The Directors have great pleasure in presenting the 29th Annual Report
of your Company, together with the audited statement of accounts for
the financial year ended 31st March, 2015.
The highlights of the financial performance of the Company are as
(Rs. in lacs)
Particulars 2014-2015 2013-14
Sales (net of excise duty) 43,192.84 36,102.05
Other Income 266.46 518.48
Total Income 43,459.30 36,620.53
Profit before Depreciation,
Interest & Taxes (PBDIT) 5,509.05 5,102.41
Depreciation 2,510.86 2,306.09
Profit before Interest
& Taxes (PBIT) 2,998.19 2,796.33
Financial Charges 368.63 590.37
Profit before Taxes (PBT) 2,629.56 2,205.96
Provision for Taxes 787.85 613.43
Profit after tax ( PAT) 1,841.71 1,592.53
Balance of profit brought forward 9,863.70 9,030.11
for appropriation 11,705.42 10,622.64
Dividend 469.20 469.20
Tax on dividend 93.81 79.74
Transfer to General Reserve 100.00 160.00
Balance Surplus in P & L Account 10,309.05 9,863.70
Paid-up Equity Share Capital 1,876.80 1,876.80
Earnings Per Share (EPS) 9.81 8.49
The FY 2014-15 has witnessed key policy reforms, aimed at aiding growth
revival and surmounting the structural constraints in the Indian
Economy. The Indian Economy grew at 7.3 % in FY 2014-15. The Economy
posted a 7.5 % growth in the January to March quarter of the fiscal,
outpacing China''s GDP of 7 % in that quarter. Growth rebounded in the
three most crucial components of industrial sector i.e. mining,
manufacturing and electricity. The latest policy initiative of the
Indian Government Make in India is a welcome move for the growth of
Automobile Sector showed growth both in Domestic as well as Export
Sales. FY 2014-15 numbers reveal all vehicle categories other than
Commercial Vehicles are in positive territory. Riding on the back of a
gradual uplift in market sentiments, excise duty cuts continuing
through to December 2014 and the opening up of the mining and
infrastructure sectors, the Indian automotive industry posted an
overall growth of 7.22 % in FY 2014-15, as compared to 3.53 % in the
previous fiscal year.
According to International Monetary Fund, the global economy is
expected to grow at 3.5% in 2015 and 3.8% in 2016. However, Global
recovery will continue to be moderate and uneven. While developed
economies are expected to strengthen, aided by lower oil prices and low
interest rates, most emerging economies are expected to slow down
moderately, due to country specific reasons-with India being an
exception. The Indian economy is expected to grow by 7.5% in 2015-16.
Growth will benefit from recent policy reforms, a consequent pick-up in
investment, and lower oil prices. Demand is expected to grow due to
various underlying factors including Make in India, Digital India,
raising per capita income, growing urbanization etc.
Growth of your Company has been satisfactory and upto the expectation.
During the FY 2014-15, total revenue from operations (net of excise)
stood at Rs.431.92 crores as compared to Rs 361.02 crores in FY
2013-14, registering an impressive increase of 19.63%. The profit
before tax stood at Rs 26.30 crores as compared to Rs 22.07 crores in
previous year. Similarly, the Net profit of the Company also grew by
15.65% i.e. from Rs 15.94 crores to Rs 18.41 crores.
Exports of our country were not much encouraging due to massive
fluctuation of the exchange rate, recession in the world economy & the
pressure of rising raw material cost. Still, your company''s export
sales were increased by 12% with export revenue of Rs 94.12 crores in
the FY 2014-15 as compared to previous year of Rs 84.04 crores,
registering a growth of 12%. This was made possible, because of your
Company''s continuing efforts to tap new customers and markets.
Your Company expects to benefit over the next period from its good
business linkage with OEMs, due to its healthy operating efficiencies.
In view of this, the long term prospects of your Company are bright.
The paid up Equity Share Capital as on 31st March 2015 was Rs.
18,76,80,000. During the year under review, the Company has not issued
shares or granted stock options or sweat equity.
During the year under review, an interim dividend of 10 % i.e. Rs. 1.0
per equity share amounting to Rs. 187.68 lacs was declared and paid,
the same is being confirmed at the forthcoming AGM. The Directors have
now recommended to the shareholders a final dividend of 15% i.e. Rs.
1.50 per equity share, resulting in a payout of Rs. 281.52 lacs. The
total dividend payout stands at Rs 469.20 Lacs (Previous year Rs 469.20
Lacs) & tax on dividend comes to Rs 93.81 Lacs (Previous year 79.74
Lacs). Additionally, an amount of Rs. 1.00 Crore is transferred to
If the dividend on the shares as, recommended by the Board of
Directors, is approved by the shareholders in their 29th Annual General
Meeting, payment of such dividend will be made to those members whose
names appear in the Register of Members as per Book closure dates
mentioned in the shareholder''s information.
