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Bharat Gears Ltd.

BSE: 505688 Sector: Auto
NSE: BHARATGEAR ISIN Code: INE561C01019
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OPEN 132.00
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VOLUME 3965
52-Week high 190.20
52-Week low 102.24
P/E 6.66
Mkt Cap.(Rs cr) 141
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 132.00
CLOSE 137.95
VOLUME 3965
52-Week high 190.20
52-Week low 102.24
P/E 6.66
Mkt Cap.(Rs cr) 141
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharat Gears Ltd. (BHARATGEAR) - Director Report

Company director report

(SECTION 134 OF THE COMPANIES ACT 2013)

To The Members

The Directors are pleased to present the 49th Annual Report and the AuditedFinancial Statements for the year ended 31 March 2021.

(`/Crores) Financial year ended

Financial Results 31.03.2021 31.03.2020
Revenue from operations and other income (gross) 504.40 468.00
Profit before finance costs and depreciation and amortisation expense 37.17 23.51
Finance costs 22.67 21.65
Depreciation and amortisation expense 24.15 26.68
Profit/(Loss) before tax (9.65) (24.82)
Less: Tax expense/(benefit) (1.95) (6.04)
Profit/(Loss) after tax (7.70) (18.78)
Other comprehensive income 0.95 (0.72)
Total comprehensive income (6.75) (19.50)
Statement of other equity
Opening balance 70.27 80.35
Add: Total comprehensive income/(loss) for the year (6.75) (19.50)
Add: Share premium on right issue of equity shares - 10.54
Add: Equity component of liability 0.98 -
Less: Dividend including dividend distribution tax - (1.12)
Closing balance 64.50 70.27

DIVIDEND

In view of losses for the year the directors of the Company have decided not torecommend any dividend on equity shares of the Company for the year ended 31 March 2021.

FINANCIAL PERFORMANCE

Operations of the Company were affected in the initial months of the financial yearbecause of the nationwide lockdown implemented by Government of India to curb the spreadof COVID-19 Pandemic. Post lockdown offtake from customers has been robust. As a resultoverall sales volume showed an upward trajectory on the back of strong demand from OEMs.Revenue from operations for the year has increased by 9% in comparison to thecorresponding year.

Operations for FY21 resulted in EBITDA of Rs 3717 lakhs vis--vis an EBIDTA of Rs 2352lakhs for FY20. The improvement is largely on account of increase in contribution due tohigher volumes. This was partially set-off by higher incidence of premium freight.

In FY21 the Company has incurred expense of Rs 195 lakhs on account of VoluntaryRetirement Scheme.

During FY21 the Company has obtained an interest free unsecured loan of Rs 200 lakhsfrom a Director. The Company has repaid an amount of Rs 1783 lakhs during FY21 in respectof long term loans.

Loss after tax for the year ended 31 March 2021 was Rs 770 lakhs against loss aftertax of Rs 1878 lakhs in previous year.

INDIAN ACCOUNTING STANDARDS ("IND AS")

The financial statements for the year ended 31 March 2021 have been prepared inaccordance with the Indian Accounting Standards ("Ind AS") as required under theprovisions of Section 133 of the Companies Act 2013 read with rules made there under asamended.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of the Company's operations in terms of performance in marketsmanufacturing activities business outlook risks and concerns forms part of theManagement Discussion and Analysis a separate section of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) read with 134(5) of the Companies Act 2013 yourDirectors confirm that:-

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31 March 2021 and of the Profitand Loss of the Company for the period ended on that date;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY CONTRACTS AND ARRANGEMENTS

The contracts or arrangements of the Company with related parties during the periodunder review referred to in Section 188(1) of the Companies Act 2013 were in ordinarycourse of business and on arm's length basis. During the year the Company had not enteredinto the contract/arrangement/transaction with related parties which could be consideredmaterial in accordance with the related party transaction policy of the Company. Thusthere are no transactions which are required to be reported in the prescribed Form AOC-2of the Companies (Accounts) Rules 2014.

