DIRECTORS' REPORT TO THE MEMBERS, Your Directors take pleasure in presenting the 32nd Annual Report together with the Audited financial statements of the Company for the financial year ended March 31, 2015. DIVIDEND Considering the fund requirements for our future plans for up-gradation of plant & machinery / technology up-gradation, the Board of Directors considered it appropriate not to declare any dividend for the current year. MANAGEMENT DISCUSSION AND ANALYSIS A detailed analysis of the Company's operations in terms of performance in markets, business outlook, Opportunities and Threats, Risks and Concerns forms part of the Management Discussion and Analysis, a separate section of this report. DIRECTORS' RESPONSIBILITY STATEMENT In compliance with section 134(5) of the Companies Act, 2013, the Directors of your Company confirm: • that the applicable Accounting Standards have been followed in the preparation of annual accounts and that there are no material departures; • that such accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2015 and of the profit of your Company for the year ended on that date; • that proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; • that the annual accounts have been prepared on a going concern basis; • that the internal financial controls to be followed by the Company have been laid down and such internal financial controls are adequate and were operating effectively; and • that proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively. DIRECTORS AND KEY MANAGERIAL PERSONNEL In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a company shall have at least one Woman Director on the Board of the company. During the year under review, The Board of Directors of your Company at their meeting held on January 31, 2015 co-opted Mrs. Narinder Paul Kaur as an Additional Director (Non-Executive Director/Woman Director) liable to retire by rotation. In terms of section 152 of the Companies Act, 2013, Mr. Dev Raj Arya, Director of the Company retires by rotation at the ensuing Annual General Meeting. The Board recommends that Mr. Dev Raj Arya may be re-appointed at the ensuing AGM. In terms of provisions of Section 203 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchange, the Board of Directors of the Company has designated following Directors/ Officials of the Company as Key Managerial Personnel (KMP) of the Company at its meeting held on July 31, 2014: 1. Mr. Gursharan Singh, Chairman & Managing Director 2. Mr. Dev Raj Arya, Whole Time Director & CFO 3. Ms. Kamna Tiwari, Company Secretary Ms. Kamna Tiwari, Company Secretary, Key Managerial Personnel (KMP) of the Company resigned on January 6, 2015 and the Board of Directors of the Company appointed and designated Mr. Hitesh Kumar, Company Secretary as Key Managerial Personnel (KMP) of the company at its meeting held on January 31, 2015. Necessary resolutions for the appointment/re-appointment etc. of the aforesaid directors have been included in the notice convening the ensuing annual general meeting. Your directors commend their appointment/re-appointment. Declaration by Independent Directors All the Independent Directors of your Company have made declaration to the Company that they meet all the criteria of independence laid down under section 149(6) of Companies Act, 2013 and clause 49 of Listing Agreement with the Stock Exchanges. Familarisation Programme for Independent Directors Your Company has adopted a 'Familarisation Programme for Independent Directors' to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. Your Company aims to provide its Independent Directors, insight into the Company enabling them to contribute effectively. The details of familiarisation programme is disclosed on the Company's website and may be accessed at the web link <http://www.raunaqauto.com/pdfs/Familiarisation-Programme-for-Independent-Directors> NOMINATION AND REMUNERATION POLICY The Board of Directors of your Company in terms of the Section 178 of the Companies Act, 2013 and clause 49 of the Listing Agreement with Stock Exchange. has on recommendation of Nomination and Remuneration Committee, approved a Nomination and Remuneration Policy. The aforesaid policy of the Company on Director's/ KMP appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors and other matters is annexed as "Annexure A". The salient points of said policy is stated in the Corporate Governance report forming part of the Directors' Report. PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of the Directors individually including Independent Directors, Board as a whole and of its various committees, on parameters such as participation in meetings, skills, knowledge, contribution towards corporate governance practices etc. Independent Directors in terms of Companies Act, 2013, and clause 49 of Listing Agreement, carried out performance evaluation of non-independent directors, Chairman of the Board, Board as a whole and flow of information between the company management and the Board with respect to knowledge to perform the role, participation in meetings & performance of duties etc. The Directors expressed their satisfaction with the evaluation process. DISCLOSURES Audit Committee The audit committee of your Company comprises of Mr. Raj Kumar Kapoor as the Chairman and Mr. Devender Singh and Mr. Anil Sharma as members. Details in respect of the audit committee is provided in Corporate Governance Report forming part of the Directors' Report. Whistle Blower Policy/ Vigil Mechanism Your Company has formulated an "Alert Procedure" to ensure the establishment of vigil mechanism, to provide an avenue to all stakeholders (including employees and directors) to report concerns about unethical behaviour, actual or suspected fraud or violation of the Raunaq's Code of Conduct for Directors and Senior