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Directors Report of Raunaq EPC International Ltd.

Mar 31, 2015

To The Members Raunaq International Limited

The Directors have pleasure in presenting the 50th Annual Report of your Company together with the Audited Standalone and Consolidated Financial Statements and the Auditors Report thereon for the Year ended 31st March, 2015.

FINANCIAL RESULTS

The highlights of Consolidated Financial Results of your Company and its subsidiary(ies) are as follows:

(Rs/Lacs) Consolidated Particulars Year ended Year ended March 31,2015 March 31,2014

Revenue from Operations and Other Income 9947.07 15279.25 (gross)

Profit before Finance Cost, Depreciation and Exceptional Items 701.99 1172.70

Finance Cost 358.57 381.85

Depreciation 115.83 123.55

Profit Before Tax & Extraordinary Items 227.59 667.30

Add : Extraordinary Item 127.37 -

Profit Before Tax 354.96 667.30

Less: Tax Expense 142.29 340.67

Profit After Tax 212.67 326.63

The highlights of Financial Results of your Company as a Standalone entity are as follows:

(Rs/Lacs) Standalone Particulars Year ended Year ended March 31,2015 March 31,2014

Revenue from Operations 8140.37 14110.90 and other income (gross)

Profit before Finance Cost, 787.43 1344.82

Depreciation and Extraordinary Items

Finance Cost 288.57 336.67

Depreciation 67.41 90.01

Extraordinary Items 127.37 -

Profit Before Tax 558.82 918.14

Less: Tax Expense 134.80 315.61

Profit After Tax 424.02 602.53

Surplus in Statement of Profit and Loss

Opening balance 1918.96 1586.84

Add: Profit for the year 424.02 602.53

Add : Adjustment of 10.51 -

Carrying Amount of Fixed Asset

Less:

Dividend for EarlierYear - 20.06

Tax on distributed profits - 3.41

Proposed Dividend- Equity 33.43 40.12

Tax on distributed profits 6.81 6.82

Transferred to General Reserve 100.00 200.00

Closing Balance 2,213.25 1,918.96

Dividend & Transfer to Reserves

The Board is pleased to recommend a dividend of Rs 1.00 per equity share of Rs 10/-each for the financial year 2014-2015. The total payout will be Rs 40.24 lacs, inclusive of dividend tax and surcharge thereon. Also the Directors have proposed to transfer an amount of Rs 100 lacs to General Reserve.

Business Operations

During the year under review, the sales and other income of the Company on Standalone basis was Rs 8,140.37 Lacs against Rs 14,110.90 Lacs in the previous year. The profit after tax (PAT) is '424.02 Lacs against ' 602.53 Lacs in the last year.

The sales and other income of the Company on Consolidated basis in the year 2014-2015 was Rs 9947.07 Lacs against Rs 15,279.25 Lacs in the previous year and the profit after tax (PAT) is Rs 212.67 Lacs against ' 326.63 Lacs in the last year.

Future Outlook

The Company during the year successfully completed a challenging project of 80 km raw water cross country piping project at Udaipur for Hindustan Zinc Ltd. in record time of 15 months.

During the course of the FY 2014-15 the Company has successfully bid and won large value projects such as Station Piping & Fuel Handling System for Gadarwara Thermal Power Project for National Thermal Power Corporation Ltd. The project is under execution and expected to complete by the end of year 2017. The Company is executing two more projects for National Thermal Power Corporation Ltd., which are time bound projects which include Station Piping Package for Nabinagar Super Thermal Power Project and Comprehensive & Integrated Seepage Water Recirculation System Package for Indira Gandhi Super Thermal Power Project. This seepage water project is the first of a kind project which company will be executing this year and it is another challenging task for the Company.

The Company is also working for two individual projects for Bajaj Infra Development Corporation Ltd. The first project contains the erection of Raw Water System Package for Lalitpur Super Thermal Power Project at Lalitpur (UP). The second project exceeds the first in terms of value and pertains to the establishment of CW Piping Package for Lalitpur Super Thermal Power Project.

The Company is also executing LP Piping Package for Lanco Infra Ltd. and Indian Power Corporation Ltd.

The Company entered into the FY 2014-15 with the order book of around ' 134 Crores and the order book for FY 2015-16 is Rs 135 Crores.

Consolidated Financial Statements

As required under the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements have been prepared in accordance with Accounting Standard-21 issued by the Institute of Chartered Accountants of India and have been provided in the Annual Report. These Consolidated Financial Statements provide financial information of your Company and its subsidiary as a single economic entity.

