.80 -16.00 124.4 12.36455 10 For A.18 7.76.83 15.20 -93.69.02 275. adjustment for PPA & EOI Less: Prior Period Adjustments (PPA) Add: Extra Ordinary Items (EOI) Profit/(Loss) Before Tax Less: Fringe Benefit Tax Profit/(Loss) After Tax Balance carried to Balance Sheet Basic Earnings per share of `10/.99 3.74 33.75.10.each NOTES Accounting Policies form part of the Accounts For and on behalf of the Board G.19.77.4 8. No.37 182.3 8.2010 EARNINGS Sales Less: Exise Duty Net Sales Transfer to Plant Other Income Accretion/(Decretion) to Work .72 196.06 -45.06.44. H.05.07 7.02.41 9.46 11. Suresh Director Technology (M) Place : Bangalore Date : 28th June.06.96 198.85.33 -93.08.96.2 71.12.48 -45.1 209.02.06.48.87.1 9.2 3.94.5 9.06.03. Pillai Chairman K.89 -88.1 9.49 76.19. 2011 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 8.16.06.33 190.89.29 18.76 9.06. Ramadoss General Manager (F) Vikas Goel Company Secretary Latha S.42 36. K.33 4 -93.13 9.7 4.93.2011 Year ended 31. Raghavendra Rao & Associates Chartered Accountants FRN : 003324S K.39.64.07 7.80.00 -2.22.05 -45.01 152.89 -14.29.00 187.
SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 2011 (` in Thousands) As at 31.45.97 220.127.116.11 719.00. receivables and other chargeable current assets.18.104.22.168 26..70.000 (Previous year 4.70.50.00 719.43.1 of Explanatory Notes to Accounts) 4. (Refer Note 8.00.65. which is merged with the Company and the consideration of `1 to be paid to each of them as per the Scheme of merger sanctioned by BIFR.1 SECURED LOANS FROM BANKS Cash Credit to the limit of `55.2010 1.00.03.00.2 RESERVES AND SURPLUS Capital Reserve Towards difference in the face value of Equity shares held by Governor of Andhra Pradesh and Government of India in Praga Tools Ltd.34.00.00.82 5.00 355.99.00 1.37 30 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 443.5% redeemable Preference Shares of `100/.55.637 shares are allotted as fully paid up for consideration other than cash) (Refer Note 8.65.00 (Prev.1 SHARE CAPITAL AUTHORISED a.00 355.00.82 2.000) Equity Shares of `10/.00.00. 22. b.34 29.48. year `55.each.00 443.59.00.71.03.000(previous year 4.00. SUBSCRIBED AND PAID-UP 27.71 . 35.99.137) Equity Shares of `10/. Short term loan from Banks (Secured against Fixed Deposits & Receivables) 46. (Refer Note 7 of Explanatory Notes to Accounts) ISSUED.2 of Explanatory Notes to Accounts) (Entire Share Capital is held by HMT LTD.70. 4.00) from the consortium of Banks secured by hypothecation of inventories.00.00.07.15 51.2011 As at 31.each.000(Previous year 35.each(of the above 2.43. the Holding Company and its nominees) 276.82.91 22.137 (Previous year 27.00 800.82 22.49.000) Preference Shares of `100/.53.50.91 276.000) 3.00.45.00 445.82 22.each.00 800.91 445.32.
01.81.82.50% redeemable at par. the earlier date of redemption being 22.41.19 2.00 3.2010 2.78 3.95.00 4.2 UNSECURED LOANS 5 Year Bonds (1999) Non Convertible Bonds carrying rate of interest at 16.09 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 50.03.16. Holding Company HMT Limited 9.46.04 7. Interest Accrued and Due Loan from HMT Ltd.38 70.17 50.30 75.50 8.21.47 40.82.19.00 2.17 31 .67 40. Interest Accrued and Due Term Loan for a period of 5 years carrying rate of interest @ 15.00 22.03.13 3.00 6.95.48 7.1999.2011 As at 31.50%.38.00 22.78. Interest Accrued and Due Term Loan for a period of 5 years carrying rate of interest @ 3.50%.29.19 3.06.25.Annual Report 2010-2011 SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 2011 (` in Thousands) As at 31.50%.01. Interest Accrued and Due Loan From Government of India Term Loan for a period of 5 years carrying rate of interest @ 15.
