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RACL Geartech Ltd.

BSE: 520073 Sector: Auto
NSE: N.A. ISIN Code: INE704B01017
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OPEN 60.65
CLOSE 62.65
VOLUME 6906
52-Week high 70.90
52-Week low 26.55
P/E 12.68
Mkt Cap.(Rs cr) 61
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 34th Annual Report togetherwith the Audited financial statements of the Company for the financial year ended 31stMarch 2017.

FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars 2016-17 2015-16
Sales and Other Income 12441 12581
Operational Expenses 10944 10294
Depreciation 400 396
Financial Charges 507 556
Gross Profit/(Loss) 590 569
Provision for Taxes/ Def.Tax Liab/ including earlier years 144 199
Net Profit 446 370
Profit b/f from last year (Reserves) 2154 1784
Profit carried to Balance Sheet 2600 2154

DIVIDEND

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

TRANSFER TO RESERVES

An amount of Rs. 446.53 lakhs has been transferred to General Reserve for the FinancialYear ended 31st March 2017.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of the Company's operations in terms of performance in marketsbusiness 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(5) 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 31st March 2017 and of theprofit of your 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 Mr. Dev Raj AryaWhole-time Director & CFO (DIN 00057582) of the Company retires by rotation at theensuing Annual General Meeting (AGM) and being eligible offers himself for reappointment.The brief resume and other details as required under Securities & Exchange of Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 and SecretarialStandards issued by The Institute of Company Secretaries of India are provided in theNotice of Annual General Meeting of the Company. The Board recommends that Mr. Dev RajArya Whole-time Director & CFO (DIN 00057582) may be re-appointed at the ensuingAGM.

During the year under review there is no change in the compositions of directors.

Necessary resolutions in respect of re-appointment of Mr. Dev Raj Arya Whole-timeDirector & CFO (DIN 00057582) have been included in the notice convening the ensuingannual general meeting. Your directors commend his re-appointment.

Mr. Shashank Ramesh Anikhindi (DIN 07787889) has been appointed as an additionaldirector of the Company in Independent category with effect from 27th May2017. Your Directors welcome Mr. Shashank Ramesh Anikhindi on the Board of the company.

Mr. Madan Lal Non-Executive Independent Director of the company will retire at theensuing Annual General Meeting as per the provisions of the Companies Act 2013 ("theAct"). The Board Places on record its appreciation of services rendered by Mr. MadanLal during his tenure as director of the company.

Mr. Raj Kumar Kapoor (DIN 00110338) Mr. Rakesh Kapoor (DIN 00015358) and Mr. AnilSharma (DIN 00157911) was appointed as Independent Directors on the Board of Directors ofthe Company in the Annual General Meeting held on 30th September 2014 to holdoffice for a period of 3 (Three) consecutive years till the conclusion of the 34thAnnual General Meeting (AGM) of the Company to be held in the Calendar Year 2017.

The Board recommends the re-appointments of Mr. Raj Kumar Kapoor as an IndependentDirector of the Company for a second term of 3 (Three) consecutive years with effect from29th September 2017 up to 28th September 2020 and Mr. RakeshKapoor as an Independent Director of the Company for a second term of 4 (four)consecutive years with effect from 29th September 2017 up to 28thSeptember 2021 and Mr. Anil Sharma as an Independent Director of the Company for asecond term of 2 (Two) consecutive years with effect from 29th September 2017up to 28th September 2019 respectively not liable to retire by rotation.

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 none of the Directors of the company is related to the otherDirector or to any other employee of the Company.

Familarisation Programme for Independent Directors

Your Company has adopted 'Familarisation Programmes for Independent Directors' tofamiliarise them with the Company their roles rights responsibilities in the Companynature of the industry in which the Company operates business model of the Company etc.Your Company aims to provide its Independent Directors insight into the Company enablingthem to contribute effectively.

