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RACL Geartech Ltd.

BSE: 520073 Sector: Auto
NSE: N.A. ISIN Code: INE704B01017
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OPEN 61.50
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VOLUME 176731
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52-Week low 26.55
P/E 13.14
Mkt Cap.(Rs cr) 59
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 61.50
CLOSE 58.70
VOLUME 176731
52-Week high 67.35
52-Week low 26.55
P/E 13.14
Mkt Cap.(Rs cr) 59
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

RACL Geartech Ltd. (RACLGEARTECH) - Director Report

Company director report

TO

THE MEMBERS

Your Directors take pleasure in presenting the 33rd Annual Report togetherwith the Audited financial statements of the Company for the financial year ended March31 2016.

NEW NAME

With an emphasis on change the company decided to rebrand its identity from RaunaqAutomotive Components Limited to RACL Greatech Limited. The new name iscontemporary & aligning perfectly to our core business area.

FINANCIAL RESULTS

(Rs. in Lacs)
Particulars 2015-16 2014-15
Sales and Other Income 12581 11547
Operational Expenses 10294 9947
Depreciation 396 427
Financial Charges 556 675
Gross Profit/(Loss) 569 498
Provision for Taxes/ Def.Tax Liab/ including earlier years 199 139
Net Profit 370 359
Profit b/f from last year (Reserves) 1784 1434
Profit carried to Balance Sheet 2154 1784

DIVIDEND

The company is on the path of growth and considering the fund requirements for ourfuture plans for up-gradation of plant & machinery and technology up-gradation theBoard of Directors considered it appropriate not to declare any dividend for the currentyear.

TRANSFER TO RESERVES

An amount of Rs. 350 lakhs has been transferred to General Reserve for the FinancialYear ended March 31 2016.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of the Company’s operations in terms of performance inmarkets business outlook opportunities and threats risks and concerns forms part of theManagement Discussion and Analysis is incorporated in a separate section of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance with section 134 of the Companies Act 2013 the Directors of yourCompany confirm:

• that the applicable Accounting Standards have been followed in the preparationof annual accounts and that there are no material departures;

• that such accounting policies have been selected and applied consistently andthe judgments and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of your Company as at March 31 2016 and of the profit ofyour Company for the year ended on that date;

• that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of your Company and for preventing and detecting fraud and otherirregularities;

• that the annual accounts have been prepared on a going concern basis;

• that the internal financial controls to be followed by the Company have beenlaid down and such internal financial controls are adequate and were operatingeffectively; and

• that proper systems to ensure compliance with the provisions of all applicablelaws 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 Mrs. Narinder Paul KaurNon-executive Director (DIN 02435942) of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers herself for reappointment. The briefresume and other details as required under Securities & Exchange of Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 are provided in theNotice (including Annexure to Notice) of 33rd Annual General Meeting of theCompany. The Board recommends that Mrs. Narinder Paul Kaur may be re-appointed at theensuing AGM.

During the year under review Mr. Devender Singh Nominee Director (PICUP) (DIN00115257) has retired from the services of PICUP w.e.f. December 31 2015 and accordinglyhe ceased to be a director of the company (i.e. RACL Geartech Limited) w.e.f. December 312015. Further pursuant to the provisions of Section 167(1) (b) of the Companies Act2013 Mr. Ashok Misra Nominee Director (PICUP) (DIN No. 05236190) has vacated hisoffice of Director w.e.f. 31.03.2015.

Necessary resolutions for the re-appointment of Mrs. Narender Paul Kaur Non-ExecutiveDirector of the Company have been included in the notice convening the ensuing annualgeneral meeting. Your directors commend her re-appointment.

Declaration by Independent Directors

All the Independent Directors of your Company have made declaration to the Company thatthey meet all the criteria of independence laid down under section 149(6) of CompaniesAct 2013 and regulation 16(1)(b) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.

Relationship between Directors Inter-se

Except Mr. Gursharan Singh Chairman & Managing Director and Mrs. Narinder PaulKaur Non-executive Director (Wife of Mr. Gursharan Singh) none of the Directors of thecompany is related to the other Director of the Company.

Familarisation Programme for Independent Directors

Your Company has adopted a ‘Familarisation Programme for IndependentDirectors’ to familiarise them with the Company their roles rightsresponsibilities in the company nature of the industry in which the Company operatesbusiness model of the Company etc. Your company aims to provide its independentdirectors insight into the Company enabling them to contribute effectively.

The details of familiarisation programmes may be accessed under the CorporateGovernance section of the websitehttp://raclgeartech.com/pdfs/Familiarisation_Programme_for_Independent_Directors.pdfDuring the year under review Independent Directors were apprised on an ongoing basis inthe various Board/Committee meetings on macro-economic environment information onbusiness performance operations financial parameters working capital management fundflows update on statutory compliances for Board members etc. Apart from this twofamiliarization programs were conducted in the financial year 2015-16 which were attendedby all the Independent Directors. Total number of hours spent by each Independent Directorin these programs was four hours.

