Your Directors have great pleasure in presenting the 35thAnnual Report of your Company together with the Audited Financial Statements of theCompany for the financial year ended March 31 2021. Further the consolidated performanceof the company and its subsidiaries has been referred to wherever required.
The highlights of the Standalone and Consolidated financial performanceof the Company are as under:
(Rs. in million except per share data)
|Particulars ||Standalone ||Consolidated |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from Operation ||5223.79 ||5093.25 ||7455.42 ||7220.18 |
|Other Income ||102.59 ||62.03 ||104.91 ||114.76 |
|Total Income ||5326.38 ||5155.28 ||7560.33 ||7334.94 |
|Profit before Depreciation Interest & Taxes (PBDIT) ||926.86 ||643.52 ||1003.70 ||951.45 |
|Depreciation ||251.52 ||274.53 ||430.77 ||430.34 |
|Profit before Interest & Taxes (PBIT) ||675.34 ||368.99 ||572.93 ||521.11 |
|Financial Charges ||178.94 ||215.97 ||232.80 ||331.29 |
|Profit before Taxes (PBT) ||496.40 ||153.02 ||340.13 ||189.82 |
|Provision for Taxes ||123.52 ||75.60 ||52.26 ||107.06 |
|Profit after Tax (PAT) ||372.88 ||77.42 ||287.87 ||82.76 |
|Balance of profit brought forward ||2478.94 ||2494.11 ||2574.60 ||2529.70 |
|Balance available for appropriation ||2889.76 ||2558.12 ||3019.68 ||2653.79 |
|Dividend ||* ||65.69 ||* ||65.69 |
|Tax on dividend ||- ||13.50 ||- ||13.50 |
|Balance Surplus in P & L Account ||2889.76 ||2478.94 ||3019.68 ||2574.60 |
|Paid-up Equity Share Capital ||187.68 ||187.68 ||187.68 ||187.68 |
|Earnings Per Share (EPS) ||19.87 ||4.13 ||15.34 ||4.41 |
*Please refer to dividend para of this Directors' Report
Financial Year 2020-21 was full of various challenges for Indiandomestic automobile industry. Automobile industry faced multiple regulatory geopoliticaland economic disruptions during the previous year. Corona virus (Covid-19) pandemicshaping up through second wave proved to be more fatal to humanity and hence medicalemergency was declared in recent time. It caused significant disturbance and slowdown ofeconomic activities. The after-effects of a strict but necessary countrywide lockdown anda slowdown halted the growth engine. Covid-19 is significantly impacting businessoperation of the companies by way of interruption in production supply chain disruptionunavailability of personnel closure/lock down of production facilities etc.
Available economic data forecasts indicate an unprecedented decline inglobal activity due to the Covid-19 pandemic. Figures released recently suggest evendeeper downturns than previously projected for all economies. At the same timecommencement of unlocking and easing of restrictions by the government has paved the wayfor self-restriction self-regulation with increased responsibility on every single personto protect himself/herself and those close to us while keeping economic activitiesoperational.
The second half of the period under review was still better in terms ofeconomic activities. Post lifting of lockdown the business consolidated its position anddemand started generating. Government also provided required support by business-friendlypolicies. Taking the benefit of the situation the auto industry behaved in positivemanner when the demand generated.
Almost all segments of the automobiles categories registered downfallon full year basis. The domestic sales of Commercial Vehicles decreased by 20.77% duringApril-March 2021 and Three Wheeler registered de-growth by 66.06% for the said period. InTwo Wheeler segment the sales of Scooters/ Scooterette declined by 19.51% includingdownfall in sales of Motorcycles and Mopeds by 10.65% and 3.07% respectively in FY2020-21. The Passenger vehicles is the only segment which shows the growth engine ofautomobile industry. This segment has improved significantly from the de-growth of 17.82%in Financial Year 2019-20 to de-growth of only 2.24% in F.Y. 2020-21.
