To

The Members,

The Directors have pleasure in presenting the 31^st Annual Report of the Company together with the Audited Financial Accounts for the year ended 31^st March, 2018.

1) FINANCIAL HIGHLIGHTS :

(Amt Rs. in Lacs)

2) REVIEW OF BUSINESS OPERATION AND FUTURE PROSPECTS:

During the year, the Company has made Net turnover of Rs. 695.10 Lacs in comparison to previous year of Rs. 566.85 i.e. increased by 22.63% and the Company has made Profit of Rs.16.03 Lacs in comparison to Profit after tax of previous year of Rs. 30.06. Management is working hard and aiming to increase the exports of the Company and looking forward to explore market in the gears and in the wide range of automotive parts. The future of automobile industry is very bright, there will be always increase in demand of Automobiles and this increase in demand leads to increase in automobiles parts, so the future of the Company seems to be bright. Your directors are hopeful for better financial result in coming years.

3) DIVIDEND:

Due to plough back of Profit, your Directors do not recommend any dividend.

4) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

During the year 2017-18, your Company has not made transaction forming part of section 186 of the Companies Act, 2013.

5) TRANSFER TO RESERVES:

Company has not transferred any amount to Reserves.

6) PARTICULARS RELATING TO HOLDING/SUBSIDIARY/ASSOCIATE CO.:

The Company has no Holding, Subsidiary and Associate Company.

7) DEPOSITS:

Company has not accepted any deposit and as such no amount of deposit whether Principal or interest thereon was Outstanding as of the Balance Sheet.

8) PARTICULARS OF CONTRACT OR ARRANGEMENTS MADE WITH RELATED PARTIES:

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 is carried out at arm’s length basis the details of the same is prescribed in Form AOC-2, appended as Annexure 02 to the Board’s report.

9) TRANSITION TO IND AS:

The financial statements up to year ended March 31, 2017 were prepared in accordance with the Accounting Standards notified under section 133 of the Act read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (“Indian GAAP”) and other relevant provisions of the Act as applicable. These financial statements are the Company’s first Ind AS financial statements and are covered by Ind AS 101- First time Adoption of Indian Accounting Standards. The transition to Ind AS has been carried out from the accounting principles generally accepted in India (“Indian GAAP”) which is considered as the ‘Previous GAAP’ for purposes of Ind AS 101. An explanation of how the transition to Ind AS has affected the Company’s financial position, financial performance and cash flows is provided in Note 35(c) of the financial statement.

10) MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT:

No material changes and commitment affecting the financial position of the Company occurred between the end of financial year to which this financial statement relate and the date of this report.

11) INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

12) INSURANCE:

The assets of the company including buildings, plant & machinery, stocks, etc. wherever necessary and to the extent required have been adequately insured against various risk.

13) SEGMENT REPORTING:

As per Indian Accounting Standard 108 ‘Operating Segment’, the Company has reported ‘Segment Information’, as described below:

a) The manufacturing Segment includes manufacturing of gears, gear boxes and other transmission components

b) The construction segment includes business of real estate development Details of the same is Given in Management Discussion and Analysis Report.

14) INDUSTRIAL RELATIONS & HUMAN RESOURCES:

The Company treats its all manpower as a valuable assets and growth of the company is possible through entire workforce working in the company. The industrial relation with workmen and staff continued to be extremely cordial during the year under review. The Board wishes to take place on record its appreciation for the valuable services rendered by its entire workforce.

15) DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Sar Auto’s premises through various interventions and practices. The Company has formed a policy on prevention of Sexual Harassment policy of Women at workplace and framed Internal Complaints Committee and during the year 2017-18. No complaint has been received.

16) PARTICULARS OF EMPLOYEES:

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in as Annexure 03 to Board’s report.

17) MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management discussion and Analysis report for the year under review, as stipulated under Regulation 34(2) of SEBI (LODR) Regulations, 2015 is presented in separate section and forms part of the Annual Report.

18) CORPORATE GOVERNANCE:

CORPORATE GOVERNANCE is a system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community and considering the importance of Corporate Governance, your Company is committed to maintaining the highest standards of corporate governance and adheres to the corporate governance requirement set out by SEBI. All conditions of corporate governance as required under SEBI (LODR) Regulations, 2015 have been Voluntary complies with and duly audited. A certificate from the statutory auditors of the company regarding compliance of conditions of corporate governance has been obtained and is enclosed to the report of corporate governance.

19) CEO/ CFO CERTIFICATION:

Pursuant to the Regulation 17(8) of SEBI (LODR) Regulations, 2015, the CEO/ CFO Certification for preparation of financial statements etc. is annexed in this report.

20) NUMBER OF MEETINGS OF THE BOARD:

The Board has met 4 (Four) times during the financial year, the details of which are given in the Corporate Governance Report and forms part of Annual Report.

21) DIRECTORS:

Shri Shreyas Rameshbhai Virani (DIN: 00465240), retires at the ensuing Annual General Meeting of the Company pursuant to provision of section 152(6) of the Companies Act, 2013 and being eligible offer himself for re-appointment. The Board of Directors of the Company at its meeting held on 13^th August, 2018 has re-appointed Shri Shreyas R. Virani, as whole-Time Director of the Company w.e.f 30^th September, 2018 for a further period of 5 years i.e.upto 29^th September, 2023 and as per requirement of section 196(4) of the Companies Act, 2013, Board proposes before the Members at the ensuing Annual General Meeting to approve the said terms of appointment including remuneration.

22) DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary Declaration from each Independent Director under section 149(7) of the Companies Act, 2013 that he/she meets with the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013.

23) POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The Company’s Policy relating to appointment of Directors, payment of Managerial remuneration, Directors, qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Nomination & Remuneration policy and disclosed in the website of the Company.

24) BOARD EVALUATION:

As per Companies Act, 2013 Board has made annual evaluation of its own performance and also of its committees and Individual Directors. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

25) COMMITTEES OF THE BOARD:

At present the Company is having 5 (Five) Committees as mentioned below:

- AUDIT COMMITTEE:

The Company has an adequately qualified Audit Committee constituted in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (LODR) Regulations, 2015, The details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report.

- NOMINATION AND REMUNERATION COMMITTEE:

The Company has also constituted Nomination and Remuneration Committee Pursuant to provision of section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulations, 2015, and the details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report.

- STAKEHOLDERS RELATONSHIP COMMITTEE:

To consider and resolve the Grievances of Stakeholders, the Company has framed Stakeholders Relationship Committee in accordance with the provision of section 178 of the Companies Act, 2013 and Regulation 20 of SEBI (LODR) Regulations, 2015, and the details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report.

- CORPORATE SOCIAL RESOPONSIBILIY COMMITTEE:

The Company is committed to conduct its business in a socially responsible, ethical and environmental friendly manner and to continuously work towards improving quality of life of the communities in its operational areas. The Company has a duly constituted CSR Committee, which is responsible for fulfilling the CSR objectives of the Company and the details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report.

- RISK MANAGEMENT COMMITTEE

The Company has framed Risk Management Committee which mainly aims at Identification of Risk level at various stages of Business operation/ activities and to manage the Risk and evaluation of RMS i.e Risk Management System. The details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report.

26) DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement as enumerated under:-

(a) In the preparation of the annual accounts, the applicable Indian accounting standards had been followed;

(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 at the end of the financial year and of the profit and loss of the company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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; and

(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.

(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.

27) STATEMENT FOR COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS:

We the Directors of the Company hereby states the Company has complied all applicable Secretarial Standards to the extend its applicable.

28) AUDITORS AND AUDITORS’ REPORT: STATUTORY AUDITORS

Pursuant to provision of section 139 of the Companies Act, 2013, in 30^th Annual General Meeting convened on 19^th September, 2017, M/s. J.A. Sheth & Associates, (FRN: 119980W), Chartered Accountants have been appointed as Statutory Auditor of the Company to hold office for 2017-18 till the conclusion of Annual General Meeting of the Financial year 202122, Subject to ratification by the Shareholders annually. However, as per Companies Amendment Act, 2017 now appointment of Statutory Auditor is not required to be ratified by the Shareholders at every Annual General Meeting and as such Board recommends to appoint M/s. J.A. Sheth & Associates, as Statutory Auditors of the Company to carry out statutory audit for a consecutive period of Four years i.e. for the year 2018-19 till the conclusion of the Annual General Meeting concerning of the financial year 2021-22.

STATUTORY AUDITORS’ REPORT:

The observations of Auditor in his report read with the relevant note to accounts in schedule are self-explanatory and do not require further explanation. The Audit Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDITOR:

Pursuant to Provision of section 204(1) of the Companies Act, 2013, the Board has appointed M/s. K. P. Rachchh & Co., Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2017-18.

SECRETARIAL AUDITORS’ REPORT:

The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed herewith to this Report. The qualifications put up in the Secretarial Audit Report are self-explanatory. Secretarial Auditors Report in the prescribed format i.e. MR-3 is attached in this report as Annexure 04.

29) CORPORATE SOCIAL RESPONSIBILITY:

The Company is committed to conduct its business in a socially responsible, ethical and environmental friendly manner and to continuously work towards improving quality of life of the communities in its operational areas. The Company has a duly constituted CSR Committee, which is responsible for fulfilling the CSR objectives of the Company.

In this year company has made profit and CSR is not applicable to company under section 135 of the Companies Act, 2013 and fluctuations in the profitability of the Company no CSR activities was carried out during last year.

30) CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 05 attached to this report.

31 ) EXTRACT OF ANNUAL RETURN:

The extracts of Annual Return as provided under Section 134(3)(a) and sub-section (3) of section 92 read with Rule 12(1) of the Companies (Management and administration) Rules, 2014 is furnished in Annexure 06 and is attached to this Report.

32) WHISTLE BLOWER POLICY (VIGIL MECHANISM):

The Company has in place a whistleblower policy, to support the Code of Business Ethics. This policy documents includes the Company’s commitment to maintain an open work environment in which employees, consultants and contractors are able to report instances of unethical or undesirable conduct, actual or suspected fraud or any violation of Company’s Code of Business Ethics at a significantly senior level without fear of intimidation or retaliation. The said policy is placed on the website of the company.

ACKNOWLEDGMENT:

Your Directors wish to place on record their sincere appreciation for the continued cooperation, guidance, support and assistance received during the year under report by our Bankers, all the customers, suppliers of the Company including Government agencies. The Board of Directors also wishes to express its appreciation for the efforts and contribution made by the employees at all levels during the year under report.

Place: Rajkot For and on Behalf of

Date: 13^th August, 2018 Sar Auto Products Ltd

Rameshkumar D. Virani

Chairman and Managing Director

DIN: 00313236