Directors Report of Rane Brake Lining Ltd.

Mar 31, 2019

The Directors have pleasure in presenting the Fourteenth Annual Report together with the accounts for the year ended March 31, 2019 and other prescribed particulars:

1. State of Company’s affairs

1.1. Financial Performance

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

(Rs. in Crores)

Particulars	2018-19	2017-18
Sales and Operating Revenues *	513.89	482.28
Other Income	7.08	4.92
Profit Before Tax (PBT)	49.31	54.89
Provision for tax	12.78	19.14
Profit After Tax (PAT)	36.53	35.75
Total Comprehensive Income	36.34	36.21
Surplus brought forward	44.14	38.37
Amount available for	80.48	74.58
appropriation

* Net of Excise Duty - FY 2017-18

The Key performance indicators, operational performance and balance sheet highlights are furnished in page nos. 6 & 7 of this annual report.

The Sales and other Operating Revenues grew by 6.55%. The Profit Before Tax decreased by 10.17% over the previous year. Earnings per share for the year 2018-19 was Rs.46.15 as against Rs.45.17 in the previous year.

There was no material changes and commitments, 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.

1.2. Appropriation

The Board of Directors declared and paid an interim dividend of 65% (i.e., Rs.6.50/- per share of Rs.10/each, fully paid-up) on February 15, 2019 to all the eligible shareholders whose name appeared in the register of members of the Company as on February 07, 2019, being the Record Date fixed for this purpose.

Further, the Board has recommended a final dividend of 90% (i.e., Rs.9/-per share of Rs.10/- each, fully paid-up) for approval of shareholders at the ensuing fourteenth

Annual General Meeting scheduled to be held on July 25, 2019. With that the total dividend paid / payable for FY 2018-19 including the distribution tax and surcharge thereon would be Rs.14.79 Crores. On declaration of final dividend by the shareholders, it will be paid on July 30, 2019 to all the eligible shareholders whose name appears in the register of members of the Company as on July 18, 2019, being the Record Date fixed for this purpose.

The Board has retained Rs.23.38 Crores as surplus in the Profit and loss account after transferring Rs.22.00 Crores to the general reserves.

1.3. Management Discussion & Analysis

The business of your Company is manufacturing and marketing of auto components for transportation industry viz., friction material (Disc Pads, Brake Shoes, Clutch Facings, Clutch Buttons, Brake Linings and Brake Blocks). The analysis on the performance of the industry, the Company, internal control systems, risk management are presented in the Management Discussion and Analysis report forming part of this report and is provided in ‘Annexure A’.

2. Board of Directors

2.1. Composition

The Corporate Governance Report given in ‘Annexure E’ contains the composition of the Board of Directors of the Company.

There is no change in the composition of Board of Directors with reference to the previous year.

The terms and conditions for appointment of Independent Directors have been disclosed on the website of the Company and available at http:// ranegroup.com/rbl_investors/terms-conditions-appointment-id/.

Mr. Parvataneni Santosh Kumar (DIN:00267280) Independent Director, retired as per the retirement policy of the Company, with effect from conclusion of the Board meeting held on May 22, 2019. Consequently, his membership in the Audit Committee and Nomination and Remuneration Committee also ceases with effect from the said date. The Board places on record its appreciation for the services rendered by Mr. Parvataneni Santosh Kumar during his association with the Company as an Independent Director.

The Nomination and Remuneration Committee of the Board, at its meeting held on March 18, 2019, had recommended the appointment of Mr. Krishna Kumar Seshadri (DIN: 00062582) as an Independent Director. The Board of Directors have co-opted Mr. Krishna Kumar Seshadri as an Additional Director in the category of Non-Executive and Independent Director with effect from May 22, 2019. The appointment as an Independent Directors is subject to the approval at the ensuing AGM. The notice convening the 14th AGM seeks necessary approval of the members for his appointment as an Independent Director to hold office for a term upto conclusion of 16th AGM (2021).

The Corporate Governance report annexed to this report contains necessary disclosures regarding the above Director proposed for appointment at the ensuing 14th AGM of the Company.

All the Directors have affirmed compliance with the Code of Conduct of the Company. The Independent Directors have affirmed that they satisfy the criteria laid down under section 149(6) of the Companies Act 2013 (Act) and Regulation 25 and other applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), as amended from time to time. The Board of Directors at its first meeting of the FY 2018-19 has taken on record the declarations and confirmations submitted by the Independent Directors.

During the year, the Board had not appointed any person as an Alternate Director for an Independent Director on the Board.

The Company has obtained a certificate from a company secretary in practice that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Directors of Companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority.

2.2. Retirement by rotation

Mr. Harish Lakshman (DIN: 00012602) is retiring by rotation at the ensuing 14th AGM. Being eligible, he offers himself for re-appointment. The proposal for re-appointment of Mr. Harish Lakshman as a Director is included in the notice convening the 14th AGM.

2.3. Board Meetings

The schedule of meetings of the Board of Directors and Committees of the Board is circulated to the Directors in advance. During the year, five (5) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The gap between two consecutive meetings of the Board of Directors was less than 120 days.

2.4. Meeting of Independent Directors

A meeting of Independent Directors was held to assess the quality, quantity and timeliness of flow of information between the management and the Board. The Independent Directors expressed that the current flow of information and contents were good to effectively perform their duties. They also reviewed the performance of the Non-Independent Directors and the Board as a whole and the performance of the Chairperson of the Company taking into account the views of other Non-Executive Directors.

3. Board and Management

3.1. Board Evaluation

During the year, the Board carried out an annual evaluation of its performance as well as of the working of its Committees and individual Directors, including Chairman and Managing Director of the Board. This exercise was carried out through a structured questionnaire prepared separately for the Board, Committees, Chairman, Managing Director and individual Directors, as per the criteria laid down by Nomination and Remuneration Committee. The Chairman’s performance evaluation was also reviewed by Independent Directors at a separate meeting during the year.

The evaluation methodology, questionnaire and process were judiciously formulated taking into consideration following parameters of the Board’s functioning

a) Board Structure and Processes: Composition, appointment process, diversity, approach towards risk assessment, monitoring mechanism for any related party transactions, ethical standards and fairness in decision makings

b) Meetings and Discussions: Adequacy, relevance of information, follow up actions, discussions and debate especially on critical and dissenting views, if any.

c) Board Information and Functioning: Adequacy of time for strategic discussions, integrity of accounting and financial reporting systems and feedback of Independent Directors.

d) Board Committee Effectiveness: Clarity of charter laid down, effectiveness of reports of the Committees, its mandates and working procedures, its transparency and independence and contributions towards recommendations made to the Board.

The individual Directors’ evaluation were carried out with an unbiased approach through peer evaluation focussing on following areas:

a) Group dynamics i.e., exhibiting positive behaviours, framing of constructive contents and staying engaged while expressing honest opinions.

b) Competency attributes like having sufficient understanding and knowledge of the Company and operating sector and fulfilling functions assigned to them by the Board and governing laws ; and

c) Commitment in terms of exercising own judgement, voicing independent opinions and responsibility towards the Company and its success.

The outcome of the evaluation is also considered by the Nomination and Remuneration Committee while considering re-appointments of Directors on the Board and appointment in various Committees.

The Board acknowledged the key areas of improvement emerging through this exercise and the Chairman discussed with the other Board members during the meetings, the action plans including the need for revisiting the Board meeting schedule to allow sufficient time for discussions on matters of strategic importance and scheduling Directors’ visits to the manufacturing facilities and facilitating interaction with the business and functional heads.

Certain strategic discussions at the Board and Committee meetings brought to the fore were around long-term strategy in terms of industry trends, technology developments, measures to enhance productivity, innovation and competitiveness and sustainable business models.

Discussions on initiatives taken across the Rane group on areas like Human Resource development especially in the context of talent acquisition & management, succession planning, employee engagement, leadership development at senior management level and Information and Technology challenges, were given extensive time and focus by the Board.

3.2. Familiarisation program for Independent Directors

The familiarisation program for Independent Directors and details of familiarization programmes to Independent Directors are available at http://ranegroup. com/rbljnvestors/familiarisation-programme-for-independent-directors/

3.3. Key Managerial Personnel

Mr. Vinay Lakshman, Managing Director (MD), Mr. M A P Sridhar Kumar, Senior Vice President - Finance & Chief Financial Officer (CFO) and Mr. Venkatraman, Company Secretary hold the office of Key Managerial Personnel (KMP) within the meaning of Section 2(51) of the Companies Act, 2013. During the year there was no change in the Key Managerial Personnel (KMP).

3.4. Remuneration Policy

The policy on appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) laid down by the Nomination and Remuneration Committee (NRC) of the Board is available on the website of the Company www.ranegroup.com

I n accordance with the said policy, approval obtained from the shareholders at the 13th AGM held on July 24, 2018, Mr. L Ganesh, Chairman will be paid a commission of Rs.1.00 Crore as recommended by NRC and approved by the Board. This commission amount does not exceed 2% of the net profits of the Company for FY 2018-19.

