RACL Geartech Ltd Directors Report.

Dear Shareholders,

Your Directors are pleased to present the 37th Report of Board of Director ("Board") on the business and operations of RACL Geartech Limited ("Company") together with its Audited Financial Statements for the financial year ended 31st March, 2020.

FINANCIAL PERFORMANCE

The financial performance of the Company during the year under review is summarized below:

(Rs in Lakh)

Particulars For the year ended 31st March, 2020 For the year ended 31st March, 2019
Revenue from Operations 21232.92 18995.12
Total Expenses 19093.70 17362.30
Finance Costs 844.22 637.59
Depreciation & Amortisation 1127.73 799.59
Profit before Tax 2190.82 1734.13
Tax Expenses:
Current Tax (558.10) (509.89)
Deferred Tax 65.25 (247.00)
Total Comprehensive Income for the Period 1636.27 943.23
Earnings Per Share (Rs)
1. Basic 15.33 9.34
2. Diluted 15.33 9.34

STATE OF AFFAIRS AND OPERATIONAL HIGHLIGHTS

During the year under review, the Revenue from operations of your Company for the year ended 31st March, 2020 stood at Rs 21232.92 Lakh as compared to the revenue generation of Rs 18995.12 Lakh in the previous year ended 31st March, 2019. The Company earned a Profit of Rs 1636.27 Lakh, for the year ended 31st March, 2020 in comparison with the Profit of Rs 943.23 Lakh earned in the previous year.

TRANSFER TO RESERVES

The Company transferred Rs 1636.27 to the Reserves for the Financial Year ended 31st March, 2020.

SHARE CAPITAL

Pursuant to the Resolution passed by the Members of the Company in the Extra-Ordinary General Meeting of the Company held on 19th June, 2019, the Company issued and allotted 5,00,000 Equity Shares of Rs 10.00 each at a Premium of Rs 62.50 each to Mr. Gursharan Singh, Chairman & Managing Director of the Company on 3rd July, 2019 on Preferential basis through Private Placement, in compliance with Section 42 and 62 of the Companies Act, 2013, ("Act") the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and SEBI Listing (Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") alongwith other applicable law(s) to the extent applicable on the Company in this regard. Subsequently, the Paid-up Share Capital of the Company increased from 1,02,81,600 Equity Shares to 1,07,81,600 Equity Shares of Face Value of Rs 10.00 each.

DIVIDEND

The Board of Directors of the Company had declared and paid an Interim Dividend @ 10% i.e. Re. 1.00 per share to its Shareholders on 2nd December, 2019. Considering the growing operations of the Company and expansion requirements, the Board of Directors considered to treat the said Interim Dividend paid by the Company as the Final Dividend for the financial year 2019-20.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, 4 (four) meetings of the Board of Directors were held. For details of the meetings of the Board and Board Committees, please refer to the Corporate Governance Report, which forms part of this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In compliance with the requirements of the Act and Listing Regulations, the Company, as on date, has 9 (Nine) Directors on Board with an optimum mix of Executive, Non Executive and Independent Directors.

During the year under review, Mr. Anil Sharma whose term expired, as an Independent Director on 28th September, 2019, was appointed as the Non- Executive Non-Independent Director w.e.f. 29th September, 2019. Subsequently, Mr. Jagdish Keswani was appointed as the Additional Independent Director in compliance with the requirements of the Listing Regulations.

During the year under review, Mr. Hitesh Kumar, Company Secretary and Compliance Officer, tendered his resignation from his position and was relieved from his services w.e.f. closure of business hours of 28th December, 2019. Subsequently, Ms. Shagun Bajpai was appointed as the Company Secretary and Compliance Officer w.e.f. 6th February, 2020 by the Board.

Brig. Harinder Pal Singh Bedi (Retd.) was recently added to the Board as the Additional Non-Executive Independent Director. His appointment along with Mr. Jagdish Keswani is required to be regularized in the ensuing Annual General Meeting ("AGM") by the Shareholders, which is being put forth in the Notice of the AGM for their approval.

Further, Mr. Shashank Ramesh Anikhindi, Independent Director of the Company shall complete his first term on the Board. His re-appointment on the Board for a second term is being placed before the Shareholders for their approval.

Mr. Raj Kumar Kapoor shall complete his second term as an Independent Director and shall retire in compliance with Section 149 of the Act.

The details of the changes in the Board and Key Managerial Personnel that took place during the year under review and upto the date of this Report, are provided under Corporate Governance Report which forms part of this Report.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have given declarations confirming that they meet the criteria of independence as laid down under Section 149(6) of the Act, and Listing Regulations.

RELATION 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.

COMMITTEES OF THE BOARD OF DIRECTORS

Your Company has following Committees of Board of Directors:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee;

4. Corporate Social Responsibility Committee; and

5. Financial Affairs Committee.

The role and composition of these Committees, including the number of meetings held during the year under review and the related attendance, are provided under Corporate Governance Report which forms a part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. in the preparation of the annual accounts for the year under review, the applicable accounting standards have been followed and there are no material departures.

b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as on 31st March, 2020 and of the Profit of the Company for the year ended 31st March, 2020.

