Rasandik Engineering Industries India Ltd Directors Report.

To The Members,

Your Directors have pleasure in presenting the 35th Annual Report of your Company together with the Audited Statement of Accounts of the Company for the financial year ended 31 March 2019 and the Auditors Report thereon.

FINANCIAL RESULTS:

The summarised working results for the year ended 31 March 2019 as compared to earlier year are as under:

(र in million)
Particulars 2018-19 2017-18
FINANCIAL RESULTS
Total Income 2745.60 2527.08
Profit Before Finance Cost, Depreciation and Taxation 330.32 318.36
Finance Cost 124.60 164.63
Depreciation 140.61 138.45
Profit Before Tax 75.70 15.29
LESS:
Tax expense
Current tax 15.11 (2.74)
Deferred tax 21.04 5.29
Profit/Loss After Tax (Loss) 29.03 12.73

OPERATING RESULTS AND THE STATE OF COMPANYS AFFAIRS

During the year under review, the overall performance of the Company showed upward movement as compared to the previous year. The total revenue of the company for the year ended 31 March, 2019 was र2745.60 million as compared to र2527.08 million in the previous year. The profit before depreciation, finance cost, taxation is increased to र330.32 million from र318.36 million in the previous year. The net profit after depreciation, finance cost and tax is र29.03 million for the current financial year as compared to profit of र12.73 million in the previous year.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this report. There has been no change in the nature of the business of the Company.

DIVIDEND

The Directors express their inability to declare any dividend for the financial year ended 31 March 2019 on account of plough back of profit during the year under review.

PROSPECTS FOR THE CURRENT YEAR

Although demand for vehicles in India decreased over the past years but Inflation and consumer sentiments do not induce great confidence either. Indian economy has been experiencing a slow growth phase and Low growth of GDP is expected to continue, and your Company is expecting a modest growth for the coming financial year 2019-20.

HUMAN RESOURCES

The human resource profile of your Company is an optimal mix of industry experience and fresh blood from engineering and business institutions. During the year under review, the Company is continuously renewing and updating the knowledge and skill of its employees at all levels through training and development. The relationship with employees continues to be cordial.

CORPORATE GOVERNANCE

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a detailed report on Corporate Governance as updated with the particulars of this financial year, is annexed to this report together with certificate of the Auditors on the compliance with the said Code (Annexure - I).

MANAGEMENT DISCUSSION & ANALYSIS REPORTS

In terms of the SEBI (Listing Obligations and disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is given separately and forming part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, approval of the members was obtained for continuation of directorship of Dr. Shyam Sunder Sethi and Shri A. R. Halasyam (non executive Director), who have attained the age of 75 years. The approval of shareholders was received on 20 December 2018 by way of postal ballot pursuant to the provisions of section 110 of the Companies Act, 2013, and other applicable laws.

Dr. Shyam Sunder Sethi (DIN: 01394311) and Shri M S Ramaprasad (DIN: 00842539) were appointed as Independent Directors on the Board of the Company pursuant to the provisions of Section 149 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the erstwhile Clause 49 of the Listing Agreement with the stock exchanges. They hold office as Independent Directors of the Company up to September 29, 2019 ("first term" in line with the explanation to Sections 149(10) and 149(11) of the Act). It is proposed to re-appoint Dr. Shyam Sunder Sethi and Shri M S Ramaprasad as Independent Directors of the Company, not liable to retire by rotation and to hold office for a second term of 5 (five) consecutive years on the Board of the Company.

Pursuant to Sections 152 and other applicable provisions, if any, of the Companies Act, 2013, Shri Rajiv Kapoor, Director of the Company, will retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for reappointment.

The Board hereby confirms that all the independent directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said section 149(6) and Regulation 25(9) of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015.

Formalisation programme for independent directors was completed by the company during the year 2018-19.

At present, (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows:

Shri Rajiv Kapoor, Chairman and Managing Director

Mr. Gautam Bhattacgharya - Chief Financial Officer (CFO)

Mr. Pradeep Chandra Nayak - Company Secretary (CS)

The details regarding the number of Board and Committee meeting and number of meetings attended by the Directors has been given in detail under the section of Corporation Governance.

