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Notes to Accounts of Rane Brake Lining Ltd.

Mar 31, 2016

1. Segment Reporting

The Company is engaged in the business of manufacture of "Components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

2. Pursuant to the provisions of Section 197 of Companies Act 2013, Mr. Vinay Lakshman was appointed as Managing Director by the Board with effect from October 1, 2015 for a period of three years. The terms and conditions of his appointment and remuneration payable are being proposed for approval of the shareholders at the ensuing annual general meeting.

3. Derivative Instrument and hedge accounting

As per Accounting Standard AS 30 "Financial Instruments: Recognition and Measurement''; adopted with effect from 1st April 2014 the Company has provided for the effective portion amounting to Rs. Nil of the changes in the fair values of forward contracts designated as cash flow hedges directly in ''Hedge Reserve Account'' being part of the shareholders'' funds the changes in fair value relating to the ineffective portion amounting to Rs. Nil of the cash flow hedges and forward contracts are recognised in the Profit and Loss Statement.

4. The figures for the previous year have been regrouped wherever necessary to conform to current year''s classification. Figures have also been rounded off to Crores of rupees.


Mar 31, 2014

1. General Information

Rane Brake Lining Limited (The "Company") is engaged in manufacture of brake linings, disc pads, clutch facings, clutch buttons, brake shoes and railway brake blocks and as such operates in a single reportable business segment of ''components for transportation industry''. The Company is having four manufacturing facilities at Chennai, Hyderabad, Puducherry and Trichy. The Company is a Public Limited Company and listed on The Madras Stock Exchange Limited, Chennai, Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.

(Rupees in Crores)

As at As at 31 March 2014 31 March 2013

2 Contingent Liabilities

Claims against the company not acknowledged as debt

Income Tax matters 6.41 4.01

Sales Tax matters 1.79 1.31

Excise Duty matters 0.74 1.73

Service Tax matters 1.87 1.70

10.81 8.75

(a) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. Future cash outflows in respect of the above are determinable only on receipt of the judgements / decisions pending with various forums / authorities.

(b) The Company does not expect any reimbursements from third parties in respect of the above contingent liabilities.

(c) Compensated Absences (Vesting and Non-vesting unfunded)

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

The Company accounts its liability for long term compensated absences based on actuarial valuation, as at the balance sheet date, determined every year by an independent actuary using the Projected Unit Credit method. Actuarial gains and losses are recognised in the profit and loss account in the year in which they occur.

3 Segment Reporting

The Company is engaged in the business of manufacture of "components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

4 The figures for the previous year have been regrouped wherever necessary to conform to current year''s classification. Figures have also been rounded off to Crores of rupees.


Mar 31, 2013

1. General Information

Rane Brake Lining Limited (The "Company") is engaged in manufacture of brake linings, disc pads, clutch facings, clutch buttons, brake shoes and railway brake blocks and as such operates in a single reportable business segment of ''components for transportation industry''. The Company is having four manufacturing facilities at Chennai, Hyderabad, Puducherry and Trichy. The Company is a Public Limited Company and listed on The Madras Stock Exchange Limited, Chennai, Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.

2.1.a In respect of foreign currency loans availed, the Company has entered into derivative contracts to hedge the loans including interest. This has the effect of freezing the rupee equivalent of these liabilities as reflected under the Borrowings. Thus there is no impact in the Profit & Loss Statement, arising out of exchange fluctuations for the duration of the loans. Consequently, there is no restatement of the loan taken in foreign currency. The interest payable in Indian Rupees on the borrowings are accounted for in the Profit & Loss Statement.

(Rupees in Crores)

As at As at 31 March 2013 31 March 2012

3 Contingent Liabilities

Claims against the company not acknowledged as debt

Income Tax matters 4.01 5.43

Sales Tax matters 1.31 0.85

Excise Duty matters 1.73 1.69

Service Tax matters 1.70 1.56

Labour Cases 0.01

8.75 9.54

4 Segment Reporting

The Company is engaged in the business of manufacture of "components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

5 The figures for the previous year have been regrouped wherever necessary to conform to current year''s classification. Figures have also been rounded off to Crores of rupees.


Mar 31, 2012

1. Fully hedged foreign currency transactions

Year end balance of foreign currency External Commercial Borrowings (ECBs) and Buyers Credit facility amounting to Rs. 51.20 Crores are fully hedged through related swap contracts and are accounted as INR loan. The Company has been consistent in treating the ECBs and the associated swap contracts as composite transaction.

Consequently, there are no foreign currency translation requirements as evidenced by repayment made to date.

The Company has applied the principle of substance over form as set out in paragraph 17(b) of Accounting Standard 1 notified in the Companies (Accounting Standards) Rules, 2006 to reflect a true and fair view of the performance and financial position of the Company.

(Rupees in Crores)

As at As at

31 March 2012 31 March 2011

Claims against the company not acknowledged as debt

Income Tax matters 5.43 5.45

Sales Tax matters 0.85 0.76

Excise Duty matters 1.69 1.24 Service Tax matters 1.56 1.28

Labour Cases 0.01 0.01

9.54 8.74

(a) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements from third parties in respect of the above contingent liabilities.

