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Directors Report of Rane Engine Valve Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their forty third Annual Report together with the accounts for the year ended March 31, 2015.

1. State of Company''s affairs

1.1 Financial Performance

The fi nancial highlights for the year under review are as follows:

(Rs. in Crores) Particulars 2014-15 2013-14

Sales and Operating Revenues 395.18 265.92

Other Income 4.05 1.03

Profit Before Tax (PBT) 31.46 (43.56)

Provision for tax :

Current 2.14 -

MAT Credit entitlement (2.14) -

Deferred 7.98 (14.47)

Profit After Tax (PAT) 23.48 (29.09)

Surplus / (Deflicit) brought forward (15.43) 13.66

Amount available for appropriation 9.01* (15.43)

* includes Rs. 0.96 crores addition pursuant to Merger

Key performance indicators, operational performance and balance sheet summary are furnished in Page No. 4 of this Annual Report.

The net sales and operating revenue of the Company was at Rs. 395.18 crores as against Rs. 265.92 crores in the previous year. The Company incurred a net Profit of Rs. 31.46 crores as against loss of Rs. 43.56 crores in the previous year.

There was no change in nature of business during the year. The Company is a subsidiary company of Rane Holdings Limited (RHL / holding company). The Company does not have any subsidiary, associate or joint venture.

2. Appropriation

Out of the Profit available for appropriation of Rs. 9.01 crores, the directors have recommended a dividend of 25%. The total dividend amount inclusive of distribution tax and surcharge thereon would be Rs. 2.02 crores. After transfer of Rs. 4.97 crores to the general reserve, Rs. 2.02 crores has been retained as surplus in the Profit and Loss Account.

3. Management Discussion & Analysis

Your Company is engaged in the manufacturing and marketing of components for transportation industry viz., engine valves, valve guide, tappet, pistons, seat inserts and stem seals. A detailed analysis on the performance of the industry, the Company, internal control systems, risk management policy are enumerated in the Management Discussion and Analysis report forming part of this report and annexed as ''Annexure A.

4. Amalgamation

The Hon''ble High Court of Judicature at Madras vide its order dated February 26, 2015 has sanctioned the Scheme of Amalgamation of Kar Mobiles Limited (KML) with Rane Engine Valve Limited (Scheme) under Sections 391 to 394 of the Companies Act, 1956. Consequent to Scheme coming into force all the assets and liabilities of KML have been transferred and vested with the Company effective April 1, 2014, being the appointed date for the scheme. KML was dissolved without being wound up as on effective date April 01, 2015 and authorized share capital of KML has been vested with the company.

In consideration of the Scheme, the Board of directors, on May 04, 2015, allotted 15,68,000 equity shares of Rs. 10/- each fully paid up in the ratio of 7:10 i.e. fully paid up shares of equity shares of the company for every 10 equity shares of KML, to the equity shareholders of KML whose name appear in the register of members as on April 28, 2015 (Record Date).

The significant benefi ts expected as a result of the amalgamation are as follows:

- Business Synergy : Consolidation of business operations and signifi cant impetus to growth since KML is also engaged in the similar areas of business.

- Optimal utilization of resources: Enhancement of the scale of operations and reduction in overheads, administrative, managerial and other expenditure, operational rationalization, sharing of technology, organizational effi ciency, and optimal utilization of various resources.

- Enhancement in Shareholder Value: Improvement in shareholder value for both the companies by way of improved fi nancial structure and cash fl ows, increased asset base and stronger consolidated revenue and Profitability.

- Expansion: Enhancing the leveraging capability of the combined entity for larger expansion strategies and tapping bigger opportunities in the automotive industry.

- Consolidation of expertise: Consolidation of managerial expertise of the companies will facilitate greater focus and utilization of resources.

5. Board of Directors

5.1 Composition

The composition of the Board of Directors of the Company is furnished in the Corporate Governance Report annexed to this report.