Directors Responsibility Statement
In terms of section 134(3) (c) & 134 (5) of the Companies Act, 2013,
and to the best of their knowledge and belief, and according to the
information and explanations provided to them, your Directors hereby
make the following statements:
(a) that in preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanations
relating to material departures, if any,
(b) that such accounting policies have been selected and applied
consistently and judgments and estimates made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as on March 31, 2015 and of the profit of the Company for
the year ended on that date,
(c) that proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for prevention and
detection of fraud and other irregularities,
(d) that the annual financial statements have been prepared ongoing
(e) that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively, and
(f) that the systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
Details of Subsidiary/Joint Ventures/Associate Companies
The Company has neither any Subsidiary, Joint Venture nor an Associate
Company within the meaning of Companies Act, 2013. However, the Company
is evaluating various options to tap the business opportunities in
North American Free Trade Agreement (NAFTA) region by having an entity.
Directors and KMP''s appointment/ reappointment
a. Retire by Rotation
Independent Directors are not liable to retire by rotation. Mr. Pranav
Kapuria, Managing Director of the Company, retire by rotation at the
ensuing Annual General Meeting and being eligible offer himself for
b. Additional Director
Ms. Malini Sud was appointed as an Independent and
Additional Director of the Company who holds the office till the date
of ensuing Annual General Meeting. Her appointment is being confirmed
at the ensuing Annual General Meeting subject to your approval.
c. Re-appointment of Managerial Personal
Mr. Pranav Kapuria and Mr. Anuj Kapuria have completed their tenure as
the Managing Director and the Whole Time Director respectively. The
Board of Directors upon the recommendation of Nomination and
Remuneration Committee has re-appointed them for another period of five
(5) years, subject to your approval.
d. Key Managerial Personnel''s
All Whole Time Directors such as Mr. Deep Kapuria, Executive Chairman,
Mr. Pranav Kapuria, Managing Director and Mr. Anuj Kapuria, Executive
Director are regarded as KMPs, in addition to Chief Financial Officer
(C.F.O.) and Company Secretary (C.S.). Mr. S.K. Khatri is the
continuing C.S. of the Company. Mr. Vijay Mathur, Sr. General Manager
(Finance) was regularized as C.F.O. He resigned from the post of
C.F.O. w.e.f. 30th November, 2014, upon the appointment of Mr. Alok
Agarwal as the C.F.O. w.e.f. 1st December, 2014. However, Mr. Vijay
Mathur will Continue to work as Sr. General Manager (Finance).
Resolutions for the said appointment/reappointment of Directors
pursuant to Section 149 & 152 of the Companies Act, 2013 & Rules made
there under & Clause 49 of the Listing Agreement are being included in
the notice for the ensuing Annual General Meeting for the approval of
There is no other change in the Directors during the FY 2014-15.
Meetings of the Board
Necessary Board Meetings transacted to conduct the operations of the
Company. The details are given in the Corporate Governance Report,
which forms part of this Annual Report. It is confirmed that the gap
between two consecutive meetings was not more than one hundred and
twenty days as provided in section 173 of the Act.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Committees.
Declaration of Independent Director(s)
The Independent Directors have submitted their declarations of
independence, as required pursuant to provisions of section 149(7) of
the Act, stating that they meet the criteria of independence as
provided in sub-section (6).
a) Statutory Auditors
M/s Gupta Vigg & Company, Chartered Accountants, (Firm Registration No.
001393N) Statutory Auditors of the Company hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment. Pursuant to provisions of section 139 of the Act and the
Rules made thereunder, the Board upon the recommendation of Audit
Committee proposes to reappoint M/s Gupta Vigg & Company, Chartered
Accountants as Statutory Auditors of the Company till the conclusion of
the next Annual General Meeting. They have furnished a certificate
confirming the eligibility under section 141 of the Act and Rules made
The Auditors'' Report does not contain any qualification, reservation or
adverse remark and do not call for any further explanation/
clarification by the Board of Directors as provided under Section 134
of the Act. With respect to the point no. (VII) (b) in Annexure to
Auditors'' Report with regard to non deposit of disputed taxes. The
Board wishes to inform that the matters are related to non- admission
of service tax input by the Excise Department, others such as Entry tax
& regular income tax matter for which the Company has preferred appeal
to Appellate Authorities. The rest of report by the Statutory Auditors
is self explanatory. Please refer to the Notes to Accounts, wherever
b) Cost Auditors
As per Section 148 and all other applicable provisions of the Companies
Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014,
the Board of Directors has on the recommendation of the Audit
Committee, approved the re-appointment of M/s. Kabra & Associates, Cost
Accountants as the Cost Auditors of the Company for the year ending 31
March, 2016. The remuneration proposed to be paid to them requires
ratification of the shareholders of the Company. In view of this, your
ratification for payment of remuneration to Cost Auditors is being
sought at the ensuing AGM. Accordingly, a resolution seeking
ratification by members for the remuneration payable to M/s Kabra &
Associates is included at Item No. 10 of the Notice convening 29th
Annual General Meeting.
c) Secretarial Auditor
Section 204 of the Companies Act, 2013 inter-alia requires every listed
company to annex with its Board''s report, a Secretarial Audit Report
provided by a Company Secretary in Practice, in the prescribed form.