Management Discussion and Analysis

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

Directors' Responsibility Statement

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that, -

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

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit and loss of the Company for the period ended on that date;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(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 the Company and that such internal financial controls are adequate and were operating effectively; and

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

Related Party Contracts and Arrangements

The particulars of the undergoing contracts or arrangements of the Company with related parties during the period under review referred to in Section 188(1) of the Companies Act, 2013 were in ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the related party transaction policy of the Company. The said policy as approved by the Board in terms of provisions of Clause 49 of the Listing Agreement is available on the website of the Company i.e. www.raunaqinternational.com under the link http://www.raunaqinternational.com/pdf/related-party- transaction-policy.pdf

The prescribed form AOC-2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure-"A" to this report.

Particulars of Loans, Guarantees or Investment

Details of Loans or guarantee given or security provided has been adequately disclosed in the financial statements in terms of provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Directors

In accordance with the provisions of the Act and the Articles of Association of your Company, Dr. Sanjeev Kumar and Mr. Gauatam Mukherjee, Directors retire by rotation at the ensuing Annual General Meeting. Therefore, in terms of Section 149 of the Companies Act, 2013, it has been proposed to appoint Dr. Sanjeev Kumar and Mr. Gautam Mukherjee as Non Executive Independent Directors for a period of 5 (Five) Years upto the conclusion of the 55thAnnual General Meeting (AGM) of the Company in the Calendar year 2020 at the ensuing AGM of the Company.

The Board of Directors of the Company appointed Ms. Seethalakshmi Venkataraman as an Additional Director (Woman Director) on 28th March, 2015 till the conclusion of forthcoming Annual General Meeting.

Therefore, in terms of Section 149 of the Companies Act, 2013, it has been proposed to appoint Ms. Seethalakshmi Venkataraman as Non Executive Independent Director for a period of 5 (Five) Years upto the conclusion of the 55th Annual General Meeting (AGM) of the Company in the Calendar year 2020 at the ensuing AGM of the Company.

The Company has received notice under Section 160 of the Companies Act, 2013 from member(s) of the Company, proposing the candidature for the office of Director for the above Directors.

During the year under review, the members approved the appointment of Mr. V.K. Pargal and Mr. Satya Prakash Mangal as Independent Directors.

The brief resume of the Directors proposed to be appointed is given in the notice calling the Annual General Meeting.

Number of Meetings of the Board

During the financial year 2014-15, Five (5) Board Meetings were held on the following dates. The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges:-

- 30thMay, 2014;

- 31 stJuly, 2014;

- 13th November, 2014;

- 10th February, 2015; and & 28thMarch, 2015

Independent Directors

In terms of provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors held on 30th May, 2015 stating that they fulfill the criteria of Independent

Director as prescribed under Section 149(6) of the Companies Act, 2013 and are not being disqualified to act as an Independent Director.

In terms of Clause 49 of the Listing Agreement, the Company has adopted a familiarization programme for Independent Directors. The details of the said programme is available on the website of the Company i.e. www.raunaqinternational.com under the link http: //www.raunaqinternational.com/pdf/familarisation- programme.pdf.

Policy on Director's Appointment and Remuneration

In terms of provisions of Section 178 of the Companies Act, 2013 read with revised Clause 49 of the Listing Agreement, a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors of the Company in pursuance of its formulation and recommendation by the Nomination and Remuneration Committee thereby analyzing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy is annexed as Annexure-"B" to this report and is also available on the website of the Company i.e. www.raunaqinternational.com under the link http://www.raunaqinternational.com/pdf/nomination-and- remuneration-policy.pdf.

Evaluation Process

The Board of Directors of the Company has established a framework for the evaluation of its own performance and that of its committees and individual Directors of the Company.

The certain parameters covering the evaluation of the Chairman, Executive Directors and Independent Directors have been fixed by the Board on the basis of which the evaluation is being carried out on annual basis in terms of provisions of the Companies Act, 2013.

Key Managerial Personnel

The Board of Directors of the Company has designated following Directors/Officials of the Company as Key Managerial Personnel (KMP) of the Company w.e.f. 30th September, 2014 in terms of provisions of Section 203 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges:

1. Mr. Surinder P. Kanwar Chairman & Managing Director

2. Mr. Sachit Kanwar Joint Managing Director

3. Mr. Rajan Malhotra Chief Executive Officer

4. Mr. Shalesh Kumar Chief Financial Officer

5. Mr. Kaushal Narula Company Secretary

No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31st March, 2015.

Disclosures under Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014

Details pertaining to remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 201 4 are enclosed as Annexure-"C" to this report.

