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RACL Geartech Ltd.

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

The Directors take pleasure in presenting the 35th Annual Report together with the Audited financial statements of the Company for the financial year ended 31st March, 2018.

FINANCIAL highlights:

(Rs. in Lakhs)

Particulars

2017-18

2016-17

Sales and Other Income

14011

12432

Operational Expenses

12145

10929

Depreciation

496

400

Financial Charges

571

515

Profit before Tax

864

649

Provision for Taxes/ Def.Tax Liab/ including earlier years

77

135

Net Profit

722

453

Reserves from last year

3752

3299

Reserves brought forward to Balance Sheet

4474

3752

TRANSFER TO RESERVES

An amount of Rs. 722 lakhs has been transferred to General Reserve for the Financial Year ended 31st March 2018.

DIVIDEND

Operations of the company are growing fast and the company is in expansion mode. Considering the fund requirements for our future plans for up-gradation of plant & machinery / technology up-gradation, the Board of Directors considered it appropriate not to declare any dividend for the current year.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of the Company''s operations in terms of performance in markets, business outlook, Opportunities and Threats, risks and concerns forms part of the Management Discussion and Analysis is incorporated in a separate section of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance with section 134(5) of the Companies Act, 2013, the Directors of your Company confirm:

- that the applicable Accounting Standards (i.e. Indian Accounting Standards) have been followed in the preparation of annual accounts and the corresponding figures for the previous years have been regrouped/ rearranged accordingly and that there are no material departures;

- that such accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2018 and of the profit of your Company for the year ended on that date;

- that proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

- that the annual accounts have been prepared on a going concern basis;

- that the internal financial controls to be followed by the Company have been laid down and such

internal financial controls are adequate and were operating effectively; and

- that proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013, Mrs. Narinder Paul Kaur, Non- Executive Non-Independent Director (DIN: 02435942), of the Company retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers herself for reappointment. The brief resume and other details as required under Securities & Exchange of Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 and Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI) are provided in the Notice of 35th Annual General Meeting of the Company. The Board recommends that Mrs. Narinder Paul Kaur, Non- Executive Non-Independent Director (DIN: 02435942), may be re-appointed at the ensuing AGM.

Necessary resolutions in respect of re-appointment of Mrs. Narinder Paul Kaur, Non- Executive Non-Independent Director (DIN: 02435942), have been included in the notice convening the ensuing annual general meeting. Your directors commend his re-appointment.

During the year under review, Mr. Madan Lal (DIN: 00272672), ceased to be a Non-Executive Independent Director of the company w.e.f. 28th September, 2017, as his term of appointment has been completed.

During the year under review, Mr. Shashank Ramesh Anikhindi (DIN 07787889) has been appointed as an additional director of the Company in Independent category with effect from 27th May, 2017 and appointed (regularized) as Independent Directors on the Board of the Company in the Annual General Meeting held on 28th September, 2017 to hold office for a for a term of 3 (Three) consecutive years with effect from 29th September, 2017 up to 28th September, 2020.

During the year under review, following directors of the company has been reappointed on the Board in the Annual General Meeting held on 28th September, 2017:

- Mr. Raj Kumar Kapoor (DIN: 00110338), as an Independent Director of the Company for a second term of 3 (Three) consecutive years with effect from 29th September, 2017 up to 28th September, 2020,

- Mr. Rakesh Kapoor (DIN: 00015358), as an Independent Director of the Company for a second term of 4 (four) consecutive years with effect from 29th September, 2017 up to 28th September, 2021, and

- Mr. Anil Sharma (DIN: 00157911), as an Independent Director of the Company for a second term of 2 (Two) consecutive years with effect from 29th September, 2017 up to 28th September, 2019.

- Mr. Gursharan Singh (DIN: 00057602), as Chairman & Managing Director of the company for a period of 5 years w.e.f. 23rd August 2017 up to 22nd August, 2022.

- Mr. Dev Raj Arya (DIN: 00057582), as Whole time Director & Chief Financial Officer of the company for a period of 2 years w.e.f. 22nd October, 2017 up to 21st October, 2019.

