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Directors Report of Rane Holdings Ltd.

Mar 31, 2017

Report of the Board of Directors

The directors take the pleasure in presenting the Eighty First Annual Report together with the accounts for the year ended 31 March, 2017,

1. Financial Performance

Your Company''s investment profile is as given below:-

Sl.

No.

Name of investee company

Products/Services

Ownership of your Company

Subsidiary companies

1

Rane (Madras) Ltd,

Steering gear products, steering and suspension linkages, Diecasting products, Other article of aluminium,

56,30%

a) Rane (Madras) International

Hold strategic overseas investments

Holdings B,V, ,

The Netherlands - (RMIH)

100,00%

(i) Rane Precision Die Casting Inc,, (RPDC)

High pressure aluminium die casting for automotive applications

100,00%

2

Rane Engine Valve Ltd,

Engine valves, valve guides and tappets

51,10%

3

Rane Brake Lining Ltd,

Brake linings, disc pads, clutch facings and clutch buttons

46,10%

4

Rane Holdings America Inc,, USA

Providing business development services in North American region for Rane Group Companies

100,00%

5

Rane Holding Europe GmbH, Germany (being renamed from Mainsee 1038, VV GmbH)

Providing business development and other related support services for Rane Group companies in the European countries

100,00%

Joint Venture Companies

6

Rane TRW Steering Systems Private Ltd,

Hydraulic steering gear, Hydraulic pumps, Seat belt and Air Bags

50,00%

7

Rane NSK Steering Systems Private Ltd,

Manual steering columns and electric power steering

49,00%

8

JMA Rane Marketing Ltd,

Automotive component trading with Pan India dealer network

48,97%

The Company''s income stream comprises of (i) dividend from the above investments, (ii) trademark fee for use of ''RANE'' trademark and (iii) service fee from the group companies for providing services in the areas of management, information technology, business development and manpower training.

During the year under review the Company had divested the entire equity shareholding of 45,2% in SasMos HET Technologies Limited (SasMos) considering various factors with a view to streamline and consolidate investments in the automotive, aerospace and defence sectors in alignment with the vision of Rane group.

The Company established a Wholly Owned Subsidiary (WOS) in Germany during March, 2017, to provide business development and other related support services for Rane group companies in the European region through acquisition of 100% equity shares of a newly incorporated company Mainsee 1038, V V GmbH, This WOS is being renamed as Rane Holdings Europe GmbH.

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

(Rs. Crores)

Particulars

2016-17

2015-16

Income

98,80

75,85

Profit before tax

62,81

42,90

Provision for tax

12,95

7,25

Profit after tax

49,86

35,65

Surplus brought forward

17.18

12,88

Amount available for appropriation

61,26

32,72

Key Performance indicators, operational performance and balance sheet summary are furnished in Page No 10-11 of this annual report.

During the year, income of your Company had increased by 30,26% over that of the previous year, The earnings per share for the year 2016-17 increased to Rs. 34,92 as compared to that of last year Rs. 24,97.

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

2. Appropriation

During the year 2016-17, the board of directors declared an interim dividend of 35% (i,e,, Rs. 3,50 per equity share of Rs. 10/- each, fully paid-up) and the same was paid on February 27, 2017 to all the eligible shareholders whose name appeared in the registered of members of the Company as on February 21, 2017, being the Record Date fixed for this purpose, The board of directors of the Company at their meeting held on May 26, 2017 have considered and recommended a final dividend of 50%,fi,e,, Rs. 5/- per equity share of Rs. 10/each, fully paid-up) for approval of the shareholders at the ensuing eighty-first Annual General Meeting (AGM) to be held on August 31, 2017.

The total 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 September 7, 2017 to all the eligible shareholders whose name appears in the register of members of the Company and records of depositories as on August 24, 2017, being the Record Date fixed for this purpose.