On export side the overall automobile exports decreased by 13.05%.While Three Wheelers and Two Wheelers registered a downfall of 21.67% and 6.87%respectively exports of Passenger Vehicle drastically decreased by 38.92% and CommercialVehicles registered a de-growth of 16.64% in April-March 2021 over the last F.Y. 2019-20.
On a positive note your Company showed tremendous agility andforesight by quickly pivoting to take actions that addressed challenges posed by theCovid-19 pandemic. The Company topmost priority was to serve our customers by providingthem our services and ensuring the well being of our employees and workers during thispandemic by meticulous planning deploying remote services for customers providing the ITinfrastructure to the employees to work from home etc.
The Indian auto components industry is going through a transformationalperiod with the concept of mobility changing continuously. The prospects of the Industrylooks good of the next year.
State of Company Affairs
Your Company is one of the few industrial enterprises which have becomea world-class Indian brand with a green and sustainable strategy of growth despite anincreasing volatile economic and business environment. Besides being cost competitivedelivering to strict schedules and adhering to high quality standards are the main keys ofsuccess for auto component manufacturers especially to enter into and grow exportmarkets. Your company possesses all the above skills and is appreciated by customers allover the world. Keeping this in mind your company is today tapping new geographies due tothe high potential available in the export markets.
Detailed information on the operations and on the state of affairs ofthe Company are majorly covered in the Management Discussion & Analysis Reportforming part of this report. The performance of the Company was far better than theperformance of Auto Industry. During the F.Y. 2020-21 the total revenue stood at 5326.38million as compared to 5155.28 million in the last F.Y. 2019-20 registering a minimalgrowth of 3.32 %. The profit before tax has significantly increased to 496.40 million ascompared to 153.02 million in previous year due to the operational excellency. Similarlythe Net profit after tax of the Company is also on the upside at 372.88 million incomparison to 77.42 million in previous year registering a significant growth of 381.63%.
On a consolidated basis the total revenue is 7560.33 million in F.Y.2020-21 as compared to 7334.94 million in the previous F.Y. 2019-20. Similarly the Netprofit after tax is 287.87 million as compared to 82.76 millions in previous F.Y.
At the export front on standalone basis the Company recorded anexport turnover of 1245.65 million as compared to 1334.44 million in the previous yearthereby recorded degrowth of 6.65% as compared to the percentage during the same period inthe previous year. The total export turnover now fall to 23.39% of the total turnover ofthe Company.
We have taken proactive steps to correct the position of the Company inexport market. We will approach our goals with discipline and focus to tap more customersand markets and gain the grounds again.
Your Company expects to benefit over the next period with abovestrategy and operating efficiencies. In view of this the long term prospects of yourCompany are bright.
Consolidated Financial Statements
In accordance with the provisions of the Companies Act 2013 (theAct') and Ind AS-110 on Consolidated Financial Statements read with Ind AS-28 onInvestments in Subsidiaries outside India the Audited Consolidated Financial Statementsfor the F.Y. ended March 31 2021 are provided in this Annual Report.
Impact of COVID-19 pandemic
India witnessed one of the most stringent lockdowns in history in theaftermath of the novel coronavirus outbreak. With all major sectors completely closed downfor two months Q1 was a complete washout for the economy. On the positive side Indiadealt effectively with the first wave of Covid-19 infections while the country was facedby a calamitous second wave of the pandemic.
In view of the above F.Y. 2020-21 has been an unparalleled yearmarked by a major disruptions caused by the Covid-19 pandemic.Your Company'sresilience and underlying ability to adapt to an evolving business environment has aidedthe Company to sustain and improved its position in the market.
The swiftness and intensity of the second wave and possible third wavehave overwhelmed health systems devastated lives and livelihoods. It is a health crisisof the kind we have not seen in generations. Given the scientific progress we have madeover the past year vaccination is the most effective control tool more we arevaccinated more we are safe.