Hyderabad Plant &Machinery includes 17 items of fixed Assets identified as obsolete and for disposal.05.3.67.00.36 7. GHMC issued a notice vide notice No.50 210. 4.17 Buildings 23.07.a with effect from 21-04-1982 to 21-08-2001) and the same has been allowed to be withdrawn by the Hon' ble Court.12 1.000 sq.41. Out of the above land.25 Previous year 284.05.05.63 Plant & Machinery 278.84 Furniture.03 83.4 In the matter relating to 195 acres and 33 guntas land handed over to the Compnay (Praga Tools Division) by the Govt.88.06.04. but the company has paid for the entire 195.98. Fresh Lease Deed in respect of Lease Hold Lands are pending to be executed. it has come to the notice that approx. and net value of `50.1 Pending finalisation of the rates by the Government of Rajasthan. 6.25.02 19.2 The Company has leased out land admeasuring 2. the netblock of which is `15. payable for conversion of Revenue land for Industrial use at Machine Tool Unit Ajmer.85 acres and 227.03 201.11 293.01.25 222.10 1.12 Depreciation as at 01.57. of A.14. 41/786/RW/TPS/GHMC/SC/2007 dated 01-12-2007 to take over 238.2000 in line with para 10 (J) and Annexure 12 of the Scheme of Arrangements approved by the Department of Company Affairs.86 sq.2011 01. .2011 Net Block Net Block as at as at 31.46 Cr. In respect of Praga Tools Division.09 59.58.09 83.15 5. depreciation of `3.17 4. provision has been made for estimated liability for lease rent. 3..43.52. has been charged for the year 2010-11 on the Original Cost of the Assets on straight line basis. 4. Fixed Assets include immovable properties.72 7.00 -11. yds available at kavadiguda. Accordingly Hon"ble Court has passed an order allowing decree holder (Smt. Fittings &Office Appliances 9. However.00 1.91 76.29. 4.29.52 1.21 22.214.171.124.53.Annual Report 2010-2011 4.2010 Depreciation Total during Depreciation the year as at 31.53.2010 Particulars Gross Block Additions at cost as at 1.3. nominally valued at Re.54.74 229.84 28. FIXED ASSETS SCHEDULE AS AT 31.30 83.74 -98.4.19 229.61 -1. as on 01.72 1.72 24.42 238.90.45 31. yds of land for road widening programme under taken by them out of the 3000 sq.79 24. 348. the mutation of title deeds is yet to be done in the revenue records to that effect.490/-. Further though Forge & Foundry Division was closed.10 Cr.52.23 23.50 4.14.78 19.57.02 -1. 39 acres of land is not in the actual posession of the Company.04. Fixed Assets have been transferred from the Holding Company to the Subsidiary at Gross value of `202. Reserve for depreciation of `151. 2.30. The compensation payable by the APSEB has not yet been determined. 20012 of 2003 on the file of Hon'ble High Court of A. vested under the Scheme of Arrangement approved by the Govt.45 1.13.34 84 55. an amount of `58.64 Cr.28.97 Transport Vechicles 67. of Andhra Pradesh in 1962-63.23 62.713/.2011 Deductions Adjustment Gross Block at cost as at 31.10 62.55 126.96.36.199 8. Kalamassery & Hyderabad gifted by the respective State Governments measuring 177.43. During recently conducted survey of the company.30 8.P.is provided during the year.54.90 329. if any.30 acres respectively.21 9.08. provision for conversion charges.64 Total 313.72 188.8.131.52 16.64 90. The Company had protested for this and raised a demand for compensation for the land proposed to be taken over by them for road widening programme at prevailing market rate which is pending. has not been made in the accounts as the matter is sub-judice and execution of lease deed is pending.2010 Land & Land Development 1. and others wherein the Company has sought directions for demarking 195. Necessary applications are yet to be filed before the respective State Governments for transfer of Title in respect of the above gifted Lands from Holding Company in favour of the Subsidiary Company.4. of India. 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 32 3.95 -5. keeping in view the original estimated life of the Asset.08. However.09 313. against the Govt.33 acres of land for the decree holders.79 10.87. LAND 4.13 1.3 The Company is in possession of Gift land located at Bangalore.77.85 Cr.29. The Company has filed Writt Petition No.3.52.02 1. Mahaboob Unnissa Begum) to withdraw the above amount.044 has been deposited by the Company in the City Civil Court towards the value of land (including interest @ 6% p..75 Acres.2011 (` in Thousands) 45.77. mts. Depreciation of `9.71 acres to the Kerala Electricity Board and the Postal Authorities in Kalamassery.26.P. 1 each. Secunderabad without any compensation.33 acres of land for handing over the same to the Company.69 83.34 9. of land is alloted to APSEB for setting up to 33 KV Switching Station and 33/11 KV Electrical sub-station.21 6.03.
56. 5.82.94 78.05 - - .68 1. 33 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 10.44 17.69 184.108.40.206 50.16.63 2.00.03.76 93.16.99 86.03.43 16.2 SUNDRY DEBTORS UNSECURED Debts outstanding for a period exceeding six months Considered good Considered doubtful Other Debts: Considered good Less:Provision for Doubtful debts 28.83 27.35 43.10 220.127.116.11.47.80 36.36.2010 4 5.24 15.21 27.05.2011 As at 31.01.16.44.65.37 2.04.01.45.58 57.23 95.35 36.20.48 21.10.Annual Report 2010-2011 SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 2011 (` in Thousands) As at 31.56 33.moving inventory and materials *Includes stock with C&F Agents/Contractors Ancilliary units/in Bonds/at site.38. Debts due by firms or private companies respectively in which any director is a partner or a director or a member Debts due from other companies under the same management.16 10.16 29.36.79 16. Maximum amount due by directors or other officers of the company at any time during the year.35.30 18.104.22.168 53.48 2.52 112.78.16 62.79 Debts due by directors or other officers of the Company.44.1 INVESTMENTS INVENTORIES* Stores and Spare Parts Tools and Instruments Raw Materials and Components Materials & Components in transit (including receipts pending inspection and acceptance) Finished Stock Work-in-Progress Scrap Less: Provision for slow / Non .59 90.87.17 19.41.46 27.