NOMINATION AND REMUNERATION POLICY

In terms of the section 178 of the Companies Act 2013 and Part D of Schedule II ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 your Company has a Nomination and Remuneration Policy. The aforesaidpolicy of the Company on director’s appointment and remuneration including criteriafor determining qualifications positive attributes independence of directors and othermatters is annexed as "Annexure - A".

PERFORMANCE EVALUATION OF BOARD COMMITTEES AND DIRECTORS

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out the annual performance evaluation of theIndependent Directors and various committees of directors on parameters such as skillsknowledge participation in meetings and contribution in field of Management / Finance /Operation / Strategy etc.

Independent Directors in terms of Companies Act 2013 and Regulation 25 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 carried out performance evaluation of non-independent directorsChairman of the Board and Board as a whole with respect to skills knowledgeparticipation 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 remunerationcommittee has carried out the performance evaluation of every Director’s (includingExecutive Directors Non-Executive Directors and Independent Directors etc.) on parameterssuch as skills knowledge participation in meetings and contribution in field ofManagement / Finance / Operation / Strategy etc.

The Directors expressed their satisfaction with the evaluation process.

DISCLOSURES

Audit Committee

The audit committee of your Company comprises of Mr. Raj Kumar Kapoor as the Chairmanand Mr. Anil Sharma and Mr. Rakesh Kapoor as members. Details in respect of the auditcommittee is provided in Corporate Governance Report forming part of the Directors’Report.

Whistle Blower Policy/ Vigil Mechanism

Your Company has formulated an "Alert Procedure" to ensure the establishmentof vigil mechanism to provide an avenue to all stakeholders (including employees anddirectors) to report concerns about unethical behaviour actual or suspected fraud orviolation of the RACL’s Code of Conduct for Directors and Senior ManagementPersonnel. The said policy is also posted on the website of the Company which may beaccessed at the web-linkhttp://raclgeartech.com/pdfs/Vigil_Mechanism_Whistle_Blower_Policy_july2016.pdf

Number of Meetings of the Board

During the year under review 4 (four) meetings of the Board of Directors were helddetails of which are provided in Corporate Governance Report forming part of theDirectors’ Report.

Particulars of Loans Guarantees or Investments

There is no investment made by the company and has not provided any loan guarantee orsecurities under section 186 of the Companies Act 2013.

Particulars of Employees and Related Disclosures

Details as required under section 197(12) read with Rule 5(1) of Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 and Companies (Appointment andRemuneration of Managerial Personnel) Rules 2016 is annexed as "Annexure - B".

A statement showing the names of employees as per section 197(12) of the Companies Act2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2016 is annexed as "Annexure- C".

Extract of Annual Return

The extract of the Annual Return is detailed in Form MGT.9 annexed as "Annexure- D".

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section 3(m) of section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are provided in "Annexure- E" which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the requirements of Section 135 of Companies Act 2013 YourDirectors have constituted the Corporate Social Responsibility Committee (CSR Committee)at its meeting held on February 11 2016 comprising of Mr. Anil Sharma as the Chairmanand Mrs. Narinder Paul Kaur and Mr. Dev Raj Arya as other members.

The said Committee recommends to the Board the CSR projects/activities to beundertaken by the Company monitors the implementation of the CSR Policy and reports tothe Board of Directors. On recommendation of CSR committee the Board of Directors of yourCompany approved Corporate Social Responsibility Policy which may be accessed at thefollowing web-link:http://raclgeartech.com/pdfs/Corporate_Social_Responsibility_Policy_july2016.pdf

Annual report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 has been appended as "Annexure - F"and forms integral part of this Report.

AUDITORS AND AUDITORS’ REPORT

Statutory Auditors

M/s. A. Sachdev & Co. Chartered Accountants were appointed as statutory Auditorsat 31st Annual General Meeting to hold office till the conclusion of 34thAGM subject to ratification of the appointment by the members at every AGM. In terms ofSection 139 of the Companies Act 2013 appointment of M/s. A. Sachdev & Co. asAuditors of the Company is recommended for ratification at ensuing Annual General Meeting.

The Notes on financial statement referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. The Auditors’ Report doesnot contain any qualification reservation or adverse remark.

Secretarial Auditors

As per section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 your Company appointed M/s. K. K.Malhotra & Co. Company Secretaries as Secretarial Auditor of the Company for thefinancial year ended March 31 2016.

The Secretarial Audit Report for the financial year ended March 31 2016 is annexed as "Annexure- G". The Auditors’ Report does not contain any qualification reservationor adverse remark.