In addition to the approval already obtained from shareholders by way of a special resolution under Section 197 of the Companies Act, 2013 and the Rules made thereunder, specific approval of shareholders is sought again, pursuant to the provisions of Regulation 17(6)(ca) of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 (SEBI LODR), for payment of commission to Mr L Ganesh for FY 2018-19.

The details of remuneration paid / payable to the Directors during the financial year 2018-19, is furnished in the Corporate Governance report annexed to this report of the Board.

4. Audit

4.1. Audit Committee

The terms of reference and meetings of the Audit Committee are disclosed in the Corporate Governance Report section of the Annual Report. The Audit Committee of the Board acts in accordance with the above terms of reference, which is in compliance with the provisions of Section 177 of the Companies Act, 2013 (Act) and Regulation 18 of SEBI LODR and other applicable provision of SEBI LODR, as amended from time to time.

4.2. Statutory Auditors

M/s. Varma & Varma, Chartered Accountants (Varma & Varma) were re-appointed by the shareholders at the 12th AGM held on August 23, 2017 for a second term of five consecutive years commencing from the conclusion of 12th AGM (2017) till 17th AGM (2022).

Varma & Varma has confirmed that they do not suffer from any disqualification under Section 141 of the Companies Act, 2013 and the rules made thereunder. Varma & Varma has also submitted the peer review certificate issued to them by The Institute of Chartered Accountants of India.

During the year under review, Varma & Varma has not reported any matter under Section 143(12) of the Companies Act, 2013 requiring disclosure under Section 134(3)(ca) of the Companies Act, 2013.

The statutory auditors report to the members for the year ended March 31, 2019 does not contain any qualification, reservation, adverse remark or disclaimer.

4.3. Cost Audit & Maintenance of Cost Records

Appointment of Cost auditor is not applicable to the Company under Companies (Cost Records and Audit) Rules, 2014. Further, the maintenance of cost records as prescribed under provisions of Sec 148(1) of the Companies Act 2013 are not applicable for the business activities carried out by the Company.

4.4. Secretarial Auditors

M/s. S Krishnamurthy & Co., a firm of Company Secretaries in practice, are the Secretarial Auditors of the Company. The Secretarial Audit report given in ‘Annexure B’ was taken on record by the Board of Directors at its meeting held on May 22, 2019. The secretarial audit report does not contain any qualification, reservation, adverse remark or disclaimer.

The Annual Secretarial Compliance report, (hereinafter referred to as ‘compliance report’), for FY 2018-19 issued by M/s. S Krishnamurthy & Co., the secretarial auditors of the Company, have confirmed compliance with securities law applicable to the Company and the same has been taken on record by the Board of Directors at their meeting held on May 22, 2019. The compliance report does not contain any qualification, reservation, adverse remark or disclaimer and the Board has approved filing of the same with the stock exchanges.

4.5. Internal Auditors

M/s. Capri Assurance and Advisory Servicies, a firm of independent assurance service professionals, continues to be the 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. The internal auditors report directly to the Audit Committee and the Audit Committee while reviewing their performance scope, functioning, periodicity and methodology for conducting the internal audit, has taken into consideration their confirmation to the effect that their infrastructure viz internal audit structure, staffing and seniority of the officials proposed to be deployed etc. which are adequate and commensurate to the scope, functioning, periodicity and methodology for conducting the internal audit.

For FY 2018-19, the Audit Committee has taken on record their certification to the effect that:

i. They have evaluated the internal control systems and risk management systems and reviewed the risk management systems and management’s process of identification and mitigation of risks and controls;

ii. There were no significant findings requiring follow-up thereon and there were no matters of suspected fraud or irregularity or a failure of internal control systems of material nature requiring investigation or reporting to the Audit Committee/ Board;

iii. Internal control systems of the Company for financial reporting are adequate and are operating effectively throughout the year;

iv. There were no deficiencies in the design or operation of internal controls;

v. There were no significant changes in the internal control over financial reporting during the year under review;

vi. There were no instances of fraud or involvement therein of management or an employee having a significant role in the entity’s internal control system over financial reporting and

vii. The Company has a proper system for ensuring compliance with all applicable laws and the same is adequate and working effectively.

5. Directors’ Responsibility Statement

I n 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 based on the information and explanations obtained by them, confirm that:

a. i n the preparation of financial statements for the financial year 2018-19, the applicable accounting standards had been followed and there were no material departures;

b. they had 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;

c. they had 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;

d. they had prepared the financial statements for the financial year on a ‘going concern’ basis;

e. they had laid down internal financial controls to be followed by the Company and such internal financial controls were adequate and were operating effectively and

f. they had 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

All 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 has been obtained for the transactions which are foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are reviewed by the Audit Committee 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 at the link: http://ranegroup.com/rbl_investors/policy-on-related-party-transactions/.

None of the Directors or Key Managerial Personnel or Senior Management Personnel has any material financial and commercial transactions, where they have personal interest, which may have potential conflict with interest of the Company at large.

7. Corporate Social Responsibility (CSR)

The Rane Group’s vision on Corporate Social Responsibility (CSR) is: “To be 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 viz., (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, Committee Chairman, Mr. L Ganesh, Director and Mr. S C Gupta, Independent Director, as its members. The ‘Annexure C’ to this report contains the annual report on CSR activities of the Company for FY 2018-19. The CSR policy of the Company is posted on our website at the link: http://ranegroup.com/rbl_ investors/corporate-social-responsibility-policy.

8. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo The ‘Annexure D’ to this report contains the information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014. .

9. Particulars of Directors, Key Managerial Personnel 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 Personnel (KMP) and Employees of the Company are provided in the full version of the Annual Report. The full version of the Annual Report 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’s website www.ranegroup.com.

10. Corporate Governance Report

Your Company is a leader in compliance with the corporate governance norms under the SEBI regulations. The Corporate Governance report and the certificate issued by the Statutory Auditors are available in ‘Annexure E’ to this report.

11. Other Disclosures

a) Details of loan, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013, if any, 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 policies approved and adopted by the Board have been made available on the Corporate Governance section of the Investor page on the website of the Company viz. www.ranegroup.com.

e) The extract of the Annual Return under Section 92(3) of the Companies Act, 2013 in form MGT-9 is available on the website of the Company at www. ranegroup.com and in ‘Annexure F’ to this report.

f) The Company has complied with the applicable secretarial standards viz., SS-1 on meetings of Board of Directors and SS-2 on General Meetings issued by Institute of Company Secretaries of India as per section 118(10) of the Companies Act, 2013.

g) The Company does not accept any deposit falling under the provisions of section 73 of the Companies Act, 2013 and the rules framed thereunder.

h) 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.

i) 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 dissemination mechanism across the Company. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the period, the details of complaints received / resolved or pending are as under in accordance with provisions of the Companies Act, 2013, as amended from time to time.

No. of complaints received during the financial year - Nil

No. of complaints disposed during the financial year - Nil

No. of complaints pending as of end of the financial year - Nil

There was no complaints reported during the year under review through this mechanism.

j) Electronic copies of the Annual report and the notice convening the 14th Annual General meeting (AGM) would be sent to the members whose email address are registered with the Company or their respective Depository Participants. For members who have not registered their email address, physical copies of the Notice and Annual Report would be sent in the permitted mode.

For and on behalf of the Board

L Ganesh

Chairman

DIN: 00012583

Vinay Lakshman

Chennai Managing Director

May 22, 2019 DIN: 07295820

---

Mar 31, 2018

REPORT OF THE BOARD OF DIRECTORS

The Directors have pleasure in presenting the Thirteenth Annual Report together with the accounts for the year ended 31 March, 2018 and other prescribed particulars:

1. State of Company’s affairs

1.1. Financial Performance

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

Rs, in crores

Particulars	2017-18 1	2016-17
Sales and Operating Revenues *	482.46	466.11
Other Income	4.74	4.47
Profit Before Tax (PBT)	54.89	42.70
Provision for tax	19.14	7.77
Profit After Tax (PAT)	35.75	34.93
Total Comprehensive Income	36.21	34.75
Surplus brought forward	38.37	9.34
Amount available for appropriation	74.58	44.09

*Net of Excise Duty

**Figures for FY 2016-17 have been restated as per applicable Indian Accounting Standards

Key performance indicators, operational performance and balance sheet summary are furnished in page no 3 of this annual report.

In the preparation of the financial statements for the financial year 2017-18, the Company has adopted Ind AS and the transition date is 01 April, 2016.

The Sales and Other Operating Revenue grew by 3.51%. The Profit before tax improved by 28.52% over the previous year. Earnings per share for the year 2017-18 was Rs, 45.17 as against Rs, 44.13 in the previous year.