A sum of Rs. 6126 Crores has been retained as surplus in the Profit and Loss Account,

3. Management Discussion & Analysis

Your Company holds strategic investment in subsidiaries and joint ventures (collectively called ''Rane Group'') engaged in the manufacturing and marketing of components for transportation industry and also provides management and other services to Rane Group, A detailed analysis of the automotive industry, group companies'' performance, internal control systems, risk management etc, are discussed in a separate section in this Annual Report under the heading ''Management Discussion & Analysis'',

4. Consolidated financial statements

The following methodology as specified under applicable accounting standards have been applied in consolidating the financial results of the group companies in the consolidated financial results attached in the annual report:-

(a) Subsidiary companies - each line item of income, expenditure, assets and liabilities have been consolidated one hundred percent, Minority interests have been appropriately considered,

(b) Joint Venture companies - each line item of income, expenditure, assets and liabilities have been consolidated based on the percentage of share held in these companies,

(c) Associate company - share in the profit after tax based on the percentage of share held has been consolidated,

The consolidated financial statements of the Company are prepared based on the audited financial statement of the subsidiary companies and joint-venture companies, for the year ended March 31, 2017. As regards the associate company, the financial statements for the period ended February 28, 2017, have been considered for the purpose of consolidation, since the Company had divested the entire shareholding, before the end of the financial year 2016-17 ,

In terms of Section 136 of the Companies Act, 2013 the Company has not attached the financial statements of the subsidiary companies, However, the financial information of the subsidiary companies duly audited by the auditors are disclosed in this annual report, The Company undertakes to make available a soft or hard copy of the annual report and annual accounts of the subsidiary companies and the related detailed information to investors, as may be required by them, seeking such information at any point of time on demand, The annual accounts of the subsidiary companies have been posted in the website of the Company viz, https:// www,ranegroup,com and also kept open for inspection by any investor at the registered office of the Company and that of the respective subsidiary companies, The consolidated financial statements presented by the Company, which form part of this annual report are based on the financial statements of its subsidiary companies,

5. Board of directors

5.1 Composition

The composition of the board of directors of the Company is furnished in the Corporate Governance Report as ‘Annexure-E'' to this report,

During the year, Dr, (Mr,) V Sumantran was appointed by the members, as Independent Director effective May 27, 2016 till the conclusion of eighty-third AGM (2019),

During the year, Mr, L Lakshman, Executive Chairman of the Company relinquished his executive role in the Company after being at the helm for over 25 years, Mr, Anil Kumar Nehru, Independent Director retired on attaining the age of 75 years as per the retirement policy of the Company, effective conclusion of board meeting held on May 27, 2016.

The board of directors at its meeting held on March 31, 2017 placed on record the immense contribution made by Mr, L Lakshman in the transformation of Rane Group under his leadership and requested him to continue as a nonexecutive director, Further, the Nomination and Remuneration Committee (NRC), recognizing his contribution towards development of the Company and the Rane group and his vast expertise, experience and knowledge of the industry especially on areas like Business Strategies, Human Resource, Total Quality Management, Information Technology, etc,, recommended to the board it would be in the long term interest of the Company and the Rane group, if, Mr, L Lakshman continues to guide the Company,

Taking into consideration the request of the board, Mr, L Lakshman consented to continue on the board in a non-executive capacity, providing guidance and mentorship to the executive management, advisory support in initiatives of strategic importance to the Group''s future growth plans of entering new business areas in India as well as plans for expansion in overseas markets.

Based on the recommendations of the Nomination and Remuneration Committee, the board unanimously approved the continuation of Mr, L Lakshman as Non-Executive Director and designated him as ''Chairman Emeritus'' of the Company for a period of four years with effect from April 1, 2017 on such terms and conditions subsequently approved by the shareholders.

In recognition of the value of guidance and mentorship of Chairman Emeritus, the shareholders of the Company have approved vide postal ballot that Mr, L Lakshman be paid a commission up to 2% of the profits of the Company, subject to a ceiling of Rs. 1 Crore per annum, effective April 1, 2017. The shareholders have also approved that Mr, L Lakshman be paid advisory fees upto a sum of Rs. 1 Crore per annum, for advisory services rendered by him towards initiatives in areas of importance and unique to the growth and development of the Rane group, Given his professional capacity, qualification, experience and insight in the automotive industry, the remuneration is in line with the present industry practices and standards.