Cost Auditors

Pursuant to Companies (Cost Records and Audit) Amendment Rules 2014 notified by theMinistry of Corporate Affairs (MCA) on December 31 2014 the Company shall not bemandatorily required to get its Cost Records for the financial year 2015-16 audited interms of provisions of Section 148 of the Companies Act 2013.

RELATED PARTY TRANSACTIONS

In terms of Regulation 23 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Board of Directors of yourCompany has approved Related Party Transactions Policy on dealing with Related PartyTransactions. The policy may be accessed at the web-linkhttp://raclgeartech.com/pdfs/Related_Party_Transaction_Policy_july2016.pdf

All related party transactions during the financial year were on arm’s lengthbasis and were in the ordinary course of business. During the year there were no materialrelated party transactions made by the Company which could be considered material inaccordance with Related Party Transactions Policy of the Company.

RISK MANAGEMENT

The Board of Directors of your Company has laid down a Risk Management Policy for theCompany which provides a risk and controls matrix with identification of risks inherentto the business corporate governance functions and sources of these risks theirpossible consequences and control measures to help manage them. Every unit and function isrequired to deploy the control measures and ensure timely reporting.

In the opinion of the Board none of the above mentioned risks threaten the existenceof the Company.

INTERNAL FINANCIAL CONTROL

The Board of Directors of your Company is satisfied with the Internal Financial Controlprocess. Internal control environment of the Company is reliable with well documentedframework to mitigate risks. A detailed analysis is provided in the Management Discussionand Analysis Report.

CORPORATE GOVERNANCE

The Company is committed to maintain and adhere to the highest standards of CorporateGovernance practices.

Pursuant to regulation 34 read with Schedule V of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 Reports onManagement Discussion and Analysis and on Corporate Governance have been includedelsewhere in this Report as separate sections. A certificate from M/s. A. Sachdev &Co. Chartered Accountants regarding compliance of conditions of Corporate Governance asstipulated in regulation 34 read with Schedule V of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 has also beenincluded in the Annual Report.

ENVIRONMENT HEALTH AND SAFETY

For your Company the absolute respect of Environment Health and Safety (EHS) is apriority.

RACL Geartech Limited gives importance to safety health and well-being of itsemployees and all the people working for the Company. Your Company is working hard toreduce the number of accidents to Zero. The Company encourages and ensures not only itsemployees but also its subcontractors working on Company’s plants as well as itscustomers for complying with occupational health and safety measures.

PERSONNEL

Personnel relations with all employees remained cordial and harmonious throughout theyear. Your Directors wish to place on record their sincere appreciations for thecontinued sincere and devoted services rendered by all the employees of the Company.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

Except as disclosed elsewhere in the Annual Report there have been no material changesand commitments which can affect the financial position of the Company between the end offinancial year i.e. March 31 2016 and the date of this report.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has in place an anti-sexual harassment policy (i.e. Prevention of SexualHarassment at Workplace) in line with the requirement of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. Internal Compliance Committee(ICC) has been set up to redress complaints received regarding sexual harassment. Allemployees (Permanent contractual temporary and trainees) are covered under this policy.The company has not received any compliant about sexual harassment during the year2015-16.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. There is no change in the nature of business of the Company.

3. Issue of equity shares with differential rights as to dividend voting or otherwise.

4. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.

5. Company has no subsidiaries joint ventures or associate companies which have becomeor ceased during the year.

6. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company’s operations in future.

7. The annual listing fee for the year under review has been paid to BSE LimitedMumbai where your company’s shares are listed. The Financial Results of the companycan be accessed at the company’s website http://raclgeartech.com/financials.html

ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the banks Government authorities customers vendors andmembers during the year under review. Your Directors also wish to place on record theirdeep sense of appreciation for the committed services by the Company’s executivesstaff and workers.

For and on behalf of the Board
For RACL Geartech Limited
(Formerly Raunaq Automotive Components Limited)
Sd/-
Place: Noida Gursharan Singh
Date: August 6 2016 Chairman and Managing Director
Regd. Office: 15TH Floor Chiranjiv Tower 43
Nehru Place New Delhi-110019 INDIA
Ph. : +91-11-26418622 Fax : +91-11-26448962
Email : investor@raclgeartech.com

ANNEXURE "A" TO THE DIRECTORS’ REPORT NOMINATION AND REMUNERATION POLICY

Introduction:

In pursuance of the Company’s policy to consider human resources as its invaluableassets to pay equitable remuneration to all Directors Key Managerial Personnel (KMP) andemployees of the Company to harmonize the aspirations of human resources consistent withthe goals of the Company and in terms of the provisions of the Companies Act 2013 and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended from time to time this policy on nomination and remunerationof Directors Key Managerial Personnel and Senior Management has been formulated by theNomination and Remuneration Committee and approved by the Board of Directors.

