The Hi-Tech Gears Ltd Directors Report.

Dear Members,

Your Directors have great pleasure in presenting the 34th Annual Report of your Company, together with the audited financial statement of accounts of the company for the financial year ended 31st March, 2020. Further, the consolidated performance of the company and its subsidiaries has been referred to wherever required.

Financial Results

The highlights of the standalone and consolidated financial performance of the Company are as under:-

( in Mn except per share data)

Particulars Standalone Consolidated
2018-19 2019-20 2018-19 2019-20
Revenue from Operation 6472.15 5093.25 9137.22 7220.18
Other Income 162.37 62.03 169.59 114.76
Total Income 6634.52 5155.28 9306.81 7334.94
Profit before Depreciation, Interest & Taxes (PBDIT) 986.12 643.52 1301.99 951.45
Depreciation 270.80 274.53 421.91 430.34
Profit before Interest & Taxes (PBIT) 715.32 368.99 880.08 521.11
Financial Charges 184.10 215.97 294.81 331.29
Profit before Taxes (PBT) 531.22 153.02 585.27 189.82
Provision for Taxes 176.38 75.60 229.49 107.06
Profit after Tax (PAT) 354.84 77.42 355.78 82.76
Balance of profit brought forward 2216.68 2494.11 2220.69 2529.70
Balance available for appropriation 2573.30 2558.12 2608.89 2653.79
Dividend 65.69 65.69* 65.69 65.69*
Tax on dividend 13.50 13.50* 13.50 13.50*
Balance Surplus in P & L Account 2494.11 2478.94 2529.70 2574.60
Paid-up Equity Share Capital 187.68 187.68 187.68 187.68
Earnings Per Share (EPS) 18.91 4.13 18.96 4.41

* Please refer to dividend para of this Director Report

General Information

Financial Year 2020 was another roller coaster year for domestic automobile industry. Auto industry faced multiple regulatory, geopolitical, and economic disruptions creating both developments and challenges for the Indian economy. However, the outbreak of Coronavirus (COVID-19) pandemic globally is causing significant disturbance and slowdown of economic activity. In many countries, businesses are being forced to cease or limit their operations for long or indefiniteperiod of time. COVID-19 is significantly impacting business operation of the companies, by way of interruption in production, supply chain disruption, unavailability of personnel, closure / lock down of production facilities etc. Almost all segments of the automobiles categories registered downfall on full year basis. The domestic sales of Commercial Vehicles decreased by 28.75% during April-March 2020 and Three Wheeler registered de-growth by 9.19% for the said period. In Two Wheeler segment, the sales of Scooters/ Scooterette declined by 16.94% including downfall in sales of Motorcycles and Mopeds by 17.53% and 27.64% respectively in FY 2019-20. The Passenger vehicles is the only segment which shows the growth engine of automobile industry, unfortunately during financial year 2020 this segment is also showing downfall by 17.82%.

On export side, the overall automobile exports increased by 2.95%. While Three Wheelers and Two Wheelers registered a downfall/ growth of 11.54% and 7.30% respectively, exports of Passenger Vehicle increased by 0.17% and Commercial Vehicles registered a de-growth of 39.25% in April-March 2020 over April-March 2019.

The Indian auto components industry is going through a transformational period with the concept of mobility changing continuously. The prospects of the Industry is to benefit over next years are good.

State of Company Affairs

Your Company is one of the few industrial enterprises which have become a world-class Indian brand with a green and sustainable strategy of growth, despite an increasing volatile economic and business environment. Besides being cost competitive, delivering to strict schedules and adhering to high quality standards are the main keys of success for auto component manufacturers, especially to enter into and grow export markets. Your company possesses all the above skills and is appreciated by customers all over the world. Keeping this in mind, your company is today tapping new geographies due to the high potential available in the export markets. However, the FY 20 was a tough year for the Company. Due to the high volatility in the financial year, there was stress in volumes in all sections of automobile business. The outbreak of COVID-19 also contributed the downside of business.