Particulars of Employees

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

Risk Management

The Company has in place mechanisms to inform Board Members about the risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly defined framework.

A detailed note on Risk Management is given in the Management Discussion and Analysis section forming part of this Report.

Corporate Social Responsibility

Pursuant to the approval of the Board of Directors of the Company, a Corporate Social Responsibility (CSR) Committee has been constituted in terms of provisions of Section 135 of the Companies Act, 2013. The CSR Committee of the Company has also formulated a CSR policy containing the areas wherein the Company proposes to spend the share of its profits as prescribed under Section 135 of the Companies Act, 2013 and the said policy has been approved by the Board of Directors of the Company thereby directing the CSR Committee to execute the CSR initiatives.

As per the provisions of the said Section, the amount of Rs 16.34 lacs was required to be spent on CSR activities by the Company during the year, however, considering the performance for the year, the Company has not spent the required funds on CSR activities.

The report on CSR activities in terms of provisions of Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 is enclosed as Annexure-"E" to this report.

CSR Committee

The CSR Committee comprises of Mr. Surinder P. Kanwar, Mr. Sachit Kanwar, Mr. P.K. Mittal and Mr. Satya Prakash Mangal.

Audit Committee

The Audit Committee comprises of Dr. Sanjeev Kumar, Mr. V.K. Pargal, Mr. P.K. Mittal and Mr. Satya Prakash Mangal.

Internal Complaints Committee for Prevention of Sexual Harassment

Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted Internal Complaints Committee 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 from harassment/discrimination and every employee is treated with dignity and respect. The said policy is available on the website of the Company i.e. www.raunaqinternational.com under the link http ://www.raunaqinternational.com/pdf/policy-on- prevention-of-sexual-harassment-ril.pdf.

Subsidiaries/Joint Ventures/Associate Companies

Your Company has a 100% wholly owned subsidiary, Xlerate Driveline India Limited (XDIL).

Xlerate Driveline India Limited (XDIL) is engaged in the manufacturing of automotive components having its Industrial Unit at Faridabad, Haryana.

As on date, the Company holds 1,18,77,038 (One Crore Eighteen Lakhs Seventy Seven Thousand Thirty Eight) Equity Shares of Rs 10/- (Rupees Ten) each of XDIL amounting to Rs 11,87,70,380/- (Rupees Eleven Crores Eighty Seven Lakhs Seventy Thousand Three Hundred Eighty Only) as an investment directly/through its nominees which is equivalent to 100% paid up capital of XDIL.

Deposits

During the year under review, the Company did not accept any deposits. However, the Unclaimed Final Dividend for the Financial Year 2007-08 is proposed to be transferred into the "Investor Education and Protection Fund" on 27thAugust, 2015 upon completion of seven years from the date of transfer of said Dividend into the unclaimed Dividend Account.

Auditors

The Statutory Auditors, M/s. V.P. Jain & Associates, Chartered Accountants (Regn No. 015260N), had been appointed as

Statutory Auditors of the Company in the 49thAnnual General Meeting held on 29thAugust, 2014 for a period of 3 (Three) years in terms of provisions of Section 139 of the Companies Act, 2013 to hold office from the 49thAGM to the third consecutive Annual General Meeting from the 49thAGM in the Calendar year 2017 (subject to ratification by the members at every Annual General Meeting).

Therefore, the consent of members for ratification of appointment of Statutory Auditors to hold office from the ensuing Annual General Meeting of the Company till the next Annual General Meeting of the Company in calendar year 2016 is being sought in the ensuing Annual General Meeting.

Report on Financial Statements

The report of M/s V.P. Jain and Associates (ICAI Registration No. 015260N), Chartered Accountants, the Statutory Auditors of the Company on the financial statements of the Company for the year ended 31st March, 2015 is annexed to the financial statements in terms of provisions of Section 134(2) of the Companies Act, 2013. The observations of the Auditors in their report are self-explanatory and/or explained suitably in the Notes forming part of the Financial Statements. The report of the Statutory Auditors does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.

Secretarial Audit

The Board has appointed Mr. Ashok Tyagi, Practicing Company Secretary as Secretarial Auditor for the Financial Year 2014-15 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the Financial Year ended 31st March, 2015 in the prescribed form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure-"F" to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.

Internal Financial Controls and their Adequacy

Raunaq International has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance. The Report on Corporate Governance as

stipulated under Clause 49 of the Listing Agreement forms part of this Report.

The requisite Certificate of Compliance from Statutory Auditors, M/s V.P. Jain & Associates, confirming compliance with the conditions of Corporate Governance, is attached to this Report.