The Company has issued a letter of appointment to all independent directors and the terms and conditions of their appointment have been disclosed on the website

of the Company and available at http://rane.co.in/pdf/ investors/revl/revltermsid.pdf

In terms of section 149 of the Companies Act, 2013 (Act), Mr Ashok Malhotra, Mr C N Srivatsan, Mr R V Raghavan and Mr Krishna Kumar Seshadri, Independent Directors were appointed by the shareholders at the 42nd Annual General Meeting (AGM) held on July 24, 2014, for a period of three years to hold office from the conclusion of the 42nd AGM till the conclusion of 45th AGM. Dr. Brinda Jagirdar was co-opted to the Board as an additional director in the capacity of independent director on October 24, 2014. The Board has recommended the appointment of Dr. Brinda Jagirdar as independent director effective October 24, 2014 till the conclusion of 46th AGM. Notice has also been received from a member signifying his intention to propose her appointment as independent director of the Company at the ensuing AGM. The appointment of Dr. Brinda Jagirdar also fulfi ls the criteria of appointment of woman director on the Board under Section 149(1) of the Companies Act, 2013 and clause 49 of the listing agreement.

All the independent directors have affirmed that they satisfy the criteria laid down under section 149(6) of the Companies Act, 2013 and clause 49 of the listing agreement.

5.2 Retirement by rotation

At the ensuing AGM, Mr Harish Lakshman retires by rotation and being eligible, offer himself for re-appointment. The notice convening the AGM includes the proposal for his re-appointment as director.

5.3 Board Meetings

A calendar of meetings is prepared and circulated in advance to the directors. During the year five (5) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening period between two consecutive meetings was within the period prescribed under the Companies Act, 2013.

5.4 Meeting of Independent Directors

During the year, one separate meeting of Independent Directors was held. All the Independent Directors were present at this meeting. In the said meeting, the Independent Directors assessed the quality, quantity and timeliness of fl ow of information between the management and the Board and expressed that the current fl ow of information and contents were adequate for the board to effectively perform its duties.

6. Board and Management

6.1 Board evaluation

Pursuant to the provisions of the Companies Act, 2013 and clause 49 of the listing agreement, the annual evaluation of the Board, its committees and directors individually is carried out as per the criteria laid down by the Nomination and Remuneration Committee.

The evaluation of Board and its committees are founded on the structure, composition, effectiveness in terms of roles and responsibilities and processes encompassing the information fl ow and functioning. The guiding standards for the assessment of performance of directors (including the independent directors) are their attendance and participation at board meetings, sharing of their relevant domain expertise, networking in other forums, their strategic inputs and demonstration towards governance compliances.

For evaluation of performance of the Chairman additional aspects like institutional image building, providing guidance on strategy and performance, maintaining an effective and healthy relationship between the Board and the management are taken into consideration. The evaluation methodology is comprehensive and commensurate with the size of the Board and the Company.

6.2 Familiarisation program for independent directors

The company has framed a familiarization program for independent directors which has been put up on the website and available at http://rane.co.in/ raneenginevalve/revlinvestors.html

6.3 Key Managerial Personnel

Mr L Ganesh, Chairman and Managing Director, Mr B Suresh Kumar, General Manager – Finance and Mr V Subramani, Secretary, hold the office of Key Managerial Personnel as Managing Director, Chief Financial officer and Secretary respectively.

6.4 Remuneration policy

The policy on appointment, remuneration and evaluation criteria for Directors and Senior Management is as per the recommendations of the Nomination and Remuneration Committee of the Board. The Company recognizes that compensation is a strategic lever in the achievement of vision and goals. The compensation philosophy is designed to attract, motivate and retain talented employees who drive the company''s success and it aims at aligning compensation to goals of the company, performance of the individual, internal equity, market trends and industry practices, legal requirements and appropriate governance standards.

The remuneration to Directors, Key Managerial Personnel and Senior Management Personnel involves a balance between fixed and incentive pay refl ecting short and long term performance objectives appropriate to the working of the Company and its goals. The Nomination and Remuneration Committee recommends the remuneration of Directors and senior management of a group, which is approved by the Board of Directors, subject to the approval of shareholders, where necessary.