For your Company too it was a challenging year. The pandemic resultedin muted consumer demand along with disruptions in production supply chain and retailnetworks. The Company's took various steps in securing the safety of our people theviability of the ecosystem and for securing the health of the business through a laserfocus on cash flows. The Company constituted a rigorous review mechanism to reachpre-Covid production levels in a coherent and sustainable manner. It efficientlycollaborated with all stakeholders including its workforce supply chain partners &their associates to restore the distribution network and enable a seamless pipeline ofsupplies. This helped us navigate the crisis well. After the lockdown was lifted theCompany focused on meeting the growing demand. Gradually as demand started coming backfrom the second quarter of last year the company swiftly shifted gear significantlyratcheted up capacities moved fast to serve customer demand and ended the year on astrong note.
As the research fraternity came together to develop the coronavirusvaccine in record time it offered a clear peek into the strength and agility of humankindin a manner never witnessed before. Going ahead rapid vaccination remains the key tocontrol the pandemic and bounce the economy back to pre-Covid growth levels and upwards.We are supporting the Government initiatives wherein it is committed to vaccinate as manyas people at earliest. It is estimated that 50% of our population will have atleast oneshot of vaccine by the time our we meet at the ensuing General Meeting.
The paid up Equity Share Capital as on March 31 2021 stood at 187.68million. During the year under review the Company has not issued shares or granted stockoptions or sweat equity. However during the F.Y. 2021-22 your Company's Board ofDirectors have passed the resolution for implementing the "The Hi-Tech Gears LimitedStock Incentive Plan 2021" to reward attract motivate and retain employees andDirectors of the Company and its existing or future subsidiary companies in or outsideIndia subject to the approval of the shareholders at the ensuing 35thAnnualGeneral Meeting of the Company.
During the year under review and based on the performance of thecompany the Board of Directors at their meeting held on June 29 2021 recommended afinal dividend @ 20% i.e. 2/- per equity share amounting to 37.53 million the same is tobe approved by the shareholders at the forthcoming Annual General Meeting.
As per the new provisions of the Indian Finance Act 2020 read withIncome Tax Act 1961 dividend declared/recommended and paid by the Company afterApril 12020 is taxable in the hands of shareholders and the Company is required to deduct the taxat source ("TDS") on the distribution of dividend income to its shareholders atthe prescribed applicable rates. In view of this the Company has sent communication toshareholders to inform their status PAN and other details so that company can comply theprovisions accordingly.
During the F.Y. under review no amount has been transferred to Reserveof the Company.
Change in the nature of business
There was no change in the nature of the business of the company duringthe financial year 2020-21.
Compliance with Secretarial Standards
The Company is fully compliant with all applicable SecretarialStandards issued by the Institute of Company Secretaries of India (ICSI).
Directors Responsibility Statement
In terms of section 134 (3) (c) & 134 (5) of the Companies Act2013 and to the best of their knowledge and belief and according to the information andexplanations provided to them your Directors hereby make the following statements:
(a) that in preparation of the Annual Accounts the applicableaccounting standards have been followed along with proper explanations relating tomaterial departures if any;
(b) that such accounting policies have been selected and applied themconsistently and made judgments and estimates made that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as on March 31 2021and of the profit and loss of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for prevention and detection of fraud and otherirregularities;
(d) that the annual financial statements have been prepared on goingconcern basis;
(e) that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively and
(f) that the systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.
Details of Internal Financial Controls with reference to the FinancialStatement
In view of the requirement of the Companies Act 2013 the Company hassuccessfully documented and implemented its Internal Financial Controls (IFC). Thisensures orderly and efficient conduct of its business including adherence to Companypolicies safeguarding of its assets accuracy prevention of errors & completeness ofthe accounting records and the timely preparation of reliable financial information. TheInternal Financial Controls with reference to the Financial Statements were adequate andoperating effectively.
Further the Audit Committee monitors the adequacy and effectiveness ofyour Company's internal control framework.