01 37.61.03.17 5.98 35..48 1.5 LOANS AND ADVANCES* SECURED CONSIDERED GOOD: Advances to Employees .81 3.05 4.05 3.68 5.25.32 5.78 4.4 OTHER CURRENT ASSETS Special Tools Interest Accrued on deposits 2.05.68 5.78 34 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 .06.36 94.06.16.12.01.62.98 2.27 1.60 9.41 2.62. Holding Company & its Subsidiaries HMT Limited Holding Co.70.25.House Building / Vehicle Advance UNSECURED CONSIDERED GOOD Advances to HMT Ltd.73 9.21 39.45.03 35.31 1.03.68 5.93 28.38 22.214.171.124 5.68 5.29 64.77 126.96.36.199 30.03 30.37 3.2011 As at 31.32.67 15.23.70 22.77.60 1.10.98 30.3 CASH AND BANK BALANCES Cash and Cheques on hand and in transit With Scheduled Banks in Current Account With Scheduled Banks in Deposit Account With Post Offices in Savings Bank Accounts* *Pass Books deposited with Central Excise Authorities 188.8.131.52 9. HMT Bearings Limited HMT Watches Limited ADVANCES RECOVERABLE IN CASH OR IN KIND OR FOR VALUE TO BE RECEIVED UNSECURED Considered Good For Capital Expenditure Others Considered Doubtful For Capital Expenditure Others Less:Provision for doubtful loans and advances For Capital Expenditure Others 1.03.39.67 1.21 46.SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 2011 (` in Thousands) As at 31.12 2.39.97 1.70 21.2010 5.32 1.
78 1.Annual Report 2010-2011 SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 2011 (` in Thousands) As at 31.36 46.61.12 17.34. Holding Co.29.1 CURRENT LIABILITIES Acceptances Sundry Creditors .08 55.25 154. as per the Scheme of merger sanctioned by B I F R.Dues to Micro and Small Enterprises .66.2011 As at 184.108.40.206.82 6.98 57.85 46.32 1.29 1.01.88 57.09.10.83 1.73.79 3.01.55 61.07 . Advances received against sales Other Liabilities * Interest accrued but not due on Loans * Includes `1050 (previous year 1057) thousand payable to minority share holders of Praga Tools Ltd.81.20 6.83.56 141. Central Excise. 35 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 42.83.22 1.83 - - - - 2. Deposits* Advance IncomeTax Advance Fringe Benefit Tax 61.HMT Chinar Watches Limited .40 1.44..20 *Includes advances due from Directors and Officers of the Company Advances due by firms or private companies respectively in which any director is a partner or a director or a member Advances due from other companies under the same management Maximum amount due by directors or other officers of the company at any time during the year.44 4.67. etc..Other dues Dues to HMT Ltd.59.13 36.76.93 26.04.53 57.03.89 41.02 5.03.and its Subsidiaries .36.63 78.2010 OTHER ADVANCES UNSECURED CONSIDERED GOOD Balance with Collectors of Customs.11 1.24 4. 6.77 2.28 31.73.HMT Limited Holding Co.HMT (International) Limited .48.
05 761.52 7.17.60 93.79 715.40.51 77.81.33 854.58 7.SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 2011 (` in Thousands) As at 31.80.03.2 PROFIT & LOSS ACCOUNT Opening Balance Net Loss for the year Closing Balance 761.20711 As at 31.2010 6.42 63.67 5.10.1 MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Technical knowhow 3.20 141.15 63.03.12 62.2 PROVISIONS Provision for FBT Gratuity Other Provisions 56.53 220.127.116.11 3.06.03.93 36 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 .25 126.13 111.95.79 5.31.13.
77 1.34 1.86 5.on Exchange Variation Provisions withdrawn .65.93. FINISHED STOCK AND SCRAP WORK IN PROGRESS Closing Balance Opening Balance FINISHED STOCK Closing Balance Opening Balance SCRAP Closing Balance Opening Balance 8.04.23.64 198.02 1.11 -14.04.50 27.52.02 18.104.22.168.13 88.98 209.08 -8.30.54 12.1 SALES Machine Tools Accessories Sundry jobs and miscellaneous sales Packing/forwarding charges Less: Exise Duty Net Sales 8.3 22.214.171.124 57.83 1.29 18.12.80 6.83 55.03.00 39.88.46 16.97 4.69 -11.88 1.61 16.on sale of assets .04.35 27.08 1.Annual Report 2010-2011 SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT YEAR ENDED 31ST MARCH 2011 (` in Thousands) Year ended 126.96.36.199 188.8.131.52.86 184.108.40.206.52 65.72 2.72 37 .24 -16.16.06.2010 8.67.37 182.89 43.2 JOBS DONE FOR INTERNAL USE Capital works Shop manufactured Special Tools OTHER INCOME Servicing Income Recoveries from Staff/Others Royalties Government Grant Rececived Profit .19.69.48.04.91 1.63 -8.89 7.80 153.Others Miscellaneous Income ACCRETION/(DECRETION) TO WORK-IN-PROGRESS.90 16.4 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 168.80 -5.02 23.16 19.06.20.83 15.12 41.89 220.127.116.11.02.05.58 57.68 11.82.76 57.33 190.00 48.09 33.17 23.2011 Year ended 31.58 -18.104.22.168 48.52 63.03.91.65.86 95.74.46 2.60 1.96 1.