Detailed information on the operations and on the state of affairs of the

Company are majorly covered in the Management Discussion & Analysis Report, forming part of this report. The performance of the Company was in line with the performance of Auto Industries. During the FY 2019-20, the total revenue stood at Rs. 5,155.28 million as compared to Rs. 6,634.52 million in the last FY 2018-19, registering a degrowth of

22.30 %. The profit before tax was drastically decreased to Rs. 153.02 million as compared to Rs 531.22 million in previous year. Similarly, the Net profit after tax of the Company was also on the downside at

Rs. 77.42 million in comparison to Rs. 354.84 million in previous year, registering a degrowth of 78.18%.

On a consolidated basis, the total revenue was Rs. 7,334.94 million as compared to Rs. 9,306.81 million in the previous FY. Similarly, the Net profit after tax was Rs. 82.76 million as compared to Rs. 355.78 millions in previous FY.

At the export front, the Company recorded an export turnover of Rs. 1334.44 million as compared to Rs. 1912.10 million in the previous year, hereby recorded degrowth of 30.21% as compared to the percentage during the same period in the previous year. The total export turnover now fall to 26.20% of the total turnover of the Company.

We have taken proactive steps to correct the position of the Company in export market. We will approach our goals with discipline and focus to tap more customers and markets and gain the grounds again.

Your Company expects to benefit over the next period with above strategy and operating efficiencies. In view of this, the long term prospects of your

Company are bright.

Consolidated Financial Statements

In accordance with the provisions of the Companies Act, 2013 (‘the Act) and IndAS-110 on Consolidated Financial Statements, read with IndAS-28 on Investments in Subsidiaries outside India, the Audited Consolidated Financial Statements for the FY ended March 31, 2020 are provided in this Annual Report.

Impact of COVID-19 pandemic

Towards the end of financial year 2019-20, the entire global economy including auto industry has been facing with an unprecedented disruption, owing to the COVID-19 pandemic. The COVID-19 outbreak has severely impacted the business of the company with shattered supply chains, halted production and deliveries to the Customers. The Companys manufacturing facilities was closed from March 23, 2020 to May 03, 2020 due to nationwide lockdown announced by the Government of India. Subsequently, the Company has resumed its operations in limited manner with effect from May 04, 2020, with available workforce, in strict compliance with Standard Operating Protocols (SOPs) issued by the Union Government and State Government from time to time. The health and safety remained the main key focus for the company The Company has put in place stringent monitoring processes for Covid-19 ensuring the following:

Sanitizing the premises and vehicles on regular basis Maintenance of social distancing at all work places Enforcing wearing of masks and regular cleaning of hands

Strictly following the social distancing at workplaces, factories, canteen etc.

Regular health updates of all the employees and their families

Promoting awareness through do and dons posters for all its employees

All customers and vendors have been communicated with about the measures taken by the Company

Supply Chain is being monitored to ensure availability of material.

Staggered time schedules and encouraging work from home for the employees, wherever possible.

Even after the complete lifting of lockdown, the turnaround to take a significantly longer time. However, management is working on planned and concerted response both immediate and medium to long term which will ensure recovery. The management is closely monitoring the situation and to take appropriate action in the interest of all stakeholders.

Share Capital

The paid up Equity Share Capital as on 31st March, 2020 was Rs. 187.68 million. During the year under review, the Company has not issued shares or granted stock options or sweat equity.

Dividend

During the year under review and based on the performance of the company, the Board of Directors, at their meeting held on February 07, 2020, declared an interim dividend @15% i.e. Rs. 1.50 per equity share amounting to

Rs. 28.15 million, the same is being confirmed at the forthcoming Annual General Meeting. Further, the Directors have not recommended any final dividend for the financial year 2019-20. The total dividend payout stands at Rs. 65.69 million* (Previous year Rs. 65.69 million) & tax on dividend comes to Rs 13.50 million (Previous year Rs. 13.50 million). During the FY under review, no amount has been transferred to General Reserve of the Company.

Change in the nature of business

There was no change in the nature of the business of the company during the financial year 2019-20.

Change of the registered office

In order to enhance better administrative and economic control over the company and to streamline & rationalize its operations as well as the management of affairs of the Company, the Registered Office was shifted from the State of Rajasthan to the State of Haryana during the Financial Year 2020. The Regional Director North Western Region approved the move and later, Registrar of Company (ROC) have issued fresh certificate of Incorporation in this regard. The Companys registered situated at Plot No 24, 25, 26, Sector-7, IMT Manesar, Gurugram-122050, Haryana w.e.f. July 19, 2019.