Details of Subsidiary/Joint Ventures/Associate Companies
As on March 31 2021 the Company has nine (09) Wholly OwnedSubsidiaries (including step-down subsidiaries) in Canada and US. There is no reverseinvestment by the subsidiary companies in the share capital of the Company.
The Board have duly reviewed the affairs of the Subsidiary companiesfrom time to time wherein 2545887 Ontario Inc. The Hi-Tech Gears Canada Inc. and"Teutech Holding Co." are considered to be Material Subsidiary'companies pursuant to provisions of Regulation 16 of the SEBI (LODR) Regulations 2015.Further there is no material change in the business of subsidiary companies and theCompany has taken note of all the significant transactions and arrangements entered intoby its subsidiaries. The other financial and vital details related to subsidiaries areprovided in attached AOC-1 form (Statement containing salient features of the financialstatement of subsidiaries) pursuant to section 129 (3) and section 136 of the CompaniesAct 2013 and rules made thereunder.
In accordance with the provisions of the CompaniesAct 2013 andapplicable accounting standards the standalone and consolidated financials together withthe reports of Statutory Auditors are provided in the Annual Report. Further theCompany's policy for determining material subsidiaries in terms of applicable listingregulations and other applicable laws is available at www.thehitechgears.com.
Directors Key Managerial Personnel's and Evaluation
The Board is duly constituted with proper balance of Executive &Non-Executive Directors Independent Directors Woman Independent Director and Whole TimeDirectors. No new Director or Key Managerial Personnel has been appointed or resignedduring the year under review.
Retire by Rotation
Independent Directors are not liable to retire by rotation. Pursuant tothe provision of Section 152(6) of the Companies Act 2013 Mr. Anant Jaivant Talaulicar(DIN: 00031051) Non-Executive Non Independent Director being longest in the officeretires by rotation at the ensuing Annual General Meeting and being eligible offer himselffor the re-appointment. Brief profile of Mr. Anant Jaivant Talaulicar is provided in theNotice convening theAnnual General Meeting.
Further Mr. Ramesh Chandra Jain Non-Executive Director is completingthe age of 75 years during this Financial Year a resolution is being proposed in theNotice of the ensuing Annual General Meeting with respect to his continuation as theDirector of the Company.
a. Key Managerial Personnel's
All Whole Time Directors i.e. Mr. Deep Kapuria Executive Chairman Mr.Pranav Kapuria Managing Director and Mr. Anuj Kapuria Executive Director are regarded asKMPs in addition to Chief Financial Officer (C.F.O.) and Company Secretary (CS).
b. Independent Directors
The Board has 7 (Seven) Independent Directors including one WomanIndependent Director as on March 31 2021 representing diversified fields and expertise.Details are provided in the appropriate section of the Corporate Governance Report.
During the F.Y. 2021-22 Mr. Prosad Dasgupta resigned from the positionof Independent Director w.e.f. June 29 2021.
The Independent Directors have submitted their declarations ofindependence as required pursuant to provisions of section 149 (7) of the Companies Act2013 The Companies (Appointment and Qualification of Directors) Rules 2014 andRegulation 16 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015(the Listing Regulations') as amended from time to time stating that theymeet the criteria of independence as provided in sub-section (6) of section 149 ofCompanies Act 2013 and the SEBI Listing Regulations.
c. Meetings of the Board
The Board met 5 (five) times during the period 2020-21 to conduct theoperations of the Company. The details are given in the Corporate Governance Report whichforms part of this Annual Report. It is confirmed that the gap between two consecutivemeetings was not more than one hundred and twenty days as provided in section 173 of theAct.
d. Annual Evaluation of the Board its Committees and of IndividualDirectors
Pursuant to the provisions of the Companies Act 2013 and the SEBI(LODR) Regulations 2015 the Board carried out an formal annual performance evaluation ofits own performance 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 individualquestionnaire covering various information required to have the evaluation. All thelayers of the Board such as Board Committees and the Independent Directors performedtheir part by evaluating the performances of the holders as mandated.