Further during the Financial Year 2020-21 there were no materially significantrelated party transactions entered into by your Company with the Promoters Directors KeyManagerial Personnel or other designated persons which might have potential conflict withthe interest of the Company at large.

As all the related party transactions are at arm's length price and in the ordinarycourse of business the same are placed before the Audit Committee for its approval. Therewas no related party transaction which required approval of the Board. During theFinancial Year under review the Audit Committee has approved the related partytransactions through the omnibus mode in accordance with the provisions of the CompaniesAct 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. Related party transactions were disclosed to the Board on regular basis as per IndAS-24. Details of related party transactions as per Ind AS-24 may be referred to in theNotes to the Financial Statements.

The policy on Related Party transactions as approved by the Board in terms of theprovisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("the Regulations") is available on the official website ofthe Company i.e. www.bharatgears.com under the link: http://bharatgears.com/documents/related_partyfitransaction_policy.pdf

PARTICULARS OF LOANS GUARANTEES OR INVESTMENT

During the period under review the Company has not made any loan guarantee orinvestment in terms of the provisions of Section 186 of the Companies Act 2013.

DIRECTORS

During the Financial Year 2020-21 the members of the Company vide their specialresolution(s) passed at the Annual General Meeting held on 16 September 2020 approvedthe:

Re-appointment of Mr. Rakesh Chopra as a Non-Executive Independent Director on theBoard of the Company for a further period of 5 (Five) years upto the conclusion of the 53rdAnnual General Meeting (AGM) of the Company in the Calendar Year 2025 in terms of theprovisions of Section 149 of the Companies Act 2013;

Re-appointment of Mr. Virendra Kumar Pargal as a Non-Executive Independent Directoron the Board of the Company for a further period of 5 (Five) years upto the conclusion ofthe 53rd Annual General

Meeting (AGM) of the Company in the Calendar Year 2025 in terms of the provisions ofSection 149 of the Companies Act 2013;

Re-appointment of Mr. Surinder Paul Kanwar as Chairman and Managing Director of theCompany for a further period of 5 (Five) years w.e.f. 01 October 2020;

Re-appointment of Mr. Nagar Venkatraman Srinivasan as a Non-Executive Director onthe Board of the Company liable to retire by rotation upto the conclusion of the 49thAnnual General Meeting (AGM) of the Company in the Calendar year 2021 in terms of theprovisions of Section 152 of the Companies Act 2013.

in terms of the applicable provisions of the Companies Act 2013 and the Regulationsread with Regulation 17 of the Regulations as amended and the provisions of Section 196(3)of the Companies Act 2013 the age of Mr. Virendra Kumar Pargal and Mr. Nagar VenkatramanSrinivasan being more than seventy five years at the commencement of their respectivetenure and the age of Mr. Surinder Paul Kanwar to be more than seventy years during histenure.

The tenure of Mr. Sameer Kanwar as Joint Managing Director of the Company has expiredon 31 May 2021. The Board of Directors of the Company in its meeting held on 11 June 2021has re-appointed Mr. Sameer Kanwar as Joint Managing Director of the Company for a furtherperiod of 3 (Three) years w.e.f. 01 June 2021 subject to the approval of shareholders atthe ensuing Annual General Meeting of the Company by way of special resolution in terms ofthe applicable provisions of the Companies Act 2013 and the Regulations.

In terms of the provisions of Section 149 of the Companies Act 2013 Mr. WolfgangRudolf Schilha had been appointed as a Non-Executive Independent Director on the Board ofthe Company at the Annual General Meeting (AGM) of the Company held on 04 August 2016 fora period of 5 (Five) years upto the conclusion of the 49th AGM of the Companyin the Calendar year 2021.

Therefore in terms of the provisions of Section 149 of the Companies Act 2013 it hasbeen proposed to re-appoint Mr. Wolfgang Rudolf Schilha as a Non-Executive IndependentDirector at the ensuing Annual General Meeting (AGM) of the Company for a period of 5(Five) years upto the conclusion of the 54th AGM of the Company in the Calendaryear 2026 by way of special resolution pursuant to the applicable provisions of theCompanies Act 2013 and the Regulations in read with Regulation 17 of the Regulations asamended as the age of Mr. Wolfgang Rudolf Schilha will be more than seventy five yearsduring his proposed tenure.