26 22.76 45.99.24 64.41 85.37 45.67.42 17.24.38 22.214.171.124 126.96.36.199 48.62 48.Spares.* *Includes Stores and Spare parts for: Repairs to Buildings Repairs to Machinery 4.43.15 6.72 4.37 41.88 1.2 PERSONNEL* Salaries.92.SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT YEAR ENDED 31ST MARCH 2011 (` in Thousands) Year ended 31.82 20.04.80 2 40 17 4.22 188.8.131.52 3 33 18 3.60 19.03.87.34 63. 3.23 90.07 71.23.23 1.05 61.Wages and Bonus House Rent Allowance Gratuity Contribution to PF & FPS Deposit Linked Insurance Contribution to ESI Welfare Expenses ** * Includes wages for repairs to buildings repairs to machinery * Managerial Remuneration (Remuneration to Managing Director) Salaries Welfare Provident Fund Gratuity Total Remuneration ** Includes provision for loss incurred by PF Trusts.62.01 24.08.00 184.108.40.206 76.77.02.74 19.50 27.2010 9.Matls.48.Tools & Pkg.35.39 70.21 2.26.00 9.06 9.2011 Year ended 31.41.63 4.26 17.07 38 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 .78 1.03.94 27.75 124.85 220.127.116.11 MATERIALS Raw materials and Components Opening Stock Purchases Less: Closing Stock Consumption of Raw Materials and Components Consumption of Stores.82 152.23 30.48 43.68 18.104.22.168.
67 36.in any other manner .20 67.16 8.73 1.reimbursement of expenses .15 2.45 32.87 39 Reconditioning Expenses 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 7.3 OTHER EXPENSES Power and Fuel Rent Rates and Taxes Excise Duty Insurance Water and Elecricity Repairs to building Repairs to machinery Printing and Stationery Travelling Expenses Advertisement and Publicity Training Auditors Remuneration # Other Agents Commission Provision for slow / Non-moving inventory and materials Provision for Doubtful Debts.03.13 1.63.03.36 29.19.in respect of taxation matters .service tax **Travelling Expenses and Travel Insurance relating to Directors 7.Annual Report 2010-2011 SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT YEAR ENDED 31ST MARCH 2011 (` in Thousands) Year ended 31.94 1.for Audit .60 45.22 1.57 24 2.58 1.13 37.48.90 3.13 8 22 .38.01 : 2.25 8.01 22.214.171.124 2.10.2011 Year ended 31.32 39.2010 9.87 13.25 5.07 2.19.42 8.64.11.09 1.14 8.89.23 63.73.95.Loans and Advances Warranty claims Amortisation of Special Tools Share of Holding company Expenses Loss on Exchange Variation Miscellaneous Expenses** # .96 14.37 4.25 33.08 1.02 3.16 1.60 7.20.66 126.96.36.199.03.03.82.97 33.50 27.12 1.78 34.12 1.22 1.19 46.44 1.92 36.16 3.57.35 1.71 1.
31.48 21.44.71 4.7 Provision for Taxes (Fringe Benefit Tax) 40 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 - .39.78.64 4.5 Prior Period Adjustments : (PPA) Expenditure: .16 11.Other Income 14.98 3.10.32 9.28.26 4.03.SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT YEAR ENDED 31ST MARCH 2011 (` in thousands) Year ended 31.50 4.20 11.33 16.17.26.Material .98 7.Depreciation .17 19.34 5.6 Extra Ordinary items Income from sale of Land - 9.65 3.74 4.77.03.48 7.27 7 1 97 14.04.19.Banks .Personnel .35 13.97.Other Expenses Less: Income .03.36.26 3.05.82 12.2010 9.42.14 8.Others 4.4 INTEREST Government Loans Term loans from Banks Cash Credits from Banks Bonds Others Less: Interest Earned .06 1.2011 Year ended 31.84 2.33.15 4.45 4.30 9.00 3.
2011 As at 31. 18 in respect of Govt.32 lakhs.per employee covered under LIC Group Gratuity Scheme. HMT Machine Tools Ltd.a. to the separate Trust constituted and administered by the Life Insurance Corporation of India under which the coverage is limited to `50.e. Controlled Companies. no separate disclosure of such transactions is required under Accounting Standard No. HMT Machine Tools Limited. The actuarial valuation has been made based on the following assumptions: i) ii) iii) iv) v) Retirement Age Future Salary escalation Rate of discount Attirtion rate Mortality rate 58 years 7% p. 41 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 . The provision for gratuity as on 31-03-11 for the balance amount based on the above assumptions for over and above the amount covered under the LIC policy in respect of the Company as assessed by LIC is `6897.2010 10 EXPLANATORY NOTES BALANCE SHEET 1 Segment Reporting: as per Accounting Standard -17 (AS 17) Machine Tool Products and Servicing of such products being a part of its marketing obligation and the risk and return remaining same. the liability being determined on actuarial valuation done by LIC using Projected Unit Credit Method.03. The Gratuity has been provided by the Company under a defined benefit scheme to cover the eligible employees. 1 to 3% depending on age LIC (1994-96) ultimate The liability for gratuity under Group Gratuity Scheme with LIC to the extent of `50000/.Annual Report 2010-2011 (` in thousands) As at 31.HMT Limited has taken a Master Policy under Group Gratuity Scheme with LIC which includes HMT Limited.13 lakhs. the accounting for deferred tax liability does not arise. HMT Watches Limited and HMT Chinar Watches Limited and annual contributions are made to the extent required.000/. Impairment of Assets: as per Accounting Standard 28 (AS 28)Based on the Assessment done internally the impact due to impairment of Assets is Nil. Following is the disclosure as per AS-15 in respect of Gratuity Liability limited to `50.1 For HMT Machine Tools Limited except Praga Tools Division. Related Party Transactions: as per Accounting Standard 18 (AS 18) The Company has entered in the related party transaction during the year with its fellow subsidiaries and parent Company. Hyderbad.as on 31-03-2011 is `154. The Holding Company i. The allocation of the provosion for Gratuity is made based on the LIC data which consists of the provision in accounts of 4 companies viz HMT Limited. DISCLOSURE REQUIRED AS PER ACCOUNTING STANDARD . 8% p. Deferred Tax liability : as per Accounting Standard 22 (AS 22)As the financial statements of the Company for the year 2010-11 as well as during the previous year 2009-10 show net loss..03.a.per eligible employee and the balance is being retained in the books to meet any additional liability accruing thereon.15 (REVISED) 2 3 4 5 5. there exists no distinguishable segments to be reported upon. HMT Watches Limited and HMT Chinar Watches Limited.000/. However.
