Hindustan Motors Ltd

to the Members

Your Directors present their Eighty-second (82nd) Annual Report together with audited financial statements of the Company for the year ended March 31, 2024.

During the year under review, the Company's revenue/Other Income is Rs.30.16 Crores compared to Rs.3.79 Crores in the previous financial year. The following table gives a summary of the performance.

( in crores )

The revenue account shows a profit of Rs.25.29 Crores after providing Rs.0.42 Crores for depreciation & amortisation expense. There is a deficit of Rs.123.00 Crores after adjusting revaluation reserve for land and building in the Statement of Profit and Loss as at the end of the current year as against Rs.148.45 Crores in the last year.

A Cash Flow Statement for the year under review is also a ached to the enclosed Annual Accounts.

The Company is not having any subsidiary / associate company and therefore consolidated accounts of the Company have not been prepared.

There is no operational profit in the Statement of Profit & Loss after taking into account the results for the year under review. As such, Board of Directors of the Company has not considered recommending any dividend on the equity shares of the Company.

The Company has not transferred any amount to any reserves during the year under report.

There has been no change during the period under review in the nature of business of the Company.

As reported earlier that due to low productivity, growing indiscipline, shortage of funds and lack of demand for products, the Company was compelled to declare "Suspension of work" at its U arpara Plant with effect from 24th May, 2014 and the suspension of work is continuing due to no change in the situation.

No material changes or commitments or any significant and material adverse orders or rulings passed by the regulators or Courts or Tribunals impacting the going concern status and Company's operations in future have occurred between end of the financial year of the company and date of this report.

A detailed Management Discussion & Analysis Report forms part of this report is annexed as Annexure-1.

The Company has been continuously rationalising the cost post "suspension of work" at U arpara plant. It has reduced the fixed cost including employee cost considerably and continuously working on further reducing its fixed cost. The accumulated losses of the Company was brought down to Rs.12308.32 Lacs as on 31st March, 2024 as compared to Rs.25218.07 Lacs as on 31st March, 2017. The net worth of the Company has also turned positive, and the value is Rs.904.69 lacs as on 31st March, 2024 as compared to negative net worth of Rs.1632.50 lakhs as on 31st March, 2023. The Company is presently debt free (Financial debt) barring few liabilities which stand mainly on employee account, trade payables & other liabilities. At present, the current asset of the Company exceeds the current liabilities resulting in favourable current ratio and reflects that Company has sufficient liquidity to meet its liabilities. The Company is considering various measures including alternative use of Fixed Assets to generate revenue. The Company has started to monetize its old and obsolete assets including equipment during the year.

The long awaited eco-friendly electric vehicle project is stalled at the moment due to Notice from Government of West Bengal on resumption of U arpara Land,

The Company has alternate plans to facilitate and generate additional revenue and realize adequate fund required, after the resumption issue is resolved.

Thus, the Company will facilitate and generate additional revenue and realize further fund required.

There was no change in the nature of the business of the Company during the year under report.

No material changes and commitments affecting the financial position of the company occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

There are no Loans, Guarantees and Investments made under the provisions of Section 186 of the Companies Act, 2013 during the year under review.

All transactions of the Company with its related parties during the financial year 2023-24 were at arm's length basis and in the ordinary course of business operations of the Company, which were pre-approved by the Independent Directors in the Audit Committee. All related party transactions are quarterly reviewed by the Audit Committee. To provide a framework for the related party transactions and also to identify the material related party transaction, the Company has implemented a Related Party Transaction Policy, which can be accessed at the website of the Company at www.hindmotor.com. During the reporting period, there was no material related party transactions as per Listing Regulation and the Related Party Transaction Policy of the Company. All related party transactions of the Company, which were in the ordinary course of business during the financial year 2023-24 are provided in Note No. 34 of the Financial Statements.

Your Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 and the Rules made thereunder and therefore, no amount of principal or interest was outstanding as on the date of Balance Sheet.

Provisions of Section 135 of the Companies Act, 2013 related to Corporate Social Responsibility is not applicable to the Company as the Company does not fulfil any of the stipulated requisite criteria.

The Company exposed to some internal risks to generate liquidity to meet the existing liability of the Company and day to day activities as the U arpara Plant of the Company is still under suspension of work.

In order to identify and mitigate risks, the Company has constituted a Corporate Risk Management Committee. The Company has a Corporate Risk Management Charter to identify the nature and magnitude of risk associated with the Company and to take steps for mitigating the impact of such risks. The Corporate Risk Management Committee continuously identify and prioritize the risks associated with the functioning of the Company, lays down mitigation plan for identified risks with assigning responsibilities and adequately monitoring and managing the same. These are reviewed periodically.