Vigil Mechanism

In terms of provisions of Section 177 of the Companies Act, 2013, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The mechanism under the Policy has been appropriately communicated within the organisation. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees. It protects employees wishing to raise a concern about serious irregularities, unethical behaviour, actual or suspected fraud 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 envelope or sent through e-mail to the Compliance Officer.

During the year under review, no employee was denied access to the Audit Committee.

The policy on vigil mechanism is available on the website of the Company i.e. www.raunaqinternational.com under the link http://www.raunaqinternational.com/pdf/policy-on-vigil- mechanism.pdf.

Reconciliation of Share Capital Audit

As per the directive of the Securities and Exchange Board of India (SEBI), M/s A.K. Jha & Associates, Practising Company Secretaries, New Delhi undertakes a Reconciliation of Share Capital Audit on a quarterly basis. The Audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company.

The Reconciliation of Share Capital Audit Reports as submitted by the Auditor on quarterly basis were forwarded to the BSE Limited (BSE), Mumbai and Delhi Stock Exchange Limited (DSE), New Delhi where the original shares of the Company are listed.

Listing of Shares

The Equity shares of the Company are listed on the BSE Limited (BSE), Mumbai and Delhi Stock Exchange Limited, New Delhi .

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.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the Company during the year under review. The particulars with respect to foreign earnings and outgo during the year under review are as follows:-

(Rs/Lacs) Particulars 2014-15 2013-14

Foreign Exchange Earned - -

Foreign Exchange Used 9.99 230.02

Extract of Annual Return

In terms of provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company in Form MGT-9 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure- "G" to this report.

Court/Tribunal Orders

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

Acknowledgements

The Board of Directors gratefully acknowledge the continued co-operation, trust and support of the shareholders and would like to place on record its appreciation for the dedicated services rendered by the Employees at all levels. The Directors further express their gratitude to the Bankers, Customers and Sub- vendors and other associates for co-operation and confidence reposed by them in the Company.

For and on behalf of the Board of Directors

Place: New Delhi Surinder P. Kanwar Dated: May 30, 2015 Chairman & Managing Director




Mar 31, 2014

To The Members

Raunaq International Limited

The Directors have pleasure in presenting the 49th Annual Report of your Company together with the Audited Standalone and Consolidated Financial Accounts and the Auditors'' Report thereon for the Year ended March 31,2014.

FINANCIAL RESULTS

The highlights of Consolidated Financial Results of your Company and its subsidiary(ies) are as follows:

(Rs/Lacs)

Consolidated Particulars Year ended Year ended March 31,2014 March 31,2013

Revenue from Operations and 15,279.25 8,818.68 Other Income (gross)

Profit before Finance Cost, 1,172.70 635.89

Depreciation and Exceptional Items

Finance Cost 381.85 232.56

Depreciation 123.55 67.87

Profit BeforeTax & Exceptional Items 667.30 335.46

Less : Exceptional Item - 0.78

Profit Before Tax 667.30 334.68

Less: Tax Expense 340.67 151.04

Profit AfterTax 326.63 183.64

The highlights of financial results of your company as a standalone entity are as follows:

(RS''/Lacs) Standalone Particulars Year ended Year ended March 31,2014 March 31,2013

Revenue from Operations and 14,110.90 8,790.57 other income (gross)

Profit before Finance Cost, 1,344.82 704.62

Depreciation and Extraordinary Items

Finance Cost 336.67 232.20

Depreciation 90.01 64.63

Profit Before Tax 918.14 407.79

Less: Tax Expense 315.61 137.42

Profit After Tax 602.53 270.37

Surplus in Statement of Profit and Loss

Opening balance 1,586.84 1,432.11

Add: Profit for the year 602.53 270.37

Less: Dividend for Earlier Year 20.06 -

Tax on distributed profits 3.41 -

Proposed Dividend - Equity 40.12 13.37

Tax on distributed profits 6.82 2.27

Transferred to General Reserve 200.00 100.00

Closing Balance 1,918.96 1,586.84

Dividend & Transfer to Reserves

The Board is pleased to recommend a dividend of Rs.1.20 per equity share of Rs. 10/- each for the financial year 2013-2014. The total payout will be Rs. 46.94 lacs, inclusive of dividend tax and surcharge thereon. Also the Directors have proposed to transfer an amount of Rs. 200 lacs to General Reserve.

Your Company has paid dividend of Rs. 20.06 Lacs and Rs. 3.41 Lacs as tax on distribution of dividend on pari passu basis on Bonus Shares allotted during the financial year 2013-14 to the shareholders on account of Final Dividend for the year 2012-13 as required under the Listing Agreement as those shares were allotted prior to record date for the dividend payment and after the date of earlier year balance sheet.