The board of directors at their meeting held on March 31, 2017 appointed Mr. L Ganesh as Managing Director in the designation of ''Chairman'' for a period of three years with effect from April 1, 2017. The shareholders have approved his appointment and terms, including remuneration payable to him vide postal ballot.

Mr. Anjanikumar Choudhari (DIN: 00234208) and Mr. Shujaat Khan (DIN: 00526891) were appointed as Independent Directors by the shareholders at the 78th AGM held on August 12, 2014, for a period of three years, to hold office upto the conclusion of the ensuing 81st AGM.

Mr. Shujaat Khan has expressed his intention not to seek re-appointment at the ensuing 81st AGM, due to his other professional commitments.

The Nomination and Remuneration Committee at its meeting held on May 26, 2017, have recommended the re-appointment of Mr. Anjanikumar Choudhari as an Independent Director, for a second term of three consecutive years viz., from the conclusion of the ensuing 81st AGM till the conclusion of 84th AGM or August 30, 2020, whichever is earlier, The notice convening the 81st AGM seeks approval of the members by way of special resolution for his re-appointment as an Independent Director for a second term,

All the independent directors have affirmed that they satisfy the criteria laid down under Section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR),

5.2 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,

5.3 Board meetings

A calendar of meetings is prepared and circulated in advance to the directors, During the year 5 (five) 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,

5.4 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 nonexecutive directors,

6. Board and management

6.1 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 make recommendations 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 in 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 their appointment in various committees of the board,

6.2 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/rhlinvestors,html

6.3 Key Managerial Personnel

Mr. L Ganesh, Chairman & Managing Director, Mr. Siva Chandrasekaran, Secretary and Mr, J Ananth, Chief Financial Officer hold the office of Key Managerial Personnel under the Companies Act, 2013,

During the year, there was no change in the Key Managerial Personnel.

6.4 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 - A'',

7. Audit

7.1 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,

7.2 Statutory Auditors

M/s Deloitte Haskins and Sells (DHS) were re-appointed by the shareholders at the eightieth AGM (AGM 2016), as Statutory Auditors of the Company for a second term of five consecutive years to hold office until the conclusion of the eighty fifth AGM (AGM 2021).Their appointment is however, subject to ratification by members at every AGM in accordance with Section 139 of the Companies Act, 2013 read with applicable rules made thereunder,

The Company has received letter from DHS consenting for the appointment and confirmation to the effect that their appointment for the 2017-18, if ratified, would be within the limits and that they are free from any disqualification specified in Section 141 of the Companies Act, 2013 and the rules made thereunder, DHS 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, 2017 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,

7.3 Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s S Krishnamurthy & Co., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company, The report on the Secretarial Audit carried out for the year 2016-17 is annexed herewith as ‘Annexure -B''. The secretarial audit report does not contain any qualification, reservation, adverse remark or disclaimer.

7.4 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 taken as per the directions of Audit Committee on a regular basis to improve efficiency in operations.

8. Directors'' Responsibility Statement

In terms of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the directors, to the best of their knowledge and belief 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,

9. 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 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 policies on Related Party Transactions and Material Subsidiaries as approved by the Board is uploaded on the Company''s website link (http://ranegroup.com/pdf/policies/rhlrpt.pdf and http://www,ranegroup,com/pdf/policies/rhlmsp,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.

10. 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, Mr. L Ganesh and Mr. Anjanikumar Choudhari as its members, The Annual Report on CSR activities carried out during the year 2016-17 is annexed as ''Annexure C''. The CSR policy of the Company is available in the Company''s website (http://www.ranegroup.com/pdf/ policies/rhlcsr,pdf)

11. Fixed Deposits

Your Company does not accept any deposit from public in terms of Section 73 of the Companies Act, 2013 and the rules framed thereunder.