Auditors and their Reports
a) Statutory Auditors
M/s O P Dadu & Co. Chartered Accountants (Firm Registration No.001201N) the Statutory Auditors of the Company were appointed in the 31stAnnual General Meeting for a term of five consecutive years till the conclusion of 36thAnnual General Meeting of the Company to be held in the year 2022-23. They had furnished acertificate confirming the eligibility under section 141 of the Companies Act 2013 andRules made thereunder.
Pursuant to the provisions of Companies (Amendment) Act 2017 read withMCA notification dated 07th May 2018 the appointment of Statutory Auditors isnot required to be ratified at every Annual general Meeting.
The Auditors' Report does not contain any qualificationreservation or adverse remark and do not call for any further explanation/ clarificationby the Board of Directors as provided under Section 134 of the Act. With respect to thepoint no. (vii) (b) in Annexure "A" to Auditors' Report relating tonon-deposit of disputed taxes the Board wishes to inform that those matters are relatedto regular tax matters for which the Company has preferred appeal to AppellateAuthorities. The necessary explanations are also provided in Note 38A (2) to theStandalone Financial Statements. The rest of report by the Statutory Auditors isself-explanatory. Please refer to the Notes to Accounts wherever necessary. furtherthere were no frauds reported by the Statutory Auditors to the Audit Committee or theBoard under Section 143(12) of the act.
b) Cost Auditors
The provisions relating to section 148(1) read with rules areapplicable accordingly cost accounts and records are made and maintained.
The cost audit for the Financial Year 2020-21 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 theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 the Boardof Directors have approved the re-appointment of M/s. Kabra & AssociatesCostAccountants as the Cost Auditors of the Company for the F.Y. 2021-2022 upon therecommendation of the Audit Committee. The remuneration proposed to be paid to themrequires ratification of the shareholders of the Company. In view of this your approvalfor payment of remuneration to Cost Auditors is being sought at the ensuing Annual GeneralMeeting. Accordingly a resolution seeking approval by members for the remunerationpayable to M/s Kabra & Associates is included in the Notice convening 35th AnnualGeneral Meeting.
c) Secretarial Auditor
The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by ICSI.
As per Section 204 of the Companies Act 2013 inter-alia requires everylisted company to annex with its Board's Report a Secretarial Audit Report providedby a Company Secretary in Practice in the prescribed format. The Board of Directorsappointed M/s GroverAhuja & Associates Practicing Company Secretaries as SecretarialAuditor to conduct SecretarialAudit of the Company and their report is annexed to thisBoard Report (Annexure-I). The Secretarial Audit Report does not contain anyqualification reservation or adverse remark except one observation of clerical mistake infiling of IEPF-1 form. Your company has submitted necessary intimation to IEPF Authorityfor rectification of the aforesaid error. Further due to Covid pandemic your Company hasfiled APR (Annual Performance Report) for F.Y. 2019-20 in extended period of time.
Additionally pursuant to Regulation 24 (A) of the SEBI (LODR) 2015Regulations read with SEBI circular dated CIR/CFD/CMD1/27/2019 dated February 08 2019the Company has undertaken and received an Annual Secretarial Compliance Report from M/sGrover Ahuja & Associates Practicing Company Secretaries and submitted the same tothe stock exchanges within the specified time period.
Internal Control Systems and its Adequacy
The Company has internal control systems commensurate with the sizescale and complexity of its business operations. The scope and functions of InternalAuditors are defined and reviewed by the Audit committee. M/s. Grant Thornton BharatLLP (formerly known as Grant Thornton India LLP) is the continuing Internal Auditorswho regularly presents 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 CompaniesAct 2013 and Rules made there under all unpaid or unclaimed dividends are required to betransferred by the Company to IEPF after the completion of seven years from the date ofdeclaration of dividend.
