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Directors Report of Rane (Madras) Ltd.

Mar 31, 2015

Dear Members,

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

1. State of Company's affairs

1.1 Financial Performance

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

(Rs. crores)

Particulars 2014-15 2013-14

Sales and operating revenues 778.88 726.60

other income 1.09 0.91

profit Before tax (pbT) 16.84 19.68

Provision for tax :

current 3.50 4.15

Deferred 4.40 2.90

Mat credit availed (3.50) (4.15)

profit after tax (pat) 12.44 16.78

Surplus brought forward 61.39 53.70

Amount available for appropriation 73.20 70.48

Key performance indicators, operational performance and balance sheet summary are furnished in page No 4 of this annual report.

The company recorded a turnover of Rs. 646.86 crores from its steering and linkage products showing a marginal increase of 2 % over previous year. The company achieved a turnover of Rs. 95.48 crores from die casting business showing an increase of 31% over previous year. The company also achieved a turnover of Rs. 12.98 crores from its auto parts division, which was formed during the current financial year. The total turnover of the company was Rs. 755.32 crores, registering an overall growth of 6% over the previous year.

The company also incurred an exceptional expenditure of Rs. 3.24 crores towards voluntary retirement scheme. The company earned a pBT of Rs. 16.84 crores representing 2% of the turnover. earnings per share for the year 2014- 15 was Rs. 11.20 as against Rs. 15.35 in the previous year.

There was no material change or commitment, affecting the financial position of the company between the end of the financial year of the company and the date of the report other than those disclosed in the financial statements.

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. During the year, Rane engine valve limited (REvL), a fellow subsidiary of the company, amalgamated into itself, Kar mobiles limited (KML) an associate company of the holding company.

1.2. Appropriation

out of the profit available for appropriation of Rs. 73.20 crores, the directors have recommended a dividend of 45%. The total equity and preference dividend amount inclusive of distribution tax and surcharge thereon would be Rs. 6.37 crores. After transfer of Rs. 60.46 crores to the general reserve, Rs. 6.37 crores has been retained as surplus in the profit and Loss Account.

1.3. Management Discussion & Analysis

Your company is engaged in the manufacturing and marketing of auto components for transportation industry viz., steering and suspension systems, linkage products, steering gear products and aluminium alloy based high pressure die-casting products. 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'.

2. Board of Directors

2.1 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/rml/rmltermsid.pdf in terms of Section 149 of the companies Act, 2013 (Act), all the independent Directors were appointed by the shareholders at the 10th Annual General Meeting held on July 31, 2014, for a period of three years to hold office from the conclusion of the 10th AGM till the conclusion of 13th AGM. All the independent directors have affirmed that they satisfy the criteria laid down under section 149 of the companies Act 2013 and clause 49 of the listing agreement.

2.2 Retirement by rotation

At the ensuing Annual General Meeting (AGM), Mr. Harish Lakshman, Director retires by rotation and being eligible, offers himself for re-appointment. The notice convening the AGM includes the proposal for his re-appointment as director.

2.3 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 less than 120 days.

2.4 Meeting of Independent Directors

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

3. Board and Management

3.1 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 flow 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.

3.2 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/ranemadras/ rmlinvestors.html

3.3 Key Managerial Personnel

Mr S parthasarathy, chief Executive officer (cEo) within the meaning of Section 2(18) of the companies Act, 2013 and Ms S Subha Shree, Secretary, hold the office of Key managerial personnel, respectively.

Mr p Krishnamoorthy, chief Financial officer (cFo) resigned from the services effective January 30, 2015. Based on the recommendations of Nomination and Remuneration committee, the Board of directors at its meeting held on May 21, 2015 has approved the appointment of Ms J. Radha, as cFo.

3.4 Remuneration policy

the policy on appointment, remuneration and evaluation criteria for Directors and Senior Management is 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 reflecting 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 as a group, which is approved by the Board of Directors, subject to the approval of shareholders, where necessary.

4. Audit

4.1 Audit Committee

In terms of the provisions of Section 177 of the companies Act, 2013 and clause 49 of the listing agreement, an Audit committee of the Board is 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.

4.2 Statutory Auditors

The Auditors, M/s Deloitte Haskins & Sells (DHS) were appoint as Statutory auditors at the last (tenth) annual General meeting (AGM) held on July 31, 2014, for a period of three years i.e, until the conclusion of the thirteenth AGM. their appointment is howerver, subject to ratification by members at every AGM.

The company has received letter from DHS consenting for the re-appointment and confirmation to the effect that their appointment, would be within the limits and that they do not suffer from any disqualification specified in section 141 of the companies act, 2013 and the rules made thereunder. DHS has submitted the peer review certificate issued to them by the institute of chartered accountants of india.