There was no material changes and commitments, 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.

1.2. Appropriation

During the year 2017-18, the board of directors declared an interim dividend of 65% (i.e., Rs, 6.50 per share of Rs, 10/- each, fully paid-up) and the same was paid on 19 February, 2018 to all the eligible shareholders whose name appeared in the register of members of the Company as on 08 February, 2018, being the Record Date fixed for this purpose.

The board of directors have considered and recommended a final dividend of 90% (i.e Rs, 9/- per share of Rs, 10/- each, fully paid-up) for approval of shareholders at the ensuing thirteenth Annual General Meeting to be held on 24 July, 2018. The total final dividend amount inclusive of distribution tax and surcharge thereon would be Rs, 8.59 crores. The final dividend, if declared by the shareholders, will be paid on 01 August, 2018 to all the eligible shareholders whose name appears in the register of members of the Company as on 17 July, 2018, being the Record Date fixed for this purpose.

Rs, 23.37 crores has been retained as surplus in the Profit and loss account after transferring Rs, 20.31 crores to the general reserves.

1.3. Management Discussion & Analysis

Your Company is engaged in the manufacturing and marketing of auto components for transportation industry viz., friction material (Disc Pads, Brake Shoes, Clutch Facings, Clutch Buttons, Brake Linings and Brake Blocks). A detailed analysis on the performance of the industry, the Company, internal control systems, risk management 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.

During the year, at the twelfth (12^th) Annual General Meeting the shareholders approved the appointment of Mr. P S Kumar (DIN: 00267280) as Independent Director in the first term, effective from 20 January, 2017 till the conclusion of 14^th AGM. Further, during the year, Mr. Srinivasan Sandilya (DIN: 00037542), Mr. Suresh Chandra Gupta (DIN: 02085068), Mr. Anil Kumar Venkat Epur (DIN: 00202454), were re-appointed for a second consecutive term as Independent Directors by the shareholders at the 12^th AGM held on August 23, 2017.

Mr. Vinay Lakshman (DIN: 07295820), holds the office of Managing Director till 30 September, 2018, pursuant to approval accorded by shareholders at the 11^th AGM held on 21 July, 2016. The board of directors at its meeting held on 13 April, 2018, based on the recommendations of

Nomination and Remuneration Committee, has re-appointed him as Managing Director for a period of five years viz., from 01 April, 2018 to 31 March, 2023 subject to approval of the shareholders at the ensuing 13^th AGM of the Company.

Ms Ranjana Kumar (DIN: 02930881) was appointed as Independent Directors for a first term, by the shareholders at the 10^th AGM held on 20 July, 2015, to hold office upto the conclusion of the ensuing 13^th AGM. Based on performance evaluation, the Nomination and Remuneration Committee at its meeting held on 13 April, 2018, has recommended re-appointment for a second consecutive term as an Independent Director for a period of three years.

M/s. Nisshinbo Holdings Inc., our foreign collaborator, has nominated Mr. Yasuji Ishii (DIN: 08078748) as a director in the place of Mr. Kazuhiro Iwata (DIN: 06875329), effective from 13 April, 2018. The Board of Directors has co-opted Mr. Yasuji Ishii to the Board as a nominee director with effective from 13 April, 2018, based on the recommendations of the Nomination and Remuneration Committee. Mr. Yasuji Ishii would be a non-executive, non-independent director, being a nominee of the foreign collaborator (promoters) of the Company.

The Board places on record its appreciation for the services rendered by Mr. Kazuhiro Iwata during his association with the Company as a nominee director of the foreign collaborator.

The notice convening the 13^th AGM contains necessary resolution(s) for appointment / re-appointment of Directors at the ensuing AGM.

The Corporate Governance report annexed to this report contains necessary disclosures regarding the above directors proposed for appointment / re-appointment at the ensuing 13^th AGM of the Company.

The terms and conditions of appointment of independent directors have been disclosed on the website of the Company and available at http://ranegroup.com/pdf/ investors/rbl/rbltermsid.pdf

All directors have affirmed compliance with the Code of Conduct of the Company. The independent directors have affirmed that they satisfy the criteria laid down under section 149(6) of the Companies Act 2013 (Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR).

2.2. Retirement by rotation

At the ensuing Annual General Meeting (AGM), Mr. L Lakshman (DIN: 00012554), 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. In the said meeting, the independent directors assessed the quality, quantity and timeliness of flow of information between the management and the Board at the meeting and expressed that the current flow of information and contents were adequate for the Board to effectively perform its duties. They also reviewed the performance of the non-independent directors and the board as a whole and the performance of the chairperson of the Company taking into account the views of executive directors and nonexecutive directors.

3. Board and Management

3.1. Board evaluation

During the year, a formal process for annual evaluation of performance of Board, its committees and directors individually was carried out as per the criteria laid down by the Nomination and Remuneration Committee, pursuant to the provisions of the Companies Act, 2013 (CA 2013) and SEBI LODR.

The criteria for evaluation of board and its committees were founded on the structure, composition, board-management relationship, 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) were founded on aspects relating to their group dynamics, competency and commitment to the success of the Company.

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 were taken into consideration.

The evaluation was carried out through a structured methodology approved by the Nomination and Remuneration Committee after ensuring that the aspects laid down under each of the criteria are comprehensive and commensurate with the size of the board and the Company. The Nomination and Remuneration Committee, reviews and makes recommendation to the board, from time to time, for ensuring an optimum composition of the Board and its Committees, induction of directors into the Board, participation on the Board effectiveness and evaluation process. The outcome of the evaluation also forms the basis for the Nomination and Remuneration Committee while considering re-appointments of Directors and appointment in various Committee of the Board.

3.2. Familiarizations program for independent directors

The familiarization program for independent directors and details of familiarization program for independent directors has been put up on the website and available at - http:// ranegroup.com/rbl_investors/familiarisation-programme-for-independent-directors/

3.3. Key Managerial Personnel

Mr. Vinay Lakshman, Managing Director (MD), Mr. M A P Sridhar Kumar, Vice President - Finance & Chief Financial Officer (CFO) and Mr. Venkatraman, Secretary (CS) hold the office of Key Managerial Personnel within the meaning of Section 2(51) of the Companies Act, 2013.

During the year there was no change in the Key Managerial Personnel (KMP).

3.4. Remuneration policy

The Nomination and Remuneration Committee has laid down a policy on appointment and remuneration of directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP). The same is annexed herewith as ‘Annexure B’.

Pursuant to approval accorded by the shareholders at the 10^th AGM held on 20 July, 2015, Mr. L Ganesh has been receiving commission up to 2% of the net profits of the Company for a period commencing from 01 April, 2015. The Nomination and Remuneration Committee at its meeting held on 13 April, 2018 has recommended payment of Rs, 1,10,23,640/- as commission for the financial year 2017-18 to Mr. L Ganesh, Chairman. Based on the recommendations of the NRC, the Board of Directors propose payment of commission of up to 2% of net profits for a further period of three years commencing from 01 April, 2018, subject to the approval of the shareholders at the ensuing 13^th AGM 2018 under Section 197, 198 and other applicable provisions of the Companies Act 2013.

The details of remuneration paid / payable to the directors during the financial year 2017-18, is furnished in the Corporate Governance report annexed to this report of the board of directors.

4. Audit

4.1. Audit Committee

In terms of the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI LODR, the Audit Committee of the Board acts 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

M/s. Varma & Varma, Chartered Accountants were re-appointed by the shareholders at the 12^th AGM held on August 23, 2017 for a second term of five consecutive years commencing from the conclusion of 12^th AGM (2017) till 17^th AGM (2022), as per the provisions of the Companies Act, 2013. Subject to notification of the relevant provisions of the Companies (Amendment) Act, 2017, their appointment may have to be ratified by members at every AGM in accordance with Section 139 of the Companies Act, 2013 read with applicable rules made thereunder. In the event of notification of the aforesaid amendment, the requirement for ratification would be infructuous and shall be dispensed with.

The Company has received letter from M/s Varma & Varma consenting for continuation as statutory auditors and confirmation to the effect that their appointment for 2018-19, if ratified, would be within the limits and that they are free from disqualification specified under Section 141 of the Companies Act, 2013 and rules made thereunder. M/s. Varma & Varma have also submitted the peer review certificate issued to them by The Institute of Chartered Accountants of India (ICAI). The statutory auditors report to the members for the year ended 31 March, 2018 does not contain any qualification, reservation, adverse remark or disclaimer.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.

4.3. Cost Audit

Cost audit is not applicable to the Company as per the threshold limits prescribed under Companies (Cost Records and Audit) Rules, 2014.