A notice has been received from a member under Section 160 of the Companies Act 2013signifying their intention to propose Mr. Wolfgang Rudolf Schilha as candidate for theoffice of Non-Executive Independent Director of the Company.

Further in terms of the provisions of Section 152 of the Companies Act 2013 it hasbeen proposed to re-appoint Mr. Nagar Venkatraman Srinivasan as a Non-Executive Directorliable to retire by rotation at the ensuing Annual General Meeting (AGM) of the Companyupto the conclusion of the next Annual General Meeting (AGM) of the Company in theCalender Year 2022 by way of special resolution pursuant to the applicable provisions ofthe Companies Act 2013 and the Regulations in read with Regulation 17 of the Regulationsas amended the age of Mr. Nagar Venkatraman Srinivasan being more than seventy five yearsat the commencement of his proposed tenure.

BOARD'S OPINION REGARDING INTEGRITY EXPERTISE AND EXPERIENCE (INCLUDING THEPROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED/RE-APPOINTED DURING THE YEAR

The Board is of the opinion that the Independent Directors appointed/re-appointedduring the year under review are person(s) of integrity and possess core skills/expertise/competencies (including the pro_ciency) as identified by the Board of Directors asrequired in the context of Company's business(es) and sector(s) for the Company tofunction effectively.

NUMBER OF MEETINGS OF THE BOARD

During the financial year 2020-21 4 (Four) Board Meetings were held on the followingdates:-

28 June 2020;

13 August 2020;

09 November 2020; and

11 February 2021

The gap between any two meetings was not more than one hundred twenty days as mandatedunder the provisions of Section 173 of the Companies Act 2013 and Regulation 17(2) of theRegulations.

However the gap between the Board Meeting held on 28 June 2020 was more than 120 (onehundred and twenty) days from the Board Meeting held on 29 January 2020 in the FinancialYear 2019-20 pursuant to the relaxations provided by the Securities and Exchange Board ofIndia for Board/Audit Committee Meetings held/proposed to be held between the period 01December 2019 and 31 July 2020 vide its circular Ref No. SEBI/HO/CFD/CMD1/ CIR/P/2020/38dated 19 March 2020 and Ref No. SEBI/ HO/CFD/CMD1/CIR/P/2020/110 dated 26 June 2020 andthe relaxations provided by the Ministry of Corporate Affairs for Board Meetingsheld/proposed to be held till 30 September 2020 vide its General Circular No. 11/2020dated 24 March 2020 respectively during the outbreak of Covid-19 pandemic in the Country.

INDEPENDENT DIRECTORS

In terms of the provisions of Section 149(7) of the Companies Act 2013 read withRegulation 25(8) of the Regulations all the Independent Directors of the Company havefurnished a declaration to the Compliance Officer of the Company at the meeting of theBoard of Directors held on 11 June 2021 stating that they fulfill the criteria ofIndependent Director as prescribed under Section 149(6) of the Companies Act 2013 readwith Regulation 16(1)(b) of the Regulations and are not being disqualified to act as anIndependent Director. Further they have declared that they are not aware of anycircumstance or situation which exist or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgmentand without any external influence.

In the opinion of the Board all the Independent Directors fulfill the conditionsspecified in the Companies Act 2013 read with the Rules made thereunder and theRegulations and are independent of the management.

In terms of Regulation 25(7) of the Regulations the Company has adopted afamiliarization programme for the Independent Directors to familiarize them with workingof the Company nature of the industry in which the Company operates business model ofthe Company their roles rights responsibilities and other relevant details. The detailsof familiarization programme during the Financial Year 2020-21 are available on theofficial website of the Company i.e. www.bharatgears.com under the link:https://www.bharatgears.com/documents/details-of-familiarization-programme-for-independent-directors-fy-20-21.pdf

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL (KMP) ANDSENIOR MANAGEMENT PERSONNEL

In terms of the provisions of Section 178 of the Companies Act 2013 read withRegulation 19 of the Regulations Nomination and Remuneration Committee (‘NRC') hasformulated a policy relating to appointment and determination of the remuneration for theDirectors Key Managerial Personnel and Senior Management Personnel which has been adoptedby the Board of Directors of the Company. The NRC has also developed the criteria fordetermining the qualifications positive attributes and independence of Directors and formaking payments to the Executive and Non-Executive Directors of the Company.