The report issued by the auditors to the members for the year ended march 31, 2015 does not contain any qualification, reservation, adverse remark or disclaimer.

4.3 Cost Auditors

pursuant to section 148 of the companies act, 2013 and subject to notification 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 financial year 2014-15. However, as per companies (cost records and audit) Rules, 2014 notified by Ministry of corporate affairs, 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.

4.4 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 Secretarial audit report does not contain any qualification reservation, adverse remark or disclaimer.

4.5 Internal Auditors

the company continues to engage M/s capri assurance and advisory Servicies, a firm of independent 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 efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. internal auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of audit committee on a regular basis to improve efficiency in operations.

5. 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 confirm that they had:

i. followed the applicable accounting standards in the preparation of the financial statements for the financial 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 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 act for safeguarding the assets of the company, preventing and detecting fraud and other irregularities;

iv. prepared the financial statements for the financial year on a 'going concern' basis;

v. laid down internal financial controls to be followed by the company and such internal financial controls were adequate and were operating effectively and;

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

6. Related Party Transactions

An related party transactions that were entered into during the financial 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 potential conflict with the interest of the company at large.

All related party transactions are placed before the Audit committee as also the Board for approval. Prior omnibus approval of the audit committee is obtained for transactions, which are foreseen and repetitive in nature. the transactions entered into pursuant to the omnibus approval are reviewed by the audit committe on a quarterly basis.

the company has put in place proper system for identification and monitoring of such transactions. the policy on related party transactions as approved by the Board is uploaded on the company's website viz. www.rane.co.in/pdf/policies/rmlrpt.pdf. None of the Directors or Key Managerial personnel or Senior Management personal has any material financial or commercial transaction where they have personal interest, that may have potential conflict with interest of the company at large.

7. Corporate Social Responsibility (CSR)

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 of (a) Education; (b) Healthcare; (c) community developement 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, committee chairman, mr L Ganesh, Director and Ms Anita Ramachandran, an independent director as its members. the annual Report on cSR activities carried out during the year 2014-15 is annexed as Annexure 'C'.

8. Fixed Deposits

the outstanding fixed deposit amount as at the year ended march 31, 2015 was Rs.4.66 crores. An deposits that matured during the year were repaid. the company has not defaulted in repayment of any fixed deposits or any interest thereon. Despite efforts to identify and repay unclaimed matured deposits, a sum of Rs.0.01 crores remains unclaimed as on march 31,2015.

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 chapter v, 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. AIso 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 filed 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.

9. 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'.

10. Particulars of Directors, Key Managerial Personal 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, Key managerial personal (KMp) and employees of the company are provided in the annual Report. Having regard to the provisions of first 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 URL: www.rane.co.in/ranemadras/ranemadrasinvestors.html/

11. 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 'E'.

12. 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

Chennai HARISH LAKSHMAN L GANESH May 21,2015 Director Chairman


Mar 31, 2013

The Directors have pleasure in presenting their ninth 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. crores)

Particulars 2012-13 2011-12 Sales and Operating Revenues 639.87 670.75

Other Income 1.49 2.36

Profit Before Tax 30.06 37.17

Provision for tax :

Current 6.05 7.65

Deferred 1-27 2.12

MAT Credit availed (0-68)

Profit After Tax 23.42 27.40

Surplus brought forward 40.93 27.49

Amount available for appropriation 64.35 54.89

The drop in market demand resulted in reduced sales and operating revenues at Rs.639.87 crores compared to Rs.670.75 crores in the previous year, representing negative growth of 4.60%. This coupled with escalation in certain committed costs has adversely affected the Profit Before Tax (PBT) at Rs.30.06 crores as against previous year of Rs.37.17 crores. The earnings per share for the year 2012-13 was lower at Rs.23.04 as against Rs.26.95 during the year 2011-12.

2. Appropriation

Out of the profit available for appropriation of Rs. 64.35 crores, the directors have declared and paid an interim dividend of 20% on the equity capital of the Company for the year ended March 31, 2013. Further, the directors have recommended a final dividend of 50%, making total dividend as 70% for the year. The total dividend amount inclusive of distribution tax and surcharge thereon would be Rs. 8.30 crores. After transfer of Rs. 2.35 crores to the General Reserve, Rs.53.70 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. A detailed analysis on the performance of the industry and the Company are enumerated in the Management Discussion and Analysis report forming part of this report and annexed as Annexure A''.

4. Fixed Deposits

The outstanding fixed deposit amount as at the year ended March 31, 2013 was Rs.6.11 crores. The deposits that matured during the year were repaid / renewed excepting a sum of Rs.0.02 Crores for which claims are yet to be lodged with the Company.

5. Board of Directors

At the ensuing Annual General Meeting (AGM), Mr. L Lakshman and Mr. Harish Lakshman retire by rotation and being eligible, offer themselves for re-appointment. The notice convening the AGM includes the proposal for their re-appointment as directors.