The Board of Directors appointed M/s Grover Ahuja & Associates,
Practicing Company Secretaries as Secretarial Auditor to conduct
Secretarial Audit of the Company and their report is annexed to this
Board report (Annexure I). The Secretarial Audit Report does not
contain any qualification, reservation or adverse remark and do not
call for any further explanation/ clarification by the Board of
Directors under the Act.
Internal Control Systems and its Adequacy
The Company has internal control systems commensurate with the size,
scale and complexity of its business operations. The scope and
functions of Internal Auditors are defined and reviewed by the Audit
committee. Internal Auditors present their quarterly report to the
Audit Committee, highlighting various observations, system and
procedure related lapses and corrective actions being taken to address
Extract of Annual Return
As required pursuant to section 92(3) & 134 (3) (a) of the Companies
Act, 2013 and rule 12(1) of the Companies (Management and
Administration) Rules, 2014, an extract of Annual Return in MGT 9 as a
part of this Annual Report as Annexure II
The Conservation of Energy, Technology Absorption, Foreign Exchange
earnings and outgo.
Details of Energy Conservation, Technology Absorption, Research &
Development activities undertaken by the Company and foreign exchange
earnings and outgo of the Company and other information in accordance
with the provisions of Section 134(3) (m) of the Companies Act, 2013,
read with the Companies (Disclosure of Particulars in the Report of
Board of Directors), Rules, 1988, are given in Annexure III, to this
Report on Corporate Governance
The Report on Corporate Governance is given separately and forming part
of this report and the certificate from the Statutory Auditors
confirming compliance with the provisions of Corporate Governance as
stipulated in Clause 49 of the listing agreement is also attached to
Management discussion & analysis report
The Management Discussion & Analysis Report is given separately and
forming part of this report.
Corporate Social Responsibility
Pursuant to the provisions of Section 135 and other applicable
provisions of the Companies Act, 2013 and Rules made there under the
brief of the Corporate Social Responsibility is provided in Annexure IV
Particulars of contracts or arrangements with related parties
All transactions entered by the Company with the parties, which may be
regarded with related parties, were in the ordinary course of business
and on the arm''s length basis. Necessary resolution for your approval
is being placed at the ensuing Annual General Meeting, for your
approval. As provided under section 134(3)(h) of the Act and Rules made
there under disclosure of particulars of material transactions with
related parties entered into by the Company with related parties in the
prescribed format annexed to this report as Annexure V Disclosures on
related party transactions are also set out in Note No. 31 to the
financial statements. The Policy on materiality of related party
transactions and dealing with related party transactions as approved by
the Board may be accessed on the Company''s website at the link: http://
Electronic Clearing Services (ECS)
As per the circular issued by Securities & Exchange Board of India
(SEBI), companies should mandatorily use the facility of Electronic
Clearing Services (ECS), for distribution of dividends to its members.
This facility provides to the members an opportunity to receive
dividend amount directly in their bank accounts. For availing this
facility, members holding shares in physical form may send their duly
filled ECS mandate form to the Company''s Registrar and Share Transfer
Agent (RTA). Members are holding shares in dematerialized form may
kindly note that their bank account details as furnished to their
depositories will be taken for the purpose of ECS and the Company.
During the financial year 2014-15, no Resolution was required to be
passed through postal ballot. Similarly, at the forthcoming Annual
General Meeting, there is no item for approval through Postal Ballot is
Code of Conduct of Insider Trading
The Company has adopted a Code of Conduct to regulate, monitor and
report trading by insiders This Code of Conduct is intended to prevent
misuse of Unpublished Price Sensitive Information (UPSI) by
In accordance with such Code of Conduct, the Company closes its trading
window for Designated Persons from time to time. The trading window is
also closed during and after occurrence of price sensitive events as
per the said Code of Conduct.
Code of Conduct
Your Company has adopted a Code of Conduct for its Board Members and
Senior Management personnel. The code of conduct has also been posted
on the official website of the Company.
The Declaration by the Managing Director of the Company regarding
compliance with the Code of Conduct for Board Members and Senior
Management is annexed with the Corporate Governance Report.