7. Audit

7.1 Audit Committee

In terms of the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the listing agreement, the Audit Committee of the Board was re-constituted to act in accordance with terms of reference prescribed therein. Detailed disclosure on compositions, terms of reference and meetings of the Audit Committee are furnished in the Corporate Governance Report.

7.2 Statutory Auditors

M/s. Brahmayya & Co., Chartered Accountants were appointed as Statutory Auditors at the last (forty second) AGM held on July 24, 2014, for a period of three years from the conclusion of the forty second AGM until the conclusion of the forty fifth AGM, subject to ratifi cation by members at every AGM.

The Company has received letter from the Statutory Auditors consenting to the re-appointment and a confirmation to the effect that their appointment, would be within the prescribed limits and that they do not suffer from any disqualifi cations under Section 141 of the Companies Act, 2013 and the rules made thereunder. M/s Brahmayya & Co. have also submitted the peer review certifi cate issued to them by The Institute of Chartered Accountants of India. The Statutory Auditors Report does not contain any qualif cation, reservation, adverse remark or disclaimer.

7.3 Cost Auditors

Pursuant to section 148 of the Companies Act, 2013 and subject to notifi cation of rules thereunder, the board of directors on the recommendation of the audit committee appointed M/s Jayaram & Associates, Cost Accountants, as the cost auditors of the Company for the fi nancial year 2014-15. However, as per Companies (Cost Records and Audit) Rules, 2014 notified by Ministry of Corporate Affairs (MCA) on June 30, 2014 cost audit is not applicable to the Company by virtue of its turnover being less than the prescribed limits. Therefore, the Board did not proceed with the appointment of cost auditor and cost audit for the year 2014-15.

However, the Companies (Cost Records and Cost Audit) Amendment Rules, 2014 amended and notified by MCA on December 31, 2014, covers the product – Valves - Inlet & Exhaust, Valve Guides & Valve Tappets manufactured by the Company, with effect from the fi nancial year 2015-16. The Board of directors at their meeting held on May 22, 2015 have appointed M/s. Jayaram & Associates, Cost Accountants, as the cost auditors of the Company for the fi nancial year 2015- 16 as per the recommendations of the Audit Committee.

7.4 Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s S Krishnamurthy & Co., a firm of Company Secretaries in practice, to undertake the Secretarial Audit of the Company. The report on the Secretarial Audit carried out for the year 2014-15 is annexed herewith as ''Annexure B''. The report does not contain any qualif cation, reservation, adverse remark or disclaimer.

7.5 Internal Auditors

The Company continues to engage M/s Capri Assurance and Advisory Servicies, a firm of independent assurance service professionals, as Internal Auditors of the Company. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational effi ciency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors fi ndings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on a regular basis to improve effi ciency in operations.

8. Directors'' responsibility statement

In terms of Section 134(3)(c) read with section 134(5) of the Companies Act, 2013, the directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, confi rm that they had:

(i) Followed the applicable accounting standards in the preparation of the fi nancial statements for the fi nancial year 2014-15 and there are no material departures;

(ii) Selected such accounting policies and applied them consistently and made judgments and estimates that were 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 fi nancial year and of the Profit of the Company for the year under review;

(iii) Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company, preventing and detecting fraud and other irregularities and;

(iv) Prepared the fi nancial statements for the fi nancial year on a ''going concern'' basis;

(v) Laid down internal fi nancial controls to be followed by the Company and such internal fi nancial controls were adequate and were operating effectively.

(vi) Devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

9. Related Party Transactions

All related party transactions that were entered into during the fi nancial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with related parties which may have a potential confl ict with the interest of the Company at large.