The shifting of the Registered Office as aforesaid is in the best interests of the company, its shareholders and all concerned. The shifting will in no way be detrimental to the interest(s) of any member of the public, employees or other associates of the Company in any manner whatsoever.

Compliance with Secretarial Standards

The Company is fully compliant with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

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 them consistently and made 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, 2020 and of the profit of the

Company for the year ended on that date,

(c) that proper and sufficient 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 on going concern basis,

(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 effectively.

Details of Internal Financial Controls with reference to the Financial Statement

In view of the requirement of the Companies Act, 2013, the Company has successfully documented and implemented its Internal Financial Controls

 

* which includes Rs. 37.54 Million as final dividend for the financial year 2019, declared and paid in theAGM of Financial Year 2019

(IFC). This ensures orderly and efficient conduct of its business, including adherence to Company policies, safeguarding of its assets, accuracy, prevention of errors & completeness of the accounting records and the timely preparation of reliable financial information. The Internal Financial

Controls with reference to the Financial Statements were adequate and operating effectively.

Further, the Audit Committee monitors the adequacy and effectiveness your Companys internal control framework.

Details of Subsidiary/Joint Ventures/Associate Companies

As on March 31, 2020, the Company has nine (09) Wholly Owned Subsidiaries (including step-down subsidiaries) in Canada and US. There is no reverse investment by the subsidiary companies in the share capital of the Company.

The Board have duly reviewed the affairs of the subsidiary companies, from time to time wherein, 2545887 Ontario Inc., The Hi-Tech Gears Canada Inc. and Teutech Holding Co. are considered to be ‘Material Subsidiary companies, pursuant to provisions of Regulation 16 of the SEBI (LODR) Regulations, 2015. Further, there is no material change in the business of subsidiary companies and the Company has taken note of all the significant transactions and arrangements entered into by its subsidiaries. The other financial and vital details related to subsidiaries are provided in MGT-9

(Extract of Annual Return) & AOC-1 (Statement containing salient features of the financial statement of subsidiaries) attached to this Report, pursuant to section 129 (3) and section 136 of the Companies Act, 2013 and rules made thereunder.

In accordance with the provisions of the Companies Act, 2013 and applicable accounting standards the standalone and consolidated financials together with the reports of Statutory Auditors are provided in the Annual Report. Further, the Company has amended/ made revision in the policy for determining material subsidiaries in order to align with amended listing regulations and other applicable laws. The revised policy is available at www.thehitechgears.com.

Directors, Key Managerial Personnels and Evaluation

The Board is duly constituted with proper balance of Executive & Non-Executive Directors, Independent Directors and Whole Time Directors.

Retire by Rotation

Independent Directors are not liable to retire by rotation. Pursuant to the provision of Section 152(6) of the Companies Act, 2013, Mr. R.C. Jain (DIN:

00038529), Non-Executive Director, being longest in the rotation at the ensuing Annual General Meeting and being eligible offer himself for the re-appointment. Brief profile of Mr. R.C. Jain is provided in the Notice convening the Annual General Meeting.

a. Key Managerial Personnels

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.).

The Board at its meeting held on November 04, 2019, upon the recommendation of Nomination and Remuneration Committee has appointed Mr. Naveen Jain as Company Secretary (CS) and Key Managerial Personnel of the Company w.e.f. November 18, 2019 in place of Mr. S.K. Khatri, who step down from the post of Company Secretary w.e.f. November 16, 2019. b. Independent Directors

The Board has 7 (Seven) Independent Directors, including one Woman

Independent Director, representing diversified fieldsand expertise. Details are provided in the appropriate section of the Corporate Governance Report.

During the year, Mr. Neville DSouza (DIN: 08536411) was appointed as

Non-Executive Independent Director of the company, with effectfrom August 14, 2019, whose appointment was ratified by the members for a terms of 5 years in their previous annual general meeting held in 2019. The Independent Directors have submitted their declarations of independence, as required pursuant to provisions of section 149 (7) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (‘the Listing Regulations), as amended from time to time, stating that they meet the criteria of independence as provided in sub-section (6) of section 149 of Companies Act, 2013 and the SEBI Listing Regulations.

c. Meetings of the Board

The Board met 4 (four) times during the period 2019-20 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.

d. Annual Evaluation of the Board, its Committees and of Individual Directors

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015, the Board carried out an formal annual performance evaluation of its own performance, the Chairman, Directors individually and the working of the different committees. Such evaluation was done through the established evaluation framework and the SEBI Guidance Note.