12.54.92 78.43.34 98.34 85.12.56 40 10.98 96.13 0 40 0 40 40 10.12.23 20.49 1.05 188.8.131.52.12.98 98.56 85.91 8.56 85.98 20.64 78.49 2.23 8.23 8.plan assets Total (gain)/Loss for the year Actuarial gain/(Loss) recognised in the year Amounts recognised in the Balance Sheet and Profit & Loss A/c Present value of obligations as at the end of the year Fair Value of plan assets as at the end of the year Funded Status Net Asset/(liability) recognised in balance sheet Expenses Recognised in statement of Profit & Loss Account Current Service Cost Interest Cost Expected return on plan assets Net Actuarial (gain)/loss recongnised in the year Expenses recognised in statement of Profit & Loss b) c) d) e) f) 42 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 (` in Thousands) As at 31.98 96.91 8.13 1.41.12 20.54 8.54 184.108.40.206 98.48.32 69.94.92 220.127.116.11 20.32 75.05 7.74 85.72.78 8.05 2.47 40 10.78 1.12.64 78.2010 10.Defined Benefit Plan Gratuity (Funded) a) Gratuity (Funded) Reconciliation of changes in respect of obligations Present value of obligation as at beginning of year Interest cost Current Service Cost Benefits Paid Acturial (gain)/Loss on obligations Present value of obligation as at end of year Reconciliation of changes in the fair value of plan assets Fair value of plan assets of beginning of year Expected return on plan assets Contributions Benefits paid Actual Gain / (Loss) on Plan assets Fair value of plan assets at the end of year Reconciliation of fair value of plan assets Fair value of plan assets at beginning of year Actual return on plan assets Contributions Benefits Paid Fair value of plan assets at the end of year Funded status Acturial Gain/Loss recognized Actuarial gain/(Loss) for the year .94.13 2.78 1.03.32 2.2011 As at 31.32 69.12 10.05 2.47 8.43.12 -2.54 7.05 75.95 .12 20.54.Obligation Actuarial gain/(Loss) for the year .41.03.82 1.28 10.82 69.47 0 8.12 10.
01 1. pending adjudication.4 6.83.1 6.20 83. Back wages.69.2 6.78 73.27.04.10 7.2011 based on the above assumptions works out to DISCLOSURE REQUIRED AS PER ACCOUNTING STANDARD -29 PROVISIONS.63 1.02 1. Incentive & Annual bonus.10.93. etc.65 16.73. pending final decision of the Court Difference in rent payable for Kolkata office premises from 1-10-2004 and onwards.2010 Additions during 2010-11 Total Less : Used during 2010-11 Utilised Withdrawn Closing Balance as on 31.42.25 39. Others (As shown in Annexure -A) Measne profit liability.4.20 1.03.Annual Report 2010-2011 (` in Thousands) As at 31.5 6.72.45 6.15 1.28 8.3 6. Employee related claims relating to Lockouts.60.03.60.02 8.40.62 11. Tax related claims pending in appeal i) Excise Duty ii) Sales Tax iii) Property Tax iv) Disputed Income-Tax B.03.2011 As at 31. Provision for Warranty is made as per the Accounting Policy.20 5.95.02. The actuary valuation has been made based on the following assumptions: a) Retirement Age : 58 years b) Future salary rise : 7% c) Rate of discounting : 8.55 8.45 2. if any.07.19 5. in respect of Mumbai office premises.37.31 5. if any..24 8.19 1.05 25. in one of the Units for the years 1970-71 and 1972-73 and in some of the Units for 1985-86 Non receipt of related Forms against levy of concessional Sales Tax Estimated amount of contracts remaining to be executed on capital account and not provided for 6 6.74 72.7 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 8.69. to the extent ascertainable C.28 43 .03. pending decision from the Debt Recovery Appellate Tribunal.69 63. CONTINGENT LIABILITIES AND CONTINGENT ASSETS Provision in respect of present obligations arising out of past events are made in the accounts based on reasonable estimates of the obligations.85 74 63. the provision for gratuity has been done based on actuarial valuation and accordingly provision is made for incremental liability every year.45 8.5% d) Attrition rate : 1% e) Mortality Table : LIC (1994-96) The gratuity liability as on 31.44.6 6. Hyderabad.66 39.2 In respect of Praga Tools.90 13.81 34.03.2010 5.21 25.2011 Claims against the Company not acknowledged as debts A. Additional Bonus. The details of provision for Warranty claims are furnished below: Opening Balance as on 1.94.