Your Directors affirm that the remuneration paid to the Directors Key ManagerialPersonnel Senior Management Personnel and other employees is as per the Nomination andRemuneration Policy of your Company.

The salient features of the Nomination and Remuneration Policy are as under:

Formulation of the criteria for determining qualifications positive attributes andindependence of a Director.

Identification of 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 the Nomination and Remuneration policy.

Recommendation to the Board for appointment and removal of Director KMP and SeniorManagement Personnel.

Formulation of the criteria for devising a policy on diversity of Board of Directors.

Deciding that whether to extend or continue the term of appointment of the IndependentDirector on the basis of the report of performance evaluation of Independent Directors.

Recommendation to the Board all remuneration in whatever form payable to seniormanagement.

The said policy is available on the official website of the Company i.e.www.bharatgears.com under the link: https://www.bharatgears.com/documents/nomination_andfiremuneration_policy_BGL.pdf

EVALUATION PROCESS

The Nomination and Remuneration Committee has established a framework for theevaluation process of performance of the Board its Committees and Individual Directorsand the same was adopted by the Board.

During the period under review the Board of Directors at its meeting held on 11 June2021 have carried out the evaluation of the performance of Independent Directors and theirindependence criteria and the Independent Directors in their meeting held on 15 March2021 have evaluated the performance of the Chairman and

Non-Independent Directors and the Board as a whole and also assessed the qualityquantity and timeliness of flow of information between the Board and Company management.

KEY MANAGERIAL PERSONNEL

The following Directors/Officials of the Company have been designated as Key ManagerialPersonnel (KMP) of the Company by the Board of Directors in terms of the provisions ofSection 203 of the Companies Act 2013 and the Regulations:

1. Mr. Surinder Paul Kanwar Chairman and Managing Director

2. Mr. Sameer Kanwar Joint Managing Director

3. Mr. Milind Pujari Chief Financial Officer

4. Mr. Prashant Khattry Head (Legal) and Company Secretary

No Key Managerial Personnel (KMP) of the Company has resigned during the financial yearended 31 March 2021.

DISCLOSURES UNDER THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULES 2014

Details pertaining to remuneration as required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are enclosed as Annexure -"A" to this report.

PARTICULARS OF EMPLOYEES

Information regarding employees in accordance with the provisions of Rule 5(2) and Rule5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is given in Annexure- "B" to this Report.

RISK MANAGEMENT

A robust and integrated enterprise risk management framework is in existence underwhich the common prevailing risks in the Company are identified the risks so identifiedare reviewed on periodic basis by the Audit Committee and the management's actions tomitigate the risk exposure in a timely manner are assessed.

A risk management policy under the above said enterprise risk management framework asapproved by the Board has been adopted by the Company.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Companies Act 2013 the CorporateSocial Responsibility Committee ("CSR Committee") is in existence to monitor theCorporate Social Responsibility Policy of the Company as approved by the Board and thesaid policy is available on the official website of the Company i.e. www.bharatgears.comunder the link: http://bharatgears.com/documents/CSR_Policy_BGL.pdf

The CSR Committee comprises of Mr. Surinder Paul Kanwar Mr. Sameer Kanwar and Mr.Rakesh Chopra.

The role of the Corporate Social Responsibility Committee includes:

(a) Formulation and recommendation to the Board a Corporate Social ResponsibilityPolicy (CSR Policy) which shall indicate the activities to be undertaken by the company asspecified in Schedule VII of the Companies Act 2013 ("the Act").

(b) Monitoring the Corporate Social Responsibility Policy of the Company from time totime.

