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Notes to Accounts of Rane Holdings Ltd.

Mar 31, 2013

1 BRIEF ABOUT THE COMPANY

Rane Holdings Limited (RHL) is the holding company whose main activity is investing in Rane group Companies that are engaged primarily in the manufacture and marketing of auto components. The Rane Groups investment profile includes subsidiaries, joint ventures and associates. The Company''s income stream comprises of (i) dividend from the investments made in the group companies, (ii) trade mark fee for use of ""RANE"" trade mark and (iii) service fee from group companies for providing service in the areas of management, information technology, business development and infrastructure.

2 SEGMENT REPORTING

The Company holds strategic investments in subsidiaries, joint ventures and associates (collectively called "the Group") that are primarily engaged in single segment viz., manufacture and marketing of components for Transportation industry and also provides consultancy and other services to the Group. Further the Company does not have any operations outside India. As such there are no separate reportable segments as per AS 17 "Segment Reporting".

3 PREVIOUS YEAR''S FIGURE

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

1 Brief about the company

Rane Holdings Limited (RHL) is the holding company whose main activity is investing in Rane group Companies that are engaged primarily in the manufacture and marketing of auto components. The Rane Groups investment profile includes subsidiaries, joint ventures and associates. The Company's income stream comprises of (i) dividend from the investments made in the group companies, (ii) trade mark fee for use of "RANE" trade mark and (iii) service fee from group companies for providing service in the areas of management, information technology, business development and infrastructure. In September 2011, Rane forayed into defense and aerospace and invested into Sas Mos HET Technologies Private Limited.

2.1 Terms / Rights attached to Equity Shares:

The Company has only one class of equity shares having a par value of Rs10/- per share. All these shares have the same rights and preferences with respect to payment of dividend, repayment of capital and voting. The dividend proposed by the Board of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting.

2.2 Aggregate number of equity shares allotted as fully paid up without payment being received in cash for the period of 5 years immediately preceding the Balance Sheet date:

a. During the financial year 2007-2008, 44,96,493 shares with par value of Rs10 were allotted to the shareholders of Rane Engine Valves Limited (13,96,476) and Rane Brake Linings Limited (31,00,017) under the scheme of Demerger, Merger and Amalgamation approved by the Honorable High Court of Judicature at Madras.

2.3 There is no change in the number of shares at the beginning of the year and closing of the year.

3.1 Capital Redemption Reserve represents amount transferred from Statement of Profit and Loss in accordance with Section 80(1)(d) of the Companies Act, 1956 on redemption of preference shares in the previous years.

3.2 General Reserve on merger represents Rs819 Lakhs arising out of the amalgamation of Rane Investments Limited, a wholly owned subsidiary as approved by the shareholders of the Company and sanctioned by the High Court of Judicature at Madras effect from the appointed date April 1, 2009.

4.1 Security

a. Term loan from Citi Bank NA of RsNil (Rs229 Lakhs) is secured by a first charge on the current assets and by an equitable mortgage of the Company's immovable property at Perungudi. This is further secured by a second charge on the immovable property at Cathedral Road Chennai. This principal and interest rate of 10% is repayable every month and the current applicable rate of interest is 10% per annum. The balance of Rs172 lakhs (Rs229 lakhs) outstanding as at March 31, 2012 is repayable within next twelve months, and this is included in Other Current Liabilities under Current Maturities of Long Term Debt.

The Company has availed External Commercial Borrowings, and these are fully hedged through related swap contracts and are accounted as Indian rupee loan at fixed rate of interest.

b. Term loan from Yes Bank of Rs325 Lakhs (Rs468 Lakhs) is secured by an Equitable mortgage of the Company's immovable property at Cathedral Road Chennai and by a pari-passu first charge on the movable fixed assets of the Company.

The loan comprises of two components repayable at the end of every quarter, 1st Loan outstanding of Rs375 Lakhs is maturing in the month of July 2014 and 2nd Loan outstanding of Rs150 Lakhs maturing in the month of March 2015, totaling to 10& 12 installments outstanding as at March 31, 2012. The current applicable rate of interest on this loan is 12.25% per annum. Installments aggregating to Rs200 lakhs (Rs200 lakhs) due within next one year is included in Other Current Liabilities under Current Maturities of Long Term Debt.

c. Term loan from HDFC Ltd of Rs Nil (Rs667 Lakhs) is secured by an equitable mortgage of the Company's immovable property at Boat Club Road. The principal and interest on this loan is payable at the end of every quarter and there are four installments outstanding as of March 31, 2012. The current applicable rate of interest loan is 12.75% per annum.

The balance of Rs667 lakhs (Rs667 lakhs) outstanding as at March 31, 2012 is repayable within next twelve months, and this is included in Other Current Liabilities under Current Maturities of Long Term Debt.

d. Cash credit from Citibank NA is secured by a first charge on the movable assets including plant & machinery, other current assets of the Company and further secured by an equitable mortgage of the Company's immovable property at Perungudi.

e. Cash credit from Yes Bank is secured by a pari-passu first charge on the current assets of the Company.

5. QUANTITATIVE DETAILS

The Company is the Holding Company of other companies in the Rane Group. The Company provides services in the areas of Management, information technology, business development and infrastructure to the Companies in the Group. The nature of services therefore cannot be evaluated quantitatively. Consequently a disclosure of quantitative details for the same is not applicable.

6. CONTINGENT LIABILITIES AND COMMITMENTS Rs.Lakhs

Year ended Year ended

March 31, 2012 March 31, 2011

6.1 Contingent Liabilities

Guarantees 4,019 3,498

Disputed demands under appeal (Refer below) 577 524

Income Tax Act - Assessment Year (AY)

2005-2006* 85 85

2007-2008 65 65

2008-2009* 372 372 2009-2010* 53 -

575 522

Less: Deposits (79) (64)

Net Amount 496 458

* includes the following deposits AY 2009-2010 - Rs14 Lakhs

AY 2008-2009 - Rs15 Lakhs AY 2004-2005 - Rs50 Lakhs

Service Tax** 2 2

** represents Rs1.52 lakhs

6.2 Commitments

Estimated amount of contracts remaining to be executed on 197 126

capital account and not provided for

197 126

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

Notes:

i. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

ii. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

iii. The entire Plan Assets are managed by Life Insurance Corporation of India (LIC). The data on Plan Assets and Experience adjustments have not been furnished by LIC.

7. SEGMENT REPORTING

The Company holds strategic investments in subsidiaries, joint ventures and associates (collectively called "the Group") that are primarily engaged in single segment viz., manufacture and marketing of components for Transportation industry and also provides consultancy and other services to the Group. Further the Company does not have any operations outside India. As such there are no separate reportable segments as per AS 17 "Segment Reporting'.

 
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