(a) Defined benefit Plans

Gratuity : Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.

(b) Compensated Absence

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

The Company accounts its liability for long term compensated absences based on actuarial valuation, as at the balance sheet date, determined every year by an independent actuary using the Projected Unit Credit method. Actuarial gains and losses are recognised in the profit and loss account in the year in which they occur.

2 Segment Reporting

The Company is engaged in the business of manufacture of "components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

3 Previous Year Figures

The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

1. Contingent Liabilities

Claims against the Company not acknowledged as debts 87,448 70,519

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The expected rate of return on plan assets is based on the composition of plan assets held (through Life Insurance Corporation of India), historical results of the return on plan assets, the Companys policy for plan asset management and other relevant factors.

2. Segment Reporting

The Company is engaged in the business of manufacture of "components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

3. Related Party Disclosures

(a) List of Related Parties

(i) Holding Company Rane Holdings Limited (RHL) (ii) Fellow subsidiaries Rane (Madras) Limited (RML) Rane Diecast Limited (RDL) Rane Engine Valve Limited (REVL) (iii) Significant influence Nisshinbo Holdings Inc., (iv) Key Management Personnel Mr P S Rao, Manager (till May 31, 2009) under the Companies Act, 1956 Mr.L Lakshman Manager (with effect from June 1, 2009) under the Companies Act, 1956 without remuneration Mr. L Ganesh, Chairman (v) Relatives of Key Management Personnel Mrs. Pushpa Lakshman, Mr. Harish Lakshman, (L.Lakshman and L.Ganesh) Mrs. Hema C Kumar, Mrs.Vanaja Aghoram, Mrs. Shanthi Narayan, Mr. Vinay Lakshman, Ms. Meenakshi Ganesh, Mr. Aditya Ganesh and Ms. Aparna Ganesh (vi) Enterprise over which Key Rane TRW Steering Systems Limited (RTSSL) Management Personnel Kar Mobiles Limited (KML) exercise significant Rane Foundation (RF) influence

(b) The above information regarding related parties have been determined to the extent such parties have been identified on the basis of information available with the Company.

4. Previous years figures have been regrouped wherever necessary.


Mar 31, 2010

1. Change in Accounting Estimates

Based on the reassessment of the provisioning norms for debtors and inventory, all debts in excess of 180 days have been provided as doubtful debts as against 270 days in the previous year. In respect of raw materials and finished goods inventory ageing more than one year (18 months in case of imported raw materials) and semi-finished goods inventory ageing more than three months have been provided as non-moving inventory as against two years for raw materials, one year for finished goods inventory and one year for semi-finished goods inventory in the previous year. As a result of this change, the provision for doubtful debts and non-moving inventory has increased by Rs. 1,959 thousands and Rs.3,074 thousands respectively and the profit for the year ended March 31, 2010 has decreased by Rs.5,033 thousands.

2. Secured Loans

2.1 Term loans other than short term loan are secured on a pari passu basis by way of hypothecation of all the movable fixed assets of the Company.

2.2 Short term loan from a bank is secured on a pari passu basis by a first charge by way of hypothecation of inventories, book debts and all the movable fixed assets of the Company.

2.3 Cash credit and packing credit facilities are secured on a pari passu basis by a first charge created by way of hypothecation of inventories and book debts.

3. Unsecured Loans

Government of Andhra Pradesh, Commissionerate of Industries had issued to the company Eligibility Certificate No.20/2/8/1551 dated 27th January 1999 for deferral of sales tax beyond the base sales turnover of Rs.21 crores for a period of 14 years i.e. from 01.07.1998 to 30.06.2012 which would be treated as interest free loan subject to execution of agreement and other documents with the Commercial Taxes Department as per terms and conditions stipulated by the Department.

Andhra Pradesh Commercial Taxes Department. However, pending creation of a charge / mortgage on all immovable properties situated at Pregnapur Village, Hyderabad, the sales tax deferred for the period from 1st January 1999 to 31st March 2010 aggregating Rs. 48,086 thousands (Rs. 43,451 thousands) has been classified under Unsecured Loans.

4. Cash and Bank Balances

Current Accounts include Interest Warrant Account Rs.559 thousands (Rs. 206 thousands) and Unpaid Dividend Account Rs. 1,207 thousands (Rs. 1,365 thousands)

5. Current Liabilities

Disclosure relating to Micro and Small enterprises

Particulars 31 March 2010 31 March 2009 Rs. 000 Rs. 000 Total amount outstanding 20,598 664 Total amount outstanding beyond the appointed date Nil Nil Amount of Interest accrued and due as on March 31 on the balance outstanding beyond the appointed date Nil Nil Total amount paid during the year beyond the appointed date 106,012 7,645 Amount of interest accrued and due as on March 31 on amount paid during the year beyond the appointed date 432 122

The above information and that given in Schedule L “ Liabilities” regarding Micro and Small enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company.

6. Deferred Tax

The net deferred tax liability is on account of

7. Segment Reporting

The company is engaged in the business of manufacture of “components for Transportation Industry” which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

8. Previous years figures have been regrouped wherever necessary.

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