Declaration by Independent Directors

All the Independent Directors of your Company have made declaration to the Company that they meet all the criteria of independence laid down under section 149(6) of Companies Act, 2013 and regulation 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Relationship between Directors Interse

Except Mr. Gursharan Singh, Chairman & Managing Director and Mrs. Narinder Paul Kaur, Non-executive Director, none of the Directors of the company is related to the other Director or to any other employee of the Company.

Familarisation Programme for Independent Directors

Your Company has adopted ‘Familarisation Programmes for Independent Directors'' to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. Your Company aims to provide its Independent Directors, insight into the Company enabling them to contribute effectively.

The details of familiarisation programmes may be accessed under the Corporate Governance section of the website http://raclgeartech.com/pdfs/Familiarisation_Programme_for_Independent_Directors_8march2018.pdf

During the year under review, Independent Directors were apprised on an ongoing basis in the various Board/ Committee meetings on macro-economic environment, information on business performance, operations, financial parameters, working capital management, fund flows, update on statutory compliances for Board members, etc. Apart from this, 2 (two) familiarization programs were conducted in the financial year 201718, which were attended by all the Independent Directors. Total number of hours spent by each Independent Director in these programs were 4 (four) hours.

DISCLOSURES

ADOPTION OF INDIAN ACCOUNTING STANDARDS (“IND AS”)

The Company has adopted Indian Accounting Standards (“Ind AS”) and accordingly these financial statements have been prepared in accordance with the same as required under section 133 of the Companies Act, 2013 read with rules made there under. The date of transition to Ind AS is 01st April, 2016. These financial statements for the year ended 31st March, 2018 are the Company''s first Ind AS financial statements. The impact of transition has been accounted for in the financial statement of the company and the comparative period figures have been reinstated accordingly.

COMMITTEES OF BOARD

Pursuant to requirement under Companies Act, 2013 and Securities & Exchange of Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has constituted various Committees of Board such as Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Financial Affairs Committee. The details of composition of these Committees are as follows:

Audit Committee

The previous Audit Committee of the company comprises of Mr. Raj Kumar Kapoor, Independent Director as the Chairman and Mr. Anil Sharma, Independent Director and Mr. Rakesh Kapoor, Independent Director as members.

During the year under review Audit committee was reconstituted and as on date it comprises of Mr. Rakesh Kapoor, Independent Director as the Chairman and Mr. Anil Sharma, Independent Director and Mr. Shashank Ramesh Anikhindi, Independent Director as members. Details in respect of the Audit Committee are provided in Corporate Governance Report, forming part of the Directors'' Report. During the year, there was no recommendation of the Audit Committee which was not accepted by the Board of Directors of the company.

Stakeholder Relationship Committee

The previous Stakeholder Relationship Committee of the company comprises of Mr. Madan Lal, Independent Director as the Chairman and Mr. Gursharan Singh, Chairman & Managing Director and Mr. Dev Raj Arya, Director & CFO as members.

During the year under review Stakeholder Relationship Committee was reconstituted and as on date it comprises of Mr. Rakesh Kapoor, Independent Director as the Chairman and Mr. Gursharan Singh, Chairman & Managing Director and Mr. Dev Raj Arya, Director & CFO as members. Details in respect of the Stakeholder Relationship Committee are provided in Corporate Governance Report, forming part of the Directors'' Report.

Nomination and Remuneration Committee

The previous Nomination and Remuneration Committee of the company comprises of Mr. Rakesh Kapoor, Independent Director as the Chairman and Mr. Anil Sharma, Independent Director, Mr. Madan Lal, Independent Director and Mr. Gursharan Singh, Chairman & Managing Director as other members.

During the year under review Nomination and Remuneration Committee was reconstituted and as on date it comprises of Mr. Rakesh Kapoor, Independent Director as the Chairman and Mr. Anil Sharma, Independent Director, Mr. Shashank Ramesh Anikhindi, Independent Director and Mr. Gursharan Singh, Chairman & Managing Director as other members. Details in respect of the Nomination and Remuneration Committee are provided in Corporate Governance Report, forming part of the Directors'' Report.