Similarly the MCA has notified Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 effective from 7thSeptember 2016 which provide that the shares in respect of which dividend has not beenclaimed or unpaid by the shareholders for seven consecutive years or more shall also betransferred to the demat account(s) to be prescribed by the IEPF Authority.
The details of such dividend and shares transferred pursuant to theaforesaid provisions are provided in General Shareholder information section at point No.14 of Section XI of Corporate Governance Report.
In terms of the said Rules and the amendment thereof vide notificationdated February 28th 2017 and October 13th 2017 the necessarycommunications have been made to the respective shareholders whose shares were required tobe transferred to the IEPF so as to enable them to claim their dividend attached to suchshares before such dividend and shares are transferred to IEPF Authority and further thenecessary information in this regard is available on the website of the Company i.e.www.thehitechgears.com for the convenience of the shareholders.
In view of this those shareholders whose dividend is unpaid orunclaimed must claim it at the earliest. The equity shares once transferred into IEPF A/ccan only be claimed by the concerned shareholder from IEPF Authority after complying withthe procedure prescribed under the Rules and any amendment thereof.
Accordingly during the financial year 2020-21 the Company hastransferred 400 and 1600 equity shares to the IEPF Authority in two tranches in respectof which the amount of dividend has not been claimed or unpaid for the consecutive sevenyears to the concerned shareholders from the date of declaration respectively. A list ofsuch cases is also available at the company website.
As required pursuant to Section 92(3) & 134 (3) (a) of theCompanies Act 2013 the Annual Return of the Company for the F.Y. 2020-21 shall be filedwithin 60 days from the ensuingAGM. The Annual Return for the F.Y. 2019-20 filed with theMinistry of Corporate Affairs after the 34th AGM held in the year 2020 isavailable on the Company's website at www.thehitechgears.com.
The Conservation of Energy Technology Absorption Foreign Exchangeearnings and outgo
Details of Energy Conservation Technology Absorption Research &Development activities undertaken by the Company and foreign exchange earnings and outgoof the Company and other information in accordance with the provisions of Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules2014 are given in Annexure-II to this Report.
Report on Corporate Governance
In terms of Listing Regulations a report on Corporate Governance isgiven separately and forming part of this report and a certificate from the M/s GroverAhuja & Associates Practicing Company Secretaries confirming compliance with theprovisions of Corporate Governance is also annexed to the report.
Management Discussion & Analysis Report
The Management Discussion & Analysis Report is given separately andforming part of this report together with its contents.
Risk Management Policy
Pursuant to Regulation 21 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 provisions of constituting Risk Management Policy are notapplicable to the Company. Although the Company has adopted an enterprise Risk ManagementPolicy and established a Risk Management Framework with an objective of timelyidentification mitigation and control of the risks which may threaten the existence ofthe Company in accordance with the provisions of The Companies Act 2013.
Corporate Social Responsibility
Pursuant to the provisions of Section 135 and other applicableprovisions of the Companies Act 2013 and Rules made thereunder the Company have adopted& developed a Policy covering the activities mentioned in Schedule VII of CompaniesAct 2013 upon the recommendation of CSR Committee. Implementation of the policy isundertaken under the guidance of CSR Committee and a brief of the Corporate SocialResponsibility activities are provided in Annexure-III.
The CSR policy lays down CSR activities to be undertaken by yourCompany. The CSR activities undertaken by your Company are based on the approved CSRpolicy 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 beregarded as related parties were considered to be in the ordinary course of business andon the arm's length basis. As provided under section 134(3)(h) of the Act and Rulesmade thereunder disclosure of particulars of material transactions with related partiesentered into by the Company with related parties in the prescribed format annexed to thisreport as Annexure-IV. Disclosures on related party transactions are also set outin Note No. 36 to the Standalone Financial Statements and Note No. 37 to the ConsolidatedFinancial Statements.