Subsidiary Company

Your Company has a 100% wholly owned subsidiary, Xlerate Driveline India Limited (XDIL).

Xlerate Driveline India Limited (XDIL) is engaged in the manufacturing of automotive components having its Industrial Unit at Faridabad, Haryana.

As on date, the Company holds 1,18,77,038 (One Crore Eighteen Lakhs Seventy Seven Thousand Thirty Eight) Equity Shares of Rs. 10/- (Rupees Ten) each of XDIL amounting to Rs. 11,87,70,380/- (Rupees Eleven Crores Eighty Seven Lakhs Seventy Thousand Three Hundred Eighty Only) as an investment directly/through its nominees which is equivalent to 100% paid up capital of XDIL.

Business Operations

During the year under review, the sales and other income of the Company on Standalone basis was Rs. 14,110.90 Lacs against Rs. 8,790.57 Lacs in the previous year. The profit after tax (PAT) is Rs. 602.53 Lacs against Rs. 270.37 Lacs in the last year.

The sales and other income of the Company on Consolidated basis in the year 2013-2014 was Rs. 15,279.25 Lacs against Rs. 8,818.68 Lacs in the previous year and the profit after tax (PAT) is Rs. 326.63 Lacs against Rs. 183.64 Lacs in the last year.

Future Outlook

The Company has started the year 2014-15 with a not so healthy Order Book mainly because of lack of orders in the previous year 2013-14. However, the order book position during this year is expected to be reasonably good particularly in the second half of the FY 2014-15 on account of likely thrust by the new government in the Infrastructure and Power Sector.

Consolidated Financial Statements

As required under the Listing Agreement with the Stock Exchanges, Consolidated Financial statements have been prepared in accordance with Accounting Standard-21 issued by the Institute of Chartered Accountants of India and have been provided in the Annual Report. These Consolidated Financial Statements provide financial information of your Company and its subsidiary as a single economic entity.

Exemption under Section 212(8) of the Companies Act, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular Ref No. 51/12/2007-CL-III dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report.

Accordingly, in terms of the said general exemption, the Board of Directors of the Company, in its Meeting held on 23rd January, 2013, resolved that the Financial Statements and other required documents of the subsidiary companies are not required to be attached with the Balance Sheet of the Company for this fiscal.

The Annual Accounts of the Subsidiary Company and the related information are open for inspection by any member including the members of Subsidiary Company at the Registered Office of the Company and that of Subsidiary concerned, during the working hours on all working days. The Company will make available these documents to the members including members of subsidiary company upon receipt of request from them. The members, if they so desire, may write to the Company to obtain a copy of financials of the Subsidiary Company.

Allotment of Bonus Shares

During the period under review, the Company has allotted 20,05,946 Bonus Equity Shares of Rs. 10/- (Rupees Ten) each to the existing Shareholders of the Company through capitalization of reserves on 23rd May, 2013. Your Company has also paid dividend on the said Bonus Shares on account of Final Dividend for the year 2012-13 out of the profits for the financial year 2013-14 as those shares were allotted prior to record date for the dividend payment and after the date of earlier year balance sheet.

Management Discussion and Analysis

The Management Discussion and Analysis forms an integral part of this report.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Report.

The requisite Certificate of Compliance from Statutory Auditors, M/s. V.P. Jain & Associates, confirming compliance with the conditions of Corporate Governance, is attached to this Report.

DIRECTORS

In accordance with Section 256 of the Companies Act, 1956 and the Articles of Association of your Company, Mr. V.K. Pargal and Mr. Satya Prakash Mangal, Directors retire by rotation at the ensuing Annual General Meeting.

Therefore, in terms of Section 149 of the Companies Act, 2013, it has been proposed to appoint Mr. V.K. Pargal and Mr. Satya Prakash Mangal as Non-Executive Independent Directors for a period of 5 (Five) years upto the conclusion of the 54th Annual General Meeting (AGM) of the Company in the calender year 2019 at the ensuing AGM of the Company.

The Company has received notice under Section 160 of the Companies Act, 2013 (Section 257 of the Companies Act, 1956) from member(s) of the Company, proposing the candidature for the office of Director for the said Directors.

The brief resume of the Directors proposed to be appointed/re-appointed is given in the notice calling the Annual General Meeting.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that-

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profits of the Company for the period ended on that date;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. the annual accounts have been prepared on a going concern basis.

Disclosures under Section 217 of the Companies Act, 1956

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.