4.4. Secretarial Auditors

The Board of Directors have appointed M/s. S Krishnamurthy & Co., Company Secretaries in practice, to undertake the Secretarial Audit of the Company. The report on the Secretarial Audit carried out for the year 2017-18 is annexed herewith as ‘Annexure C’. 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 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 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 are 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 based on the information and explanations obtained by them, confirm that:

i. i n the preparation of the financial statements for the financial year 2017-18, the applicable accounting standards had been followed and there were no material departures;

ii. they had 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. they had 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. they had prepared the financial statements for the financial year on a ‘going concern’ basis;

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

vi. they had 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

All 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 the transactions which are foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are reviewed by the Audit Committee 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 (http://ranegroup. com/rbl_investors/policy-on-related-party-transactions/. None of the Directors or Key Managerial Personnel or Senior Management Personnel has any material financial and commercial transactions, where they have personal interest, which may have potential conflict with interest of the Company at large.

7. Corporate Social Responsibility (CSR)

The Rane Group''s vision on Corporate Social Responsibility (CSR) is “To be 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 viz., (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, Committee Chairman, Mr. L Ganesh, Director and Mr. Suresh Chandra Gupta, Independent Director, as members. The Annual Report on CSR activities carried out during the year 2017-18 is annexed as ‘Annexure D’. The CSR policy of the Company is available in the Company’s website viz., http://ranegroup. com/rbl_investors/corporate-social-responsibility-policy/

8. 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 E’.

9. Particulars of Directors, Key Managerial Personnel 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 Personnel (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 www.ranegroup.com

10. Corporate Governance Report

Your Company has complied with the corporate governance requirements pursuant to Regulation 34 and schedule V of SEBI LODR. Detailed report on the compliance and a certificate by the Statutory Auditors forms part of this report as ‘Annexure G’.

11. Other disclosures

a) Details of loan, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013, if any, 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 under Section 92(3) of the Companies Act, 2013 in form MGT-9 is annexed herewith as ‘Annexure F’.

e) The Company has complied with the applicable secretarial standards viz., SS-1 on meetings of board of directors and SS-2 on general meetings issued by Institute of Company Secretaries of India as per section 118(10) of the Companies Act, 2013.

f) The Company does not accept any deposit falling under the provisions of section 73 of the Companies Act, 2013 and the rules framed thereunder.

g) The Company has established a formal vigil mechanism named ‘Rane Whistle Blower Policy’ for reporting improper or unethical practices or actions which are volatile of the code of conduct of the Company.

h) 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 dissemination mechanism across the Company. There was no case reported during the year under review through this mechanism.

For and on behalf of the board

L GANESH

Chairman

DIN : 00012583

VINAY LAKSHMAN

Chennai Managing Director

13 April, 2018 DIN : 07295820

---

Mar 31, 2017

The Directors have pleasure in presenting the Twelfth Annual Report together with the accounts for the year ended March 31, 2017 and other prescribed particulars:

1. State of Company''s affairs

1.1 Financial Performance

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

(Rs. Crores)

Particulars	2016-17	2015-16
Sales and Operating Revenues	487.48	448.42
Other Income	4.48	3.22
Profit Before Tax (PBT)	42.36	35.48
Provision for Tax	7.64	9.72
Profit After tax (PAT)	34.72	25.76
Surplus brought forward	9.53	6.67
Amount available for appropriation	44.25	32.43

Key performance indicators, operational performance and balance sheet summary are furnished in page nos. 4-5 of this annual report.

The Sales and Other Operating Revenue grew by 8.7%.The Profit before tax improved by 19.4% over the previous year. Earnings per share for the year 2016-17 was Rs. 43.86 as against Rs.32.54 in the previous year.

There was no material changes and commitments, 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.

1.2 Appropriation

During the year 2016-17, the board of directors declared an interim dividend of 60% (i.e., Rs.6/- per share of Rs.10/- each, fully paid-up) and the same was paid on February 9, 2017 to all the eligible shareholders whose name appeared in the register of members of the Company as on February 2, 2017, being the Record Date fixed for this purpose.

The board of directors of the have considered and recommended a final dividend of 90% (i.e Rs.9/-per share of Rs.10/- each, fully paid-up) for approval of shareholders at the ensuing twelfth Annual General Meeting (AGM) to be held on August 23, 2017 The total dividend amount inclusive of distribution tax, surcharge and cess thereon would be Rs.8.57 Crores. The final dividend, if declared by the shareholders, will be paid on August 30, 2017 to all the eligible shareholders whose name appears in the register of members of the Company as on August 16, 2017, being the Record Date fixed for this purpose.

1.3 Management Discussion & Analysis

Your Company is engaged in the manufacturing and marketing of auto components for transportation industry viz., friction material (Brake Linings, Clutch Facings, Clutch Buttons, Disc Pads, Brake Shoes and Brake Blocks). A detailed analysis on the performance of the industry, the Company, internal control systems, risk management are discussed 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.

Mr. S A Murali Prasad (DIN: 00001432) retired as per retirement policy of the company, with effective from the conclusion of meeting of Board of Directors held on October 25, 2016 and the board places on record its appreciation for his valuable contributions to the organisation during his tenure.

During the year, Mr. P S Kumar (DIN: 00267280) was coopted to the Board as an additional director (in the category of Non-Executive, Independent) with effect from January 20, 2017 based on the recommendation of the Nomination and Remuneration Committee. The appointment of Mr. P S Kumar is subject to the approval of the shareholders at the ensuing 12^th AGM in the first term, effective from January 20, 2017 till the conclusion of 14^th AGM

Mr. S Sandilya (DIN: 00037542), Mr Anil Kumar V Epur (DIN: 00202454), Mr. S C Gupta (DIN: 02085068), appointed as Independent Directors by the shareholders at the 9^th AGM held on July 22, 2014, for a period of three years, hold office upto the conclusion of the ensuing 12^th AGM.

Based on the Board evaluation, the Nomination and Remuneration Committee at its meeting held on May 17, 2017, have recommended their re-appointment as Independent Directors, for a second term as set out in the notice convening the 12^th AGM which contains necessary resolution for their re-appointment for a second term, by way of special resolution.

The terms and conditions of appointment of independent directors have been disclosed on the website of the Company and available at http://ranegroup.com/pdf/investors/rbl/rbltermsid.pdf

All directors have affirmed compliance with the Code of Conduct of the Company. The independent directors have affirmed that they satisfy the criteria laid down under section 149(6) of the Companies Act 2013 (Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR).

2.2 Retirement by rotation

At the ensuing Annual General Meeting (AGM), Mr. Kazuhiro Iwata (DIN: 06875329), 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, one separate meeting of Independent Directors was held. In the said meeting, the independent directors assessed the quality, quantity and timeliness of flow of information between the management and the Board at the meeting and expressed that the current flow of information and contents were adequate for the Board to effectively perform its duties. They also reviewed the performance of the non-independent directors and the board as a whole and the performance of the chairperson of the Company taking into account the views of executive directors and other non-executive directors.

3. Board and Management

3.1 Board evaluation

During the year, a formal process for annual evaluation of performance of Board, its committees and directors individually was carried out as per the criteria laid down by the Nomination and Remuneration Committee, pursuant to the provisions of the Companies Act, 2013 (CA 2013) and SEBI LODR.

The criteria for evaluation of board and its committees were founded on the structure, composition, board-management relationship, 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) were 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 were taken into consideration.

The evaluation was carried out through a structured methodology approved by the Nomination and Remuneration Committee after ensuring that the aspects under each of the laid down criteria are comprehensive and commensurate with the size of the board and the Company. The Nomination and Remuneration Committee, reviews and makes recommendation to the board, from time to time, for ensuring an optimum composition of the Board and its Committees, induction of directors into the Board, participation on the Board effectiveness and evaluation process. The outcome of the evaluation also forms the basis for the Nomination and Remuneration Committee while considering re-appointment of Directors and appointment in various Committee(s) of the Board.

3.2 Familiarisation program for independent directors

The familiarisation program for independent directors and details of familiarisation program for independent directors has been put up on the website and available at http://ranegroup.com/ ranebrakelining/rblinvestors.html

3.3. Key Managerial Personnel

Mr. Vinay Lakshman, Managing Director (MD), Mr. M A P Sridhar Kumar, Vice President - Finance & Chief Financial Officer (CFO] and Mr. Venkatraman, Secretary hold the office of Key Managerial Personnel within the meaning of Section 2(51) of the Companies Act, 2013.

During the year there was no change in the Key Managerial Personnel (KMP).

3.4 Remuneration policy

The Nomination and Remuneration Committee has laid down a policy on appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP). The same is annexed herewith as ‘Annexure - B''.

4. Audit

4.1 Audit Committee

In terms of the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI LODR, the Audit Committee of the Board acts 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

M/s. Varma & Varma, Chartered Accountants were appointed as Statutory Auditors at the ninth AGM held on July 22, 2014, for a period of three years i.e., until the conclusion of the ensuing twelfth AGM, subject to ratification by members at every AGM.