The Policy on materiality of related party transactions pursuant toRegulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015as approved by the Board may be accessed on the Company's websitewww.thehitechgears.com.
Electronic Clearing Services (ECS)
As per the circular issued by Securities & Exchange Board of India(SEBI) companies should mandatorily use the facility of Electronic Clearing Services(ECS) for distribution of dividends to its members. This facility provides to the membersan opportunity to receive dividend amount directly in their bank accounts. For availingthis facility members holding shares in physical form may send their duly filled ECSmandate form to the Company's Registrar and Share TransferAgent (RTA). Membersholding shares in dematerialized form may kindly note that their bank account details asfurnished to their depositories will be taken for the purpose of ECS by the Company.
During the period under review no Resolution was passed through postalballot.
Code of Conduct of Insider Trading
The Company has adopted a Code of Conduct to regulate monitor andreport trading by insiders. This Code of Conduct is intended to prevent misuse ofUnpublished Price Sensitive Information ("UPSI") by designated persons. The samehas been placed on the Company's Official website i.e. www.thehitechgears.com.
In accordance with such Code of Conduct the Company closes its tradingwindow for Designated Persons from time to time. The trading window is also closed duringand after occurrence of price sensitive events as per the said Code of Conduct.
Code of Conduct
Your Company has adopted a Code of Conduct for its Board Members andSenior Management personnel pursuant to SEBI Listing Regulations. The code of conduct hasalso been posted on the official website of the Company.
The Declaration by the Managing Director of the Company regardingcompliance with the Code of Conduct for Board Members and Senior Management is annexedwith the Corporate Governance Report.
M/s Grover Ahuja & Associates practicing Company Secretariescarried out the Share Capital Audit on quarterly basis to reconcile the total issued andlisted share capital with National Securities Depository Limited (NSDL) and CentralDepository Services (India) Limited (CDSL). The Board of Directors confirms that the totalissued and paid up capital as on 31st March 2021 is reconciled with the total number ofshares in physical form and the total number of dematerialized shares held with NSDL andCDSL. The Reconciliation of Share Capital Audit Certificate is being submitted everyquarter to the Stock Exchanges and is also placed before the Board Meeting.
Listing of Shares
With a view to provide easy liquidity in the shares of the Company theequity shares of your Company are presently listed on the premier stock exchanges viz.the National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange IndiaLimited (BSE) Mumbai. Pursuant to Regulation 14 of SEBI (Listing Obligations andDisclosure Requirements)
Regulations 2015 the annual listing fees for the year 2021-22 hasbeen paid within the prescribed time period.
During the year under review your Company neither invited nor acceptedany deposit within the meaning of Section 73 of the Companies Act 2013 and rules madethere under.
Dematerialization of the equity shares
99.62% of the total equity shares of the Company are held indematerialized form with the participants of National Securities Depository Limited (NSDL)and Central Depository Securities (India) Limited as on March 31 2021.
Keeping in view the benefits of dematerialization your directors urgethe shareholders holding shares in physical form to get their shares dematerialized.
Particulars of Employees
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given in Annexure-V. Theinformation as per Rule 5(2) of the Rules forms part of this report. However as per firstproviso to Section 136(1) of the Act and second proviso of Rule 5(2) of the Rules thereport and Financial Statements are being sent to the members of the Company excluding thestatement of particulars of employees under Rule 5(2) of the Rules. Any member interestedin obtaining a copy of the said statement may write to the Company Secretary at theregistered office of the Company.
In terms of provisions of Section 178 of the Companies Act 2013 readwith Regulation 19 of the Listing Regulations a policy relating to remuneration for theDirectors Key Managerial Personnel and other employees has been adopted by the Board ofDirectors of the Company in pursuance of its formulation and recommendation by theNomination and Remuneration Committee thereby analysing the criteria for determiningqualifications positive attributes and independence of a Director. The said policy isavailable on the website of the Company at www.thehitechgears.com . Salient feature of thepolicy are provided in attached Corporate Governance Report.