Management Personnel. The said policy is also posted on the website of the Company, which may be accessed at the web-link <http://www.raunaqauto.com/pdfs/VIGIL> MECHANISM WHISTLE BLOWER POLICY Number of Meetings of the Board During the year under review, four (4) meetings of the Board of Directors were held, details of which are provided in Corporate Governance Report forming part of the Directors' Report. Particulars of Loans, Guarantees or Investments There is no investment made by the company and has not provided any loan, guarantee or securities under section 186 of the Companies Act, 2013. Particulars of Employees and Related Disclosures Details as required under section 197(12) read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as "Annexure B". A statement showing the names of employees drawing remuneration in excess of the limits as set out in section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Qualifications of Directors) Rules, 2014 is annexed as "Annexure C". Extract of Annual Return The extract of the Annual Return is detailed in form MGT.9, annexed as "Annexure D". Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The particulars, as prescribed under sub-section 3(m) of section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are provided in "Annexure E", which forms part of this report. AUDITORS AND AUDITORS' REPORT Statutory Auditors M/s. A. Sachdev & Co., Chartered Accountants, were appointed as statutory Auditors at previous Annual General Meeting to hold office till the conclusion of 34th AGM subject to ratification of the appointment by the members at every AGM. In terms of Section 139 of the Companies Act, 2013, appointment of M/s. A. Sachdev & Co. as Auditors of the Company is recommended for ratification at ensuing Annual General Meeting. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Auditors As per section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company appointed M/s. K. K. Malhotra & Co., Company Secretaries, as Secretarial Auditor of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed as "Annexure F". Cost Auditors Pursuant to Companies (Cost Records and Audit) Amendment Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on 31 December, 2014, the Company shall not be mandatorily required to get its Cost Records for the financial year 2014-15 audited in terms of provisions of Section 148 of the Companies Act, 2013 as the Industry under which the Company falls has been Exempted from the Cost Audit by MCA vide Companies (Cost Records and Audit) Amendment Rules, 2014. RELATED PARTY TRANSACTIONS In terms clause 49 of the Listing Agreement, Board of Directors of your Company has approved Related Party Transactions Policy on dealing with Related Party Transactions. The policy may be accessed at the weblink <http://www.raunaqauto.com/pdfs/Related-Party-Transaction> Policy. All related party transactions during the financial year were on arm's length basis and were in the ordinary course of business. During the year, there were no material related party transactions made by the Company which could be considered material in accordance with Related Party Transactions Policy of the Company. RISK MANAGEMENT The Board of Directors of your Company has laid down a Risk Management Policy for the Company, which provides a risk and controls matrix with identification of risks inherent to the business, corporate governance, functions; and sources of these risks; their possible consequences; and control measures to help manage them. Every unit and function is required to deploy the control measures and ensure timely reporting. INTERNAL FINANCIAL CONTROL The Board of Directors of your Company is satisfied with the Internal FinancialControl process. Internal control environment of the Company is reliable with well documented framework to mitigate risks. A detailed analysis is provided in the Management Discussion and Analysis Report. CORPORATE GOVERNANCE The Company is committed to maintain and adhere to the highest standards of Corporate Governance practices. Pursuant to clause 49 of the Listing Agreement with Stock Exchange, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections. A certificate from M/s. A. Sachdev & Co., Chartered Accountants regarding compliance of conditions of corporate governance as stipulated in clause 49 of the Listing Agreement has also been included in the Annual Report. ENVIRONMENT, HEALTH AND SAFETY For your Company, the absolute respect of Environment, Health and Safety (EHS) is a priority. Raunaq Automotive Components Limited gives importance to safety, health and well-being of its employees and all the people working for the Company. Your Company is working hard to reduce the number of accidents to Zero. The Company encourages and ensures not only its employees but also its subcontractors working on Company's plants as well as its customers for complying with occupational health and safety measures. DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT, 2013 Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this report. GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 5. The annual listing fee for the year under review has been paid to BSE Limited, Mumbai, where your company's shares are listed. The Financial Results of the company can be accessed at the company's website <http://www.raunaqauto.com/financials.html>. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENT Your Directors express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers. For and on behalf of the Board for RAUNAQ AUTOMOTIVE COMPONENTS LIMITED Gursharan Singh Chairman and Managing Director Regd Office : 15TH Floor, Chiranjiv Tower- 43, Nehru Place, New Delhi-110019 Ph. : +91 11 26418622, Fax : +91 11 26448962 Email - investor@raunaqauto.com Place: New Delhi Date : August 6,2015 |