There is no change in the Key Managerial Personnel of the Company during the year under review.

PARTICULARS W.R.T. RATIO OF REMUNERATION OF DIRECTORS AND KMP

In terms of the provisions of Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the required information with respect to ratio of remuneration of directors, key managerial personnel and employees is set out as Annexure - II which forms part of this report. There were no employees during the year under review, drawing remuneration specified under Section 197 of the Companies Act, 2013 read with applicable rules.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, the Directors confirm:

(a) That in the preparation of the annual accounts for the year ended 31 March, 2019, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

(b) That they had 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 at 31 March, 2019 and of the profit of the Company for the year ended on that date;

(c) That they had 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) That they had prepared the annual accounts on a going concern basis;

(e) That they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) That they had devised proper systems to ensure the compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively

COMMITTEES OF BOARD

Pursuant to requirement under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has formed various committees of Board such as Audit Committee, Nomination & Remuneration Committee, Stake Holders Relationship Committee and Corporate Social Responsibility Committee. The details of composition and terms of reference of these committees are mentioned in the Corporate Governance Report.

AUDIT COMMITTEE

The composition of Audit Committee of the Company as under:

S No Name Category Position
1 Dr. Shyam Sunder Sethi Non Executive - Independent Director Chairman
2 Shri Mysore Siddappa Ramaprasad Non Executive - Independent Director Member
3 Shri Agharam Ramakrishnan Halasyam Non Executive - Independent Director Member
4 Shri Rajiv Kapoor Executive - Chairman cum Managing Director Member

There was no instance when the recommendation of Audit Committee was not accepted by the Board of directors.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil Mechanism/Whistle Blower Policy.

The Company promotes ethical behaviour in all its business activities and has put in place a vigil mechanism for Directors, Employee and other person dealing with the Company for reporting illegal or unethical behaviour, actual or suspected fraud or violation of the companys Code of Conduct.

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

Your Company has formulated policy for prevention of sexual harassment of its women employees in line with "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY

In compliance of the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a Corporate Social Responsibility Committee (CSR Committee). The terms of reference of the Corporate Social Responsibility Committee is provided in the Report on Corporate Governance. (Annexure - III)

POLICY ON DIRECTORS APPOINTMENT, REMUNERATION AND INDEPENDENT DIRECTOR

Pursuant to the requirement under Section 134(3) (e) and 178 (3) of the Companies Act, 2013, the brief policy on Directors Selection, appointment and remuneration is attached as Annexure - IV which forms part of this report and the detailed policy can be referred on the website of the Company i.e.www. rasandik.com.

NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2018-19, 5 (five) Board meetings were held. For details thereof, refer to the section Board of Directors- Number of Board Meetings, in Corporate Governance Report which forms integral part of this report.

AUDITORS

The Members of the Company appointed M/s. V Sankar Aiyar & Co., Chartered Accountants, New Delhi, having Firm Registration No. 109208W, Statutory Auditors of your Company for a period of five years from the conclusion of 33rd Annual General Meeting (AGM) till the conclusion of the 38th AGM of the Company to be held in the year 2022.

AUDITORS REPORT

The Audit Report does not contain any qualification, reservation or adverse remarks requiring any comment or explanation from the company. The notes on financial statements referred in the Auditors Report are self explanatory.

No fraud has been reported by the Auditors to the Audit Committee or the Board.

SECRETARIAL AUDITORS

M/s. Arun Gupta & Associates, Company Secretaries, New Delhi has been appointed as Secretarial Auditors of the Company for the financial year 2019-20 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report and Secretarial Compliance Report under Regulation 24AA of the SEBI (LODR) Regulations, 2015 submitted by Secretarial Auditors for the Financial Year 2018-19 in the prescribed form MR- 3 is attached as Annexure - C and forms part of this report.

There are no qualifications or observations or other remarks of the Secretarial Auditors in the Report issued by them for the financial year 2018-19 which call for any explanation from the Board of Directors.