Company has duly constituted Audit Committee which meets on regularintervals for the business required to be transacted thereat. The recommendations made bycommittee are accepted by the Board. A synopsis is described in the Corporate Governancereport.
Vigil Mechanism Policy
The Company has a vigil mechanism policy to deal with any instance offraud and mismanagement. The employees of the Company are free to report violations of anylaws rules regulations and concerns about unethical conduct to the Audit Committee underthis policy. The policy ensures that strict confidentiality is maintained whilst dealingwith concerns and also that no discrimination with any person for a genuinely raisedconcern. The policy may be accessed on the Company's website atwww.thehitechgears.com.
Obligation of Company under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
The Company has complied with the provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. Accordingly the company hasset up Committee for implementation of said policy.
Further during the year Company has not received any complaint ofharassment. Complete details are provided in attached Corporate Governance Report.
Particulars of Loans given Investments made Guarantees given andSecurities provided
The Company has not given any loans or guarantee covered under theprovisions of section 186 of the Companies Act 2013.
The details of the investments made by the Company are given in thenotes to the financial statements.
Material changes and Commitments
There are no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the Financial Year to whichthe financial statements relate and the date of the report. However your Company'sBoard of Directors have approved the "The Hi-Tech Gears Limited Stock Incentive Plan2021" to reward attract motivate and retain employees and Directors of the Companyand its existing or future subsidiary companies in or outside India subject to theapproval of the shareholders at the ensuing 35th Annual General Meeting of theCompany.
Details of significant and material orders passed by the regulators orcourts or tribunals impacting the going concern status and company's operations infuture
There is no significant and/or material order passed by the regulatorsor courts or tribunals impacting the going concern status of the Company.
Details of Proceedings pending under the Insolvency and BankruptcyCode 2016
Following are the details of proceedings and their status thereof atthe end of the F.Y. 2020-21:
|Name of the Applicant ||Status |
|1. Amrop India Pvt. Ltd. ||Amrop India Pvt. Ltd. filed an application in F.Y. 2018-19. The matter basically relates to commercial dispute between parties on the terms of contract. However the same is at argument stage for its admissibility due to privity of contract with the Applicant. |
|2. Happy Forgings Ltd. ||Happy Forgings Pvt. Ltd. filed an application in F.Y. 2020-21. However this was preferred as withdrawn by Applicant. The Hon'ble NCLT rejected accordingly. Applicant filed another CP (Company Petition) before Hon'ble NCLT against which the notice was issued to the Company. The Company is in process to file reply to this notice. |
Business Responsibility Reporting
As per Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Business Responsibility Reporting is not applicable tothe Company.
The Board of Directors place on record their appreciation of theuntiring efforts of the employees of the organisation at every level. The efforts tocreate a family like atmosphere continued throughout the year. Like the many yearsgone-by this year also witnessed increased cohesion among all levels of employees whichis evident from the performance of the Company. Training and Development of employeesprovided further impetus and have contributed towards the all round improved performanceof your company.The Company encourages by rewarding & recognising employees for theirlong term commitment as & when the opportunity arise.
The Board of Directors place on record the appreciation for theco-operation and valuable support extended by the customers the suppliers and all otherpersons directly or indirectly associated with the Company. Your Company regards them aspartners and shares with them a common vision of growth in the future.
Your directors place on record their sincere appreciation for theassistance cooperation and valuable support provided to the Company by CustomersVendors Banks & Financial Institutions and hope to continue to receive the same infuture. Your Directors also record their appreciation for the commitment and dedication ofthe employees of the Company at all levels.
The Board of Directors also place on record their gratitude to theshareholders of the Company for their continued support to and confidence in themanagement of the Company.
| ||By Order of the Board |
| ||For The Hi -Tech Gears Limited |
|Place: Gurugram ||Deep Kapuria |
|Dated: August 09 2021 ||Chairman |