All related party transactions are placed before the Audit Committee as also before the Board for approval. Prior omnibus approval of the Audit Committee is obtained for transactions, which are in the normal course of business and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

The Company has put in place proper system for identifi cation and monitoring of such transactions. The policy on related party transactions as approved by the Board is uploaded on the Company''s website http://rane.co.in/pdf/policies/revlrpt.pdf. None of the Directors or Key Managerial Personnel or Senior Management Personnel has any material fi nancial and commercial transactions, where they have personal interest, that may have potential confl ict with interest of the company at large.

10. Corporate Social Responsibility

The vision on Corporate Social Responsibility (CSR) is

"To be a socially and environmentally responsive organization committed to improve quality of life within and outside". The CSR activities of Rane Group focus on four specific areas such as (a) Education (b) Healthcare (c) Community Development and (d) Environment.

The CSR activities undertaken by the Company are in line with the CSR Policy and recommendations of the CSR Committee comprising of Mr L Lakshman, Commitee Chairman, Mr L Ganesh, Managing Director and | Mr S Krishna Kumar, an independent director.

The Annual Report on CSR activities carried out during the year 2014-15 is annexed as ''Annexure C''.

11. Fixed Deposits

Deposits outstanding as on March 31, 2015 amounted to Rs.6.21 crores. All deposits that matured during the year were repaid. The Company has not defaulted in repayment of any fixed deposits or any interest thereon.

The Company had discontinued accepting or renewing the fixed deposits with effect from April 1, 2014 and has not accepted deposits falling within the ambit of Section 73 of the Companies Act, 2013.

The Board was of the view that the premature and compulsory repayment of the fixed deposits prior to the date of maturity would cause inconvenience to the depositors. Also considering the age profile of our depositors that include many senior citizens, the Board felt that compulsory premature repayment of their deposits would abruptly result in the loss of regular interest payments to these depositors. Keeping the interests of the deposit-holders in mind, in terms of Section 74 (2) the Company has fi led an application before Company Law Board (CLB), to repay the deposits on their respective maturity dates in accordance with the terms of acceptance of such deposits. Approval of CLB is awaited.

12. Energy conservation, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as ''Annexure D''.

13. Particulars of Directors, KMP and Employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of directors, KMP and employees of the Company are provided in the Annual Report. Having regard to the provisions of fi rst proviso to sub-section (1) of Section 136 of the Act, the Annual Report excluding the aforesaid information is sent to the members. The said information is available for inspection by the members at the registered office during business hours on a working day of the Company up to the date of the ensuing Annual General Meeting. The full annual report including the aforesaid information is being sent electronically to all those members who have registered their e-mail address and is available on the Company website http://rane.co.in/raneenginevalve/raneenginevalveinvestors.html.

14. Corporate Governance Report

Your Company has complied with the corporate governance requirements as stipulated under clause 49 of the listing agreement. Detailed report on the compliance and a certifi cate by the Statutory Auditors forms part of this report as ''Annexure E''.

15. Other disclosures

(a) Details of loan, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

(b) The internal control systems and adequacy are discussed in detail in the Management Discussion and Analysis annexed to the Directors Report.

(c) There was no significant material order passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

(d) The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as ''Annexure F''.

(e) The Company has established a formal vigil mechanism named "Rane Whistle Blower Policy" for reporting improper or unethical practices or actions which are violative of the code of conduct of the Company. There was no instance reported during the year under review through this mechanism.

(f) The Company believes that women should be able to do their work in a safe and respectful environment that encourages maximum productivity. The Company has a zero tolerance towards sexual harassment. The Company has adopted a policy on prevention of sexual harassment of women at work place and put in place proper mechanism across the Company. There was no case reported during the year under review through this mechanism.

For and on behalf of the board

HARISH LAKSHMAN L GANESH Vice - Chairman Chairman & Managing Director

Chennai May 22, 2015


Mar 31, 2013

The Directors have pleasure in presenting their Forty First annual report together with the accounts for the year ended March 31, 2013.