DEPOSITS

During the year under review, your Company has neither accepted nor renewed any deposits during the Financial Year 2018-19 in terms of Chapter V of the Companies Act, 2013 and no amount of principal or interest was outstanding in respect of deposits from the public as on the date of balance sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure A to this Report.

ADEQUACY OF INTERNAL FINACIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place adequate internal Financial Control with reference to Financial Statement.

The policies and procedures adopted by the company ensures orderly and efficient conduct of the business, including adherence to companys policies, safeguarding the assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

EXTRACT OF ANNUAL RETURN:

The extract of Annual Return in Form MGT -9 as required under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is given in Annexure - B to this Report.

PARTICULARS OF LOANS GIVEN, GUARANTEES GIVEN OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Pursuant to the requirement under Section 134(3) (g) of the Companies Act, 2013 the particulars of loans, guarantees or investments under Section 186 of the Act as at end of the Financial Year 2018-19 are attached as Annexure - V which forms part of this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013

The Policy on related party transactions as approved by the Board has been uploaded on the Companys Website at www. rasandik.com. Pursuant to the requirement under Section 134(3) (h) of the Companies Act, 2013, the particulars of contracts or arrangements with related parties referred to in section 188(1) of the Act, are attached as Annexure - VI which forms part of this report.

The policy on materially related party transaction and on dealing with related party transaction as approved by the Board and the detail policy can be referred on the website of the Company i.e., www.rasandik.com.

ANNUAL PERFORMANCE EVALUATION

Pursuant to applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter alia, the criteria for performance evaluation of the entire Board of the Company, its committees and individual directors, including independent Directors.

For annual performance evaluation of the Board as a whole, its Committee(s) and individual Directors including the Chairman of the Board, the Company has formulated a questionnaire to assist in evaluation of the performance. On the basis of the questionnaire, a format annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.

The independent directors had met separately without the presence of Non-Independent directors and the members of management and discussed, inter alia, the performance of Non-Independent directors and Board as a whole and the performance of the Chairman of the Company.

The Nomination and Remuneration committee has also carried out evaluation of every directors performance.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANYS OPERATIONS IN FUTURE

No significant and material orders has been passed by any regulatory authority, court or tribunal which shall impact the going concern status and companys operations in future.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings/behaviours of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Companys website www. rasandik.com.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with the Code.

DETAIL OF SUBSIDAIREIS, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has no subsidiary, joint venture or associate of the Company during the Financial Year 2018-19.

EMPLOYEES STOCK OPTION PLANS /SCHEMES

No Employee Stock Options were granted to the Directors or Employees of the Company during the year under review.

INSURANCE

All the properties of the Company including Buildings, Plant and Machinery and Stocks have been adequately insured.

QUALITY SYSTEM

Your Company has been certified as an ISO/TS 169492002 version Quality System Company by AIB Vincotte Inter Belgium and also an ISO 14001 - Environment Management System Company by British International Standard (BIS).

TRANSFER TO INVESTORS EDUCATION AND POTECTION FUND

The amount represents unclaimed dividends which were lying with the Company for a period of more than seven years from their respective due dates of payment had transferred to the Investor Education and Protection Fund established by the Central Government, in compliance with Provision of the Companies Act, 2013.

CAUTIONARY STATEMENT

Statements in the Directors Report and the Management Discussion and Analysis describing the Companys objectives, expectations or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expresses in the statement. Important factors that could influence the Companys operations included: global and domestic demand, new capacity additions, changes in government policies and tax laws and other factors which are material to the business operation of the Company.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their deep sense of gratitude to the bankers, employees, shareholders, customers and suppliers for their continued support and confidence in the management.

Your Company is grateful for the co-operation and continued support extended by Maruti Suzuki India Ltd, Tata Motors Ltd, New Holland Tractors, Mahindra, Ashok Leyland, and all other Customers. Your Directors look forward to receive their continued confidence, support and encouragement.

For and on Behalf of the Board of
Rasandik Engineering Industries India Limited
Sd/-
Place: Sohna, Haryana (RAJIV KAPOOR)
Date : 10 August 2019 Chairman and Managing Director