The details of familiarisation programmes may be accessed under the CorporateGovernance section of the website http://raclgeartech.com/pdfs/Familiarisation_Programme_for_Independent_Directors.pdf

During the year under review Independent Directors were apprised on an ongoing basisin the 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 2016-17 which were attendedby all the Independent Directors. Total number of hours spent by each Independent Directorin these programs was four hours.

DISCLOSURES

SHIFTING OF REGISTERED OFFICE

The Registered Office of your Company has been shifted to 15th Floor ErosCorporate Tower Nehru Place New Delhi-110019 INDIA w.e.f. 1st April 2017.

COMMITTEES OF BOARD

Pursuant to requirement under Companies Act 2013 and Securities & Exchange ofBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 theBoard of Directors has constituted various Committees of Board such as Audit CommitteeStakeholders Relationship Committee Nomination & Remuneration Committee CorporateSocial Responsibility Committee and Financial Affairs Committee. The details ofcomposition of these Committees are as follows:

Audit Committee

The audit committee of your Company comprises of Mr. Raj Kumar Kapoor IndependentDirector as the Chairman and Mr. Anil Sharma Independent Director and Mr. Rakesh KapoorIndependent Director as members. Details in respect of the Audit Committee is provided inCorporate Governance Report forming part of the Directors' Report.

Stakeholder Relationship Committee

The Stakeholder Relationship Committee of your Company comprises of Mr. Madan LalIndependent Director as the Chairman and Mr. Gursharan Singh Chairman & ManagingDirector and Mr. Dev Raj Arya Director & CFO as members. Details in respect of theStakeholder Relationship Committee is provided in Corporate Governance Report forming partof the Directors' Report.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of four members. Mr. Rakesh KapoorIndependent Director as the Chairman and Mr. Anil Sharma Independent Director Mr. MadanLal Independent Director and Mr. Gursharan Singh Chairman & Managing Director asother members. Details in respect of the Nomination and Remuneration Committee is providedin Corporate Governance Report forming part of the Directors' Report.

Corporate Social Committee

The Corporate Social Responsibility Committee comprises of three members. Mr. AnilSharma Independent Director as the Chairman and Mrs. Narinder Paul Kaur Non-executiveDirector and Mr. Dev Raj Arya Whole - time Director & CFO as other members. Detailsin respect of the Corporate Social Committee is provided in Corporate Governance Reportforming part of the Directors' Report.

Financial Affairs Committee

The Financial Affairs Committee of your Company comprises of Mr. Raj Kumar KapoorIndependent Director as the Chairman and Mr. Gursharan Singh Chairman & ManagingDirector and Mr. Dev Raj Arya Director & CFO as members. Details in respect of theFinancial Affairs Committee is provided in Corporate Governance Report forming part of theDirectors' Report.

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.

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 Board of Directors expressed their satisfaction with the evaluation process.

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 Management Personnel. Thesaid policy is also posted on the website of the Company which may be accessed at theweb- link http://raclgeartech.com/pdfs/Vigil_Mechanism_Whistle_Blower_Policy_july2016.pdf

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 criteria fordetermining qualifications positive attributes independence of directors and othermatters is annexed as "Annexure - A". The salient points of said policy isstated in the Corporate Governance report forming part of the Directors' Report.

Particulars of Employees and Related Disclosures

Details as required under section 197(12) of the Companies Act 2013 read with Rule5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2016 is annexed as"Annexure - B".

A statement showing the names of employees drawing remuneration in excess of the limitsas set out in section 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) ofCompanies (Appointment and Qualifications of Directors) Rules 2014 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2016 is annexed as"Annexure - C".

Extract of Annual Return

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 POLICY

The Policy on Corporate Social Responsibility may be accessed on the Company's websiteat the 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" andforms integral part of this Report.

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

A. Sachdev & Company Chartered Accountants were appointed as statutory Auditorsat 31st Annual General Meeting (AGM) to hold office till the conclusion of 34thAGM subject to ratification of the appointment by the members at every AGM.

In accordance with the provision of Section 139 of the Companies Act 2013 read withthe Companies (Audit and Auditors) Rules 2014 A. Sachdev & Company CharteredAccountants (Firm Registration No. 001307C) completes its term as the Statutory Auditorsof the Company at the conclusion of the ensuing Annual General Meeting ("AGM")of the Company.