1. Financial Performance:

The financial highlights for the year under review are as follows :

(Rs. in Crores)

Particulars 2012 - 2013 2011 - 2012

Sales and Operating Revenues 262.76 307.02

Other Income 3.49 2.17

Profit before tax (18.92) 28.72

Provision for tax (6.31) 7.95

Profit after tax (12.61) 20.77

Surplus brought forward 26.27 13.86

Amount available for appropriation 13.66 34.63

The net sales and operating revenue of the Company was at Rs.262.76 crores as against Rs.307.02 crores in the previous year. The drop in sales was mainly due to reduced market demand in all the key segments, where the Company has presence. The Company incurred a net loss of Rs.18.92 crores as against the profit of Rs.28.72 crores in the previous year. The drop in sales as well as higher energy costs due to non-availability of power from the State Electricity Boards resulting in the higher usage of diesel generator sets were the major reasons for the loss.

2. Appropriation

Considering the loss and the necessity to conserve cash for the near term, your directors have not recommended any dividend for the year 2012-13.

3. Management Discussion and Analysis

Your Company is engaged in the manufacturing and marketing of auto components for transportation industry. A detailed analysis of the automotive industry, your Company''s performance etc. are discussed in the report on ''Management Discussion and Analysis'' which forms part of this report and annexed as Annexure ''A''.

4. Fixed Deposits

The deposits outstanding as on March 31, 2013 amounted to Rs.8.44 crores. All deposits that matured during the year were repaid / renewed except for a sum of Rs.0.01 Crores for which claims have not been lodged with your Company.

5. Board of Directors

Mr. Ashok Malhotra and Mr. R V Raghavan retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. The notice convening the ensuing Annual General Meeting includes the proposal for their re-appointment as directors.

Mr. Krishna Kumar Seshadri was co-opted to the Board during the year and would hold office up to the ensuing Annual General Meeting of the Company. The Company has received notice from a shareholder signifying the intention to propose the appointment of Mr. Krishna Kumar Seshadri as director of the Company, at the ensuing Annual General Meeting.

6. Conservation of Energy

Energy Audit was carried out to identify energy saving projects, resulting in reduction in units consumed per valve. Focus was on renewable energy augmentation viz., wind energy and optimising lower cost power such as private power during the year. Focused efforts were also undertaken to upgrade the design of the old machines facilitating efficiency of power usage.

7. Research and Development Activities

Disclosure of particulars with respect to Research & Development, technology absorption, adaptation and innovation, as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 in Form B are furnished in Annexure ''B''.

8. Foreign Exchange Earnings and Outgo

Strategic initiatives were undertaken to increase export business in terms of customers, product and geographical location by identifying new business opportunities.

Foreign exchange earned during 2012-13 was Rs.65.82 crores against foreign exchange outgo of Rs.21.20 crores. Your Company continued to remain a substantial net foreign exchange earner with the foreign exchange earned being 3 times higher than the outgo.

9. Employees

There was no employee for whom the particulars as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is applicable.

10. Auditors

Statutory Auditors

M/s. Brahmayya & Co., Chartered Accountants, Chennai, the auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. The declaration under Section 224(1B) of the Companies Act, 1956 has been received from them. M/s. Brahmayya & Co., has submitted the Peer Review Certificate issued to them by The Institute of Chartered Accountants of India.

The notice of the forthcoming Annual General Meeting contains necessary resolution in this regard. Your directors recommend the re-appointment of M/s. Brahmayya & Co., as Statutory Auditors.

Cost Auditors

In terms of the Companies (Cost Accounting Records) Rules, 2011, the Cost Compliance Report for the financial year 2011-12 was filed with The Ministry of Corporate Affairs (MCA) on December 28, 2012 which is well within the extended due date of February 28, 2013.

Pursuant to the Cost Audit Orders issued by the MCA under Section 233B of the Companies Act, 1956, the Board has appointed M/s. Jayaram & Associates, Cost Accountants, Chennai, to carry out the cost audit of the Company for the financial year 2012- 2013. The Company would be filing the Cost Audit Report for the financial year ended March 31, 2013 before the due date viz. September 30, 2013 or such other date, if any, extended by the MCA.