in view of pending order from State Government for exemption from payment of stamp duty. sanctioned by BIFR. as on 31. with the Company.2007. the Holding Company towards Equity Share Capital to be utilised for Capital Expenditure to the tune of `90 Cr. the Holding Company.each) to ` 800 Crore by the creation of 4.. on 31.2008. of India/Holding Co.60. The Company has alloted 4.2007 under the approved Revivial Plan of the Company through HMT Ltd.43.03. for Technology acquisition and upgradation totalling `120 Cr. 9 Sanctioned Rehabilitation Scheme from B I F R The BIFR has sanctioned Rehabilitation Package for the company envisaging various sanctions.37 Equity shares of `10/each to HMT Ltd.45 Cr.2 Towards Preference Share Capital: The Govt.03..96.000 Preference Shares of `100/. the Holding Company. The formalities of filing Return of allotment with ROC and issue of Share Certificates are not completed by the Company. 8 Issued.000 Preference Shares of `100/. subscribed and paid up capital The Govt.90. The formalities of filing Return of allotment with ROC and issue of Share Certificates are not completed by the Company.00. the Authorized Share Capital of the Company has been increased from `16 Crore (comprising of 1.1956 is yet to be completed pending Order from the Central Govt.each.1 Towards Equity Share Capital: 8. from the various stake holders as envisaged in the DRS. Training and Re-training to the extent of `10 Cr.. of Govt. However. Pending the outcome of AAIFR Orders and other statutory formalities to be complied with. 8. Loan have been converted into Equity Share Capital under the approved Revival Plan of the Company.000 Equity Shares of `10/. 44 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 (` in Thousands) As at 31. to the Company through HMT Ltd.00..44. in view of pending order from State Governmentfor exemption from payment of stamp duty. no effect has been given for the waivers and exemptions in the financial statements for the period ended 31-03-2011.each and 33.00.000 Equity Shares of `10/. of India has released an amount of `120 Cr. the Holding Company. and `20 Cr.5% redeemable Preference Share Capital of `443 Cr. of India has released funds to the Company towards 3.2010 .06. Further as per the scheme of merger of Praga Tools Ltd.each to HMT Ltd. the Company has alloted 18. some stake holders including the consortium of the banks filed appeal with AAIFR against the Order of BIFR and final hearing yet to be heard. The formalities of filling of Notice of increase in the Authorised Share Capital with the Registrar of Companies in terms of Section 97(1) of the Companies Act.2011 As at 31. waivers and exemptions from various Government agencies and banks.45.03. approved by BIFR.00. for exemption from payment of filling fee as per the Rehabilitation Scheme sanctioned by BIFR on 13.03.7 Authorised Share Capital In pursuance to approval of the Annual General Meeting held on 26th September 2008. Moreover `122..
24.26 - 3.41 1.32 23. However.1 Amounts recoverable from employees advances.2 Include usable slow/non moving and surplus stores and materials / Work in Progress and Stock in Trade.4 Provision for penal damages on belated remittences of PF contributions withdrawn as per BIFR sanction in case No.03.1 Dues to Micro and Small Enterprises based on the information available with the Company.60 4. Hyderabad.1 Include Excise Duty paid/payable on Closing Stock of Finished Goods as per the Guidance Note on Accounting Treatment for Excise Duty issued by the Institute of Chartered Accountants of India with effect from 1.4.45 13 Current Liabilities: 13.21 10.10 98. Hyderabad. 504/98 in respect of Praga Tools Divilsion.09 45 .1999.53 23.2010 10 INVENTORIES 10.87. 10.22. etc.01.39.85 11.95 5.2 No provision towards Govt.13.48 98.58 3.3 Amount recoverable from sales tax refund on account of sales reversal in Praga division in earlier years.43 2.Annual Report 2010-2011 (` in Thousands) As at 31.50.60. a) b) c) (I) (ii) Principal Interest 1.41 Amount of interest paid Amount of interest accrued and remaining unpaid at the end of each accounting year 13.3 No provision towards penal interest on un-paid contributions under Employees family Pension Scheme in respect of Praga Tools Division.30. if any.28.11 2. 11.49 5. 18.104.22.168.06 1. pending adjudication /negotiations 12. 11 Sundry debtors include: 11. this has no effect on the working results of the Company. Loans & Advances.66.2011 As at 31. 2.1 Dues towards erection and commissioning for a period exceeding one year.26 12 Advance include: 12. 14 Balances under Sundry Debtors .43 - - 3. 13.2 Amount paid by way of Adhoc to employees towards wage/ salary / DA revision arrears.. pending final decision by the concerned Sales Tax Authority. counter guarantee fee has been made in the books in respect of Praga Tools Division. and Current Liabilities are subject to confirmation. 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 1.74.98 6. Hyderabad as per directives of BIFR. although confirmation has been sought.2 Amounts withheld towards liquidated damages and interest on advances claimed /if claimed on delayed supplies.92 2. 13. pending adjustment for which necessary provision has been made in the accounts. bonus.03. 9.
1 Provision for Earned Leave encashment .32 67. Value of Special Tools individually costing less than `750/.30 30. Expenditure on Research & Development Previous years figures have been reclassified wherever necessary to conform to this years classification. Provision remaining at year end `17.23 .written off during the year.68 2 1.94 6. in compliance to AS-15. 2.71 thousands.71 4.37 18 19 20 46 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 (` in Thousands) Year ended 31.2 Provision for Settlement Allowance.05.33 4.) 17 Gratuity has been provided for/paid under a Group Gratuity Policy with Life Insurance Corporation of India. Additional provision made during the year for full coverage (based on salary at year end) in excess of `50000/.62. (Previous Year end `4. Provision remaining at year end `4. (Previous Year end `17.per employee based on actuarial valuation by LIC.19.46.09.2010 4.24.) 16.03.70. based on actuarial valuation of Earned Leave at credit as at year end. based on actuarial valuation of Settlement Allowance at credit as at year end. in compliance to AS -15.06 39 2.62.03.2011 Year ended 31.74.74 thousands.84 27.39.18 thousands.PROFIT & LOSS ACCOUNT Sales: 15 16 Sales are net of sales returns -Sales returns for the year Personnel include 16.37 thousands.