Auditors

M/s. V.P. Jain & Associates, Chartered Accountants (Regn No. 015260N), the Statutory Auditors of the Company hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Board recommends for their appointment as Statutory Auditors of the Company in terms of provisions of Section 139 of the Companies Act, 2013 from the ensuing Annual General Meeting to the third consecutive Annual General Meeting from the ensuing Annual General Meeting in the calender year 2017 (subject to ratification by the members at every Annual General Meeting). Certificate from the Auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013.

Auditors'' Report

The observations of the Auditors in their report are self- explanatory and/or explained suitably in the Notes forming part of the Financial Statements.

Personnel

Employees'' relations continue to be cordial. Information regarding employees in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended is given in Annexure"A" to the Directors'' Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

The information in accordance with the provisions of Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the

Company during the year under review. The particulars with respect to foreign earnings and outgo during the year under review are as follows:-

(Rs in Lacs) Particulars 2013-14 2012-13

Foreign Exchange earned - -

Foreign Exchange Used 230.02 146.56

Fixed Deposits

During the period under review, the Company did not accept any fixed deposits. In terms of Section 205C of the Companies Act, 1956, the deposit and interest thereon, which remains unclaimed for a period of seven years from the date when it became due is required to be deposited with the Investor Education and Protection Fund established under the Companies Act, 1956. During the Financial Year 2013-14, there was no amount required to be transferred to the Investor Education and Protection Fund. However, the Unclaimed Dividend (Interim & Final) for the Financial Year 2006-07 is proposed to be transferred into the "Investor Education and Protection Fund" on 15th July, 2014 and 30th July, 2014 respectively upon completion of seven years from the date of transfer of said Dividend into the unclaimed Dividend Account(s).

Reconciliation of Share Capital Audit

As per the directive of the Securities and Exchange Board of India (SEBI), M/s A.K. Jha & Associates, Practising Company Secretaries, New Delhi, undertakes a Reconciliation of Share Capital Audit on a quarterly basis. The Audit is aimed at

reconciliation of total shares held in CDSL, NSDL and ir physical form with the admitted, issued and listed capital o the Company.

The Reconciliation of Share Capital Audit Reports a: submitted by the Auditor on quarterly basis were forwardec to the Delhi Stock Exchange Limited (DSE) and [BSE Limited (BSE)(for the last quarter only as shares listed on BSE w.e. 21st March, 2014)]

Listing of Shares

The Equity shares of the Company are listed on the Delhi Stoci Exchange Limited, New Delhi. During the period unde review, the Equity Shares of the Company have also been admitted for listing and trading on BSE Limited (BSE), Mumba w.e.f 21st March, 2014. Now therefore, the Equity Shares of the Company stands listed on BSE along with DSE.

The Annual Listing Fees for the year 2014-2015 has been paid in advance to the aforesaid Stock Exchanges.

Acknowledgements

The Board of Directors gratefully acknowledge the continued co-operation, trust and support of the shareholders and would like to place on record its appreciation for the dedicated services rendered by the Employees at all levels The Directors further express their gratitude to the Bankers Customers and Sub-vendors and other associates for co operation and confidence reposed by them in the Company..

For and on behalf of the Board of Directors

Place: New Delhi Surinder P. Kanwar Date: 30 May, 2014 Chairman & Managing Director


Mar 31, 2013

Dear Members

The Directors have pleasure in presenting the 48th Annual Report of your Company together with the Audited Standalone and Consolidated Financial Accounts and the Auditors'' Report thereon for the year ended March 31,2013.

FINANCIAL RESULTS

The highlights of Consolidated Financial Results of your Company and its subsidiary(ies) are as follows:

(Rs. /Lacs) Consolidated Particulars Year ended Year ended March 31, 2013 March 31, 2012*

Revenue from Operations and 8,818.68 - Other I ncome (gross)

Profit before Finance Cost, 635.89 - Depreciation and Exceptional Items

Finance Cost 232.56 -

Depreciation 67.87 -

Profit BeforeTax& Exceptional Items 335.46 -

Less : Exceptional Item 0.78 -

Profit Before Tax 334.68 -

Less:Tax Expense 151.04 -

Profit AfterTax 183.64 -

*No consolidated figures for previous year since subsidiary formed in the currentyear 2012-13.