Reconciliation of Share Capital Audit
M/s Grover Ahuja & Associates, practicing Company Secretary carried out
the Secretarial Audit on quarterly basis to reconcile the total issued
and listed share capital with National Securities Depository Limited
(NSDL) and Central Depository Services (India) Limited (CDSL). The
Board of Directors confirms that the total issued and paid up capital
as on 31st March, 2015 is reconciled with the total number of shares in
physical form and the total number of dematerialized shares held with
NSDL and CDSL. The Reconciliation of Share Capital Audit Certificate is
being submitted every quarter to the Stock Exchanges and is also placed
before the Board Meeting.
Listing of Shares
With a view to provide easy liquidity in the shares of the Company, the
equity shares of your Company are presently listed on the premier stock
exchanges viz., the National Stock Exchange of India Limited (NSE) and
the Bombay Stock Exchange India Limited (BSE) Mumbai. Pursuant to
Clause 38 of the Listing Agreement, the annual listing fees for the
year 2015-2016 has been paid within the prescribed time period.
During the year under review your Company neither invited nor accepted
any deposit within the meaning of Section 73 of the Companies Act,
2013, and rules made there under.
Dematerialization of the equity shares
99.28 % of the total equity shares of the Company are held in
dematerialized form with the participants of National Securities
Depository Limited (NSDL) and Central Depository Securities (India)
Limited as on the date of this report.
Keeping in view the benefits of dematerialization, your directors urge
the shareholders holding shares in physical form to get their shares
Change of Name
The Board of Directors propose to change the name of the Company by
prefixing The before the existing name of the Company, making it The
Hi-Tech Gears Limited. Registrar of Companies, Jaipur have conveyed
its name availability approval by vide its letter dated 7th August,
2015. A Special Resolution in this respect is being moved for your
approval at the ensuing 29th Annual General Meeting. After your
approval necessary formalities will be completed, for Change of name.
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Remuneration Policy is
stated in the Corporate Governance Report.
Company has duly constituted Audit Committee, which meets on regular
intervals for the business required to be transacted thereat. The
recommendations made by such committee are accepted by the Board.
As per Companies Act, 2013, the Company has reconstituted and revised
the roles, responsibilities & powers of the Audit Committee. A synopsis
is described in the Corporate Governance Report.
Vigil Mechanism Policy
The Company has a vigil mechanism policy to deal with any instance of
fraud and mismanagement. The employees of the Company are free to
report violations of any laws, rules, regulations and concerns about
unethical conduct to the Audit Committee under this policy. The policy
ensures that strict confidentiality is maintained whilst dealing with
concerns and also that no discrimination with any person for a
genuinely raised concern. The policy may be accessed on the Company''s
website at the link: http://www.hitechgears.com/
Obligation of Company under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 Company has adopted a
policy for prevention of Sexual Harassment of Women at workplace and
has set up Committee for implementation of said policy. During the year
Company has not received any complaint of harassment.
Particulars of Loans given, Investments made, Guarantees given and
The company has not given any loans or guarantees covered under the
provisions of section 186 of the Companies Act, 2013.
The details of the investments made by company are given in the notes
to the financial statements.
Material changes and Commitments
There are no material changes and commitments affecting the financial
position of the Company which have occurred between the end of the
Financial Year to which the financial statements relate and the date of
Details of significant and material orders passed by the regulators or
courts or tribunals impacting the going concern status and company''s
operations in future
There is no significant and/or material order passed by the regulators
or courts or tribunals impacting the going concern status of the
Particulars of Employees
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
given in Annexure VI
Risk Assessment and Mitigation Process
Company has a risk assessment policy which is periodically reviewed by
the Audit Committee and Board of Directors in their meeting and it
takes the appropriate measures.
Business Responsibility Reporting
As per Clause 55 of the Listing Agreement with the Stock Exchanges
Business Responsibility Reporting is not applicable.
The Board of Directors place on record their appreciation of the
untiring efforts of the employees of the organization at every level.
The efforts to create a family like atmosphere continued throughout the
year. Like the many years gone-by, this year also witnessed increased
cohesion among all levels of employees, which is evident from the
performance of the Company. Training and Development of employees
provided further impetus and have contributed towards the all round
improved performance of your company. The Company encourages by
rewarding & recognizing employees for their long term commitment as &
when the opportunity arise.
The Board of Directors place on record their appreciation for the
co-operation and valuable support extended by the customers, the
suppliers and all other persons directly or indirectly associated with
the Company. Your Company regards them as partners and shares with them
a common vision of growth in the future.
Your directors place on record their sincere appreciation for the
assistance, cooperation and valuable support provided to the Company by
Customers, Vendors, Banks & Financial Institutions and hope to continue
to receive the same in future. Your Directors also record their
appreciation for the commitment and dedication of the employees of the
Company at all levels.
The Board of Directors also place on record their gratitude to the
shareholders of the Company for their continued support to and
confidence in the management of the Company.
By Order of the Board
For Hi - Tech Gears Limited
Place:New Delhi Deep Kapuria