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The Hi-Tech Gears Ltd.

BSE: 522073 Sector: Auto
NSE: HITECHGEAR ISIN Code: INE127B01011
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VOLUME 17399
52-Week high 266.00
52-Week low 95.90
P/E 22.37
Mkt Cap.(Rs cr) 455
Buy Price 0.00
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OPEN 252.00
CLOSE 250.85
VOLUME 17399
52-Week high 266.00
52-Week low 95.90
P/E 22.37
Mkt Cap.(Rs cr) 455
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

The Hi-Tech Gears Ltd. (HITECHGEAR) - Director Report

Company director report

Dear Members

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

Financial Results

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

( in Mn except per share data)

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

* Please refer to dividend para of this Director Report

General Information

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

On export side the overall automobile exports increased by 2.95%. While Three Wheelersand Two Wheelers registered a downfall/ growth of 11.54% and 7.30% respectively exportsof Passenger Vehicle increased by 0.17% and Commercial Vehicles registered a de-growth of39.25% in April-March 2020 over April-March 2019.

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

State of Company Affairs

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

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

Company are majorly covered in the Management Discussion & Analysis Report formingpart of this report. The performance of the Company was in line with the performance ofAuto Industries. During the FY 2019-20 the total revenue stood at Rs. 5155.28 million ascompared to Rs. 6634.52 million in the last FY 2018-19 registering a degrowth of

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

Rs. 77.42 million in comparison to Rs. 354.84 million in previous year registering adegrowth of 78.18%.

On a consolidated basis the total revenue was Rs. 7334.94 million as compared to Rs.9306.81 million in the previous FY. Similarly the Net profit after tax was Rs. 82.76million as compared to Rs. 355.78 millions in previous FY.

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

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

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

Company are bright.

Consolidated Financial Statements

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

Impact of COVID-19 pandemic

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

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

Strictly following the social distancing at workplaces factories canteen etc.

Regular health updates of all the employees and their families

Promoting awareness through do' and don's posters for all its employees

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

Supply Chain is being monitored to ensure availability of material.

Staggered time schedules and encouraging work from home for the employees whereverpossible.

Even after the complete lifting of lockdown the turnaround to take a significantlylonger time. However management is working on planned and concerted response bothimmediate and medium to long term which will ensure recovery. The management is closelymonitoring the situation and to take appropriate action in the interest of allstakeholders.

Share Capital

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

Dividend

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

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

Change in the nature of business

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

Change of the registered office

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

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

Compliance with Secretarial Standards

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

Directors Responsibility Statement

In terms of section 134 (3) (c) & 134 (5) of the Companies Act 2013 and to thebest of their knowledge and belief and according to the information and explanationsprovided to them your Directors hereby make the following statements: (a) that inpreparation of the Annual Accounts the applicable accounting standards have been followedalong with proper explanations relating to material departures if any (b) that suchaccounting policies have been selected and applied them consistently and made judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company as on March 31 2020 and of the profit of the

Company for the year ended on that date

(c) that proper and sufficient adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for prevention anddetection of fraud and other irregularities

(d) that the annual financial statements have been prepared on going concern basis

(e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively and

(f) that the systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.

Details of Internal Financial Controls with reference to the Financial Statement

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

 

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

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

Controls with reference to the Financial Statements were adequate and operatingeffectively.

Further the Audit Committee monitors the adequacy and effectiveness your Company'sinternal control framework.

Details of Subsidiary/Joint Ventures/Associate Companies

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

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

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

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

Directors Key Managerial Personnel's and Evaluation

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

Retire by Rotation

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

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

a. Key Managerial Personnel's

All Whole Time Directors such as Mr. Deep Kapuria Executive Chairman Mr. PranavKapuria Managing Director and Mr. Anuj Kapuria Executive

Director are regarded as KMPs in addition to Chief Financial Officer

(C.F.O.) and Company Secretary (C.S.).

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

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

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

During the year Mr. Neville D'Souza (DIN: 08536411) was appointed as

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

c. Meetings of the Board

The Board met 4 (four) times during the period 2019-20 to conduct the operations of theCompany. The details are given in the Corporate

Governance Report which forms part of this Annual Report. It is confirmed that the gapbetween two consecutive meetings was not more than one hundred and twenty days as providedin section 173 of the Act.

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

Pursuant to the provisions of the Companies Act 2013 and the SEBI (LODR) Regulations2015 the Board carried out an formal annual performance evaluation of its ownperformance the Chairman Directors individually and the working of the differentcommittees. Such evaluation was done through the established evaluation framework and theSEBI Guidance Note.