Mrs. Anita Ramachandran was co-opted to the Board during the year and would hold office up to the ensuing AGM of the Company. The Company has received notice from a shareholder signifying the intention to propose the appointment of Mrs. Anita Ramachandran as director of the Company, at the AGM.

During the year, Mr. V Narayanan, retired from the Board on attaining the age of 75 years as per the retirement policy of the Company. The Board places on record its appreciation for the services rendered by Mr. V Narayanan during the tenure of office with the Company.

6. Conservation of energy

In the light of shortage of power in the states where the Company''s plants are located, the initiatives to conserve energy has become very important. The Company has enhanced its efforts to identify more energy efficient machines optimizing the power usage. Energy audits and efforts in reducing wasteful consumption of energy have been enhanced giving the company considerable benefit in the unit consumption of power for the products manufactured.

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

The foreign exchange earnings during 2012-13 was Rs.95.02 crores against foreign exchange expenditure of Rs.3.52 crores. The Company continued to remain a substantial net foreign exchange earner with theforeign exchange earnings being 26 times higher than the expenditure.

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

Statutory Auditors

The Auditors, M/s Deloitte Haskins & Sells (DHS) hold office until the conclusion of the ensuing AGM and have expressed their willingness to continue as statutory auditors of the Company. The Company has received letter from DHS to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956. DHS has submitted the Peer Review Certificate issued to them by The Institute of Chartered Accountants of India.

The notice of the ensuing AGM contains necessary resolution in this regard. Members may consider appointing DHS as Statutory Auditors of the Company for the financial year 2013-14.

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 February 18,2013 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 2012-13. 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 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(1 B) 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. Director''s Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act 1956, and based on the representations received from 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 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, preventing and detecting fraud and other irregularities;

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

12. 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". CSR activities of Rane Group are channelized through Rane Foundation, a public charitable and educational trust, in the social and environmental spectrum.

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

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

- Contributed to community development programs for elderly citizens and orphanages by sponsoring for their food, medical and other expenses.

- Organized Health & Education camps including Blood Donation camps, Polio Camps and Mid- Day meals for school children.

- Organized environmental improvement activities by undertaking renovation of temples, public toilets and planting of trees.

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

L GANESH

Chairman

Chennai HARISH LAKSHMAN

May 22,2013 Director


Mar 31, 2012

The Directors have pleasure in presenting their eighth 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. Crores)

Particulars 2011-12 2010-11

Sales and Operating Revenues 669.29 583.98

Other Income 3.82 1.48

Profit Before Tax 37.17 30.83 Provision for tax :

Current 7.65 7.44

Deferred 2.12 (1.18)

Profit After Tax 27.40 24.57

Surplus brought forward 27.49 13.65

Amount available for appropriation 54.89 38.22

During the year, the Sales and Operating Revenues grew by 14.60% over the previous year. The Profit Before Taximprovedby20.56%overthe previous year. Earnings per share for the year 2011-12 was higher at Rs. 26.95 as against Rs.24.18 in the previous year.

2. Appropriation

Profit available for appropriation is Rs. 54.89 crores. The directors have declared and paid an interim dividend of 55% on the equity capital of the Company for the year ended March 31, 2012 and have recommended a further 40% as final dividend, making for a total dividend of 95% for the year. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs. 11.22 crores leaving the company with retained profits of Rs. 43.67 crores. Out of this, Rs. 2.74 crores is being transferred to the General Reserve and Rs. 40.93 crores being retained as Surplus in the Profit and Loss Account.

3. Management Discussion & 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, 2012 amounted to Rs. 10.77 crores. All deposits that matured during the year were repaid / renewed except for a sum of Rs.0.02 crores for which claims have not been lodged with your Company.

5. Board of Directors

Mr. M Lakshminarayan and Mr. T Mukherjee retire by rotation and being eligible, offer themselves for re-appointment. The notice convening the ensuing Annual General Meeting includes the proposal for their re-appointment as directors.

6. Conservation of energy

Your Company has been taking several initiatives to conserve energy. As an on-going process, energy audits have been conducted across the various Plants. Significant efforts continue in elimination of wasteful consumption of energy. Apart from this, a process of defining energy efficient machines has been initiated and progressively all machines are being converted to energy efficient machines, by optimizing the machine usage. Arising out of the above efforts, unit consumption of power for producing the products are coming down year by year.

7. Research & 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

The foreign exchange earned during 2011-12 was Rs. 74.64 crores against foreign exchange outgo of Rs. 25.71 crores. Your Company continued to remain a substantial net foreign exchange earner with the foreign exchange earned being 2.9 times higher than the outgo.