Objective and purpose of the Policy:

The objective and purpose of this policy are:

• To lay down criteria and terms and conditions with regard to identifying personswho are qualified to become Directors (Executive and Non-Executive) and persons who may beappointed in Senior Management and Key Managerial positions and to determine theirremuneration.

• To determine remuneration based on the Company’s size and financialposition and trends and practices on remuneration prevailing in peer companies in theAuto Component Industry.

• To carry out evaluation of the performance of Directors as well as KeyManagerial and Senior Management Personnel.

• To provide them reward linked directly to their effort performance dedicationand achievement relating to the Company’s operations.

• To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage. In the context of theaforesaid criteria the following policy has been formulated by the Nomination andRemuneration Committee and adopted by the Board of Directors.

Effective Date:

This policy shall be effective with retrospective effect from 1st April2014.

Constitution of the Nomination and Remuneration Committee:

As per the provisions of Section 178 of the Companies Act 2013 and Clause 49 of theListing agreement [now it’s required under Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015] The Board has changedthe nomenclature of Remuneration Committee by renaming it as Nomination and RemunerationCommittee on 31st July 2014. The Nomination and Remuneration Committeecomprises of following Directors:

Sr. No. Committee Chairman & Members
1. Mr. Rakesh Kapoor Chairman (Independent Director).
2. Mr. Anil Sharma Member (Independent Director).
3. Mr. Madan Lal Member (Independent Director).
4. Mr. Gursharan Singh Special invitee Member (Chairman and Managing Director).

The Board has the power to reconstitute the Committee consistent with theCompany’s policy and applicable statutory requirement.

Definitions

Board means Board of Directors of the Company.

Directors means Directors of the Company.

Committee means Nomination and Remuneration Committee of the Company asconstituted or reconstituted by the Board.

Company means RACL Geartech Limited.

Independent Director means a director referred to in Section 149 (6) ofthe Companies Act 2013.

Key Managerial Personnel (KMP) in relation to a company means—(i)the Chief Executive Officer or the Managing Director or the Manager; (ii) the CompanySecretary; (iii) the Whole-Time Director; (iv) the Chief Financial Officer; and

(v) Such other officer as may be prescribed under the applicable statutory provisions /regulations.

Senior Management means who are members of its core management teamexcluding Board of Directors and all members of the management one level below theExecutive Director including the functional Heads. Unless the context otherwise requireswords and expressions used in this policy and not defined herein but defined in theCompanies Act 2013 as may be amended from time to time shall have the meaningrespectively assigned to them therein.

Applicability

• The Policy is applicable to;

• Directors (Executive and Non Executive).

• Key Managerial Personnel.

• Senior Management Personnel.

General

• This Policy is divided in three parts:

Part - A covers the matters to be dealt with and recommended by the Committee tothe Board Part - B covers the appointment and nomination and; Part - Ccovers remuneration and perquisites etc.

• The key features of this Company’s policy shall be included in theBoard’s Report.

PART - A

MATTERS TO BE DEALT WITH PERUSED AND RECOMMENDED TO THE BOARD BY THE NOMINATION ANDREMUNERATION COMMITTEE

The Committee shall:

• Formulate the criteria for determining qualifications positive attributes andindependence of a director.

• Identify persons who are qualified to become Director and persons who may beappointed in Key Managerial and Senior Management positions in accordance with thecriteria laid down in this policy.

• Recommend to the Board appointment and removal of Director KMP and SeniorManagement Personnel.

PART – B

POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR KMP AND SENIOR MANAGEMENT

Appointment criteria and qualifications:

1. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.

2. A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person is sufficient /satisfactory for the concerned position.

3. The Company shall not appoint or continue the employment of any person as Whole timeDirector who has attained the age of seventy years. Provided that the term of the personholding this position may be extended beyond the age of seventy years with the approval ofshareholders by passing a special resolution based on the explanatory statement annexed tothe notice for such motion indicating the justification for extension of appointmentbeyond seventy years.

Term / Tenure:

1. Managing Director/Whole-time Director:

- The Company shall appoint or re-appoint any person as its Executive ChairmanManaging Director or Executive Director for a term not exceeding five (5) years at a time.No re-appointment shall be made earlier than one year before the expiry of term.

2. Independent Director:

- An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board’s report.

- No Independent Director shall hold office for more than two consecutive terms butsuch Independent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly. However if a person who hasalready served as an Independent Director for 5 (five) years or more in a company as onOctober 1 2014 shall be eligible for appointment on completion of his/her present termfor one more term of upto 5 (five) years only or such other date as may be determined bythe Committee as per regulatory requirement he / she shall be eligible for appointmentfor one more term of 5 years only.

- At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director Serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company.