Your Directors on recommendation of the Audit Committee seek approval of the Membersat the ensuing AGM of the Company for appointment of Gianender & AssociatesChartered Accountants [Firm Registration No. 004661N] for an initial term of 3 (Three)consecutive years. Gianender & Associates Chartered Accountants have confirmed theireligibility and willingness for appointment as Statutory Auditors of the Company under theprovisions of the Companies Act 2013 and Rules framed thereunder. Accordingly aresolution proposing appointment of Gianender & Associates Chartered Accountants[Firm Registration No. 004661N] as the Statutory Auditors of the Company for a term of 3(Three) consecutive years from the conclusion of the 34th Annual Generalmeeting (AGM) until the conclusion of 37th AGM of the Company pursuant toSection 139 of the Companies Act and Rules framed thereunder on such remuneration as maybe decided by Board of Directors of the Company is set out in the resolution included inthe Notice convening the AGM of the Company. As per provisions of Section 139(1) of theAct their appointment for the above tenure is subject to ratification by Members at everyAGM.

The Board of Directors places on record its appreciation for the services rendered byA. Sachdev & Company Chartered Accountants as the Statutory Auditors of the Company.

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

Secretarial Auditors

As per section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 your Company appointed K. K. Malhotra& Company Company Secretaries as Secretarial Auditor of the Company for thefinancial year ended 31st March 2017. The Secretarial Audit Report for thefinancial year ended 31st March 2017 is annexed as "Annexure - G".

Internal Auditor

Pursuant to provisions of Section 138 of the Companies Act 2013 the Board ofDirectors has appointed Protiviti India Member Private Limited [CIN:U93000HR2009PTC057389] as Internal Auditors of the Company for a period of 2 (Two)financial years i.e. 2017-18 & 2018-19.

Cost Auditors

Pursuant to Companies (Cost Records and Audit) Amendment Rules 2014 notified by theMinistry of Corporate Affairs (MCA) on 31st December 2014 the Company shallnot be mandatorily required to get its Cost Records for the financial year 2016 - 17audited in terms 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 length basis andwere in the ordinary course of business. During the year there were no material relatedparty transactions made by the Company which could be considered material in accordancewith 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 A. Sachdev &Company Chartered Accountants regarding compliance of conditions of Corporate Governanceas stipulated in regulation 34 read with Schedule V of the Securities and Exchange Boardof India (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 its customersfor 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. 31st March 2017 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 Complaints Committee(ICC)/ Internal Committee has been set up to redress complaints received regarding sexualharassment. All employees (Permanent contractual temporary and trainees) are coveredunder this policy. The company has not received any complaint about sexual harassmentduring the year 2016-17.

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. During the financial year company has borrowed an unsecured Loan of Rs. 50 Lakhsfrom its Directors i.e. Rs. 42 Lakhs from Mr. Gursharan Singh Chairman & ManagingDirector and Rs. 8 Lakhs from Mrs. Narinder Paul Kaur Non Executive Director of theCompany as an exempted deposits

8. Unclaimed Shares : As on 31st March 2017 the Company does not have anyunclaimed shares.

9. The annual listing fee for the year under review has been paid to stock exchangei.e. BSE Limited Mumbai where your company's shares are listed. The Financial Results ofthe company can be accessed at the company's websitehttp://raclgeartech.com/financials.html

ACKNOWLEDGMENT

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 their deep sense of appreciation for thecommitted services by the Company's executives staff and workers.

For and on behalf of the Board
For RACL Geartech Limited
(Formerly Raunaq Automotive Components Limited)
Sd/-
Place: Noida Gursharan Singh
Date: 14th August 2017 Chairman and Managing Director
Regd. Office: 15th Floor Eros Corporate Tower
Nehru Place New Delhi-110019 INDIA
Ph.: +91-11-66155129
e-Mail - 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 financial position andtrends and practices on remuneration prevailing in peer companies in the Auto ComponentIndustry.