(c) Recommendation of the amount of expenditure to be incurred on the activitiesreferred to in clause (a) above.

(d) Instituting a transparent monitoring mechanism for implementation of the CSRprojects or programs or activities undertaken by the Company.

Your Company has spent Rs 2423083/- (Rupees Twenty Four Lakhs Twenty Three ThousandEighty Three Only) in the Financial Year 2020-21 including the balance unspent amount ofRs 1951250/- (Rupees Nineteen Lakhs Fifty One Thousand Two Hundred Fifty Only) upto theFinancial Year 2019-20 as per the following details:

AMOUNT SPENT ON CSR ACTIVITIES IN THE FINANCIAL YEAR 2020-21

 

 

S.no. Financial Year to which the amount pertains Amount (`)
1. Amount unspent upto 1951250.00
Financial Year 2019-20
2. Amount spent for the 275000.00
Financial Year 2020-21
3. Surplus amount spent 196833.00
TOTAL 2423083.00

The report on CSR activities with other details in terms of the provisions of Rule 8 ofthe Companies (Corporate Social Responsibility) Rules 2014 for the Financial Year 2020-21is enclosed as Annexure-"C" to this report.

Further a Certificate issued by Mr. Milind Pujari Chief Financial Officer of theCompany certifying that the funds of CSR have been utilized for the purposes and in themanner as recommended by the CSR Committee and approved by the Board is enclosed as Annexure-"D"to this report.

AUDIT COMMITTEE

The Audit Committee comprises of Mr. Rakesh Chopra Mr. Virendra Kumar Pargal and Ms.Hiroo Suresh Advani.

Further the details on the Audit Committee and its terms of reference etc. have beenfurnished in the Corporate Governance Report forming part of this Report. During the yearunder review all recommendations of the Audit Committee were accepted by the Board ofDirectors of the Company unanimously.

INTERNAL COMPLAINTS COMMITTEE FOR PREVENTION OF SEXUAL HARASSMENT

Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 read with Rule 14 of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Rules 2013 the Company hasconstituted Internal Complaints Committee (ICC) at all its Units (i.e. Faridabad Mumbraand Lonand) where any grievance of sexual harassment at workplace can be reported.

The Company has also adopted a policy on Prevention of Sexual Harassment at workplace.The objective of the policy is to provide its women employees a workplace free fromharassment/discrimination and every employee is treated with dignity and respect. The saidpolicy is available on the official website of the Company i.e. www.bharatgears.com underthe link: http://bharatgears. com/documents/policy-for-prevention-of-sexual-harassment.pdf

During the year under review ICC of all units of the Company has not received anycomplaint pertaining to sexual harassment of women at workplace.

SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES

During the year under review no Company has become or ceased to be subsidiary jointventure or associate of the Company.

DEPOSITS

During the year under review the Company did not accept any deposits.

Investor Education and Protection Fund (IEPF)

IntermsoftheprovisionsofSection124(5)oftheCompanies Act 2013 read with the lnvestorEducation and Protection Fund (IEPF) Authority (Accounting Audit Transfer and Refund)Rules 2016 and further amendments thereto the Unclaimed Final Dividend pertaining to theFinancial Year 2012-13 amount aggregating to Rs 306778.00 (Rupees Three Lakhs SixThousand Seven Hundred Seventy Eight Only) and 4166 (Four Thousand One Hundred Sixty Six)Equity Shares had been transferred to the "Investor Education and ProtectionFund" established by the Central Government. For detailed information please referthe Corporate Governance Report forming part of this report.

AUDITORS

The Statutory Auditors M/s S R B C & CO LLP (SRBC) Chartered Accountants (ICAIRegistration No. 324982E/ E300003) had been appointed as Statutory Auditors of the Companyin the 45th Annual General Meeting (AGM) held on 09 August 2017 for a periodof 5 (Five) years in terms of the provisions of Section 139 of the Companies Act 2013 tohold office from the 45th AGM to the 50th AGM in the calendar year2022.