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

Auditors and their Reports a) Statutory Auditors

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

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

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

Auditors is not required to be ratified at every Annual general Meeting. The Auditors'Report does not contain any qualification reservation or adverse remark and do not callfor any further explanation/ clarification by the Board of Directors as provided underSection 134 of the Act. With respect to the point no. (vii) (b) in Annexure "A"to Auditors' Report relating to non-deposit of disputed taxes. The Board wishes to informthat those matters are related to regular tax matters for which the Company has preferredappeal to Appellate Authorities. The necessary explanations are also provided in Note 38A(2) to the Standalone Financial Statements. The rest of report by the Statutory Auditorsis self-explanatory. Please refer to the Notes to Accounts wherever necessary.

b) Cost Auditors

The provisions relating to section 148(1) read with rules are applicable accordinglycost accounts and records are made and maintained. The cost audit for the Financial Year2020 was done by M/s Kabra

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

Further as per Section 148 and all other applicable provisions of the Companies Act2013 read with the Companies (Audit and Auditors) Rules 2014 the Board of Directorshave on the recommendation of the Audit Committee approved the re-appointment of M/s.Kabra & Associates Cost Accountants as the Cost Auditors of the Company for the yearending 2020-

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

c) Secretarial Auditor

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

As per Section 204 of the Companies Act 2013 inter-alia requires every listed companyto annex with its Board's Report a Secretarial Audit Report provided by a CompanySecretary in Practice in the prescribed format. The Board of Directors appointed M/sGrover Ahuja & Associates Practicing Company Secretaries as Secretarial Auditor toconduct Secretarial Audit of the Company and their report is annexed to this Board Report

(Annexure-I).

The Secretarial Audit Report does not contain any qualification reservation or adverseremark and do not call for any further explanation/ clarification by the Board ofDirectors under the Act.

Additionally pursuant to SEBI circular dated CIR/CFD/CMD1/27/2019 dated February 082019 the Company has undertaken and received an Annual Secretarial Compliance Report fromM/s Grover Ahuja & Associates Practicing Company Secretaries and submitted the sameto the stock exchanges within the specified time period.

Internal Control Systems and its Adequacy

The Company has internal control systems commensurate with the size scale andcomplexity of its business operations. The scope and functions of

Internal Auditors are defined and reviewed by the Audit committee. Internal

Auditors present their quarterly report to the Audit Committee highlighting variousobservations system and procedure related lapses if any and corrective actions beingtaken to address them.

Investor Education and Protection Fund (‘IEPF')

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

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

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

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

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

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

1000 and 570 equity shares to the IEPF Authority in two tranches in respect of whichthe amount of dividend has not been claimed or unpaid for the consecutive seven years tothe concerned shareholders from the date of declaration respectively. A list of such casesis also available at the company website.

Extract of Annual Return

As required pursuant to Section 92(3) & 134 (3) of the Companies Act 2013 anextract of Annual Return in the prescribed form MGT-9 is annexed to this Report as AnnexureII and also on company's website on the link: www.thehitechgears.com.

The Conservation of Energy Technology Absorption Foreign Exchange earnings and outgo

Details of Energy Conservation Technology Absorption Research & Developmentactivities undertaken by the Company and foreign exchange earnings and outgo of theCompany and other information in accordance with the provisions of Section 134(3) (m) ofthe Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 aregiven in Annexure III to this Report.

Report on Corporate Governance

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

Management Discussion & Analysis Report

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

Risk Management Policy

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

Corporate Social Responsibility

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

Your Company has in place a CSR Policy. The CSR policy lays down CSR activities to beundertaken by your Company. The CSR activities undertaken by your Company are based on theapproved CSR policy which is available on the Company's website www.thehitechgears.com.

Particulars of contracts or arrangements with related parties

All transactions entered by the Company with the parties which may be regarded withrelated parties were considered to be in the ordinary course of business and on the arm'slength basis. As provided under section 134(3)(h) of the Act and Rules made thereunderdisclosure of particulars of material transactions with related parties entered into bythe Company with related parties in the prescribed format annexed to this report as Annexure-V.Disclosures on related party transactions are also set out in

Note No. 36 to the financial statements.

The revised Policy on materiality of related party transactions pursuant to Regulation23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as approvedby the Board may be accessed on the Company's website at the link www.thehitechgears.com.

Electronic Clearing Services (ECS)

As per the circular issued by Securities & Exchange Board of India (SEBI)companies should mandatorily use the facility of Electronic Clearing Services (ECS) fordistribution of dividends to its members. This facility provides to the members anopportunity to receive dividend amount directly in their bank accounts. For availing thisfacility members holding shares in physical form may send their duly filled ECS mandateform to the Company's

Registrar and Share Transfer Agent (RTA). Members are holding shares in dematerializedform may kindly note that their bank account details as furnished to their depositorieswill be taken for the purpose of ECS and the Company.

Postal Ballot

During the period under review no Resolution was required to be passed through postalballot. Similarly at the forthcoming Annual General Meeting there is no item forapproval through Postal Ballot is being placed.

Code of Conduct of Insider Trading

The Company has adopted a Code of Conduct to regulate monitor and report trading byinsiders. This Code of Conduct is intended to prevent misuse of Unpublished PriceSensitive Information ("UPSI") by designated persons.

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

The same has been placed on the Company's Official website i.e. www.thehitechgears.com.