The framework included different tools such as individual questionnaire, covering various information required to have the evaluation. All the layers of the Board, such as Board, Committees and the Independent Directors performed their part by evaluating the performances of the holders as mandated.

Auditors and their Reports a) Statutory Auditors

M/s O P Dadu & Co., Chartered Accountants, (Firm Registration No. 001201N) the Statutory Auditors of the Company, were appointed in the

31st Annual General Meeting for a term of five conclusion of 36th Annual General Meeting of the Company to be held in the year 2022-23. They have furnished a certificate confirming the eligibility under section 141 of the Companies Act, 2013 and Rules made thereunder.

Pursuant to the provisions retiresby of Companies (Amendment) Act, 2017 read with MCA notification dated 07th May, 2018, the appointment of Statutory

Auditors is not required to be ratified at every Annual general Meeting. 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 "A" to Auditors Report relating to non-deposit of disputed taxes. The Board wishes to inform that those matters are related to regular tax matters for which the Company has preferred appeal to Appellate Authorities. The necessary explanations are also provided in Note 38A (2) to the Standalone Financial Statements. The rest of report by the Statutory Auditors is self-explanatory. Please refer to the Notes to Accounts, wherever necessary.

b) Cost Auditors

The provisions relating to section 148(1) read with rules are applicable, accordingly cost accounts and records are made and maintained. The cost audit for the Financial Year 2020 was done by M/s Kabra

& Associates, Cost Accountants. Their report does not contain any qualifications, reservations or adverse remarks and do not call for any further explanations.

Further, 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 have 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 2020-

2021. The remuneration proposed to be paid to them requires ratification of the shareholders of the Company. In view of this, your approval for payment of remuneration to Cost Auditors is being sought at the ensuing Annual General Meeting. Accordingly, a resolution seeking approval by members for the remuneration payable to M/s Kabra & Associates is included in the Notice convening 34th Annual General Meeting.

c) Secretarial Auditor

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by ICSI.

As per Section 204 of the Companies Act, 2013 inter-alia requires every listed company to annex with its Boards Report, a Secretarial Audit Report provided by a Company Secretary in Practice, in the prescribed format. 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.

Additionally, pursuant to SEBI circular dated CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Company has undertaken and received an Annual Secretarial Compliance Report from M/s Grover Ahuja & Associates, Practicing Company Secretaries and submitted the same to the stock exchanges within the specified time period.

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, if any and corrective actions being taken to address them.

Investor Education and Protection Fund (‘IEPF)

Pursuant to section 124, 125 and applicable provisions of the Companies Act, 2013 and Rules made there under, all unpaid or unclaimed dividends are required to be transferred by the Company to IEPF after the completion of seven years from the date of declaration of dividend.

Similarly, the MCA has notified Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 effective from 7th September 2016 which provide that, the shares in respect of which dividend has not been claimed or unpaid by the shareholders for seven consecutive years or more shall also be transferred to the demat account(s) to be prescribed by the IEPF Authority.

The details of such dividend and shares transferred pursuant to the aforesaid provisions are provided in General Shareholder information section at point No. 14 of Section XI of Corporate Governance Report and Note No. 11 of the Notice of ensuring 34th Annual General Meeting.

In terms of the said Rules and the amendment thereof vide notification dated 28th February, 2017 and 13th October, 2017, the necessary communications have been made to the respective shareholders whose shares were required to be transferred to the IEPF so as to enable them to claim their dividend attached to such shares before such dividend and shares are transferred to IEPF and further, the necessary information in this regard is available on the website of the Company i.e. www.thehitechgears. com for the convenience of the shareholders.

In view of this, those shareholders whose dividend is unpaid or unclaimed must claim it at the earliest. The equity shares once transferred into IEPF can only be claimed by the concerned shareholder from IEPF Authority after complying with the procedure prescribed under the Rules and any amendment thereof.

Accordingly, during the financial year 2019-20, the Company has transferred

1,000 and 570 equity shares to the IEPF Authority, in two tranches in respect of which the amount of dividend has not been claimed or unpaid for the consecutive seven years to the concerned shareholders from the date of declaration respectively. A list of such cases is also available at the company website.