• 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 April 2014.

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 Committee comprises offollowing Directors:

Committee Chairman & Members

Mr. Rakesh Kapoor Chairman (Independent Director).

Mr. Anil Sharma Member (Independent Director).

Mr. Madan Lal Member (Independent Director).

Mr. Gursharan Singh Special invitee Member (Chairman and Managing Director).

The Board has the power to reconstitute the Committee consistent with the Company'spolicy 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) of theCompanies 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 Company Secretary;

(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 team excludingBoard of Directors and all members of the management one level below the ExecutiveDirector including the functional Heads. Unless the context otherwise requires words andexpressions used in this policy and not defined herein but defined in the Companies Act2013 as may be amended from time to time shall have the meaning respectively assigned tothem 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 to theBoard

Part - B covers the appointment and nomination and;

Part - C covers remuneration and perquisites etc.

• The key features of this Company's policy shall be included in the Board'sReport.

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 (IncludingIndependent 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 SENIOR

MANAGEMENT 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 PF 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.

"ANNEXURE B" TO THE DIRECTORS' REPORT

Details as required under section 197(12) of the Companies Act 2013 read with Rule5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andCompanies (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 31st March 2017:

(Amount in Rs.)

Name of Director and KMP Remuneration of Directors and KMP for the financial year ended 31s1 March 2017 Ratio of remuneration of each director to median remuneration of employees % increase in remuneration for the financial year ended 31st March 2017
Mr. Gursharan Singh Chairman & Managing Director 7645000 30.60 Nil
Mr. Dev Raj Arya Whole-time Director & CFO 3965000 15.87 Nil
Mr. Raj Kumar Kapoor Independent Director1 210000 0.84 35.48
Mr. Anil Sharma Independent Director1 195000 0.78 11.42
Mr. Madan Lal Independent Director1 168000 0.67 14.28
Mr. Rakesh Kapoor Independent Director1 180000 0.72 33.33
Mrs. Narinder Paul Kaur Non-Executive Director1 1170000 4.68 45.34
Mr. Hitesh Kumar Company Secretary 457000 N.A. N.A.

1 In case of Independent Director remuneration includes sitting fee for attended themeetings of the Board of Directors and Committees thereof and in case of Non - ExecutiveDirector remuneration includes sitting fee and/ or retainership fees if any.

2. In the financial year there was an increase of 9.27% in the median remuneration ofemployees.

3. There were 483 permanent employees on the rolls of Company as on 31stMarch 2017;

4. The average percentile increase made in the salaries of employees other than themanagerial personnel in the last financial year 2016-17 was 10 % whereas there was nopercentile increase in the managerial remuneration for the same financial 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: 14th August 2017 Chairman and Managing Director
Regd. Office: 15th Floor Eros Corporate Tower
Nehru Place New Delhi-110019 INDIA
Ph.: +91-11-66155129
e-Mail - investor@raclgeartech.com

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.