54 7.81 6.49.08.46 61.06 76.29 12.84 4.92. OTHERS 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Value 6.05.15.09. EXPENDITURE AND EARNINGS IN FOREIGN CURRENCY/ EXHANGE AND CONSUMPTION (a) CIF VALUE OF IMPORTS: Raw Materials Components and Spare Parts Capital Goods (b) EXPENDITURE IN FOREIGN CURRENCY ON ACCOUNT OF TRAVELLING EXPNS.07 3.00 63.01 Nil Nil 21% 79% 100% 1.09..41.54 13.01 6.91 8.99 3.27 14.54 6.65.80 7.17.062 4.31 42.84 22.46 97. COMPONENTS. (ON PAYMENT BASIS) (c) CONSUMPTION OF RAW MATERIALS.79.41 43.69 22.214.171.1240 1 CONSUMPTION OF RAW MATERIALS AND COMPONENTS Qty.28.25.65 9.23 Nos 530 23 3 36 0 58 16 3 0 Value 1.59.79 12.54.02.94 60.41.03.82 21.86 126.96.36.199. Steel MT 1408 Non-ferrous Metals MT 1 Ferrous Castings MT 1501 Non-ferrous Castings MT 10 Forgings MT 60 Aluminium Strips MT Standard parts Components Others TURNOVER Machine Tools Die-casting and plastic machinery Presses Printing Machines Precision Machines Cutter & Grinder Thread Rolling Machines CNC Lathe Spares Accessories Sundry Jobs and Miscellaneous Sales Job Work Others Nos 529 22 3 28 0 90 15 1 0 2 3 INFORMATION REGARDING IMPORTS.19.21 55.42 8.27.33 1.25.94. 1123 1 1617 35 60 Value 6.41 16.03.27 6.72 1.60.98 9.94 Value 188.8.131.52.48 10.72 1.06 6.27 4.58 3.96 78.46 9.80 71.40 9.40.09 4.93 2.29 MT MT MT MT MT MT Qty.75 184.108.40.2061 Year ended 31.00 220.127.116.11 18.104.22.168.65 2.54.Annual Report 2010-2011 NOTES FORMING PART OF PROFIT AND LOSS ACCOUNT YEAR ENDED 31ST MARCH 2011 (` in Thousands) Year ended 31.34 4.00 Nil Nil 47 .29.21 15.15 22.214.171.124.82 21% 79% 100% 15. STORES & SPARE PARTS Imported Indigenous (d) EARNINGS IN FOREIGN EXCHANGE EXPORTS Routed thorugh HMT( International) Ltd.126.96.36.199 63.02.97.78 7.50 1.20.19.
Installed Capacity for each type of products manufactured by the Company cannot be worked out precisely as the capacity is overlapping for each product. INSTALLED CAPACITY. LICENSED CAPACITY. There is no licenced capacity for Printing Machines. M/c. Capacity indicated is as registered with DGTD Figures in brackets relate to previous year. The above figures relate to machines only. PRODUCTION AND FINISHED STOCK Products Machine Tools Die Casting and Plastic Injection Moulding Machines Metal Forming Presses Printing Machines Precision Machines Lamp mkg. 4. 48 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 Nos Nos Nos Nos Nos Nos Nos Nos Nos Nos Nos Nos 503 (510) 22 (18) 3 (3) 24 (36) -(--) -(--) 25 (21) 534 (530) 85 (51) 13 (15) 2 (3) 12 (12) -(1) . CNC Systems Ball Screws Grinding Machines Thread Machine CNC Lathe CNC Machining Centre Unit Licensed Capacity 6187 (6187) 130 (130) 50 (50) 390 (390) -(--) 8 (8) 800 (800) 4300 (4300) Installed Capacity 953 (949) 34 (34) 15 (15) --36 --(--) 301 (301) 1000 (1000) 301 (301) Production Opening Finished Stock 54 (74) 1 (6) -(--) 4 (4) 5 (5) -(--) 3 (5) 43 (37) 10 (17) 5 (6) 1 (1) -(--) Closing Finished Stock 28 (54) 1 (1) -(--) -(4) 5 (5) -(--) 1 (3) 82 (43) 5 (10) 3 (5) 2 (1) -(--) NOTES 1.4. Installed capacities indicated above are the targets of production fixed for the year based on single /double/ triple shift operation. 3. 2.