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

The Company is conscious of the imperative to protect environment and the natural resources for achieving sustainable economic growth and have started several initiatives in this regard such as conservation of energy and water and eco-friendly waste management system. In view of the nature of activities of the Company, disclosure relating to technology absorption are not applicable to the Company,

The disclosure foreign exchange earnings and outgo, in terms of provisions of Section 134 (3)(m) read with Rule 8 of the Companies (Accounts) Rules, 2014 are given hereunder:

Foreign Exchange earnings and outgo

Rs. in Lakhs

Foreign Exchange

2016-17

2015-16

Earnings

4,350

Nil

Outgo

67

48

13. 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 ‘Annexure D'' to this report.

14. 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 E'',

15. Other disclosures

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

b, The Internal control systems and adequacy are discussed in detail in the Management Discussion and Analysis annexed to the Directors Report.

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

d, The details forming part of the extract of the Annual Return under Section 92(3) of the Companies Act, 2013 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.

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

For and on behalf of the Board

Chennai L Ganesh

May 26, 2017 Chairman & Managing Director


Mar 31, 2016

The directors take the pleasure in presenting the Eightieth Annual
Report together with the accounts for the year ended 31 March, 2016.

1. Financial Performance

Your Company''s investment profile is as given below:-

Ownership of
Sl.
No. Name of investee company Products /
Services your
Company
Subsidiary companies

1 Rane (Madras) Ltd. Steering gear
products, steering
and suspension
linkages,
Die-casting 56.3%
products. Other
article of
aluminums.

a) Rane (Madras)
International Hold strategic
overseas
investments 100%
Holdings B.V. , The
Netherlands - (RMIH)

(i) Rane Precision Die
Casting Inc.,
(RPDC) High pressure
aluminums die
casting for
automotive
applications 100%

2 Rane Engine Valve Ltd.* Engine valves,
valve guides
and tappets 51.1%

3 Rane Brake Lining Ltd. Brake linings,
disc pads, clutch
facing and clutch
button 46.1%

4 Rane Holdings
America Inc. Providing business
development
services in North
American region 100.0%

for Rane Group
Companies
Joint Venture
Companies *

5 Rane TRW Steering
Systems Hydraulic
steering
gear, Hydraulic
pumps, seat belt
and Air Bags 50.0%
Private Ltd.

6 Rane NSK Steering
Systems Manual steering
columns and
electric power
steering. 49.0%
Private Ltd.

7 JMA Rane Marketing
Ltd. Automotive
component trading
with Pan India
dealer network. 49.0%

Associate companies

8 SasMos HET
Technologies Ltd. Design,
prototyping and
manufacture of
customized
electric 45.2%
solutions for
defense and
aerospace
applications.

The Company''s income stream comprises of (i) dividend from
the above investments, (ii) trademark fee for use of ''RANE''
trademark and (iii) service fee from the group companies for
providing services in the areas of management, information
technology, business development and infrastructure.

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

(Rs, Crores)

Particulars 2015-16 2014-15

Income 75.85 59.94

Profit before tax 42.90 32.68

Provision for tax 7.25 6.76

Profit after tax 35.65 25.92

Surplus brought forward 12.88 82.44

Amount available
for appropriation 32.72 108.36


Key Performance indicators, operational performance and balance sheet
summary are furnished in Page No. 4-5 of this annual report.

During the year, income of your Company had increased by 26.54% over
that of the previous year. The earnings per share for the year 2015-16
was Rs, 24.97 compared to last year Rs, 18.16.

There was no material change or commitment, affecting the

financial position of the Company between the end of the financial year
of the Company and the date of the report other than those disclosed in
the financial statements. There was no change in nature of business
during the year.

2. Appropriation

During the year 2015-16, the board of directors declared an interim
dividend of 100% (i.e., Rs, 10/- 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 register of
members of the Company as on March 18, 2016 (being the Record Date)
fixed for this purpose. In view of the interim dividend, the Board did
not recommend any final dividend for the year ended March 31, 2016.

After transfer of Rs, 15.54 crores to General reserve, Rs, 17.18 crores
has been retained as surplus in the Profit and Loss Account.