As reported earlier, the Company has declared "Suspension of Work" at its U arpara Plant in Hooghly District of West Bengal with effect from 24th May, 2014. The general industrial relation at the plant is sensitive but being managed. The number of employees as on 31st March, 2024 is 235 which was 269 as on 31st March, 2023.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 is available on the Company's website and can be accessed at www.hindmotor.com .

During the year, Four (4) Board Meetings and Four (4) Audit Committee Meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The Audit Committee comprises of Independent Directors namely, Smt. Mou Mukherjee (Chairperson) and Shri Raj Kamal Johri, and a Non-Executive Non-Independent Director namely, Shri A. Sankaranarayanan. All the recommendations made by the Audit Committee were accepted by Board. Further details regarding Board Meetings and Audit Committee Meetings are given in the Corporate Governance Report which forms part of the Board's Report.

The Company continues to remain commi ed to high standards of corporate governance. The report on corporate governance as per the requirement of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this report is annexed as Annexure-2. The Company has complied with all the requirements of corporate governance. The certificate from the Auditors of the Company confirming compliance to the conditions of the corporate governance requirements is also annexed.

Business Responsibility and Sustainability Report (BRSR) is not applicable to the Company.

In terms of the requirement of Section 134 of the Companies Act, 2013, Directors' Responsibility Statement is annexed as Annexure-3 to this report.

Information as per the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure-4 and Annexure-5 to this report.

Additional Information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 is annexed as Annexure-6 to this report.

The Company has comprehensive and adequate internal financial controls system for all major processes including financial statements to ensure reliability of reporting. The system also helps management to have timely data/feedback on various operational parameters for effective review. It also ensures proper safeguarding of assets across the Company and its economical use. The internal financial controls system of the Company is commensurate with the size, scale and complexity of its operations. The systems and controls are periodically reviewed and modified based on the requirement. The Company has an internal audit function which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. It is also responsible for assessing and improving the effectiveness of risk management, control and governance process. The scope of Internal Audit is well defined and documented and the audit committee reviews the observations of the Internal Audit critically. The composition and working of the audit committee forms part of the Corporate Governance Report.

The Report by the Auditors is self–explanatory and it does not contain any adverse remarks or qualifications or observations.

The Statutory Auditors of the Company, Messrs. Ray & Ray, Chartered Accountants (Registration No.301072E), were appointed in the Seventy-seventh Annual General Meeting of the Company held on 18th September, 2019, as Statutory Auditors of the Company until the conclusion of Eighty-second Annual General Meeting to be held in 2024 i.e., for the financial years 2019-20 till 2023-24 and accordingly they will retire after conclusion of the forthcoming Annual General Meeting post completion of their tenure.

Further, with regard to preparation of accounts on going concern basis, the Auditors have made some observations under "Emphasis of Mafter" appearing in the Auditors' Report which the management has responded in note-41 to the audited financial statements for the year ended 31st March, 2024.

The Board of Directors of the Company has appointed KAMG & Associates, Chartered Accountants (FRN 311027E) as Statutory Auditors of the Company to hold officefor a term of five (5) years beginning from the conclusion of the 82nd Annual General Meeting of the Company till the conclusion of the 87th Annual General Meeting subject to approval of the shareholders in the forthcoming Annual General Meeting.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs. R.B.M. & Associates, a firm of Company Secretaries in Practise (CP No.20376) to undertake the Secretarial Audit of the Company.

The Report of the Secretarial Auditor is annexed herewith as Annexure-7. There are no qualifications or observations or remarks made by Secretarial Auditor in his report.

Your Company has no subsidiaries or Joint Venture or Associate company.

Shri Raj Kamal Johri, Smt. Mou Mukherjee and Shri Om Prakash Gupta are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in Section 149 of the Companies Act, 2013 and the Rules made thereunder about their status as Independent Directors of the Company.

MCA vide its Notification dated 1st December, 2019 introduced new Rules called the Companies (Appointments and Qualification of Directors) 5th Amendment Rules, 2019 for person eligible and willing to be appointed as an Independent Director. Rule states that the compliances to be carried out before appointment of Independent Director as well as for those who are already appointed.

All our Independent Directors have already registered their names in the Independent Directors database.

The details of familiarization programme for Independent Directors has been disclosed on the website of the Company www.hindmotor. com and web link thereto is h p://www.hindmotor.com/files/Familiarisation-Programme-for-Independent-Directors.pdf.

There are no changes in the Board of Directors of the Company during the year under report.

At the ensuing Annual General Meeting, Mr. A. Sankaranarayanan, Director of the Company, retires by rotation and being eligible offers himself for re-appointment.