Pursuant to the provisions of Section 139, 141 read with Companies [Audit and Auditors) Rules, 2014 and any other applicable provisions of the Act, including rules made thereunder, the Audit Committee at its meeting held on May 17, 2017 has reviewed the proposal to re-appoint M/s. Varma & Varma as Statutory Auditors of the Company for a second term of five consecutive years commencing from the conclusion of 12^th AGM [2017) untill the conclusion of 17^th AGM [2022) and recommended the same to the board for proposing it to the shareholders at the ensuing 12^th AGM.

The Company has received a letter from M/s. Varma & Varma consenting to the re-appointment and confirmation to the effect that their appointment, if made, would be within the prescribed limits and that they do not suffer from any disqualification under Section 141 of the Companies Act, 2013 and the rules made thereunder. M/s. Varma & Varma have also submitted the peer review certificate issued to them by The Institute of Chartered Accountants of India. The notice of the ensuing 12^th AGM contains necessary resolution in this regard. Members may consider appointing M/s. Varma & Varma as Statutory Auditors of the Company as per the provisions of the Companies Act, 2013 till the conclusion of the 17^th AGM [2022).

During the year under review, the Auditors have not reported any matter under Section 143 [12) of the Act and therefore no detail is required to be disclosed under Section 134[3)[ca) of the Companies Act, 2013. The Statutory Auditors'' Report to the members for the year ended March 31, 2017 does not contain any qualification, reservation, adverse remark or disclaimer.

4.3 Cost Audit

Cost audit is not applicable to the Company as per the threshold limits prescribed under Companies [Cost Records and Audit) Rules, 2014.

4.4 Secretarial Auditors

The Company had appointed M/s. S Krishnamurthy & Co., Company Secretaries in practice, to undertake the Secretarial Audit of the Company. The report on the Secretarial Audit carried out for the year 2016-17 is annexed herewith as ''Annexure C''. 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 Services, 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 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 are 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 based on the information and explanations obtained by them, confirm that:

i. in the preparation of the financial statements for the financial year 2016-17, the applicable accounting standards had been followed and there were no material departures;

ii. they had 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. they had 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. they had prepared the financial statements for the financial year on a ''going concern'' basis ;

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

vi. they had 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

All 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 for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are reviewed by the Audit Committee 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 (http://ranegroup.com/pdf/policies/rblrpt. pdf). None of the Directors or Key Managerial Personnel or Senior Management Personnel has any material financial and commercial transactions, where they have personal interest, which 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 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 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, Committee Chairman, Mr. L Ganesh, Director and Mr.S C Gupta, independent director, as members. The Annual Report on CSR activities carried out during the year 2016-17 is annexed as ‘Annexure D''. The CSR policy of the Company is available in the Company''s website (http://www.ranegroup.com/ pdf/policies/rblcsr.pdf)

8. Fixed Deposits

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. Pursuant to the order of Company Law Board (CLB) had vide its order dated September 16, 2015 the company has repaid all the outstanding deposits and interest thereon during the year and there are no outstanding deposits / interest, as on March 31, 2017 The Company has not defaulted in repayment of any fixed deposits or any interest thereon.

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 E''.

10. Particulars of Directors, Key Managerial Personnel 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 Personnel (KMP) and Employees of the Company are provided in the Annual Report is annexed herewith as ''Annexure F.

11. Corporate Governance Report

Your Company has complied with the corporate governance requirements pursuant to Regulation 34 and schedule V of SEBI LODR. Detailed report on the compliance and a certificate by the Statutory Auditors forms part of this report as ‘Annexure G''.

12. Other disclosures

a) Details of loan, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013, if any, 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 under Section 92(3) of the Companies Act, 2013 in form MGT-9 is annexed herewith as ‘Annexure H''.

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.

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

L GANESH

Chairman

Chennai VINAY LAKSHMAN

May 17, 2017 Managing Director

---

Mar 31, 2016

The Directors have pleasure in presenting the Eleventh (11th) Annual Report together with the accounts for the year ended March 31, 2016 and other prescribed particulars:

1. State of Company''s affairs

1.1 Financial Performance

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

(Rs. Crores)

Particulars 2015-16 2014-15

Sales and Operating Revenues 448.42 416.41

Other Income 3.22 2.08

Profit before tax (PBT) 35.48 20.60

Provision for Tax 9.72 4.49

Profit after tax (PAT) 25.76 16.11

Surplus brought forward 6.67 46.44

Profit available for appropriation 32.43 62.55

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

The Sales and Other Operating Revenue grew by 8%. The Profit before tax improved by 72% over the previous year. Earnings per share for the year 2015-16 was Rs. 32.54 as against Rs. 20.36 in the previous year.

There was no material changes and commitments, 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.

1.2 Appropriation

During the year 2015-16, the board of directors declared an interim dividend of 100% (i.e., Rs.10.00 per share) on the equity share capital on March 10, 2016. The interim dividend was paid on March 23, 2016 to all the eligible shareholders whose name appeared in the registered of members of the Company as on March 18, 2016 (being the Record Date) fixed for this purpose. In view of this, the board did not recommend any final dividend for the year ended March 31, 2016.

After transfer of Rs. 13.37 crores to the general reserve, Rs. 9.53 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., friction material (Brake Linings, Clutch Facings, Clutch Buttons, Disc Pads, Brake Shoes and Brake Blocks). A detailed analysis on the performance of the industry, the Company, internal control systems, risk management are discussed 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.

During the year, Mr. Vinay Lakshman was co-opted to the Board as an additional director with effect from October 1, 2015. The Board has, subject to the approval of shareholders, appointed Mr. Vinay Lakshman as Managing Director for a period of three years, viz., from October 1, 2015 to September 30, 2018.

The terms and conditions of appointment of independent directors have been disclosed on the website of the Company and available at http://rane.co.in/pdf/investors/rbl/rbltermsid.pdf

All directors have affirmed compliance with the Code of Conduct of the Company. The independent directors have affirmed that they satisfy the criteria laid down under section 149(6) of the Companies Act, 2013 (Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR).

2.2 Retirement by rotation

At the ensuing Annual General Meeting (AGM), Mr. Harish Lakshman (DIN 00012602), 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, two separate meetings of Independent Directors were held. In the said meetings, the independent directors assessed the quality, quantity and timeliness of flow of information between the management and the Board at the meeting and expressed that the current flow of information and contents were adequate for the Board to effectively perform its duties. Also in the meeting of Independent Directors, the performance of the non-independent directors and the board as a whole was reviewed and the performance of the chairperson of the Company was reviewed taking into account the views of executive directors and non-executive directors.

3. Board and Management

3.1 Board evaluation

During the year, a formal process for annual evaluation of performance of Board, its committees and directors was carried out as per the criteria laid down by the Nomination and Remuneration Committee, pursuant to the provisions of the Companies Act, 2013 (CA 2013) and clause 49 of the listing agreement as applicable at that time.

The criteria for evaluation of board and its committees were founded on the structure, composition, board- management relationship, 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) were 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 were taken into consideration.

The evaluation was carried out through a structured methodology approved by the Nomination and Remuneration Committee after ensuring that the aspects under each of the laid down criteria are comprehensive and commensurate with the size of the board and the Company.

3.2 Familiarisation program for independent directors

The familiarisation program for independent directors and details of familiarisation program for independent directors has been put up on the website and available at http://rane.co.in/ranebrakelining/rblinvestors.html

3.3. Key Managerial Personnel

Mr. Vinay Lakshman, Managing Director (MD), Mr. M A P Sridhar Kumar, Vice President - Finance & Chief Financial Officer (CFO) and Mr. Venkatraman, Secretary hold the office of Key Managerial Personnel within the meaning of Section 2(51) of the Companies Act, 2013. Mr. P S Rao, Manager, retired from the services effective September 30, 2015.

3.4 Remuneration policy

The Nomination and Remuneration Committee has laid down a policy on appointment and remuneration of directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP). The same is annexed herewith as ''Annexure B''.

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 / SEBI LODR, the Audit Committee of the Board acts 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

M/s. Varma & Varma were appointed as Statutory Auditors at the ninth Annual General Meeting (AGM) held on July 22, 2014, for a period of three years i.e., until the conclusion of the twelfth AGM. Their appointment is however, subject to ratification by members at every AGM.

The Company has received letter from Statutory Auditors to the effect that their appointment for 2016-17 if ratified, would be within the prescribed limits and that they do not suffer from any disqualification under Section 141 of the Companies Act, 2013 and the rules made thereunder. Statutory Auditors have also submitted the peer review certificate issued to them by The Institute of Chartered Accountants of India. The statutory auditors report to the members for the year ended March 31, 2016 does not contain any qualification, reservation, adverse remark or disclaimer.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.

