RACL Geartech Ltd Directors Report.

TO

THE MEMBERS,

Your Directors take pleasure in presenting the 36th Annual Report together with the Audited financial statements of the Company for the financial year ended 31st March, 2019.

FINANCIAL RESULTS:

(Rs. in Lakh)

Particulars 2018-19 2017-18
Sales and Other Income 19096 14011
Operational Expenses 15925 12145
Depreciation 799 496
Financial Charges 638 571
Profit before Tax 1734 864
Provision for Taxes/ Def. Tax Liab./ including earlier years 757 77
Net Profit 943 722
Reserves from last year 4474 3752
Reserves brought forward to Balance Sheet 5618 4474

TRANSFER TO RESERVES

An amount of Rs. 943 lakh has been transferred to General Reserve for the Financial Year ended 31st March 2019.

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 financial year 2018-19.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of the Companys 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, 2019 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, Mr. Dev Raj Arya, Whole time Director (DIN: 00057582), of the Company retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers himself 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 36th Annual General Meeting of the Company. The Board recommends that Mr. Dev Raj Arya, Whole time Director (DIN: 00057582), may be re-appointed at the ensuing AGM.

Necessary resolutions in respect of re-appointment of Mr. Dev Raj Arya, Whole time Director (DIN: 00057582), have been included in the notice convening the ensuing AGM. Your directors commend his re-appointment.

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 Inter-se

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 Familiarisation Programme for Independent Directors for the financial year 2018-19

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 2018-19, which were attended by the Independent Directors. Total number of hours spent by Independent Director in these programs was 4 (four) hours.

DISCLOSURES

ADOPTION OF INDIAN ACCOUNTING STANDARDS ("IND AS")

The Company has adopted Indian Accounting Standards ("Ind AS") in the last financial year ended on 31st March, 2018 and accordingly these financial statements for the year ended 31st March, 2019 have also been prepared in accordance with the Ind AS as required under section 133 of the Companies Act, 2013 read with rules made there under.

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 Audit committee of the company 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 Stakeholder Relationship Committee of the company 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 Nomination and Remuneration Committee of the company 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 Corporate Social Responsibility Committee of the company comprises of Mr. Raj Kumar Kapoor, 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. Details in respect of the Corporate Social Committee are provided in Corporate Governance Report, forming part of the Directors Report.

Financial Affairs Committee

The Financial Affairs Committee of the company 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.

The Company Secretary & compliance officer is appointed secretary for all the aforesaid committees.

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.

Names of the Companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year

The company has no holding, joint ventures or associate companies.

During the year under review RACL Geartech Limited has incorporated its wholly owned subsidiary company i.e. RACL Geartech GmbH, at Austria. However, the company still does not have a trade license approval for any business activity, consequently its not active or not carrying any business activity. Since, during the year under review the subsidiary company is not active, hence, consolidation of financials/ accounts for the financial year ended on 31.03.2019 not made, Therefore the requirement for separate section containing a report on performance and financial position of subsidiary company is not applicable.

Particulars of Loans, Guarantees or Investments

During the year under review, Board of Directors of the company at its meeting held on 21.05.2018 approved to provide a Loan of Rs. 1,00,00,000/- (Rupees One Crore) under section 186 of the Companies Act, 2013 to Lopan Metal Treatment Private Limited to setup a new plant at Gajraula for doing Job Work Heat treatment for RACL which would save transportation costs and reduce the lead time for the RACL.

Furthermore in the last financial year i.e. 2017-18 company has already 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, which were continued in the financial year under review i.e. 2018-19 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 Lakh).

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

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

As per the Austrian Law for incorporation of a private limited company in Austria the minimum Authorized share capital requirement is 35,000 Euro and minimum paid-up share capital requirement is 17,500 Euro, respectively.

During the year under review, Board of Directors of the company at its meeting held on 12.11.2018 approved to make an investment of 17,500 Euro (approx. Rs. 13.48 Lakh) as paid-up share capital for incorporation of wholly owned subsidiary i.e. RACL Geartech GmbH, in Austria, under section 186 or other applicable provisions of the Companies Act, 2013.

PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and regulation 17 and other applicable regulation(s) 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 on parameters such as skills, knowledge, participation in meetings and contribution in field of Management/ Finance / Operation / Strategy etc. and various committee of directors including Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Financial Affairs Committee on parameters such as Functions and Duties, Management Relations and Committee Meetings and Procedures etc.

Independent Directors in terms of Companies Act, 2013 and regulation 25 and other applicable regulation(s) 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 Directors (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 RACLs 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 weblink Vigil Mechanism / Whistle Blower Policy

NOMINATION AND REMUNERATION POLICY

In terms of the section 178 and other applicable provision(s) of the Companies Act, 2013 and Part D of Schedule II and other applicable regulation(s) 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 directors 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

Pursuant to Section 134, Section 92 and other applicable provision(s) of the Companies Act, 2013 read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on 31st March, 2019 in Form No. MGT-9 is attached herewith as "Annexure - D" to this Report and also made available at the website of the company at http://www.raclgeartech.com/annual report.html

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 Companys website at the link Corporate Social Responsibility Policy (‘CSR Policy)

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 (Three) 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 2018-19 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 2018-19.

The Secretarial Audit Report for the financial year 2018-19 is annexed as "Annexure - G" and the Report does not contain any qualification, reservation, adverse remark or disclaimer.

Internal Auditors

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. Furthermore, during the year under review Board of Directors of your company at its meeting held on 12th February, 2019 re-appointed Protiviti India Member Private Limited as Internal Auditors of the Company for a Period of 3 (Three) financial years commencing from 01.04.2019 to 31.03.2022.

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 2018 - 19 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 Related Party Transaction Policy

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 arms 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 applicable accounting standards has been made in the notes to accounts of Financial Statements for financial year 2018-19. 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 Companys plants as well as its suppliers 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 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, 2019 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 Committee in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

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.

Pursuant to regulation 34 read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, required disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are provided in the Corporate Governance Report.

GENERAL

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

1. During the year under review Company has not accepted any deposits 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 issued equity shares with differential rights as to dividend, voting or otherwise.

4. Company has not issued any shares with differential rights, sweat equity shares, ESOS etc. to employees of the Company or to others under any scheme.

5. Company has no 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 Companys operations in future.

7. Aggregate amount borrowed (as an exempted deposits) by the company from its directors as on 31.03.2019 is Rs. 30 Lakh, i.e. Rs. 22 Lakh from Mr. Gursharan Singh, Chairman & Managing Director and Rs. 8 lakh from Mrs. Narinder Paul Kaur, Non-executive Non-independent director of the company.

8. Unclaimed Shares: As on 31st March, 2019 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 companys shares are listed.

The Financial Results of the company can be accessed at the companys website Financial Results

10. During the year under review 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 Companys executives, staff and workers.

For and on behalf of the Board
For RACL Geartech Limited
Sd/-
Place: Noida Gursharan Singh
Date: 09th August, 2019 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