9. Foreign Currency Loans

Statutory Auditor's observation on accounting treatment in respect of External Commercial Borrowings (ECB) and associated swap contracts.

The auditors' have in their report drawn attention to the accounting treatment in respect of ECB and associated swap contracts. This subject matter has been fully explained in Note 2 in the financial statements. Your directors are of the view that the accounting treatment in this respect during the year and in the earlier years as well is in accordance with the substance of the transaction and as required by Accounting Standard -1 issued by The Institute of Chartered Accountants of India (ICAI) and notified by the Companies (Accounting Standards) Rules, 2006.

This accounting treatment has been consistently followed in the audited accounts in all the earlier years when the arrangements where entered into. There has been no change to the notified standards during the year which results in the treatment consistently followed by the Company being non compliant with the accounting standards or to be reviewed by the Company.

10. 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.

11. Auditors

M/s. Price Waterhouse & Co., (PWC) Chartered Accountants, Chennai, the auditors of the Company retire at the ensuing Annual General Meeting and have expressed that they are not seeking re-appointment. Your directors wish to place on record their appreciation for the services rendered by PWC during their association with the Company as Statutory Auditors since 2005.

Special notice has been received from a member signifying the intention to propose the appointment of M/s. Deloitte Haskins & Sells (DHS), Chartered Accountants as Statutory Auditors in the place of the retiring auditors. The Company has received letter from DHS to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956. DHS has submitted the Peer Review Certificate issued to them by ICAI.

The notice of the ensuing Annual General Meeting contains necessary resolution in this regard. Your directors recommend the appointment of DHS as Statutory Auditors.

12. 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.

13. Corporate Social Responsibility

The vision on Corporate Social Responsibility (CSR) is, "To be socially and environmentally responsive 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 specific CSR initiatives taken by your Company are as follows:

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

- Contributed to Community Development programs for elderly citizens and orphanages.

- Organized Health & Education camps for school children.

- Organized environmental improvement activities by planting trees at Mysore.

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 certificate by the Statutory Auditors forms part of this report as Annexure.

For and on behalf of the Board

L GANESH

Chairman

Chennai HARISH LAKSHMAN

May 22, 2012 Director


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting their seventh 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. Million)

2010-11 2009-10

Sales and Operating Revenues 5,839.87 4,196.55

Other Income 10.79 10.21

Profit before tax 308.37 200.41

Provision for tax:

Current 74.43 60.70

Deferred (11.83) 1.59

Profit after tax 245.77 138.12

Surplus brought forward 136.48 75.50

Amount available for appropriation 382.25 213.62

2. Appropriation

Profit available for appropriation is Rs.382.25 million. The Directors have declared and paid interim dividend of 45% on the equity capital of the company for the year ended March 31, 2011 and are pleased to recommend a further 25% as final dividend, making for a total dividend of 70% for the year. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs.82.89 million leaving the company with retained profits of Rs.299.36 million. Out of this, Rs. 24.58 million is being transferred to the General Reserve and Rs.274.78 million being retained as surplus in the Profit and Loss Account.

4. Deposits

The deposits outstanding as on March 31, 2011 amounted to Rs. 123.30 million. All deposits that matured during the year were repaid / renewed.

5. Board of Directors

Mr. L Lakshman and Mr. P S Kumar retire by rotation and being eligible, offer themselves for reappointment.

6. Conservation of energy

Your company has been taking several initiatives to conserve energy. Some of the key initiatives are auto switching of machines, increased usage of Variable Frequency Drives (VFD), downsizing of the motors where possible, re-designing the machines to lean concept to name a few. As an ongoing process, recommendations arising out of energy audits continue to be implemented. The high levels of Employee involvement in conserving electricity by identifying redundant power usage and by switching off power whenever not in use is continuing to contribute to the effective management of power. Focused efforts are also taken to upgrade the design of the old machines facilitating efficiency of power usage.

7. Research & 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

The strategic initiatives taken to increase export business in terms of Customers, Product and Geographical location by identifying new business has helped the Company to achieve significant increase in exports.

The foreign exchange earned during 2010-11 is Rs.890.05 million and foreign exchange outgo was Rs.199.52 million. Your company continued to remain a substantial net foreign exchange earner.

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 B.

10. Auditors

M/s Price Waterhouse & Co., Chartered Accountants, Chennai, the auditors of the Company retire at the ensuing Annual General Meeting and is 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 judgements 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

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:

- Contributed funds towards establishment of Polytechnic College by Rane foundation.

- Contributed to community development Programs for elderly citizens and orphanages.

- Organized Health & Education camps for School children.

- Organized environmental improvement activities by planting trees at Mysore.

13. Corporate Governance Report

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

For and on behalf of the Board L GANESH Chairman

L LAKSHMAN Director

Chennai May 20,2011

 
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