Corporate Social Committee

The previous Corporate Social Responsibility Committee of the company comprises of Mr. Anil Sharma, Independent Director as the Chairman and Mrs. Narinder Paul Kaur, Non-executive Non-Independent Director and Mr. Dev Raj Arya, Whole - time Director & CFO as other members.

During the year under review Corporate Social Responsibility Committee was reconstituted and as on date it comprises of Mr. Raj Kumar Kapoor, Independent Director as the Chairman and Mrs. Narinder Paul Kaur, Nonexecutive Director and Mr. Dev Raj Arya, Whole - time Director & CFO as other members. Details in respect of the Corporate Social Committee are provided in Corporate Governance Report, forming part of the Directors’ Report.

Financial Affairs Committee

The previous Financial Affairs Committee of the company comprises of Mr. Raj Kumar Kapoor, Independent Director as the Chairman and Mr. Gursharan Singh, Chairman & Managing Director and Mr. Dev Raj Arya, Director & CFO as members.

During the year under review Financial Affairs Committee was reconstituted and as on date it comprises of Mr. Rakesh Kapoor, Independent Director as the Chairman and Mr. Gursharan Singh, Chairman & Managing Director and Mr. Dev Raj Arya, Director & CFO as members. Details in respect of the Financial Affairs Committee are provided in Corporate Governance Report, forming part of the Directors'' Report.

Number of Meetings of the Board

During the year under review, 5 (five) meetings of the Board of Directors were held, details of which are provided in Corporate Governance Report, forming part of the Directors'' Report.

Particulars of Loans, Guarantees or Investments

There is no investment made by the company and it has not provided any loan under section 186 of the Companies Act, 2013.

During the year under review, company has given guarantee/securities under section 186 or other applicable provisions of the Companies Act, 2013, of following amounts for the suppliers of the company to TATA Capital Financial Services Limited and these suppliers are associated with the company for last so many years and they have undertaken to establish additional Job working facility fully dedicated to RACL Geartech Limited:

- For Global Engineering Works Limited for an amount of Rs. 114,00,000/- (Rupees One Crore Fourteen Lakhs).

- For Hariom Engineering Private Limited for an amount of Rs. 29,00,000/- (Rupees Twenty Nine Lakhs).

- Diamento Precision Parts Private Limited for an amount of Rs. 40,00,000/- (Rupees Forty Seven Lakhs).

PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the Independent Directors and various committee of directors on parameters such as skills, knowledge, participation in meetings and contribution in field of Management / Finance / Operation / Strategy etc.

Independent Directors in terms of Companies Act, 2013 and regulation 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, carried out performance evaluation of non-independent directors, Chairman of the Board and Board as a whole with respect to skills, knowledge, participation in meetings and Strong outlook towards compliance with Regulations / financial reporting standards etc.

Pursuant to the provisions of the Companies Act, 2013, the nomination and remuneration committee has carried out the performance evaluation of every Director''s (including Executive Directors, Non-Executive Directors and Independent Directors etc.) on parameters such as skills, knowledge, participation in meetings and contribution in field of Management / Finance / Operation / Strategy etc.

The Board of Directors expressed their satisfaction with the evaluation process.

Whistle Blower Policy/ Vigil Mechanism

An “Alert Procedure” has already been functioning to ensure the establishment of vigil mechanism, to provide an avenue to all stakeholders (including employees and directors) to report concerns about unethical behaviour, actual or suspected fraud or violation of the RACL''s Code of Conduct for Directors and Senior Management Personnel. The said policy is also posted on the website of the Company, which may be accessed at the web-link http://raclgeartech.com/pdfs/Vigil_Mechanism_Whistle_Blower_Policy_july2016.pdf

NOMINATION AND REMUNERATION POLICY

In terms of the section 178 of the Companies Act, 2013 and Part D of Schedule II of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 your Company has a Nomination and Remuneration Policy. The aforesaid policy of the Company on director''s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors and other matters is annexed as “Annexure - A”. The salient points of said policy is stated in the Corporate Governance report forming part of the Directors'' Report.