Ms. Sarada Hariharan (DIN No.06914753), has been appointed as an Additional Director (Category-Non-Executive Independent Director) of the Company with effect from 7th August, 2024 to hold officeup to the date of the ensuing Annual General and subject to approval by the shareholders in the upcoming Annual General Meeting to be held on 25th September, 2024.

Information about the Director proposed to be reappointed as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is provided in the Report on Corporate Governance forming part of this Report.

Shri Prakash Sahu is continuing as the Chief Executive Officer of the Company.

Shri Mahesh Kumar Kejriwal is continuing as the Chief Financial Officer of the Company.

Mrs. Vishakha Gupta is continuing as the Company Secretary of the Company.

The Nomination and Remuneration Committee identifies and ascertains the integrity, qualification, expertise, skills, knowledge and experience of the person for appointment as Director and Key Managerial Personnel. The appointment of a Director as recommended by the Nomination and Remuneration Committee requires approval of the Board.

The remuneration / compensation / commission etc. to the Directors and Key Managerial Personnel is proposed by the Nomination and Remuneration Committee in compliance with requirements of the Companies Act and recommended to the Board for it's approval. Approval of Shareholders is obtained, if required.

The Directors receive remuneration by way of fees for a ending meetings of the Board or committees thereof.

At the time of appointing an Independent Director, a formal le er of appointment is given to the candidate, which inter-alia, explains the role, functions, duties and responsibilities expected of the person as an Independent Director of the Company. The Independent Director is also explained in detail the compliance required from him under the Companies Act, 2013 and other relevant regulations. The independence of Director is decided as per provisions of the Companies Act, 2013.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for remuneration of Directors, Key Managerial Personnel and Senior Management. The said Remuneration Policy is posted on the website of the Company www.hindmotor.com.

The Board of Directors evaluated the annual performance of the Board as a whole, its committees and the directors individually in accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, in the following manner:-

i. Structured evaluation forms, as recommended by the Nomination and Remuneration Committee, after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance, for evaluation of the performance of the Board, its Committees and each director were provided to all the members of the Board.

ii. The members of the Board were requested to evaluate by filling the evaluation forms and the duly filled in evaluation forms were required to be sent to the Company Secretary in a sealed envelope or personally submi ed to the Chairman at the concerned meeting.

iii. Based on the individual evaluation of the Directors, the Board initiated a detailed discussion at the concerned meeting on the performance of the Board/Committee/Individual Director, and formulated a final collective evaluation of the Board. The Board also provided an individual feedback to the concerned director on areas of improvement, if any.

A separate meeting of Independent Directors was held on 8th November, 2023 to evaluate the performance evaluation of the Chairman of the meeting of Board of Directors (as there is no chairman of the Board), the Non-Independent Directors, the Board and flow of information from management.

As per Section 177(9) of the Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Equity Listing Agreement, the Company has established an effective vigil mechanism named Whistle Blower Policy ("the Policy") which is also in conformity with the Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with a view to provide a mechanism for Directors and Employees of the Company inter alia to raise genuine concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc. The Company encourages its employees to use the mechanism and has made provision for direct access to the Chairman of the Audit Committee in appropriate and exceptional cases. Adequate safeguards against victimization of the persons who use such mechanism are provided in the policy. The policy is posted on the website of the Company www.hindmotor.com.

No case of any fraud has been detected during the year under report. None of the auditors of the Company has reported any fraud in the Company during the year under report.

There has been no change in the share capital of the Company during the year under report. The paid up equity share capital of the Company as on 31st March, 2024 was Rs. 104.41 Crores.

The Company has in place a policy for prevention of sexual harassment in accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company did not receive any complaint during the year 2023-24.

The Company is not required to maintain Cost Audit records in term of Section 148 (1) of the Companies Act, 2013.

The Board of Directors hereby a rms that your Company in general has adhered to the Secretarial Standards as prescribed by the Institute of Company Secretaries of India during the financial year.

(a) The Company has not entered into any one-time se lement proposal with any Bank or financial institution during the year.

(b) As per available information, no application has been filed against the Company under the Insolvency and Bankruptcy Code, 2016 nor any proceeding thereunder is pending as on 31.03.2024.

(c) The Company has issued only one class of equity shares with equal voting rights.

(d) The Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

(e) None of the Directors of the Company receive any remuneration or commission from any other company belonging to Hindustan Motors group.

(f) No significant or material orders were passed by the Regulators or Courts or Tribunals, which could impact the going concern status of your Company and its future operations.

Your Directors acknowledge and thank the Company's customers, shareholders, state government authorities, business associates, banks and financial institutions for the support extended to the Company. Your Directors also record their appreciation for the commitment and dedication of the employees of your Company.