Senior Management Appointment

In order to carry out day-to-day recruitments/appointments of the Senior ManagementPersonnel the power is delegated to the Chairman & Managing Director who shallshortlist finalize appoint the suitable person and fix the remuneration subject toreview endorsement and approval of the Nomination & Remuneration Committee.

Evaluation

The Committee shall carry out evaluation of performance of every Director at regularinterval (yearly).

Mechanism/Criteria for evaluating the performance of every Director(Including Independent Directors) and Board:

The evaluation of performance of every Director (Including Independent Directors ) andBoard shall be carried out annually based on the criteria of attendance and contributionsat Board/Committee Meetings as also for the role played other than at Meetings and othercriteria as may deemed fit by the committee time to time.

Removal:

Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable Act rules and regulations the Committeemay recommend to the Board with reasons recorded in writing removal of a Director KMPor Senior Management Personnel subject to the provisions and compliance of the said Actrules and regulations.

Retirement:

The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Companies Act 2013 and the prevailing policy of the Company. The Boardwill have the discretion to retain the Director KMP Senior Management Personnel in thesame position / remuneration or otherwise even after attaining the retirement age for thebenefit of the Company.

PART - C

POLICY RELATING TO THE REMUNERATION FOR THE WHOLE-TIME DIRECTOR KMP AND SENIORMANAGEMENT PERSONNEL

General:

1. The remuneration to be paid to the Chairman and Managing Director or Whole TimeDirector if any shall be in accordance with the provisions of the Companies Act 2013and the rules made thereunder.

2. The remuneration to the KMP (other than Managing Director or Whole Time Director)and Senior Management Personnel will be determined by the Committee (as may be recommendedby the Chairman & Managing Director) and subject to the Board approval if required.

3. Increments to the existing remuneration structure may be recommended by theCommittee to the Board which shall be in accordance with the provisions of the CompaniesAct 2013 and the rules made thereunder.

4. Where any insurance is taken by the Company on behalf of its Chairman and ManagingDirector Joint Managing Director Chief Executive Officer Chief Financial Officer theCompany Secretary and any other employees for indemnifying them against any liability thepremium paid on such insurance shall not be treated as part of the remuneration payable toany such personnel. Provided that if such person is proved to be guilty the premium paidon such insurance shall be treated as part of the remuneration.

Remuneration to Managing Director KMP and Senior Management Personnel:

1. Remuneration and Perquisites:

The Managing Director KMP and Senior Management Personnel shall be eligible for amonthly remuneration as may be approved by the Board on the recommendation of theCommittee.

The breakup of the pay scale and quantum of perquisites including employer’scontribution to P.F pension scheme medical expenses club fees etc. shall be decided andapproved by the Board on the recommendation of the Committee and approved by theshareholders and Central Government wherever required.

2. Minimum Remuneration:

If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managing Director or Whole time Director inaccordance with the provisions of Schedule V of the Companies Act 2013.

Remuneration to Non- Executive / Independent Director:

Sitting Fees:

The Non- Executive / Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof or fee/compensation etc. for any otherpurpose whatsoever as may be decided by the Board. Provided that the amount of such feesshall not exceed such amount as may be prescribed by the Central Government from time totime.

Other employees Remuneration

The Managing Director and other senior executives (as relevant) will review theremuneration of all other employees not otherwise specified in this policy.

For and on behalf of the Board
For RACL Geartech Limited
(Formerly Raunaq Automotive Components Limited)
Sd/-
Place: Noida Gursharan Singh
Date: August 6 2016 Chairman and Managing Director
Regd. Office: 15TH Floor Chiranjiv Tower 43
Nehru Place New Delhi-110019 INDIA
Ph. : +91-11-26418622 Fax : +91-11-26448962
Email : investor@raclgeartech.com

"ANNEXURE B" TO THE DIRECTORS’ REPORT

Details as required under Section 197(12) of Companies Act 2013 read with Rule 5(1) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2016:

1. Ratio of remuneration of each director to median remuneration of employees andpercentage increase in remuneration of each Director Chief Financial Officer and CompanySecretary during the financial year ended March 31 2016:

S. No. Name of Director and KMP Remuneration of Directors and KMP for the financial year ended March 31 2016 (in Rs.) Ratio of remuneration of each director to median remuneration of employees % increase in remuneration for the financial year ended March 31 2016
1. Mr. Gursharan Singh – Chairman & Managing Director 7935000 34.71 7% (Annualised)
2. Mr. Dev Raj Arya – Whole-time Director & CFO 4105000 17.95 7% (Annualised)
3. Mr. Raj Kumar Kapoor – Non-Executive Independent Director1 155000 0.68 72.22
4. Mr. Anil Sharma– Non-Executive Independent Director1 175000 0.77 45.83
5. Mr. Madan Lal – Non-Executive Independent Director1 147000 0.64 22.50
6. Mr. Rakesh Kapoor – Non-Executive Independent Director1 135000 0.59 92.86
7. Mr. Devender Singh – Nominee Director2 20000 0.09 -50.00
8. Mrs. Narinder Paul Kaur – Non-Executive Director1 805000 3.52 103.28
9. Mr. Hitesh Kumar - Company Secretary 320861 N.A. N.A.