Particulars of Employees and Related Disclosures

Details as required under section 197(12) of the Companies Act, 2013, read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2016 is annexed as “Annexure - B”.

A statement showing the names of employees drawing remuneration in excess of the limits as set out in section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Qualifications of Directors) Rules, 2014 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2016 is annexed as “Annexure - C”.

Extract of Annual Return

The extract of the Annual Return is detailed in form MGT.9, annexed as “Annexure - D”.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars, as prescribed under sub-section 3(m) of section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are provided in “Annexure - E”, which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY POLICY

The Board of Directors of your company has laid down and implemented a Policy on Corporate Social Responsibility, which may be accessed on the Company''s website at the link http://raclgeartech.com/pdfs/ Corporate_Social_Responsibility_Policy_july2016.pdf

As required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 or other applicable provisions of the Companies Act, 2013, details of CSR Committee and initiatives/activities taken by the company during the year are provided in the Annual Report on CSR as annexed “Annexure - F”, and forms integral part of this Report.

AUDITORS AND AUDITORS’ REPORT

Statutory Auditors

At the 34th Annual General Meeting of the Company held on 28th September, 2017, pursuant to the provisions of the Companies Act, 2013 and rules made there under, Gianender & Associates, Chartered Accountants [Firm Registration No. 004661N] was appointed as Statutory Auditors of the Company, to hold office for a period of 3 years, from the conclusion of this 34th Annual General Meeting (AGM) until the conclusion of the 37th AGM to be held in the year 2020, subject to ratification of their appointment by the members of the company at every AGM, at such remuneration and out of pocket expenses, as may be decided by the Board of Directors of the Company.

The Statutory Auditors'' Report of Gianender & Associates, Chartered Accountants on the Financial Statements of the company for the Financial Year 2017-18 is a part of the Annual Report. The Report does not contain any qualification, reservation, adverse remark or disclaimer. The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

Secretarial Auditors

As per section 204 and other applicable provisions of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company appointed K. K. Malhotra & Company, Company Secretaries, as Secretarial Auditor of the Company for the financial year 2017-18.

The Secretarial Audit Report for the financial year 2017-18 is annexed as “Annexure - G” and the Report does not contain any qualification, reservation, adverse remark or disclaimer.

INTERNAL AUDITOR

Pursuant to provisions of Section 138 of the Companies Act, 2013, the Board of Directors of your company appointed Protiviti India Member Private Limited [CIN: U93000HR2009PTC057389] as Internal Auditors of the Company, for a period of 2 (Two) financial years i.e. 2017-18 & 2018-19.

The Internal Auditors of the company provided their reports to the Audit Committee and Board of Directors on quarterly basis.

Cost Auditors

Pursuant to Companies (Cost Records and Audit) Amendment Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on 31st December, 2014, the Company was not mandatorily required to get its Cost Records for the financial year 2017 - 18 audited in terms of provisions of Section 148 of the Companies Act, 2013 and maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, was also not required to be maintained by the Company.

RELATED PARTY TRANSACTIONS

In terms of Regulation 23 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Board of Directors of your Company has approved Related Party Transactions Policy on dealing with Related Party Transactions. The policy may be accessed at the web-link http://raclgeartech.com/pdfs/Related_Party_Transaction_Policy_july2016.pdf

All related party transactions as per the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year were on arm''s length basis and were in the ordinary course of business. During the year, there were no material related party transactions made by the Company which could be considered material in accordance with Related Party Transactions Policy of the Company.

Suitable disclosures as required by the accounting standards has been made in the notes to accounts of Financial Statements for financial year 2017-18. Particulars of contracts or arrangements with related party referred to in section 188 or other applicable provisions of the Companies Act, 2013 is annexed as “Annexure - H”.

RISK MANAGEMENT

The Board of Directors of your Company has laid down a Risk Management Policy for the Company, which provides a risk and controls matrix with identification of risks inherent to the business, corporate governance, functions and sources of these risks, their possible consequences and control measures to help manage them. Every unit and function is required to deploy the control measures and ensure timely reporting.