The Company has received a letter from M/s. Jayaram & Associates, to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. Based on the recommendation of the Audit Committee, the Board has re-appointed M/s.Jayaram & Associates, as cost auditors for the financial year 2013-14.

11. Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act 1956 and based on representations received from the operating management, the directors hereby confirm that they have:

i. Followed the applicable accounting standards in the preparation of the annual accounts for the financial year 2012-13 and there are no material departures;

ii. Selected such accounting policies and applied them consistently and made judgments and estimates that were 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 loss of the Company for the year under review;

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

iv. Prepared the accounts for the financial year on a ''going concern'' basis.

12. Corporate Social Responsibility (CSR)

The vision on Corporate Social Responsibility (CSR) is, "To be a socially and environmentally responsible organization committed to improve quality of life within and outside". The objective of our CSR activities is to socially sensitize the employees of the Company so as to build an environment of care and concern.

As a good corporate citizen, the Company undertakes philanthropic activities to express our

emotion of belonging to the nation and our concern for the under privileged members of the society. Employees'' exposure to under-privileged groups and the hardships faced by them enhances their emotional intelligence.

Some of the CSR initiatives undertaken by your Company were as follows:

- Contribution of funds by way of donation, towards establishment of Polytechnic College at Trichy by Rane Foundation.

- Under the concept of "Oru Thuli Kalvi", the following initiatives were undertaken :

- Adopted an Employee of "The Banyan". Trained, Groomed, Motivated and Empowered the female social worker and enabled her to execute her work with great confidence and to the utmost satisfaction of her superiors.

- Provided computers to schools in Mathirapatti and Seniapatti villages at Trichy.

- Created passion among students to become toppers in their school and come out with flying colours by awarding mementoes for all the class toppers.

- Books and notebooks were also given to students of various schools.

- Apprentice training programme for students of class 10 and 12 from economically weaker sections were conducted imparting them with employment skills.

- Sensitized rural people about road safety and alcoholism through street play.

- Under the concept of "Kudi Magan", our employees donate blood regularly and pledged to donate organs after their demise.

- Under the concept of "Thai Mann", sensitized employees about global warming and the need for plantation of trees on world environment day by planting trees in nearby villages.

- The Company has evolved a concept "Kulir Kaappom'' under which old clothes were collected from families of the employees and donated to GOONJ, volunteer organisation helping needy people.

- "SWAR" a self-learning and awakening programme on the destitutes was conducted for the employees.

13. Corporate Governance Report

Your Company has complied with the Corporate Governance requirements as stipulated under clause 49 of the Listing Agreement. Detailed report on the compliance and a certificate by the Statutory Auditors forms part of this report as Annexure ''C''.

For and on behalf of the Board

Chennai HARISH LAKSHMAN L GANESH

May 21, 2013 Vice-Chairman Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting their Fortieth annual report together with the accounts for the year ended March 31, 2012.

1. Financial Performance:

The financial highlights for the year under review are as follows :

(Rs. in Crores)

Particulars 2011 - 2012 2010 - 2011

Sales and Operating Revenues 307.02 288.31

Other Income 2.17 1.39

Profit before tax 28.72 16.12

Provision for tax 7.95 5.32

Profit after tax 20.77 10.80

Surplus brought forward 13.86 7.14

Amount available for appropriation 34.63 17.94

During the year, the sales and operating revenues grew by 6% over the previous year. The Profit Before Tax improved by 78% over the previous year. This includes Rs.16.27 cores profit on sale of surplus land near Chennai. During the year, the Company also paid Rs.4.06 cores as compensation to employees under a Voluntary Retirement Scheme. Earnings per share was higher at Rs.40.32 as against Rs.20.97 in the previous year.

2. Appropriation

Profit available for appropriation is Rs.34.63 crores. The Directors have declared and paid an interim dividend of 75% on the equity capital of the Company for the year ended March 31, 2012 and have recommended a further 30% as final dividend, making for a total dividend of 105% for the year. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs.6.28 crores leaving the Company with retained profits of Rs.28.35 crores. Out of this, Rs.2.08 crores is being transferred to the General Reserve and Rs.26.27 crores being retained as surplus in the Profit and Loss Account.