1 In case of Independent director and nominee Director remuneration includes sittingfee for attended the meetings of the Board of Directors and committees thereof and in caseof Non - Executive Director remuneration includes retainership fees and sitting fee.

2 Ceased to be director w.e.f. 31.12.2015

2. In the financial year there was an increase of 5% in the median remuneration ofemployees.

3. There were 504 permanent employees on the rolls of Company as on March 31 2016.

4. The average percentile increase made in the salaries of employees other than themanagerial personnel in the last financial year 2015-16 was 12.05% whereaspercentile increase in the managerial remuneration was 7% (Annualised) for the samefinancial year.

5. It is hereby affirmed that the remuneration paid is as per the Nomination andRemuneration policy of the Company.

For and on behalf of the Board
For RACL Geartech Limited
(Formerly Raunaq Automotive Components Limited)
Sd/-
Place: Noida Gursharan Singh
Date: August 6 2016 Chairman and Managing Director
Regd. Office: 15TH Floor Chiranjiv Tower 43
Nehru Place New Delhi-110019 INDIA
Ph. : +91-11-26418622 Fax : +91-11-26448962
Email : investor@raclgeartech.com

"ANNEXURE C" TO THE DIRECTORS’ REPORT

Statement pursuant to Section 197(12) of the Companies Act 2013 read with rule 5(2)and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and Companies (Appointment and Remuneration of Managerial Personnel) Rules 2016:

A. Particulars of top ten employees in terms of remuneration drawn:

SI. No. Name Designation Remuneration (in Rs.) Qualification Experience in RACL Geartech Ltd. (in years) Date of Commencement of employment Age (in years) Previous employment and Designation
1. Gursharan Singh Chairman & Managing Director 7935000/- Diploma in Mech. Engg. PGDM Export Management 28 YRS 15/10/1987 53 YRS Escorts Tractors Ltd (Ford) Prodt. Engg II
2. Dev Raj Arya Whole-time Director & CFO 4105000/- LLB Company Secretary M.A. in Economics Cost Accountant 18 YRS 18/08/1997 65 YRS Vishal Lakto (I) Ltd Com. Sect. (GM)
3. Rajiv Kumar Goel Associate Vice President 2081600/- B. Tech (Mech) 25 YRS 01/10/1990 48 YRS NA
4. Deepak Saxena Associate Vice President 1661600/- B.E. (Metailurgy) 20 YRS 01/09/1995 50 YRS Clutch Auto Ltd Faridabad Engineer
5. Girish Kapoor General Manager 1498600/- Diploma in Mech. Engg. 25 YRS 01/06/1990 50 YRS Tirupati Udyog Ltd. Trainee Supervisor Q/C
6. Yogesh Baweja General Manager 1414600/- M.B.A. (Operations Research) B.E. (Mechanical) 4-Year Diploma Tool & Die Making and Certificte Course Import & Export Management 3 YRS 01/04/2013 48 YRS Samtel Group DGM
7. Hemant Kumar Joint General Manager 1352600/- AMJE Mech Engg Diploma in Mech Engg. 7 YRS 18/08/2008 47 YRS Lumax Industries Sr. MGR
8. Naveen Chandra Agarwal Joint General Manager 1244600/- B. Tech. (Prod) 24 YRS 09/08/1991 49 YRS VXL India Ltd. Universal Engg. Faridabad Enginee (Prod)
9. Syed Mustahasan Jalil Assistant General Manager 1079600/- Diploma in Elect. Engineering B.A. 8 YRS 08/01/2008 48 YRS Getrag HI-Tech Gears (India) Pvt. Ltd. Manager (Maintenance)
10. Anil Kumar Saini Assistant General Manager 1031600/- ITI Draughtsman Mechanical 23 YRS 28/04/1992 52 YRS KM Enterprises Delhi Design Consultant

Notes:

1. Remuneration includes salary and the value of perquisites on the basis of income TaxRules wherever applicable.

2. The above named employees are in permanent employment.

3. Except Mr. Gursharan Singh Chairman & Managing Director (Husband of Mrs.Narinder Paul Kaur Non-Executive Director) of the company None of the above employee isrelated to any of the Directors of the Company.

4. None of the employees by himself or along with his spouse and dependent childrenholds 2% or more of the equity shares of the Company.

B. Particulars of employees employed throughout the financial year ended March 31 2016and were in receipt of Remuneration aggregating not less than Rs. 10200000/- per annumand Employed for the part of the financial year ended March 31 2016 and were in receiptof Remuneration aggregating not less than Rs.