REPORT ON FINANCIAL STATEMENTS

The report of M/s S R B C & CO LLP (SRBC)Chartered Accountants (ICAI RegistrationNo. 324982E/E300003) the Statutory Auditors of the Company on the financial statements ofthe Company for the year ended 31 March 2021 is annexed to the financial statements interms of the provisions of Section 134(2) of the Companies Act 2013. The observations ofthe Auditors in their report are self-explanatory and/or explained suitably in the Notesto the Financial Statements. The report of the Statutory Auditors does not contain anyqualification reservation or adverse remark which needs any explanation or comment of theBoard.

SECRETARIAL AUDIT

The Board has appointed M/s TVA & Co. LLP Practicing Company Secretaries asSecretarial Auditor for the Financial Year 2020-21 in terms of the provisions of Section204 of the Companies Act 2013 and Regulation 24A of the Regulations. The SecretarialAudit Report of the Company for the Financial Year ended 31 March 2021 in the prescribedform MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is enclosed as Annexure -"E" to this report. The Secretarial AuditReport does not contain any qualification reservation or adverse remark which needs anyexplanation or comment of the Board.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company has a proper and adequate system of internal financial controls whichincludes the policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. Duringthe year such controls were tested and no material weakness in the design or operationswere observed.

COST RECORDS AND AUDIT

During the year under review the Company had been mandatorily required to maintain thecost records as specified by the Central Government under sub-section (1) of section 148of the Companies Act 2013 and accordingly such accounts and records have been made andmaintained.

In terms of the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 as amended M/s M.K. Kulshrestha &Associates Cost Accountants Ghaziabad has conducted the audit of the cost records of allthe 3 (Three) plants of the Company viz. Mumbra (Maharashtra) Lonand (Maharashtra) andFaridabad (Haryana) for the year ended 31 March 2020 and submitted their report thereonwithin the prescribed time limits. Subsequently M/s M.K. Kulshrestha & AssociatesCost Accountants Ghaziabad shall conduct the audit of the cost records of all the 3(Three) plants of the Company viz. Mumbra (Maharashtra) Lonand (Maharashtra) andFaridabad (Haryana) for the year ended 31 March 2021 and shall submit their reportthereon within the prescribed time limits during the Financial Year 2021-22.

Further on recommendation of the Audit Committee the Board of Directors of theCompany in its meeting held on 11 June 2021 has approved the appointment of M/s M.K.Kulshrestha & Associates Cost Accountants Ghaziabad as Cost Auditors of the Companyto conduct the audit of the cost records of all the 3 (Three) plants of the Company viz.Mumbra (Maharashtra) Lonand (Maharashtra) and Faridabad (Haryana) for the year ending 31March 2022.

CORPORATE GOVERNANCE

The Company is committed to maintain the quality standards of Corporate Governance. TheReport on Corporate Governance as stipulated under Schedule V(C) of the Regulations formspart of this Report.

The requisite Certificate of Compliance from Statutory Auditors M/s S R B C & COLLP (SRBC) confirming compliance with the conditions of Corporate Governance is attachedto this Report.

VIGIL MECHANISM/WHISTLE BLOWER MECHANISM

In terms of the provisions of Section 177 of the Companies Act 2013 and theRegulations the Company has established an effective mechanism called Vigil Mechanism(Whistle Blower Mechanism). The mechanism under the Policy has been appropriatelycommunicated within the organisation. The purpose of this policy is to provide a frameworkto promote responsible whistle blowing by employees or by any other person who avails suchmechanism. It protects employees or any other person who avails such mechanism wishing toraise a concern about serious irregularities unethical behavior actual or suspectedfraud within the Company by reporting the same to the Audit Committee.

Protected disclosure can be made by the whistle blower in a closed and secured envelopeor sent through e-mail to the Compliance Officer.

During the year under review no compliant has been received and no employee was deniedaccess to the Audit Committee.

The functioning of the Whistle Blower Mechanism/Vigil Mechanism existing in the Companyis reviewed by the Audit Committee on Annual basis.