Extract of Annual Return

As required pursuant to Section 92(3) & 134 (3) of the Companies Act, 2013, an extract of Annual Return in the prescribed form MGT-9 is annexed to this Report as Annexure II and also on companys website on the link: www.thehitechgears.com.

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 Rule 8(3) of the Companies (Accounts) Rules, 2014, are given in Annexure III, to this Report.

Report on Corporate Governance

In terms of Listing Regulations, a report on Corporate Governance is given separately and forming part of this report and a certificate from the M/s Grover Ahuja & Associates, Practicing Company Secretaries confirming compliance with the provisions of Corporate Governance is also annexed to the report.

Management Discussion & Analysis Report

The Management Discussion & Analysis Report is given separately and forming part of this report together with its contents.

Risk Management Policy

Pursuant to Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, provisions of constituting Risk Management Policy are not applicable to the Company. Although the Company has adopted an enterprise Risk Management Policy and established a Risk Management Framework with an objective of timely identification, mitigation and control of the risks, which may threaten the existence of the Company, in accordance with the provisions of The Companies Act, 2013.

Corporate Social Responsibility

Pursuant to the provisions of Section 135 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder the Company have adopted & developed a Policy covering the activities mentioned in Schedule VII of Companies Act, 2013, upon the recommendation of CSR Committee. Implementation of the policy is undertaken under the guidance of CSR Committee and a brief of the Corporate Social Responsibility is provided in Annexure-IV.

Your Company has in place a CSR Policy. The CSR policy lays down CSR activities to be undertaken by your Company. The CSR activities undertaken by your Company are based on the approved CSR policy, which is available on the Companys website, www.thehitechgears.com.

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 considered to be in the ordinary course of business and on the arms length basis. As provided under section 134(3)(h) of the Act and Rules made thereunder, 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. 36 to the financial statements.

The revised Policy on materiality of related party transactions pursuant to Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as approved by the Board may be accessed on the Companys website at the link www.thehitechgears.com.

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 Companys

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.

Postal Ballot

During the period under review, 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 being placed.

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 designated persons.

During the year, the company has amended the said code of conduct to regulate, monitor and report trading by designated persons and their immediate relatives in pursuance to the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 including the code of practices and procedures of fair disclosure of unpublished price sensitive information.

The same has been placed on the Companys Official website i.e. www. thehitechgears.com.

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 a Code of Conduct for its Board Members and Senior Management personnel in place pursuant to SEBI Listing Regulations.

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, 2020 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 Regulation 14 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the annual listing fees for the year 2020-21 has been paid within the prescribed time period.

Fixed Deposits

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

99.61% 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 dematerialized.

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. Remuneration Policy

In terms of provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of the Listing Regulations, a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors of the Company in pursuance of its formulation and recommendation by the Nomination and Remuneration

Committee thereby analysing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy available on the website of the Company at www.thehitechgears.com. Salient feature of the policy are provided in attached Corporate Governance Report.

Audit Committee

Company has duly constituted Audit Committee, which meets on regular intervals for the business required to be transacted thereat. The recommendations made by committee are accepted by the Board. 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 Companys website at www.thehitechgears.com.

Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Accordingly, the company has set up Committee for implementation of said policy.

Further, during the year Company has not received any complaint of harassment. Complete details are provided in attached Corporate Governance Report.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

The Company has not given any loans or guarantee covered under the provisions of section 186 of the Companies Act, 2013.

The details of the investments made by the 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 report whichthefinancialstatementsrelate andthe date ofthe . passed by the regulators or Detailsof courts or tribunals impacting the going concern status and companys 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 Company.

Business Responsibility Reporting

As per Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 of Business Responsibility Reporting is applicable to the Company. A detailed report is annexed as Annexure VII.

Personnel

The Board of Directors place on record their appreciation of the untiring efforts of the employees of the organisation 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 & recognising employees for their long term commitment as & when the opportunity arise.

Trade Relations

The Board of Directors place on record their appreciation for the cooperation 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.

Acknowledgement

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 or 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 The Hi -Tech Gears Limited

Deep Kapuria Chairman

Place : New Delhi

Dated : August 13, 2020