850000/- per month.

NIL

C. If employed throughout the financial year or part thereof was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than 2 (two) percent of the equity shares of the Company.

NIL

For and on behalf of the Board
For RACL Geartech Limited
(Formerly Raunaq Automotive Components Limited)
Sd/-
Place: Noida Gursharan Singh
Date: August 6 2016 Chairman and Managing Director
Regd. Office: 15TH Floor Chiranjiv Tower 43
Nehru Place New Delhi-110019 INDIA
Ph. : +91-11-26418622 Fax : +91-11-26448962
Email : investor@raclgeartech.com

"ANNEXURE E" TO THE DIRECTORS’ REPORT

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

(Particulars under section 134(3)(m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014

(A) CONSERVATION OF ENERGY

(i) The steps taken or impact on conservation of energy:

• HPMV bulbs are being replaced with LED lightening in the shop floor.

• Thyristor control heating systems are being implemented in normalising & pitfurnaces to conserve the electricity.

• Use of compressed air is being optimised by replacing pneumatic cylinders withhydraulic cylinders wherever possible.

• Energy efficient - Compressed Air pipe lines with modular construction are beingdeployed for reducing pressure loss in air handling from compressors to usage point.

• Effluent treatment plant has been made operational. 100% industrial effluent isbeing recycled and used for gardening.

(ii) The steps taken by the company for utilising alternate sources of energy:

• The company is exploring the possibility of utilization of solar powergeneration.

• Plants are equipped with transparent sheets to use natural day light. No lightsare used in day time.

(iii) The capital investment on energy conservation equipments:

• Rs.65.22 lakhs

(B) TECHNOLOGY ABSORPTION

(i) Efforts made towards technology absoprtion & development

• Dry cut hobbing process has been commissioned thus eliminating the use ofcutting oils and improving the product quality.

• High technology soluable cutting oils are being used for achieving higher toollife and longer replacement time of cutting oils.

• Internal honing process commissioned successfully for better product quality& improved process capability

• Transmission sub assembly deployed successfully for high performance racingmotorcycles for European OEM’s.

• New product torque limiting device productionized successfully by implementingdigital torque testing.

(ii) Benefits dervied like product improvement cost reduction product development orimport substitution etc.

• Increased customer confidence & increased business opportunities.

• Reduction in manufacturing costs.

• Reduction in level of rejection.

• Continuous thrust on reducing the cost of quality by focusing on eliminatingexternal failure cost and controlling appraisal cost.

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)

• The details of technology imported

• Year of import

• Whether the technology been fully absorbed NOT APPLICABLE

• if not fully absorbed areas where absorption has not taken place and thereasons thereof.

(iv) The expenditure incurred on Research and Development

• NIL.

(C) FOREIGN EXCHANGE EARNINGS

• Foreign Exchange earned (in terms of actual inflow) : Rs. 5899.40 lakhs
• Foreign Exchange outgo (in terms of actual outflow) : Rs. 281.69 lakhs

"ANNEXURE F" TO THE DIRECTORS’ REPORT

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES FOR THE FINANCIALYEAR 2015-16

1 A brief outline of the Company’s CSR Policy including overview of projects or programs proposed to be undertaken and a reference to the weblink to the CSR Policy and projects or programs The Company has framed a CSR Policy in compliance with section 135 of the Companies Act 2013 and "Promoting education" as CSR project/ CSR activity or program to be undertaken by the company under Corporate Social Responsibility and the weblink for the CSR Policy is h t t p : / / r a c l g e a r t e c h . c o m / p d f s / Corporate_Social_Responsibility_Policy_july2016.pdf
2 Composition of the CSR Committee (constituted on February 11 2016) Mr. Anil Sharma - Independent Director - Chairman
Mrs. Narinder Paul Kaur - Non-Executive Director - Member
Mr. Dev Raj Arya - Whole-time Director & CFO - Member
3 Average net profit of the Company for last three financial years During the Financial Year 2015-16 the provisions of Section 135 of the Companies Act 2013 were not applicable since the Company did not fall under the conditions necessary for complying with the CSR provisions.
4 Prescribed CSR expenditure (2% of the amount as in item 3 above) During the Financial Year 2015-16 the provisions of Section 135 of the Companies Act 2013 were not applicable. Hence Nil amount required to be spent during the year.
5 Details of CSR spent during the financial year(a) Total amount to be spent for the financial year(b) Amount unspent if any(c) Manner in which the amount was spent during the financial year Not Applicable in the financial year 2015-16
6 Reasons for not spending the prescribed amount Not Applicable in the financial year 2015-16
7 A responsibility statement of the CSR Committee that the implementation and monitoring of CSR policy is in compliance with CSR objectives and policy of the Company. During the Financial Year 2015-16 the provisions of Section 135 of the Companies Act 2013 were not applicable since the Company does not fall under the conditions necessary for complying with the CSR provisions.