The policy on vigil mechanism is available on the official website of the Company i.e.www.bharatgears.com under the link: http://bharatgears.com/documents/policy_on_vigil_mechanism.pdf

RECONCILIATION OF SHARE CAPITAL AUDIT

In terms of Regulation 76 of the SEBI (Depositories and Participants) Regulations2018 the Reconciliation of Share Capital Audit is undertaken by a firm of PracticingCompany Secretaries on quarterly basis. The audit is aimed at reconciliation of totalshares held in CDSL NSDL and in physical form with the admitted issued and listedcapital of the Company.

The Reconciliation of Share Capital Audit Report(s) as submitted by the Auditor onquarterly basis were filed with the National Stock Exchange of India Limited (NSE) throughNSE Electronic Application Processing System (NEAPS) and with BSE Limited (BSE) throughBSE Listing Centre where the original shares of the Company are listed.

LISTING OF SHARES

The Equity Shares of the Company are listed on the BSE Limited Mumbai and the NationalStock Exchange of India Limited Mumbai.

DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT 2013

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 and the date of this report.

Estimation of uncertainties relating to the global health pandemic from COVID-19

The Company's operations have been impacted by the unprecedented COVID-19 pandemicwhich resulted in an interruption to the production due to the nationwide lockdown in theinitial part of this year. The Company has incurred loss before tax during the currentyear amounting to Rs 964.83 lakhs primarily owing to lower volumes in the initial monthsof the year due to COVID-19 pandemic finance costs and depreciation.

The Company has been sanctioned additional facility under ‘Emergency Credit LineGuarantee Scheme (ECLGS)' by the lenders and the management has adopted several costreduction measures to maintain sufficient operational cash flows to ensure uninterruptedfulfillment of its orders from customers.

Based on management's assessment of market conditions supported by revival of demand bythe OEMs steady growth in revenue and in light of the additional facility beingsanctioned the management is confident of recovering the carrying value of its assets asat 31 March 2021 and meeting its liabilities as they fall due. The carrying value ofcurrent and non-current assets are based on the internal and external sources ofinformation indicators of economic forecasts existing as on date.

The estimates used for assessing the carrying value of assets and liabilities at 31March 2021 during the COVID-19 pandemic may undergo a change as these are dependent onthe continuing impact of the pandemic on the economy and automotive sector and the Companywill continue to monitor and address any material changes and its consequent impact on itsbusiness if any.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO

The information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-"F"to this Report.

ANNUAL RETURN

In terms of the provisions of Section 134(3)(a) read with Section 92(3) of theCompanies Act 2013 and the relevant rules made thereunder a copy of the Annual return asprescribed under Section 92 of the Companies Act 2013 as amended shall be made availableon the official website of the Company www.bharatgears.com under the link:https://www.bharatgears.com/documents/annual-return-for-2020-21.pdf.

COMPLIANCE OF SECRETARIAL STANDARDS

During the period under review the Company has duly complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India.

COURT/TRIBUNAL ORDERS

There were no instances of any significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Company's operations infuture.

DETAILS OF APPLICATION/PROCEEDING UNDER THE INSOLVENCY AND BANCRUPTCY CODE 2016

Neither any application has been made nor any proceeding is pending against the Companyunder the Insolvency and Bankruptcy Code 2016 during the year under review.

INSTANCES OF DIFFERENCE IN VALUATION

There is no such instance where there is difference between amount of the valuationdone at the time of one time settlement and the valuation done while taking loan from theBanks or Financial Institutions.

INDUSTRIAL RELATIONS

During the year under review industrial relations in the Company continued to becordial and peaceful.

ACKNOWLEDGEMENTS

The Board of Directors thank the shareholders for their continued support and theywould like to place on record their appreciation for the dedicated services rendered bythe Employees at all levels.

The Directors wish to convey their gratitude to the Financial Institutions BanksCustomers Suppliers and Collaborators for the assistance and confidence reposed by themin the Company.

For and on behalf of the Board of Directors
Surinder Paul Kanwar
Chairman and Managing Director
Dated: 11 June 2021 DIN: 00033524

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