THE HIGHLIGHTS OF FINANCIAL RESULTS OF YOUR COMPANY AS A STANDALONE ENTITY ARE AS FOLLOWS:

(RS. /Lacs) Standalone

Particulars Year ended Year ended March 31, 2013 March 31, 2012

Revenue from Operations and 8,790.57 11,848.18 other income (gross)

Profit before Finance Cost, 704.62 1,255.31 Depreciation and Extraordinary Items

Finance Cost 232.20 251.73

Depreciation 64.63 64.74

Profit BeforeTax & Extraordinary Items 407.79 938.84

Add : Extraordinary Item - 53.33

Profit Before Tax 407.79 992.17

Less: Tax Expense 137.42 344.79

Profit After Tax 270.37 647.38

Dividend & Transfer to Reserves

The Board is pleased to recommend a dividend of Rs. 1.00 per equity share of Rs. 10/- each for the financial year 2012-2013. The total payout will be Rs. 15.64 Lacs, inclusive of dividend tax and surcharge thereon. Also the Directors have proposed to transfer an amount of Rs. 100.00 Lacs to general reserve.

Any equity shares that may be allotted before the date of the book closure for the payment of dividend shall rank pari- passu with the existing shares and shall be entitled to receive dividend for the financial year 2012-2013.

Subsidiary Company

During the period under review, your company has made investment in M/s Xlerate Driveline India Limited (XDIL), erstwhile a group company, equivalent to the 100% of the shareholding of XDIL, by virtue of that, M/s XDIL became the wholly owned subsidiary of the company.

M/s Xlerate Driveline India Limited (XDIL) is engaged in the manufacturing of automotive components having its Industrial Unit at Faridabad, Haryana.

As on date, the company currently holds 1,18,77,038 (One Crore Eighteen Lakhs Seventy Seven Thousand Thirty Eight) Equity Shares of Rs. 10/- (Rupees Ten) each of XDIL amounting to Rs. 11,87,70,380/- (Rupees Eleven Crores Eighty Seven Lakhs Seventy Thousand Three Hundred Eighty Only) as an investment directly/ through its nominees which is equivalent to 100% paid up capital of XDIL.

Business Operations

During the year under review, the sales and other income of the company on Standalone basis was Rs. 8,790.57 Lacs against Rs. 11,848.18 Lacs in the previous year. The profit after tax (PAT) is Rs. 270.37 Lacs against Rs. 647.38 Lacs in the last year.

The sales and other income of the company on consolidated basis in the year 2012-2013 is Rs. 8,818.68 Lacs and the profit after tax (PAT) is Rs. 183.64 Lacs.

On consolidation of accounts, the revenues of M/s Xlerate Driveline India Limited (XDIL), had little impact on the final numbers.

The initial loss of a new project however has had an impact on profits at the PBT and PAT levels.

The key points of RIL''sconsolidated results are : (Rs. in Lacs)

* Revenues : 8,818.68

* EBIDTA : 457.62

* EBIDTA Margin : 5.19 %

* PBT : 334.68

* PAT : 183.64

The reduction in the top-line has had an adverse impact on operating margins in comparison to the previous year. However, finance costs were kept under control - reducing in aggregate from Rs. 2.5 Crores in 2011-12 to Rs. 2.3 Crores in 2012-13.

Future Outlook

The Company has started year 2013-14 with a healthy order book.

The macro economic situation in the industry and business environment continues to remain uncertain. Therefore, our priority will be for execution of the orders in hand.

We will however, make use of our special operational skills, and it will be our endeavour to maximize booking of new orders in related projects as well.

M/s Xlerate Driveline India Limited (XDIL), the subsidiary Company is expected to stabilize its operations in the coming year.

Consolidated Financial Statements

As required under the Listing Agreement with the Stock Exchanges, Consolidated Financial statements have been prepared in accordance with Accounting Standard-21 issued by the Institute of Chartered Accountants of India and have been provided in the Annual Report. These consolidated financial statements provide financial information of your company and its subsidiary as a single economic entity.

Exemption under Section 212(8) of the Companies Act, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular Ref No. 51/12/2007-CL-III dated February 8, 2011, has provided an exemption to companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such companies publish the Audited Consolidated Financial Statements in the Annual Report.

Accordingly, in terms of the said general exemption, the Board of Directors of the company, in its Meeting held on 23rd January, 2013, resolved that the financial statements and other required documents of the subsidiary companies are not required to be attached with the Balance Sheet of the company for this fiscal.

The Annual Accounts of the subsidiary company and the related information are open for inspection by any member including the members of subsidiary company at the Registered Office of the company and that of subsidiary concerned, during the working hours on all working days. The company will make available these documents to the members including members of subsidiary company upon receipt of request from them. The members, if they so desire, may write to the company to obtain a copy of financials of the subsidiary company.A statement as required with regard to XDIL for availing the said exemption is annexed at the end of the Annual Report.