"ANNEXURE G" TO THE DIRECTORS’ REPORT

Form No. MR-3 SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST March 2016

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST March 2016

To

The Members

RACL Geartech Limited

(Formerly Raunaq Automotive Components Limited) 15th Floor Chiranjiv Tower43 Nehru Place New Delhi-110019 CIN L34300DL1983PLC016136

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by RACL Geartech Limited(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon.

Based on our verification of the books papers minute books forms and returns filedand other records maintained by the Company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofsecretarial audit We hereby report that in our opinion the Company has during the auditperiod ended on 31st March 2016 complied with the statutory provisions listedhereunder and also that the Company has proper Board-processes and compliance-mechanism inplace to the extent in the manner and subject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by RACL Geartech Limited for the period ended on 31st March2016 according to the provisions of:

I. The Companies Act 2013 (the Act) and the Rules made thereunder;

II. The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and theRules made thereunder; III. The Depositories Act 1996 and the Regulations and Bye-lawsframed thereunder;

IV. Foreign Exchange Management Act 1999 and the Rules and Regulations made thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings; V. The following Regulations and Guidelines prescribed under theSecurities and Exchange Board of India Act 1992 (‘SEBI Act’) to theextent applicable to the Company:-a. The Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeovers)Regulations 2011; b. The Securities andExchange Board of India (Prohibition of Insider Trading) Regulations1992 and theSecurities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015;c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009; d. The Securities and Exchange Board of India (EmployeeStock option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 (Notapplicable to the company during the Audit Period); e. The Securities and ExchangeBoard of India (Issue and Listing of Debt Securities) Regulations 2008

(Not applicable to the company during the Audit Period); f. The Securities andExchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations1993 regarding the Companies Act and dealing with client; g. The Securities and ExchangeBoard of India (Delisting of Equity Shares) Regulations 2009; and h. The Securities andExchange Board of India (Buyback of Securities) Regulations 1998(Not applicable to thecompany during the Audit Period);

VI. The Employees State Insurance Act 1948

VII. Employees Provident Fund and Miscellaneous Provisions Act 1952. VIII. EmployersLiability Act 1938.

IX. Environment Protection Act 1986 and other environmental Laws. X. Air (Preventionand Control of Pollution) Act 1981.

XI. Factories Act 1948. XII. Industrial Dispute Act 1947.

XIII. Payment of Wages Act 1936 and other applicable labour laws. XIV. Other laws asapplicable to the Company other than taxation laws.

We have also examined compliance with the applicable clauses/provisions of thefollowing:

i. Secretarial Standards issued by The Institute of Company Secretaries of India. ii.The Listing Agreement entered into by the Company with the stock exchange i.e. BSE Limitedand SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards Listing Agreements and SEBI (ListingObligations and Disclosures Requirements) Regulations 2015 etc. mentioned as above.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that during the audit period the Company has adopted new Articlesof Association of the Company containing clauses in conformity with the Companies Act2013.

We further report that the name of the company has been changed from RAUNAQAUTOMOTIVE COMPONENTS LIMITED to RACL Geartech Limited w.e.f. 20thOctober 2015 in accordance with applicable provisions of Companies Act 2013.

We further report that during the audit period the company hasaltered the Capital Clause (Clause V) of the Memorandum of Association of the company inaccordance with applicable provisions of Companies Act 2013. The Authorised Share Capitalof the Company is Rs. 200000000 (Rupees Twenty Crores only) divided into 20000000(Two Crores Only) equity shares of Rs. 10/- each (Rupees Ten Only).

We further report that during the audit period the company has altered Main ObjectClause (Clause III) and Liability Clause (Clause IV) in the Memorandum of Association ofthe Company through Postal Ballot and in accordance with applicable provisions ofCompanies Act 2013.

Place : Delhi For K.K. Malhotra & Co.
Date : 15.07.2016 Company Secretaries
Sd/-
K.K. Malhotra (Proprietor)
FCS No. 1410 C.P No. 446

Annexure A

To

The Members

RACL Geartech Limited

(Formerly Raunaq Automotive Components Limited) 15th Floor Chiranjiv Tower43 Nehru Place New Delhi-110019 CIN L34300DL1983PLC016136

Our Secretarial Audit Report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of theCompany. Our Responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Wherever required we have obtained the Management representation about thecompliance of laws rules and regulation and happening of events etc.

5. The compliance of the provisions of corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to future viability of theCompany nor of the efficacy of effectiveness with which the management has conducted theaffairs of the Company.

Place : Delhi For K.K. Malhotra & Co.
Date : 15.07.2016 Company Secretaries
Sd/-
K.K. Malhotra (Proprietor)
FCS No. 1410 C.P No. 446li