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. they have prepared the annual accounts on a going concern basis.

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

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

SUBSIDIARIES

Your Company has one subsidiary namely, RACL Geartech GmbH which was incorporated in Austria in February, 2019. The consolidated financial statements presented by the Company include the financial information of RACL Geartech GmbH and have been prepared in compliance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India ("ICAI").

The Company has no Joint Venture or Associate Company. There has been no material change in the nature of the business of its subsidiary.

Pursuant to provisions of Section 129(3) of the Act, a separate statement containing the salient features of the financial statements of the Companys subsidiary in Form AOC-1 is attached with the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate accounts in respect of RACL Geartech GmbH, are available on the website of the Company. The Company will make these documents available upon request made by any shareholder of the Company.

STATUTORY AUDITORS

Pursuant to Section 139 of the Act and the Rules made thereunder, M/s. Gianender & Associates, Chartered Accounts (ICAI Firm Regn. No. 004661N) were appointed as the Statutory Auditors of the Company for a term of 3 (three) years with effect from the conclusion of 34th (Thirty Fourth) AGM upto the conclusion of the 37th (Thirty Seventh) AGM.

The first term of the said Statutory Auditors of the Company shall end at the conclusion of the ensuing AGM and the Board, on the recommendation of the Audit Committee of the Company, in its meeting held on 31st July, 2020 has approved the re- appointment of M/s. Gianender & Associates, Chartered Accounts (ICAI Firm Regn. No. 004661N) for another term of 5 (five) years and recommended the same to the Members for their approval in the 37th AGM of the Company.

As required under Section 139 of the Act and Companies (Audit and Auditors) Rules, 2014, M/s. Gianender & Associates, Chartered Accountants have confirmed and issued a certificate that their appointment, if made as aforesaid, will be in accordance within the limits specified under the Act and they meet the criteria for appointment as specified under Section 141 of the Act and they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under Regulation 33 of the Listing Regulations.

AUDITORS REPORT

The Auditor Report of the Statutory Auditor is given as an annexure which forms part of the Annual Report.

SECRETARIAL AUDITOR

As per Section 204 and other applicable provisions of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company appointed K. K. Malhotra & Co., Company Secretaries, as Secretarial Auditor of the Company for the financial year 2019-20.

The Secretarial Audit Report for the financial year 2019-20 is annexed as Annexure-A and the Report does not contain any qualification, reservation, adverse remark or disclaimer. However, the Secretarial Audit Report refers to the matter pending with BSE Ltd. in respect of the composition of Board. The said matter arose on account of misinterpretation of law and has been pleaded with BSE. The issue is sub-judice.

INTERNAL AUDITOR

Pursuant to provisions of Section 138 of the Act, the Board of Directors at its Meeting held on 12th February, 2019 appointed Protiviti India Member Private Limited as Internal Auditors of the Company for a Period of 3 (Three) financial years commencing from 1st April, 2019 to 31st March, 2022.

The Internal Auditors of the Company provided their reports to the Audit Committee and Board of Directors periodically.

COST AUDIT AND MAINTENANCE OF COST RECORDS

Pursuant to Companies (Cost Records and Audit) Amendment Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on 31st December, 2014, the Company is not mandatorily required to get its Cost Records for the financial year 2019-20 audited in terms of provisions of Section 148 of the Act and maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Act, was also not required to be maintained by the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report, highlighting the performance and prospects of the Companys business, forms part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed towards maintaining the highest standards of Corporate Governance and adhering to the disclosure norms as set out by the Securities and Exchange Board of India and other Regulatory Authorities. Your Directors re-affirm their commitment to the Corporate Governance standards to the extent they are applicable to the Company. In compliance with Regulation 34 of Listing Regulations, a detailed Corporate Governance Report is annexed to and forms a part of this Report.

A certificate from Mr. K. K. Malhotra, Practicing Company Secretary, regarding compliance conditions of Corporate Governance as stipulated in Regulation 34 read with Schedule V or other applicable provisions of the Listing Regulations has also been included in the Annual Report.

BOARD EVALUATION

In terms of the Act and the rules made thereunder and as per the applicable provisions of the Listing Regulations, the Board of Directors, on recommendation of the Nomination and Remuneration Committee have evaluated the effectiveness of the Board. Accordingly, the performance evaluation of the Board, each Director and the Committees was carried out for the year ended 31st March, 2020. The evaluation of the Directors was based on various aspects which, inter alia, included the level of participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company along with the environment and effectiveness of their contribution.

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, 2020 and the date of this report.

However, the Company had shut its plants and offices due to the Lockdown ordered by the Central Government amidst the Covid-19 pandemic. They were subsequently re-opened after the Lockdown was lifted, under Government guidelines. The Company took all necessary measures to ensure safety of the employees and workers of the Company. All safety protocols of temperature screening, wearing of safety gears, social distancing, sanitizing and washing hands are being adhered to very stringently.