Issue of Bonus Shares

During the period under review, the company has capitalized a sum of Rs. 2,00,59,460/- (Rupees Two Crores Fifty Nine Thousand Four Hundred Sixty Only) out of the amount standing in the General Reserves of the company and the same has been distributed by way of issue of Bonus Shares fully paid up of Rs. 10/- (Rupees Ten) each to the shareholders in the ratio of 3:2 i.e issue of 3(Three) equity shares for every 2(Two) equity shares held pursuant to the approval of the shareholders of the company on 10th May, 2013 vide Postal Ballot.

The equity shares so allotted subject to the Memorandum and Articles of Association of the company and shall in all respects rank pari passu with existing fully paid equity shares of the company, with a right, to participate in dividend in full that may be declared after the allotment of these equity shares.

Management Discussion and Analysis

The Management Discussion and Analysis forms an integral part of this report.

Corporate Governance

The Clause 49 of the Listing Agreement became applicable on the company w.e.f 01st April, 2012 as the Net Worth of the company as on 31st March, 2012 was Rs. 29.55 Crores which is above the threshold limit for applicability of Corporate Governance requirements as prescribed by SEBI.

The company is committed to maintain the highest standards of Corporate Governance. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this report.

The requisite certificate of compliance from Statutory Auditors, M/s. V.P. Jain & Associates, confirming compliance with the conditions of Corporate Governance, is attached to this report.

Directors

In accordance with Section 256 of the Companies Act, 1956 and Articles of Association of your company, Mr. P.K. Mittal and Mr. N.V. Srinivasan, Directors retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

The brief resume of the Directors proposed to be re- appointed is given in the Corporate Governance Report.

The tenure of Mr. Surinder P. Kanwar as Managing Director of the company expired on 30th September, 2012. Pursuant to the approval of the shareholders in the Annual General Meeting held on 25th July, 2012, Mr. Surinder P. Kanwar had been re-appointed as Managing Director and designated as Chairman cum Managing Director of the company for a further period of 5(five) years w.e.f 1st October, 2012 on a token remuneration of Rs. 1 per month.

Mr. M.K. Vig, Director resigned from the Directorship of the Company on 25th May, 2012.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that-

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2013 and of the profits of the company for the period ended on that date;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

4. the annual accounts have been prepared on a going concern basis.

Disclosures under Section 217 of the Companies Act, 1956

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.

Auditors

M/s. V.P. Jain & Associates, Chartered Accountants, the Statutory Auditors of the company hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.

Auditors'' Report

The observations of the Auditors in their report are self- explanatory and/or explained suitably in the Notes forming part of the financial statements.

Personnel

Employees'' relations continue to be cordial. During the year under review, there is no employee whose particulars are required to be given under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

The information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the company during the year under review. The particulars with respect to foreign exchange earnings and outgo during the year under review are as follows:-

(Rs. in Lacs) Particulars 2012-13 2011-12

Foreign Exchange earned - - Foreign Exchange Used 146.56 5.78

Fixed Deposits

During the year under review, the company did not accept any fixed deposits. In terms of Section 205C of the Companies Act, 1956, the deposit and interest thereon, which remains unclaimed for a period of seven years from the date when it became due is required to be deposited with the Investor Education and Protection Fund established under the Companies Act, 1956. During the year, there was no amount required to be transferred to Investor Education and Protection Fund.

Reconciliation of Share Capital Audit

As per the directive of the Securities and Exchange Board of India (SEBI), M/s A.K. Jha & Associates, Practising Company Secretaries, New Delhi undertakes a Reconciliation of Share Capital Audit on a quarterly basis. The Audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company.

The Reconciliation of Share Capital Audit Reports as submitted by the Auditor on quarterly basis were forwarded to the Delhi Stock Exchange where the original shares of the Company are listed.

Listing of Shares

The equity shares of the company are listed on the Delhi Stock Exchange Limited, New Delhi.

The Annual Listing Fees for the year 2013-2014 has been paid in advance to the aforesaid Stock Exchange.

It has also been proposed to get the shares of the company listed on the Bombay Stock Exchange Limited (BSE), Mumbai.

Acknowledgements

The Board of Directors gratefully acknowledge the continued co-operation, trust and support of the shareholders and would like to place on record its appreciation for the dedicated services rendered by the employees at all levels. The Directors further express their gratitude to the Bankers, Customers and sub-vendors and other associates for co-operation and confidence reposed by them in the company.

For and on behalf of the Board of Directors

Place: Faridabad Surinder P. Kanwar Date: May 23, 2013 Chairman & Managing Director

 
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