4.3 Cost Audit

Cost audit is not applicable to the Company as per the threshold limits prescribed under Companies (Cost Records and Audit) Rules, 2014.

4.4 Secretarial Auditors

The Company had appointed M/s. S Krishnamurthy & Co., Company Secretaries in practice, to undertake the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules, thereunder. The report on the Secretarial Audit carried out for the year 2015-16 is annexed herewith as ''Annexure C 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 Services, 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 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 are 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, confirm that:

i. in the preparation of the financial statements for the financial year 2015-16, the applicable accounting standards had been followed and there were no material departures;

ii. they had 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. they had 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. they had prepared the financial statements for the financial year on a ''going concern'' basis;

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

vi. they had 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

All 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 were no materially significant related party transactions made by the Company with Related Parties which might have potential conflict with the interest of the Company at large.

All Related Party Transactions were placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed by the Audit Committee 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 has been uploaded on the Company''s website (http://rane.co.in/pdf/policies/rblrpt.pdf). None of the Directors or Key Managerial Personnel or Senior Management Personnel has any material financial and commercial transactions, where they have personal interest, which 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 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 Development and (d) Environment.

The CSR activities undertaken by the Company were in line with the CSR Policy and recommendations of the CSR Committee comprising of Mr. L Lakshman, Committee Chairman, Mr. L Ganesh, Director and Mr. S C Gupta, an independent director, as members. The Annual Report on CSR activities carried out during the year 2015-16 has been annexed as ''Annexure D''. The CSR policy of the Company is available in the Company''s website (http://www.rane.co.in/pdf/policies/rblcsr.pdf)

8. Fixed Deposits

The deposit outstanding as on March 31, 2016 amounted to Rs. 0.91 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 Chapter V, Section 73 of the Companies Act, 2013. Based on the application made by the Company in terms of Section 74 (2) Company Law Board (CLB) vide its order dated September 16, 2015 granted time to the Company to repay the deposits on their respective maturity dates in accordance with the terms of acceptance of such deposits or March 31, 2017, whichever is earlier.

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 E''.

10. Particulars of Directors, Key Managerial Personnel 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 Personnel (KMP) and Employees of the Company are provided in the Annual Report is annexed herewith as ''Annexure F''

11. Corporate Governance Report

Your Company has complied with the corporate governance requirements as stipulated under clause 49 of the listing agreement / Regulation 34 of SEBI LODR. Detailed report on the compliance and a certificate by the Statutory Auditors forms part of this report as ''Annexure G''.

12. Other disclosures

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

ii) The Internal control systems and adequacy has been discussed in detail in the Management Discussion and Analysis annexed to the Directors Report.

iii) 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.

iv) The details forming part of the extract of the Annual Return under Section 92(3) of the Companies Act, 2013 in form MGT-9 is annexed herewith as ''Annexure H''.

v) 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.

vi) 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 for reporting complaints of this nature. There was no case reported during the year under review through this mechanism.



For and on behalf of the Board L GANESH

Chairman



Chennai VINAY LAKSHMAN

May 23, 2016 Managing Director

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their Tenth Annual Report together with the accounts for the year ended March 31, 2015 and other prescribed particulars:

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 416.41 384.11

Other Income 2.08 2.40

Profit before tax 20.60 16.73

Provision for Tax 4.49 (0.48)

Profit after tax 16.11 17.21

Surplus brought forward 46.44 37.91

Profit available for appropriation 62.55 55.12

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

The Sales and Operating Revenues grew by 8.4% the Profit before tax improved by 23% over the previous year.

Earnings per share for the year 2014-15 was Rs. 20.36/- as against Rs. 21.76/- 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 f nancial 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.

2. Appropriation

Out of the Profit available for appropriation of Rs. 62.55 crores, the directors have recommended a dividend of 70% (i.e Rs. 7/-per share) for the year ended March 31, 2015. The total dividend amount inclusive of distribution tax and surcharge thereon would be Rs. 6.67 crores. After transfer of Rs. 49.21 crores to the general reserve, Rs. 6.67crores 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 auto components for transportation industry viz., friction material (Brake Linings, Clutch Facings, Clutch Buttons, Disc Pads, Brake Shoes and Brake Blocks). 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. Board of Directors

4.1 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/rbl/rbltermsid.pdf In terms of Section 149 of the Companies Act, 2013 (Act), Mr S A Murali Prasad, Mr S Sandilya, Mr Anil Kumar V Epur and Mr Suresh Chandra Gupta, Independent Directors were appointed by the shareholders at the 9th Annual General Meeting held on July 22, 2014, for a period of three years to hold off ce from the conclusion of the 9th AGM till the conclusion of 12th AGM. Ms. Ranjana Kumar was co-opted to the Board as an additional director (in the category of independent director) on January 23, 2015. The Board has recommended the appointment of Ms. Ranjana Kumar as independent director effective January 23, 2015 till the conclusion of 13th 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 Ms. Ranjana Kumar also fulf ls the criteria of appointment of women 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 aff rmed that they satisfy the criteria laid down under section 149(6) of the Companies Act, 2013 and clause 49 of the listing agreement.

4.2 Retirement by rotation

At the ensuing Annual General Meeting (AGM), Mr. L 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.

4.3 Board Meetings

A calendar of meetings is prepared and circulated in advance to the directors. During the year f ve (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.

4.4 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 assessed 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.

5. Board and Management

5.1 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.

5.2 Familiarisation program for independent directors

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

5.3 Key Managerial Personnel

Mr. P S Rao, President, appointed as ''Manager'' under Companies Act, 2013 and Mr MAP Sridhar Kumar, Vice- President – Finance, hold the off ce of Key Managerial Personnel as Manager and Chief Financial Off cer, respectively.

Mr. G Karthikeyan, resigned as Secretary of the Company on February 27, 2015. Mr. Venkatraman has been appointed as Company Secretary in this vacancy, with effect from May 22, 2015 as per the recommendations of Nomination and Remuneration Committee.

5.4 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 ref 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 as a group, which is approved by the Board of Directors, subject to the approval of shareholders, where necessary.

6. Audit

6.1 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 the 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.

6.2 Statutory Auditors

M/s. Varma & Varma, Chartered Accountants were appointed as Statutory Auditors at the last (ninth) Annual General Meeting (AGM) held on July 22, 2014, for a period of three years i.e until the conclusion of the twelfth AGM. Their appointment is however, subject to ratif cation by the 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 disqualif cations under Section 141 of the Companies Act, 2013 and the rules made thereunder. M/s. Varma & Varma have also submitted the peer review certif 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.

6.3 Cost Auditors

Pursuant to section 148 of the Companies Act, 2013 and subject to notif cation of rules thereunder, the board of directors had on the recommendation of the audit committee appointed M/s. STR & 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 notif ed 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.

6.4 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 f rm 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 qualif cation, reservation, adverse remark or disclaimer.

6.5 Internal Auditors

The Company continues to engage M/s Capri Assurance and Advisory Servicies, a f rm 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 efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Audit 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 eff ciency in operations.

7. 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 and

(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.

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

8. Related Party Transactions

All related party transactions that were entered into during the f nancial year were on an arm''s length basis and were in the ordinary course of business. There are no materially signif cant related party transactions made by the Company with Related Parties which may have a potential conf ict 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 the transactions which are foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are reviewed by the Audit Committee on a quarterly basis.

The Company has put in place proper system for identif 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/rblrpt.pdf). None of the Directors or Key Managerial Personnel or Senior Management Personnel has any material financial and commercial transactions, where they have personal interest, that may have potential conf ict with interest of the Company at large.

9. Corporate Social Responsibility (CSR)

The vision on Corporate Social Responsibility (CSR) is: "To be 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 Development (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 Mr. S C Gupta, an independent Director as its members.

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

10. Fixed Deposits

Deposits outstanding as on March 31, 2015 amounted to Rs.4.39 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 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. Also considering the age prof le 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.

11. 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''.

12. Particulars of Directors, Key Managerial Personnel 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 Personnel (KMP) and Employees of the Company are provided in the Annual Report. Having regard to the provisions of f 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 off ce 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: http://www.rane.co.in/ ranebrakelining/ranebrakelininginvestors.html.

1 3. 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 certif cate by the Statutory Auditors forms part of this report as ''Annexure E''.

14. 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 signif cant 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

L GANESH Chairman

Chennai HARISH LAKSHMAN May 22, 2015 Director

---

Mar 31, 2014

The Directors have pleasure in presenting their ninth annual report together with the accounts for the year ended March 31, 2014. In terms of the clarification issued by the Ministry of Corporate Affairs (MCA) vide General Circular 08/ 2014 dated 04.04.2014 the financial statements and the directors report have been prepared in accordance with the disclosure requirements under the Companies Act, 1956 and the rules made there under.

