Hindusthan Udyog Ltd

TO THE MEMBERS OF HINDUSTHAN UDYOG LIMITED

Your Directors have pleasure in presenting their 77^th Annual Report together with the Audited Accounts of the Company for the financial year ended 31^st March, 2024.

The Profit before tax, excluding Exceptional Items, improved significantly during the year by Rs. 974.85 Lakhs.

The Directors have considered to plough back the profits in business for better financial strength and as such they have not recommended any dividend for the year under review.

Management Discussion and Analysis Report for the year under review is appended below:-

The Company was engaged in the manufacturing of Alloy and Stainless Steel Castings with stringent quality requirements required in Turbines, Metal Shredding, Earth Moving and Mining Equipment, Power Plants, Pumps, Valves, Compressors and other Heavy Engineering Industries. The Company is also engaged in real estate business including leasing out of buildings/properties, purchase, sale, occupation _? construction and development of buildings/properties.

The Board is presently exploring options to diversify its operations for long term growth.

Your Company is exposed to threats and risks, as faced by Organizations of similar size and nature like adverse changes in the general economic and market conditions, changes in government policies and regulations etc.

The Company has internal control procedures commensurate with the nature of its business and size of its operations. The objective of these procedures are to ensure efficient use and protection of the Company's resources, accuracy in financial reports and due compliance of statutes and Company policies and procedures. The Internal Audit function is conducted by a Senior Management Team of the Company.

The adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

There was no human resource or industrial relation related problem during the year.

The explanation for significant changes, if any, in the Key Financial Ratios in terms of the Listing Regulations and the Companies Act, 2013 are given in the Notes to the Financial Statements.

The principles of good Corporate Governance through professionalism, accountability, transparency, trusteeship and control have always been followed by your Company and it has complied with all the applicable provisions of Corporate Governance as per the Listing Regulations. A separate Report on Corporate Governance forms part of the Annual Report 2023-24 along with the Auditors' Certificate on its compliance in AnnexureA.

Mr. G.K. Agarwal was appointed as an Executive Director for a period of two years commencing from 1^st October, 2023. The terms of his appointment has been approved by the Shareholders vide Postal Ballot Resolution dated 15^th December, 2023.

Mr. V.N. Agarwal ceased to be the Managing Director on completion of his tenure on 31^st December, 2023 and had expressed his unwillingness for reappointment. However, he had consented to continue on the Board as a Non-Executive Director with effect from 1^st January, 2024. Approval of Shareholders for his continuance as such has been obtained through Postal Ballot on 26^th May, 2024.

The term of Mrs. Kiran Darolia as an Independent Director is scheduled to expire on 30^th September, 2024. Necessary resolution for her re-appointment for a second consecutive term of 5 years forms part of the Notice of ensuing Annual General Meeting (AGM).

Mr. Prakash Agarwal, Director retires by rotation at the ensuing AGM and being eligible offers himself for re-appointment.

A Brief Resume of Mr. Prakash Agarwal and Mrs Kiran Darolia forms part of the Notice of the AGM.

During the year Eight Board Meetings were held on 29^th May, 2023, 20^th June, 2023, 14^th August, 2023, 30^th September, 2023, 10^th November, 2023, 30^th December, 2023, 20^th January, 2024 and 12^th February, 2024.

Pursuant to the requirement of Section 134(5) of The Companies Act, 2013, the Directors state as follows that:-

(i) in the preparation of the Annual Accounts for the financial year ended 31^st March, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for that period;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of The Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the accounts for the financial year ended 31^st March, 2024 on a "going concern" basis;

(v) the Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively; and

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such were adequate and operating effectively.

The Company believes that in order to ensure that the Board of Directors can discharge their duties and responsibilities effectively; it aims to have a Board with optimum combination of experience and commitment with the presence of Independent Directors. Such Board can provide a long term plan for the Company's growth, improve the quality of governance and increase the confidence of its shareholders.

The Company has a policy in terms of Section 178(3) of The Companies Act, 2013 on directors' appointment and remuneration including the criteria for determining their qualifications, positive attributes and independence.

The Board evaluated the effectiveness of its functioning and that of the Committees and of Individual Directors by seeking inputs on various aspects of Board/Committee Governance and considered and discussed in details the inputs received from the Directors.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in strategic planning and fulfillment of their obligations including but not limited to their participation in the Board/Committee Meetings.

The Independent Directors meet the criteria of being Independent (as prescribed in The Companies Act, 2013 and the Listing Regulations) and an Independency Certificate from them have been obtained.

As provided under Section 92(3) read with Section 134(3)(a) of The Companies Act, 2013, the Annual Return as on 31^st March, 2024 in Form MGT-7 is available on the Website of the Company.

M/s Salarpuria & Partners, Chartered Accountants (Firm Registration No. 302113E) were reappointed as the Statutory Auditors of the Company for a second term of 5 years commencing from the Financial Year 2022-23 till the conclusion of the AGM to be held in the year 2027.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under, the Board of Directors of the Company has appointed a Practicing Company Secretary to conduct the Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report for the financial year ended 31.03.2024 is annexed herewith as Annexure B, as part of this Report.

The Company is not required to maintain cost records in terms of Section 148(1) of The Companies Act, 2013.

All contracts/arrangements/transactions entered by the Company with its Related Parties during the financial year were on arm's length basis and in the ordinary course of business. Hence, the provisions of Section 188 of The Companies Act, 2013 and disclosure in Form AOC-2 are not applicable. The transactions with Related Parties are disclosed in the Notes to the Financial Statements.

Details of Loans, Investments and Guarantees, if any, given/made by the Company are disclosed in the Notes to the Financial Statements.

Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism of Directors and Employees has been established, details of which are given in the Corporate Governance Report.

Risk Management is the process of identification, assessment and prioritization of risks to minimize/mitigate/monitor the probability and/or impact of unfortunate events. Risk Management Policy enables the Company to manage such uncertainties and changes in the internal and external environment to reduce their negative impact. The Board of Directors of the Company, as and when needed, develops such policies for assessing and managing the risks in accordance with the requirements of the Companies Act, 2013.

Information required to be given pursuant to the provisions of section 197(12) of The Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure C. There were no employees who were in receipt of remuneration in excess of limits provided in Rule 5(2)(i to iii) of said Rules.

Particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required under section 134(3)(m) of The Companies Act, 2013 read with Companies (Accounts) Rules, 2014 were not applicable to the Company during the year.

Your Company has formulated a Code of Conduct which applies to Board Members and Senior Management Personnel of the Company. Confirmations towards adherence to the Code during the Financial Year 2023-24 have been obtained from all the Board Members and Senior Management Personnel in terms of the Listing Regulations and a declaration relating to compliance of this code during the year by all Board Members and Senior Management Personnel has been given by the Executive Director of the Company which accompanies this report.

There were no material changes and commitments affecting the financial position of the Company which has occurred between the financial year to which these Financial Statements relate and date of this report.

Your Directors would like to thank shareholders, customers, suppliers, bankers, employees and all other business associates for the support given by them to the Company and their confidence in its management.