In the opinion of the Board, none of the mentioned risks threaten the existence of the Company.

INTERNAL FINANCIAL CONTROL

The Board of Directors of your Company is satisfied with the Internal Financial Control process w.r.t. financial statement or others. Internal control environment of the Company is reliable with well documented framework to mitigate risks. A detailed analysis is provided in the Management Discussion and Analysis Report.

CORPORATE GOVERNANCE

The Company is committed to maintain and adhere to the highest standards of Corporate Governance practices.

Pursuant to regulation 34 read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections. A certificate from Mr. K. K. Malhotra, Practicing Company Secretary (Proprietor, K. K. Malhotra & Company, Company Secretaries), regarding compliance of conditions of Corporate Governance as stipulated in regulation 34 read with Schedule V or other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has also been included in the Annual Report.

ENVIRONMENT, HEALTH AND SAFETY

The absolute respect of Environment, Health and Safety (EHS) is on the top priority of RACL Geartech Limited.

RACL Geartech Limited gives importance to safety, health and well-being of its employees and all the people working for the Company. Your Company is working hard to reduce the number of accidents to Zero. The Company encourages and ensures not only its employees but also its subcontractors working on Company''s plants as well as its customers for complying with occupational health and safety measures.

PERSONNEL

Personnel relations with all employees remained cordial and harmonious throughout the year. Your Directors wish to place on record their sincere appreciations for the continued, sincere and devoted services rendered by all the employees of the Company.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year i.e. 31st March, 2018 and the date of this report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti-sexual harassment policy (i.e. Prevention of Sexual Harassment at Workplace) and Internal Complaints Committee (ICC)/ Internal Committee in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Internal Complaints Committee (ICC)/ Internal Committee has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, contractual, temporary and trainees) are covered under the aforesaid policy. The company has not received any complaint about sexual harassment during the year 2017-18.

GENERAL

During the year under review your Directors state that the disclosure or reporting is required in respect of the following items:

1. Company has not accepted any deposits during the year covered under Chapter V of the Companies Act, 2013.

2. There is no change in the nature of business of the Company.

3. Company has not issue equity shares with differential rights as to dividend, voting or otherwise.

4. Company has not issue of shares (including sweat equity shares, ESOS etc.) to employees of the Company or to others under any scheme.

5. Company has no subsidiaries, joint ventures or associate companies which have become or ceased during the year.

6. No significant or material orders were passed by the Regulators or Courts or Tribunals or others which impact the going concern status and Company''s operations in future.

7. During the financial year, company has borrowed an additional unsecured loan of Rs. 1 crore from its director i.e. from Mr. Gursharan Singh, Chairman & Managing Director of the Company as an exempted deposits and the aggregated amount borrowed by the company from its directors as on 31.03.2018 is Rs. 1.50 crore, i.e. Rs. 1.42 crore from Mr. Gursharan Singh, Chairman & Managing Director and Rs. 8 lakhs from Mrs. Narinder Paul Kaur, Non-executive Non-independent director of the company.

8. Unclaimed Shares: As on 31st March, 2018, the Company does not have any unclaimed shares.

9. The annual listing fee for the year under review has been paid to stock exchange i.e. BSE Limited, Mumbai, where your company''s shares are listed. The Financial Results of the company can be accessed at the company''s website http://raclgeartech.com/financials.html

10. During the year there was no fraud in the company which was reportable to the Central Government and there was no fraud reported by the Auditors to the company under sub-section (12) of section 143 or other applicable provisions of the Companies Act, 2013.

ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company''s executives, staff and workers.

For and on behalf of the Board

For RACL Geartech Limited

Sd/-

Place: Noida Gursharan Singh

Date: 11th August, 2018 Chairman and Managing Director

DIN:00057602

Regd. Office: 15th Floor, Eros Corporate Tower,

Nehru Place, New Delhi-110019, INDIA

Ph.: 91-11-66155129

e-Mail - investor@raclgeartech.com

Director’s Report