3. Management Discussion and Analysis

Your company is engaged in the manufacturing and marketing of auto components for transportation industry. A detailed analysis of the automotive industry, your company's performance etc. are discussed in the report on 'Management Discussion and Analysis' which forms part of this report and annexed as Annexure 'A'.

4. Fixed Deposits

Deposits outstanding as on March 31, 2012 amounted to Rs.11.49 crores. All deposits that matured during the year were repaid / renewed.

5. Board of Directors

Mr. Harish Lakshman and Mr. C N Srivatsan retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. The notice convening the ensuing Annual General Meeting includes the proposal for their re-appointment as directors.

6. Conservation of Energy

By sustaining high power factor and other energy saving measures such as installation of Variable Frequency Drives for Motors, your Company has reduced energy consumption and maximum demand charges. Employee involvement in conserving electricity both in shop floors and offices by switching off power whenever not in use also contributed to reduction in consumption of power. Focused efforts are also taken to upgrade the design of the old machines facilitating efficiency of power usage.

7. Research and Development Activities

The details of Disclosure of particulars with respect to Research & Development, technology absorption, adaptation and innovation, as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 in Form B are furnished in Annexure 'B'.

8. Foreign Exchange Earnings and Outgo

Strategic initiatives are undertaken to increase export business in terms of Customers, Product and Geographical location by identifying new business opportunities.

Foreign exchange earned during 2011-12 was Rs. 95.36 crores against foreign exchange outgo of Rs. 38.20 crores. Your Company continued to remain a substantial net foreign exchange earner with the foreign exchange earned being 2.50 times higher than the outgo.

9. Employees

The particulars of employees, as per Section 217 (2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules 1975, are given in Annexure 'C'.

10. Auditors

M/s. Brahmayya & Co., Chartered Accountants, Chennai, the auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. The declaration under Section 224(1B) of the Companies Act, 1956 has been received from them. M/s. Brahmayya & Co., has submitted the Peer Review Certificate issued to them by The Institute of Chartered Accountants of India.

The notice of the ensuing Annual General Meeting contains necessary resolution in this regard. Your directors recommend the re-appointment of M/s Brahmayya & Co., as Statutory Auditors.

11. Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act 1956, the directors hereby confirm that they have:

i. Followed the applicable accounting standards in the preparation of the annual accounts;

ii. Selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

iii. Taken proper and sufficient care 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 detecting fraud and other irregularities;

iv. Prepared the accounts for the financial year on a 'going concern' basis.

12. Corporate Social Responsibility (CSR)

The vision on Corporate Social Responsibility (CSR) is, "To be a socially and environmentally responsible organization committed to improve quality of life within and outside". CSR activities of Rane Group are channelized through Rane Foundation, a public charitable and educational trust, in the social and environmental spectrum. The focus of Rane's social development initiatives has been in the three specific areas of (a) Education

(b) Healthcare and (c) community development. The following social development initiatives were undertaken by your Company in this year.

The specific CSR initiatives taken by your Company are as follows:

- Contribution of funds towards establishment of Polytechnic College at Trichy by Rane Foundation by way of donation and interest-free loans.

- Tree saplings were planted under the eco- conservation programme ("Thai Mannu") in the areas around the factories with the complete participation of employees.

- Apprentice training programme for students of class 10 and 12 from economically weaker sections were conducted imparting them with employment skills.

- "SWAR" a self-learning and awakening programme on the destitutes was conducted for the employees. Organized a skill development workshop, "Indru Oru Vidhi Seivom", at one of the schools near the manufacturing facility.

- Books were donated through our campaign, "Oru Thuli Kalvi".

- Provided financial support to an hospital for the construction of outpatient ward.

- Awareness on sustainable and eco-tourism was conducted on "Sittanavasal Caves" in Pudukottai district.