93 54.71 141. No.10.52 1. No.85 1.Appeal Filed Amount claimed towards development charges.15 27.Annual Report 2010-2011 Annexure A DISCLOSURE REQUIREMENT OF CONTINGENT LIABILITIES AS PER (AS 29) (` in Thousands) Sl.18 70.94 39.31 44.12 64.37 1.09 30.14.65 4.69.40.05. its payment Interest on loan recoveries HSK Alloys Land Revenue Amount 21.73.52 17.22 21.75 8.81 17.25 Annexure B (` in Thousands) Balance as on 31-03-11 77.79 Withdrawn 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 "Others" Nature of Cases * ** Demands raised by PF / ESI Authorities Order towards Stamp duty and Registration Charges on differential value of land .37 126. Claims towards risk purchase clause by GAIL of the year 1996-97 Cases of accident by our vehicle causing injuries to 3rd parties in which HMT is a third party in all these cases because insurance Co.19. Society Customer Claim Non-agricultural Tax Total DISCLOSURE OF PROVISIONS AS PER (AS 29) Sl.05.31 .51 63.18 4.11.28 44.39. is defending the cases.50 63.74 40.71 67.13 49 44. Disputed claims relating to supply of Material.71 4.53.30 8.95.55 85.19 17.83.57 16.15.68 2.49.94.01 188.8.131.52.06 Addition during 10-11 Used during 2010-11 Utilised 13.93 1.10. 1 2 3 Class of Cases PF / ESI Cases Stamp Duty/ Registration Charges A.70.12.95 72.87 35.59 25.74 56. appeal pending with Andhra Pradesh Electricity Regulatory Commission.P. Central Power Distribution Corporation Limited & Water Board Risk purchase claim by GAIL Motor Accident Case 4 5 6 7 8 9 Suppliers Claim Employees Co-op.11.62 184.108.40.206 40.46.84 83.01 4. 1 2 Nature of Provision Provision for Gratuity Provision for Others: a Adhoc Towards Wage / Salary Revision Warranty Claims Earned Leave Encashment d Settlement Allowance e Provision for FBT Sub-Total Total b c Opening Balance as on 01-04-10 62.85 8.02.
Doubtful debts.69 2 7.33 46. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax and Extra-ordinary Items Adjustment for: Depreciation Profit on Sale of Fixed Assets (net) Interest debited (Net) Deferred Revenue Expenditure (Net) Provision for Obsolescence.93 47 -28. Pillai K.00 21.2011 Year ended 31. No.35 19.94 -45. K.75 3. For and on behalf of the Board G.23 -18.09 -18.20 50.23 -18.78 40 27.11 19.54 1.32 3.92 39. Raghavendra Rao & Associates Chartered Accountants FRN : 003324S K.46 22.82 -34.39 2 2.77 -28.77 -7. 214976 As per our Report of Even date .05 5.40 5.Investments Operating Profit Before Working Capital Changes Adjustment for: (Increase)/Decrease in Trade & Other Receivables (Increase)/Decrease in Inventories (Increase)/Decrease in Other Current Assets (Increase)/Decrease in Trade payables CASH FLOW CASH FLOW BEFORE EXTRA-ORDINARY ITEMS Extra-ordinary Items NET CASH FLOW AFTER EXTRA ORDINERY ITEMS B. Koppal Partner M.85 -42 7.77 -7.77 -7.06 9. Suresh Chairman Director Technology (M) Place : Bangalore Date : 28th June 2011 50 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Annual Report 2010-2011 -93.80 7.CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2011 (` in Lakhs) Year ended 31.41 81. Ramadoss General Manager (F) Vikas Goel Company Secretary Latha S.03.03.30 -7.97 18.43 -55 -2.60 24.70 -6.74 -68.88 7.17 -8.88 94 -8.26 -27. Advances.05 1.2010 A.23 -9.87 46. H.92 For A. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Sale proceeds of Fixed Assets Purchase of Investments NET CASH USED IN INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Issue of Share Capital Proceeds from Long Term/Short Term Borrowings (net) Interest Paid Interest Received NET CASH USED IN FINANCING ACTIVITIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AS AT 1ST APRIL (Opening Balance) CASH AND CASH EQUIVALENTS AS AT 31ST MARCH (Closing Balance) C.71 18.
Ramadoss General Manager (F) Vikas Goel Company Secretary 8 4 . (-) 3 V . Pillai Chairman Place : Bangalore Date : 28th June 2011 51 K. Expenditure 3 6 7 L L State Code: 0 8 3 1 0 3 2 0 1 1 Date Month Capital Raised during the year (Amount in Rs. Thousands) Total Liabilities 8 6 9 0 6 2 0 Sources of Funds Paid up Capital 7 1 9 5 9 9 1 432109876543212109876543210987654321098765432121098765432109876543210987654321 432109876543212109876543210987654321098765432121098765432109876543210987654321 Machine Tools . Balance Sheet Date II 0 8 / 2 5 5 7 2 Year Right Issue N I Private Placement N I Total Assets 8 6 9 0 6 2 0 Share Application Money 7 0 3 8 9 9 0 Reserves & Surplus 2 2 7 0 8 2 Secured Loans 5 1 5 5 9 7 Application of Funds Net Fixed Assets 9 3 8 2 2 4 Net Current Assets (-) 7 8 9 7 6 4 Accumulated Losses 8 5 4 1 7 9 3 IV Performance of Company (Amount in Rs. H. 1956 I Registration Details: Registration No.Annual Report 2010-2011 ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF SCHEDULE VI TO THE COMPANIES ACT.Profit/(Loss) Before Tax 9 3 0 6 3 3 Earnings per Share in Rs. Suresh Director Technology (M) K. K.Profit/(Loss) After Tax 9 3 0 6 3 3 N I L Dividend Rate (%) Unsecured Loans 7 5 1 9 5 0 Investments N I L Misc. Thousands) Public Issue N I L Bonus Issue N I L III Position of Mobilisation and Deployment of Funds (Amounts in Rs. Thousands) Turnover 1 9 0 8 9 9 6 + . 3 6 4 5 5 Generic Names of Three Principal products/services of the Company (As per monetary items) Item Code No. 5 6 Total Expenditure 2 8 0 1 3 0 9 5 + . (ITC Code) Product Description For and on behalf of the Board G.
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