RELATED PARTY TRANSACTIONS

All the related party transactions are entered on an arms length basis and are in compliance with the applicable provisions of the Act and Listing Regulations. Pursuant to the provisions of Section 188 of the Act, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, the details in Form AOC-2 is annexed with this Report as Annexure- B. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. A statement of all related party transactions is presented before the Audit Committee on a periodic basis, specifying the nature, value and terms and conditions of the transactions. The Related Party Transactions Policy as approved by Board, on recommendation of the Audit Committee, is uploaded on the Companys website at www.raclgeartech.com.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an established system of internal controls. Comprehensive policies, guidelines and procedures are laid down for all business processes. The internal control system has been designed to ensure that financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets. The Board of Directors of your Company is satisfied with the Internal Financial Control process w.r.t. financial statement and other processes. 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 SOCIAL RESPONSIBILITY

The Company is committed to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical. The Board of Directors of the Company has constituted Corporate Social Responsibility ("CSR") Committee in compliance with Section 135 of the Act. The Company is committed to inclusive, sustainable development and contributing to building and sustaining economic, social and environmental capital and to pursue CSR projects that are replicable, scalable and sustainable with a significant multiplier impact on sustainable livelihood creation and environmental replenishment. The salient features of the CSR policy and initiatives taken by the Company on CSR activities during the year under review are provided in the Annexure- C of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on the website of the Company at www.raclgeartech.com.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO AND RESEARCH & DEVELOPMENT

In accordance with the requirements of Section 134(3) (m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, a statement showing particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are annexed hereto as Annexure- D and forms a part of this Report.

VIGIL MECHANISM

In accordance with the provisions of the Act and Listing Regulations, the Company has adopted a Whistle Blower Policy, as part of Vigil Mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the management any issue which is an actual or suspected fraud or perceived to be in violation of or in conflict with the Code of Conduct of the Company. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also available on the website of the Company at www.raclgeartech.com.

EXTRACT OF ANNUAL RETURN

In accordance with Sections 134 of the Act, an extract of the annual return in the prescribed format is annexed with the Annual Report as Annexure- E and is also available on the website of the Company viz. www.raclgeartech.com.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the Notes to the Financial Statements.

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure- F to this Report.

REMUNERATION POLICY

The Board, on the recommendation of the Nomination and Remuneration Committee, has framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The Remuneration Policy has been made available on the website of the Company i.e. www.raclgeartech.com. This Policy of the Company acts as a guideline for determining, inter alia, qualification, positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal and evaluation of the performance of the Director, Key Managerial Personnel and Senior Management.

RISK MANAGEMENT

The Company has identified potential risks and required mitigation measures. Major risks identified are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee of the Company. The Company has approved and adopted Risk Management Policy to enhance control mechanism for risk evaluation and mitigation and the risk management process.

DISCLOSURE UNDER 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 Listing Regulations, 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.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the year under review, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future. However, BSE Limited imposed a fine of Rs 2,41,900.00 on the Company on account of composition of the Board of Directors under Regulation 17 of the Listing Regulations (Appointment of Independent Director). The Company had pleaded against the levied penalty and the matter is sub-judice.

ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND-AS)

In accordance with the Guidelines issued by MCA and SEBI vide circular CIR/CFD/FAC/62/2016 dated 5th July, 2016, the Company is mandatorily preparing its financial statements along with the financial results in accordance with IND-AS as notified by the MCA.

HEALTH, SAFETY AND ENVIRONMENT

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.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

Your Company considers people as its biggest assets and "Believing in People" is at the heart of its human resource strategy. Lot of efforts are put in for talent management, strong performance management, learning and training initiatives in order to ensure that your Company consistently develops inspiring strong and credible leadership. During the year under review, your Company continued to have cordial relationship with all its employees and maintained healthy, cordial and harmonious industrial relations at all levels.

GENERAL DISCLOSURES

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 issued equity shares with differential rights as to dividend, voting or otherwise.

2. 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.

3. Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

4. There has been no change in the nature of business of the Company during the financial year 2019-20.

5. Unclaimed Shares: As on 31st March, 2020 the Company does not have any unclaimed shares.

6. The annual listing fee for the year under review has been paid to the stock exchange i.e. BSE Limited, where your Companys shares are listed.

7. 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 Act.

ACKNOWLEDGMENTS

Your Directors take this opportunity to thank the Customers, Employees, Financial Institutions, Banks, Central and State Government Authorities, Regulatory Authorities, Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company who all made our consistent growth possible.

Your Directors also wish to record their appreciation for the continued co-operation and support extended by the governments of various countries where we have our operations.

For and on behalf of the Board of Directors
For RACL Geartech Limited
Place: Noida Gursharan Singh
Date: 31st July, 2020 Chairman and Managing Director
DIN:00057602