3. Management Discussion & Analysis

Your Company holds strategic investment in subsidiaries, joint ventures
and an associate company (predominant called ''Rane Group'') engaged in
the manufacturing and marketing of components for transportation
industry and also provides management and other services to Rane group.
A detailed analysis of the automotive industry, group companies''


performance, internal control systems, risk management etc. are
discussed in a separate section in this Annual Report under the heading
''Management Discussion & Analysis''.

4. Consolidated financial statements

The following methodology as specified under applicable accounting
standards have been applied in consolidating the financial results of
the group companies in the consolidated financial results attached in
the annual report:- (a) Subsidiary companies – each line item of
income, expenditure, assets and liabilities have been consolidated one
hundred percent. Minority interests have been appropriately
considered.

(b) Joint Venture companies – each line item of income, expenditure,
assets and liabilities have been consolidated based on the percentage
of share held in these companies.

(c) Associate companies – share in the profit after tax based on the
percentage of share held has been consolidated.

The consolidated financial statements of the Company are prepared based
on the audited financial statement of the subsidiary companies, joint
venture companies and associate companies.

In terms of Section 136 of the Companies Act, 2013 the Company has not
attached the financial statements of the subsidiary companies. However,
the financial information of the subsidiary companies duly audited by
the auditors are disclosed in this annual report. The Company
undertakes to make available soft or hard copy of the annual report and
annual accounts of the subsidiary companies and the related detailed
information to investors, as may be required by them, seeking such
information at any point of time on demand. The annual accounts of the
subsidiary companies have been posted in the website of the Company
viz. http://rane.co.in and also kept open for inspection by any
investor at the registered office of the Company and that of the
respective subsidiary companies. The consolidated financial statements
presented by the Company, which form part of this annual report,
include financial results of its subsidiary companies.

5. Board of directors

5.1 Composition

The composition of the board of directors of the Company is furnished
in the Corporate Governance Report as Annexure-''E'' 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/rhl/ rhltermsid.pdf

Dr. V Sumantran has been co-opted to the board as an additional
director (in the category of independent director) on May 27, 2016, as
per the recommendations of Nomination and Remuneration Committee
effective May 27, 2016 till the conclusion of eighty-second AGM. Notice
has also been received from a member signifying the intention to
propose his appointment as an independent director of the Company at
the ensuing 80th AGM.

Mr. Anil Kumar Nehru on attaining the age of 75 years, retired from the
Board effective from the conclusion of the meeting of the board of
directors held on May 27, 2016, as per the retirement policy of the
Company, All the independent directors have farmed that they satisfy
the criteria laid down under section 149(6) of the Companies Act, 2013
and SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (SEBI LODR).

5.2 Retirement by rotation

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

5.3 Board meetings

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

5.4 Meeting of Independent Directors

During the year, two (2) separate meetings of Independent Directors
were held. In the said meetings, the independent directors assessed the
quality, quantity and timeliness of fow of information between the
management and the Board at the meeting and expressed that the current
fow of information and contents were adequate for the Board to
effectively perform its duties. Also in at 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.

6. Board and management

6.1 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 clause 49 of the listing agreement.

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 fow 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.

6.2 Familiarization program for independent directors

The familiarization program for independent directors and details of
familiarization programmes to independent directors are available at
http://rane.co.in/rhlinvestors.html

6.3 Key Managerial Personnel

Mr. L Lakshman, Executive Chairman & Managing Director, Mr. L Ganesh
Vice-Chairman & Joint Managing Director, Mr. Siva Chandrasekaran,
Secretary and Mr. J Ananth Chief Financial Ofcer hold the ofce of Key
Managerial Personnel under the Companies Act, 2013

6.4 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 –A''.

7. Audit

7.1 Audit Committee

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

7.2 Statutory Auditors

In terms of the appointment made by the shareholders as per the
transition provisions of Section 139 of the Companies Act, 2013 and
applicable rules made there under, M/s Deloitte Haskins and Sells (DHS)
were appointed as Statutory Auditors for a period of two years to hold
the office until the conclusion of the eightieth AGM (AGM 2016).