1. Financial Performance:

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

(Rs. Crores)

Particulars 2013-14 2012-13

Sales and Operating Revenues 384.11 376.44

Other Income 2.40 3.24

Profit before tax 16.73 10.92

Provision for Tax (0.48) 1.82

Profit after tax 17.21 9.10

Surplus brought forward 37.91 33.40

Profit available for appropriation 55.12 42.50

The Sales and Operating Revenues grew by 2%; The Profit Before Tax improved by 53% over the previous year.

Earnings per share for the year 2013-14 was Rs. 21.76 as against Rs.11.50 in the previous year.

2. Appropriation

Out of the profit available for appropriation of Rs. 55.12 crores, the directors have recommended a dividend of 75% for the year ended March 31, 2014.The total dividend amount inclusive of distribution tax and surcharge thereon would be Rs. 6.96 crores. After transfer of Rs. 1.72 crores to the General Reserve, Rs. 46.44 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 auto components for transportation industry viz., friction material (Brake Linings, Clutch Facings, Clutch Buttons, Disc Pads, Brake Shoes and Brake Blocks). 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. Board of Directors

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

Mr. S A Murali Prasad, Mr. Anil Kumar V Epur, Mr. S Sandilya, and Mr. S C Gupta, independent directors on the Board, hold the office of director liable to retire by rotation, as per the resolution passed by the shareholders under the provisions of Companies Act, 1956. In terms of section 149 of the Companies Act, 2013, the independent directors are not liable to retire by rotation and can hold office for a consecutive tenure of five years. The Board has decided to re-appoint all the independent directors at the ensuing AGM as independent directors for a period of three years. 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.

M/s. Nisshinbo Holdings Inc., our foreign collaborators, has nominated Mr. Kazuhiro Iwata as a director in the place of Mr. Koji Nishihara. The Board of Directors has co-opted Mr. Kazuhiro Iwata to the Board as an additional director to hold office till date of the ensuing AGM. Mr. Kazuhiro Iwata would be a non-executive, non-independent director, being a nominee of one of the promoters of the Company. Notice has been received from a member signifying its intention to propose the appointment of all independent directors and Mr.Kazuhiro Iwata as director of the Company at the ensuing AGM.

The Board places on record its appreciation for the services rendered by Mr. Koji Nishihara during the tenure of office with the Company.

During the year, subject to approval of shareholders at the ensuing AGM, Mr. P S Rao was re-appointed as "Manager" of the Company within the meaning of Section 2(53) of the Companies Act, 2013 for a period of two years with effect from April 1, 2014.

5. Fixed Deposits

Deposits outstanding as on March 31, 2014 amounted to Rs. 6.76 crores. All deposits that matured during the year were repaid / renewed except for a sum of Rs. 45,000 for which claims have not been lodged with your Company.

6. Conservation of Energy

Your Company is continuously engaged in energy saving initiatives to offset the power shortage and the resultant cost impact.

Sustenance of energy savings initiatives and horizontal deployment of best practices across plants, evaluating and utilising power from low cost sources helped in reduction of power cost despite increase in Electricity Board unit rates. Through energy conservation efforts, your Company saved upto 7,28,607 units of electricity during the year 2013-14.

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

Foreign exchange earned during 2013-14 was Rs. 25.71 crores against foreign exchange outgo of Rs. 72.99 crores. Strategic initiatives were undertaken to increase export business in terms of customers, product and geographical location by identifying new business opportunities.

9. Employees

The particulars of employees, pursuant to 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. Varma & Varma hold office until the conclusion of the ensuing Annual General Meeting (AGM).

M/s. Varma & Varma has been the statutory auditors of the Company for the last two financial years (FY) viz., FY 2012-13 and FY 2013-14. In terms of the transition provision of Section 139 of the Companies Act, 2013, it is proposed to appoint M/s. Varma & Varma as Statutory Auditors of the Company for a period of three years from the conclusion of the ensuing ninth AGM until the conclusion of the twelfth AGM. Necessary resolution in this regard has been included in the notice convening the AGM.

M/s. Varma & Varma have confirmed that their appointment, if made, would be within the limits and that they do not suffer from any disqualifications under Section 141 of the Companies Act, 2013 and the rules made there under. M/s. Varma & Varma have also submitted the peer review certificate issued to them by The Institute of Chartered Accountants of India.

Cost Auditors

As per the Cost Audit Order vide No. 52/26/CAB- 2010 dated November 6, 2012, issued by the MCA under Section 233B of the Companies Act, 1956, the Board had appointed M/s. STR & Associates, Cost Accountants, Chennai to carry out the cost audit of the Company for the financial year 2012-13. The due date for filing the cost audit report for the financial year 2012-13 was September 27, 2013. This report was filed on September 25, 2013 in the XBRL format with the MCA.

Pursuant to section 148 of the Companies Act, 2013 and subject to notification of rules there under, the Board of Directors on the recommendation of the Audit Committee appointed M/s. STR & Associates., Cost Accountants, as the cost auditors of the Company for the financial year 2014-15. M/s. STR & Associates have confirmed that their appointment is within the limits and that they are free from the disqualifications specified in section 141 of the Companies Act, 2013.

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 2013-14 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 (CSR)

The vision on Corporate Social Responsibility (CSR) is: "To be socially and environmentally responsive organisation 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 Development and (d) Environment.

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

a) Education

- Contributions to Rane Foundation and JACOB Memorial Trust towards providing basic and higher education to the deserving.

- Career guidance / motivational workshops for the government school students to explore various career options through career counselling.

- Distribution of school bags and stationeries to the underprivileged students of government schools.

- Organised drawing competition for children.

- Provided used Computers to NGO.

b) Health Care

- Organised weekly health talk.

- Dental care organized for employees.

- Health & hygiene program was organised to the contract workers.

- Provided food / clothes to special children.

c) Community Development

- Provided dust bins to government schools.

- Tailoring classes conducted for women.

- Vehicle safety awareness programme conducted.

- Conducted blood donation camps.

- Provided food and organised employee birthday celebrations in children, old age, mentally challenged and visually impaired home.

d) Environment

- An environment awareness campaign was conducted to employees through "Green peace India".

- Also an environment awareness campaign was conducted for children.

- "Child Labour" awareness program organized through Indian Council for Child Welfare.

- "Auto Industry" awareness programme conducted for college students.

Pursuant to the provisions of section 135 of the Companies Act, 2013 read with Schedule VII to the Companies Act, 2013 and the rules notified there under, the Board at its meeting held on March 21, 2014 constituted CSR committee comprising of Mr. L Lakshman, director, Mr. L Ganesh, chairman and Mr. S C Gupta, an independent director.

The Board at its meeting held on May 21, 2014 reviewed the CSR policy recommended by the CSR Committee and adopted the same in compliance with the provisions of Section 135 and the rules made there under. The CSR policy of the Company is being posted on the Company''s website.

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 21, 2014 Director

---

Mar 31, 2013

The Directors have pleasure in presenting their eighth 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 376.44 359.17

Other Income 3.24 4.35

Profit before tax 10.92 21.90

Provision for tax 1.82 5.71

Profit after tax 9.10 16.19

Surplus brought forward 33.40 25.27

Profit available for appropriation 42.50 41.46

Despite slowing down of the market demand, the Sales and Operating Revenues grew by 5% over the previous year. However, the Profit Before Tax declined by 50% over the previous year mainly due to strengthening of US Dollar and Japanese Yen resulting in increased raw material cost and higher power cost as power situation in Tamilnadu and Andhra Pradesh are yet to improve. Earnings per share for the year 2012-13 was Rs. 11.50 as against Rs. 20.45 in the previous year.

2. Appropriation

Out of the profit available for appropriation of Rs. 42.50 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 20%, making total dividend as 40% for the year. The total dividend amount inclusive of distribution tax and surcharge thereon would be Rs. 3.68 crores. After transfer of Rs. 0.91 crores to the General Reserve, Rs. 37.91 crores has been 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 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

Deposits outstanding as on March 31, 2013 amounted to Rs. 7.05 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. S Sandilya and Mr. S A Murali Prasad 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 continuously engaged in energy saving initiatives to offset the power shortage and the resultant cost impact. Energy savings were achieved through available alternate economical sources, special projects in shop-floor, sustenance of high power factor and employee involvement to reduce consumption of power.

Energy conservation projects are rigorously undertaken by the Company through horizontal deployment of best practices. Energy efficient processes are widely used at different locations. Through energy conservation efforts, your Company saved upto 6,85,287 units of electricity during the year 2012-13.

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

Foreign exchange earned during 2012-13 was Rs. 21.21 crores against foreign exchange outgo of Rs. 71.30 crores.