In accordance with such Code of Conduct the Company closes its trading window forDesignated Persons from time to time. The trading window is also closed during and afteroccurrence of price sensitive events as per the said Code of Conduct.

Code of Conduct

Your Company has a Code of Conduct for its Board Members and Senior Managementpersonnel in place pursuant to SEBI Listing Regulations.

The code of conduct has also been posted on the official website of the

Company.

The Declaration by the Managing Director of the Company regarding compliance with theCode of Conduct for Board Members and Senior Management is annexed with the CorporateGovernance Report.

Reconciliation of Share Capital Audit

M/s Grover Ahuja & Associates practicing Company Secretary carried out theSecretarial Audit on quarterly basis to reconcile the total issued and listed sharecapital with National Securities Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL). The Board of

Directors confirms that the total issued and paid up capital as on 31st

March 2020 is reconciled with the total number of shares in physical form and thetotal number of dematerialized shares held with NSDL and CDSL.

The Reconciliation of Share Capital Audit Certificate is being submitted every quarterto the Stock Exchanges and is also placed before the Board Meeting.

Listing of Shares

With a view to provide easy liquidity in the shares of the Company the equity sharesof your Company are presently listed on the premier stock exchanges viz. the NationalStock Exchange of India Limited (NSE) and the Bombay Stock Exchange India Limited (BSE)Mumbai. Pursuant to Regulation 14 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the annual listing fees for the year 2020-21 has beenpaid within the prescribed time period.

Fixed Deposits

During the year under review your Company neither invited nor accepted any depositwithin the meaning of Section 73 of the Companies Act 2013 and rules made there under.

Dematerialization of the equity shares

99.61% of the total equity shares of the Company are held in dematerialized form withthe participants of National Securities Depository Limited (NSDL) and Central DepositorySecurities (India) Limited as on the date of this report.

Keeping in view the benefits of dematerialization your directors urge the shareholdersholding shares in physical form to get their shares dematerialized.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are given in

Annexure VI. Remuneration Policy

In terms of provisions of Section 178 of the Companies Act 2013 read with Regulation19 of the Listing Regulations a policy relating to remuneration for the Directors KeyManagerial Personnel and other employees has been adopted by the Board of Directors of theCompany in pursuance of its formulation and recommendation by the Nomination andRemuneration

Committee thereby analysing the criteria for determining qualifications positiveattributes and independence of a Director. The said policy available on the website of theCompany at www.thehitechgears.com. Salient feature of the policy are provided in attachedCorporate Governance Report.

Audit Committee

Company has duly constituted Audit Committee which meets on regular intervals for thebusiness required to be transacted thereat. The recommendations made by committee areaccepted by the Board. A synopsis is described in the Corporate Governance report.

Vigil Mechanism Policy

The Company has a vigil mechanism policy to deal with any instance of fraud andmismanagement. The employees of the Company are free to report violations of any lawsrules regulations and concerns about unethical conduct to the Audit Committee under thispolicy. The policy ensures that strict confidentiality is maintained whilst dealing withconcerns and also that no discrimination with any person for a genuinely raised concern.The policy may be accessed on the Company's website at www.thehitechgears.com.

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

The Company has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Accordingly the company has set up Committee forimplementation of said policy.

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

Particulars of Loans given Investments made Guarantees given and Securities provided

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

The details of the investments made by the Company are given in the notes to thefinancial statements.

Material changes and Commitments

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the Financial Year to reportwhichthefinancialstatementsrelate andthe date ofthe . passed by the regulators orDetailsof courts or tribunals impacting the going concern status and company's operationsin future

There is no significant and/or material order passed by the regulators or courts ortribunals impacting the going concern status of the Company.

Business Responsibility Reporting

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

Personnel

The Board of Directors place on record their appreciation of the untiring efforts ofthe employees of the organisation at every level. The efforts to create a family likeatmosphere continued throughout the year. Like the many years gone-by this year alsowitnessed increased cohesion among all levels of employees which is evident from theperformance of the Company. Training and Development of employees provided further impetusand have contributed towards the all round improved performance of your company. TheCompany encourages by rewarding & recognising employees for their long term commitmentas & when the opportunity arise.

Trade Relations

The Board of Directors place on record their appreciation for the cooperation andvaluable support extended by the customers the suppliers and all other persons directlyor indirectly associated with the Company. Your Company regards them as partners andshares with them a common vision of growth in the future.

Acknowledgement

Your directors place on record their sincere appreciation for the assistancecooperation and valuable support provided to the Company by Customers Vendors Banks& Financial Institutions and hope to continue to receive the same in future. YourDirectors also record their appreciation for the or commitment and dedication of theemployees of the Company at all levels.

The Board of Directors also place on record their gratitude to the shareholders of theCompany for their continued support to and confidence in the management of the Company.

By Order of the Board For The Hi -Tech Gears Limited

Deep Kapuria Chairman

Place : New Delhi

Dated : August 13 2020