13. Corporate Governance Report

Your Company has complied with the Corporate Governance requirements as stipulated under Clause 49 of the listing agreement. Detailed report on the compliance and a certificate by the Statutory Auditors forms part of this report as Annexure 'D'.

For and on behalf of the Board

Chennai HARISH LAKSHMAN L. GANESH

May 21, 2012 Vice - Chairman Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting their Thirty Ninth annual report together with the accounts for the year ended March 31, 2011.

1. Financial Performance:

The financial highlights for the year under review are as follows:

(Rs. in Million)

2010-11 2009-10

Sales and Operating Revenues 2884.54 2360.31

Other Income 12.50 11.96

Profit before tax 161.23 70.01

Provision for tax 53.20 27.01

Profit after tax 108.03 43.00

Surplus brought forward 71.42 50.77

Amount available for appropriation 179.45 93.77

2. Appropriation

Profit available for appropriation is Rs. 179.45 million. Your directors have declared and paid an interim dividend of 30% on the equity capital for the year ended March 31, 2011 and are pleased to recommend a further 20 % as final dividend making for a total dividend for the year of 50%. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs. 30 million leaving the company with retained profits of Rs. 149.45 million. Out of this, Rs. 10.80 million is being transferred to the General Reserve and Rs. 138.65 million being retained as surplus in the Profit and Loss Account.

4. Deposits

Deposits outstanding as on March 31, 2011 amounted to Rs. 137.34 million. All deposits that matured during the year were repaid / renewed.

5. Board of Directors

Mr. L Lakshman and Mr. R Jagannath retire by rotation and being eligible, offer themselves for re-appointment.

6. Conservation of Energy

By sustaining high power factor and other energy saving measures such as installation of Variable Frequency Drives for Motors, your company has reduced energy consumption and maximum demand charges. Employee involvement in conserving electricity both in shop floors and offices by switching off power whenever not in use also contributed to reduction in consumption of power. Focused efforts are also taken to upgrade the design of the old machines facilitating efficiency of power usage.

7. Research and Development Activities

The details of Disclosure of particulars with respect to Research & Development, technology absorption, adaptation and innovation, as required under the Companies Act (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 in Form B are furnished in Annexure A.

8. Foreign Exchange Earnings and Outgo

Foreign exchange earned during 2010-11 was Rs. 829.39 million and foreign exchange outgo was Rs. 557.87 million. Your company continued to remain a substantial net foreign exchange earner.

9. Employees

There was no employee for whom the particulars as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is applicable.

10. Auditors

M/s Brahmayya & Co., Chartered Accountants, Chennai, the auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. The declaration under Section 224(1B) of the Companies Act, 1956 has been received from them.

11. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act 1956, the directors hereby confirm that they have:

i. Followed the applicable accounting standards in the preparation of the annual accounts;

ii. Selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the company for the year under review;

iii. Taken proper and sufficient care 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 detecting fraud and other irregularities;

iv. Prepared the accounts for the financial year on a going concern basis.

12. Corporate Social Responsibility (CSR)

The vision on Corporate Social Responsibility (CSR) is, "To be a socially and environmentally responsible corporate citizen". CSR activities of Rane Group are channelized through Rane Foundation, a public charitable and educational trust, in the social and environmental spectrum.

The specific CSR initiatives taken by your Company are as follows:

- Contribution of funds towards establishment of Polytechnic College by Rane Foundation.

- Construction of bus shelters near the Medchal factory.

- Provision of traffic signal at road intersection near the Alandur factory.

- Providing noon meals to children in Anganwadi centre near Alandur and Ponneri factories on special occasions.

- Upgrading infrastructure in needy schools in Alandur.

- Free medical camp and donation of medicines in nearby localities of the plants.

- Donation of dress, books to schools.

- Sapling plantation in rural areas nearby the plants.

13. Corporate Governance Report

A detailed report on Corporate Governance is attached in Annexure B.

For and on behalf of the Board

L. LAKSHMAN L. GANESH Director Chairman & Managing Director

Chennai May 19, 2011

 
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