Name Designation Remuneration (in Rs.) Qualification Experience in RACL Geartech Limited (in years) Date of Commencement of employment Age (in years) Previous employment and Designation
Gursharan Singh Chairman & Managing Director 7645000 Diploma in Mechanical Engineering PGDM Export Management 29 YRS 15/10/1987 54 YRS Escort Tractors Ltd. (Ford) Prodt. Engg II
Dev Raj Arya Whole-time Director & CFO 3965000 LLB Company Secretary M.A. in Economics Cost Accountant 19 YRS 18/08/1997 66 YRS Vishal lakto (i) ltd. Company Secretary (G.M.)
Rajiv Kumar Goel Associate Vice President 2285600 B.TECH (Mechanical) 26 YRS 01/10/1990 49 YRS NA
Deepak Saxena Associate Vice President 1805600 B.E. 21 YRS 01/09/1995 51 YRS Clutch Auto Ltd. Faridabad Engineer
Girish Kapoor General Manager 1645600 Diploma in Mechanical Engineering 26 YRS 01/06/1990 51 YRS Tirupati Udyog Ltd. Trainee Supervisor Q/C
Yogesh Baweja General Manager 1603600 M.B.A.(Operations Research) B.E. (Mechanical) 4-year Diploma Tool & Die Making and Certificate curse Import & Export Management 4 YRS 01/04/2013 49 YRS Samtel Group DGM
Hemant Kumar Joint General Manager 1454600 AME Mechanical Engineering Diploma In Mechanical Engineering 8YRS 18/08/2008 48 YRS Lumax IndustriesSr. Manager
Naveen Chandra Agarwal Joint General Manager 1334600 B.TECH (Production) 25 YRS 09/08/1991 50 YRS Vxl India Ltd. Universal Engg. Faridabad Engineer (Prod.)
Syed Mustahasan Jalil Assistant General Manager 1169600 Diploma In Electrical Engineering 9 YRS 08/01/2008 49 YRS Getrag HI-TECH Gears (India) Pvt. Ltd. Manager (Maintenance)
Anil Kumar Saini Assistant General Manager 1139600 ITI Draughtsman Mechanical 24 YRS 28/04/1992 53 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. Gurshran 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 31stMarch 2017 and were in receipt of Remuneration aggregating not less than Rs.10200000/-per annum and Employed for the part of the financial year ended 31st March2017 and were in receipt of Remuneration aggregating not less than Rs. 850000/- permonth.

• 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 two (2) 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: 14th August 2017 Chairman and Managing Director
Regd. Office: 15th Floor Eros Corporate Tower
Nehru Place New Delhi-110019 INDIA
Ph.: +91-11-66155129
e-Mail - 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:

a) High energy HPMV Bulbs have been replaced with LED lights for conservation ofelectrical energy.

b) Energy efficient aluminium pressure line have been installed in Heat treatment shopfor reducing air pressure losses which in turn help in conservation of electrical energy.

c) Centrifugal chip wringer have been installed for extraction of oils from cuttingchips thus conserving mineral oils.

d) On-line normalizing is being carried out in forging shop resulting into majorsaving of electrical energy.

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

• Self recuperative type burners have been installed in one Sealed Quench Furnaceresulting into saving of 50% LPG consumption on the modified furnace. Remaining furnacesshall be planned in coming years.

(iii) Capital investment on energy conservation equipments:

• Rs.65 Lakhs

(B) TECHNOLOGY ABSORPTION

(i) Efforts made towards technology absorption & development

a) Dry cut hobbing machine have been installed for elimination of cutting oil usage.It has brought a major saving in conservation of scared mineral oils.

b) Energy efficient motors have been installed at many places to replace the oldmotors thus conservation of electrical energy.

c) Low viscosity cutting oils have been deployed to avoid drag out losses resulting insaving of cutting oils. These are also helpful in using higher cutting parameters thusimproving productivity.

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

(a) Forging weight optimization initiatives are under process to save steel which isresulting in reduced raw material consumptions & enabling to support saving ofnational resources.

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

• The details of technology imported:

a) High speed dry cut hobbing machine.

b) High speed wet cut hobbing machines.

c) High speed precision CNC Machining centre.

d) Fine pitch Gear hobbing machine.

• Year of import : 2016-17

• Whether the technology been fully absorbed : Yes

• If not fully absorbed areas where absorption has not taken place and thereasons thereof - N.A.

(iv) The expenditure incurred on research and development - Nil
(C) FOREIGN EXCHANGE EARNINGS
• Foreign Exchange earned (in terms of actual inflow) : Rs. 5558.19 lakhs
• Foreign Exchange outgo (in terms of actual outflow) : Rs. 430.67 lakhs
For and on behalf of the Board
For RACL Geartech Limited
(Formerly Raunaq Automotive Components Limited)
Sd/-
Place: Noida Gursharan Singh
Date: 14th August 2017 Chairman and Managing Director
Regd. Office: 15th Floor Eros Corporate Tower
Nehru Place New Delhi-110019 INDIA
Ph.: +91-11-66155129
e-Mail - investor@raclgeartech.com