Pursuant to the provisions of Section 139, 141 and read with Companies
(Audit and Auditors) Rules, 2014 and any other applicable provisions of
the Act including rules made there under, the Audit Committee at its
meeting held on May 27, 2016 has reviewed the proposal to re-appoint
DHS as statutory auditors of the Company for a second term of five
consecutive years commencing from the conclusion of eightieth AGM
(2016) until the conclusion of eighty-fifth

AGM (2021) and recommended the same to the board for proposing it to
the shareholders at the ensuing eightieth AGM.

The Company has received letter from DHS consenting for the
re-appointment and confirmation to the effect that their appointment,
if made, would be within the limits and that they are free from any
disqualification specified in section 141 of the Companies Act, 2013
and the rules made there under. DHS have also submitted the peer review
certificate issued to them by The Institute of Chartered Accountants of
India. The notice of the ensuing AGM contains necessary resolution in
this regard. Members may consider appointing DHS as statutory auditors
of the Company as per the provisions of the Companies Act, 2013 till
the conclusion of the eightieth AGM.

The statutory auditor''s report to the members for the year ended March
31, 2016 does not contain any qualification, reservation, adverse
remark or disclaimer.

7.3 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 form of Company Secretaries in Practice, to undertake the
Secretarial Audit of the Company. The report on the Secretarial Audit
carried out for the year 2015 -16 is annexed herewith as ''Annexure -B''.
The secretarial audit report does not contain any qualification,
reservation, adverse remark or disclaimer.

7.4 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 taken as per the directions of Audit Committee on a
regular basis to improve efficiency in operations.

8. Directors'' Responsibility Statement

In terms of Section 134(3)(c) read with section 134(5) of the Companies
Act, 2013, the directors, confirm that:

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

ii. selected such accounting policies and applied them consistently and
made judgments and estimates that were reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit of the Company for the year
under review;

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

9. 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 may have
potential confect 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 and material subsidiaries as approved by the Board is
uploaded on the Company''s website (http://rane.co.in/
pdf/policies/rhlrpt.pdf and http://www.rane.co.in/pdf/policies/
rhlmsp.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.

10. 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, Mr L Ganesh and Mr Anjanikumar Choudhari as its members.

The Annual Report on CSR activities carried out during the year 2015-16
is annexed as Annexure ''C''. The CSR policy of the Company is available
in the Company''s website (http://www.
rane.co.in/pdf/policies/rhlcsr.pdf)

11. Fixed Deposits

Your Company does not accept any deposit from public in terms of
Section 73 of the Companies Act, 2013 and the rules framed there under.

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

The Company is conscious of the imperative to protect environment and
the natural resources for achieving sustainable economic growth and
have started several initiatives in this regard such as conservation of
energy and water and eco-friendly waste management system. In view of
the nature of activities of the Company, provisions of Section 134
(3)(m) read with Rule 8 of the Companies (Accounts) Rules, 2014 are not
applicable to the Company.

13. 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 ''Annexure D'' to this
report.

14. 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 E''.

15. Other disclosures

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

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

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

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

e) The Company has established a formal vigil mechanism named ''Rane
Whistle Blower Policy'' for reporting improper or unethical practices or
actions which are volatile 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 zero tolerance towards sexual harassment. The Company
has adopted a policy on prevention of sexual harassment of women at
work place and put in place proper mechanism across the Company. There
was no case reported during the year under review through this
mechanism.

For and on behalf of the Board

Chennai L GANESH L LAKSHMAN

May 27, 2016 Vice- Chairman Executive Chairman


Mar 31, 2013

The Directors take the pleasure in presenting the Seventy Seventh Annual Report together with the accounts for the year ended March 31, 2013.