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

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. Varma & Varma hold office until the conclusion of the ensuing Annual General Meeting and have expressed their willingness to continue as statutory auditors of the Company. The Company has received letter from M/s. Varma & Varma to the effect that their appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. M/s. Varma & Varma 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 appointment of M/s. Varma & Varma 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 27, 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. STR & 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. STR & 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. STR & 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 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 (CSR)

The vision on Corporate Social Responsibility (CSR) is: "To be socially and environmentally responsive organisation 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 Development (d) Environment.

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

1. Education

- Contributions to Rane Foundation and JACOB Memorial Trust towards providing basic and higher education to the deserving.

- Career guidance / motivational workshops for the government school students to explore various career options through career counselling and renovation of the washroom facilities in government schools to promote hygiene for the school students.

- Distribution of school bags and stationeries to the underprivileged students of government schools.

2. Environment

The Company celebrated "World Environment Day" with a theme "Go Green". The activities have been broadly grouped under 4 headings viz., Green Office, Green Home, Green Society and Green School. Environment rally and awareness campaign and competitions were conducted to the school children to sensitize the importance of environment protection.

Also an environment awareness campaign was organized for the employees and their spouses to reinforce the usage of environment friendly material and participants were encouraged to say "no to plastics" in their daily life.

3. Community Development

- Conducted road safety awareness programme and distributed safety pamphlets to the drivers. High beam stickers and red colour reflectors were pasted in the vehicles.

- Conducted blood donation camps.

- Provided support to Self-Helping Groups (SHG) in women empowerment projects.

- Provided food and organized employee birthday celebrations in children, old age, mentally challenged and visually impaired home.

- Organized reading programme for visually challenged.

4. Health Care

- Provided First Aid Kits to the government schools.

- Health & hygiene program was organized to the contract workers.

- Organ donation awareness program was conducted.

- Provided food for the health camps conducted by the primary health centre.

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 20, 2013 Director

---

Mar 31, 2012

The Directors have pleasure in presenting their seventh 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 359.17 305.84

Other Income 4.35 2.48

Profit before tax 21.90 19.67

Provision for tax 5.71 4.38

Profit after tax 16.19 15.29

Surplus brought forward 25.27 16.13

Profit available for appropriation 41.46 31.42

The Sales and Operating Revenues grew by 17% over the previous year. The Profit before tax improved by 11% over the previous year. Earnings per share for the year 2011-12 was Rs. 20.45 as against Rs. 19.31 in the previous year.

2. Appropriation

Profit available for appropriation is Rs. 41.46 crores. The Directors have declared and paid interim dividend of 40% 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 70% for the year. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs. 6.44 crores leaving the Company with retained profits of Rs. 35.02 crores. Out of this, Rs.1.62 crores is being transferred to the General Reserve and Rs. 33.40 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.10.56 crores. All deposits that were matured during the year were repaid / renewed.

5. Board of Directors

Mr. L Lakshman and Mr. Koji Nishihara retire by rotation and being eligible, offer themselves for reappointment. 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 continuously engaged in energy saving initiatives to offset the power shortage and the resultant cost impact. Energy savings were achieved through available alternate economical sources, special projects in shop-floor, sustenance of high power factor and employee involvement to reduce consumption of power.

Energy conservation projects are rigorously undertaken by the Company. Energy efficient processes are widely used at different locations. Through energy conservation efforts, your Company saved up to 3,34,880 units of electricity during the year 2011-12.

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 Foreign exchange earned during 2011-12 was Rs. 20.51 crores and foreign exchange outgo was Rs. 69.14 crores.

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

9. Foreign Currency Loans

Statutory Auditors' observation on accounting treatment in respect of External Commercial Borrowings (ECBs), Buyers Credit (BC) and associated swap contracts.

The auditors' have in their report drawn attention to the accounting treatment in respect of ECBs, BC and associated swap contracts. This subject matter has been fully explained in note 5.6 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 as 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 Standard) Rules, 2006.

This accounting treatment has been consistently followed in all the earlier years when the arrangements were 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 C.

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 associations with the Company as Statutory Auditors since 2006.

Special notice has been received from a member signifying the intention to propose the appointment of M/s. Varma & Varma, Chartered Accountants as Statutory Auditors in the place of the retiring auditors. The company has received letter from M/s. Varma & Varma, Chartered Accountants to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. They have also 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 M/s. Varma & Varma Chartered Accountants 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 (CSR)

The vision on Corporate Social Responsibility (CSR) is, "To be socially and environmentally responsive organisation 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. Your company firmly believes that participation of corporates is vital to achieve sustainable and equitable economic growth in India. 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 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.

* Contributions are also made through Rane Foundation and JACOB Memorial Trust towards providing basic and higher education to the deserving.

* Your company has instituted rural education initiatives through an initiative called "Shiksha".

* Your company has also taken other initiatives in health, education, environment and community development.

Specific activities undertaken by your Company are:

- Conducted blood donation camps and AIDS prevention and control programmes

- Organized anti-tobacco awareness campaigns

- Provided financial support and distributed food to destitutes and mentally challenged children at orphanages

- Organized reading programme for visually challenged

- Provided support to Self-Helping Groups (SHG) in women empowerment projects

14. Corporate Governance Report

Your Company has complied with the Corporate Governance requirements as stipulated under Clause 49 of the listing agreement. A 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 23, 2012 Director

---

Mar 31, 2011

The Directors have pleasure in presenting their sixth 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)

Particulars 2010-2011 2009-2010

Sales and Operating 3,058.41 2,363.00 Revenues

Other Income 24.76 13.77

Profit before tax 196.66 149.33

Provision for Tax 43.84 48.46

Profit after tax 152.82 100.87

Surplus brought forward 161.31 112.20

Profit available for 314.14 213.07 appropriation

2. Appropriations

Profit available for appropriation is Rs.314.14 million. The Directors have declared and paid interim dividend of 30% on the equity capital of the company for the year ended March 31,2011 and are pleased to recommend a further 20% as final dividend, making for a total dividend of 50% for the year. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs.46.04 million leaving the company with retained profits of Rs.268. 10 million. Out of this, Rs.15.45 million is being transferred to the General Reserve and Rs.252.65 million being retained as surplus in the Profit and Loss Account.

3. Management Discussion and Analysis

a) Industry Structure, Developments and Segment-wise Performance

Your Company operates in single segment, viz., components for transportation industry. The growth within automobile industry was as follows: Growth in %

Industry Segments 2010-2011 2009-2010

Passenger Cars 27 27

Utility Vehicles 17 24

Small Commercial Vehicles 36 8 (One Ton & below)

Light Commercial Vehicles 22 77

Medium and Heavy 38 30 Commercial Vehicles

Three Wheelers 29 25

Two Wheelers 27 25

Farm Tractors 22 27

Source: Society of Indian Automobile Manufacturers.

Domestic market continued its robust growth across all segments and this required ramping up capacity. The emphasis on capacity increase and improvement of delivery continued throughout the year.

Exports

In the export market, the increase in volumes from the later part of the year 2009- 2010 continued in the year 2010- 2011. Your Company met its export commitments.

The United States Dollar, a currency on which your Companys exports are mostly dependent was relatively stable. The strengthening of the rupee was marginal and such fluctuations were handled well with the Companys forex policy.

OEM and Aftermarket

Your companys performance in the OEM Segment continued to be very good and the growth over the previous year was 58%. The Companys aftermarket sales grew at a rate of 10% over the previous year.

4. Deposits

Deposits outstanding as on March 31, 2011 amounted to Rs. 123.72 million. All deposits that were matured during the year were repaid / renewed.

5. Board of Directors

Mr. Suresh Chandra Gupta and Mr. Harish Lakshman retire by rotation. Mr. Suresh Chandra Gupta and Mr. Harish Lakshman being eligible, have offered themselves for reappointment.

6. Conservation of Energy

Your Company has been continuously engaged in energy saving initiatives to offset the power shortage and the resultant cost impact. Energy savings were achieved through available alternate economical sources, special projects in shop-floor, sustenance of high power factor and employee involvement to reduce consumption of power.

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.157.82 million and foreign exchange outgo was Rs.684.64 million. Exports during the year amounted to Rs.158.80 million.

9. Employees

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

10. Auditors

M/s Price Waterhouse & 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(1 B) 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

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. Contributions are also made through Rane Foundation and JACOB Memorial Trust towards providing basic and higher education to the deserving. Your company has instituted a merit award for school children and distributed uniforms to the school students. Also conducted awareness program on Basic Hygiene and Cleanliness to Government school children.

Your company has also taken other initiatives such as organising -

- Blood donation and Medical camps at villages

- Awareness program on Tobacco & AIDS control.

- Donations to old age homes

- Program for mentally challenged women by the employees and their family members.

- Organised Cultural competition for Physically challenged children

- Women empowerment project

- Food and clothing for orphanages

- Reading for blind

13. Corporate Governance Report

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





For and on behalf of the Board

L GANESH Chairman



L LAKSHMAN Director

Chennai May 23, 2011