1. Financial performance:

Your Company''s investment profile is as given below:-

Sl. Ownership of No. Name of investee company Products your Company

Subsidiary companies

1 Rane (Madras) Ltd. Manual steering and suspension systems 53.8%

2 Rane Engine Valve Ltd. Valves, valve guides, tappets 53.6%

3 Rane Diecast Ltd. Machined die cast products 78.7%

4 Rane Brake Lining Ltd. Brake linings, disc pads, composite brake blocs 42.5%

5 Rane Holdings America Inc. Providing business development services in North 100% American region for Rane Group Companies

Joint Venture companies

6 Rane TRW Steering Systems Ltd. Power steering systems and occupant safety systems 50.0%

7 Rane NSK Steering Systems Ltd. Solid and energy absorbing steering columns, 49.0% intermediary shafts, electric power assisted steering systems

8 JMA Rane Marketing Ltd. Distribution company for auto components (Rane 49.0% and others)

Associate companies

9 Kar Mobiles Ltd. Engine valves, collets and guides for internal 39.5% combustion engines

10 SasMos HET Technologies Ltd. Designing, prototyping and manufacturing electrical 26.0% inter-connection solutions, electronic design and integration for defense and aerospace applications

The Company''s income stream comprises of (i) dividend from the above investments, (ii) trademark fee for use of ''RANE'' trademark and (iii) service fee from the group companies for providing services in the areas of management, information technology, business development and infrastructure.

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

(Rs. in Crore)

Particulars 2012-13 2011-12

Income 57.73 63.91

Profit before tax 32.53 38.11

Provision for tax 6.58 3.86

Profit after tax 25.95 34.25

Surplus brought forward 62.58 47.23

Amount available for appropriation 88.53 81.48

During the year, income of your Company had reduced by 11% over that of the previous year. The earnings per share for the year 2012-13 was Rs.18.17 compared to last year Rs.23.99.

2. Appropriation

Taking into account Rs.62.58 crore being surplus of profit brought forward from previous year and the Profit after tax of Rs.25.95 crore, a sum of Rs.88.53 crore is available for appropriation as dividend. During the year, your directors have declared and paid an interim dividend at the rate of 35% (i.e., Rs.3.50 per equity share) on the equity capital for the year and have recommended a further 45% (i.e., Rs.4.50 per equity share) as final dividend, making for a total dividend of 80% for the year ended March 31, 2013. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs.12.67 crore. After transfer of Rs.2.59 crore to the General Reserve, Rs.73.27 crore has been retained as surplus in the Profit and Loss Account.

3. Management Discussion & Analysis

Your Company holds strategic investment in subsidiaries, joint ventures and associates (collectively called ''Rane Group'') engaged in the manufacturing and marketing of components for transportation industry and also provides management and other services to Rane Group. A detailed analysis of the automotive industry, group companies'' performance, etc. are discussed in a separate section in this Annual Report under the heading ''Management Discussion & Analysis''.

4. Consolidated financial statements

The following methodology as specified under applicable accounting standards have been applied in consolidating the financial results of the group companies in the consolidated financial results attached in the annual report:-

(a) Subsidiary companies - each line item of income, expenditure, assets and liabilities have been consolidated one hundred percent. Minority interests have been appropriately considered.

(b) Joint Venture companies - each line item of income, expenditure, assets and liabilities have been consolidated based on the percentage of share held in these companies.

(c) Associate companies - share in the profit after tax based on the percentage of share held has been consolidated.

The consolidated financial statements of the Company are prepared based on the audited financial statement of the subsidiary companies, joint-venture companies and associate companies, except in the case of JMA Rane Marketing Limited where the provisional accounts have been considered.

In accordance with the general exemption granted by Ministry of Corporate Affairs (MCA), New Delhi vide circular no.2/2011 dated February 8, 2011, the Company has not attached the financial statements of the subsidiary companies. However, the financial information of the subsidiary companies, duly audited by the auditors, are disclosed in this annual report.

As directed in the said circular, the Company undertakes to make available a soft or hard copy of the annual report and annual accounts of the subsidiary companies and the related detailed information to investors, as may be required by them, seeking such information at any point of time, on demand. The annual accounts of the subsidiary companies has been posted in the website of the Company viz. http://rane.in and also kept open for inspection by any investor at the registered office of the Company and that of the respective subsidiary companies. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary companies.

5. Fixed deposits

Your Company does not accept any deposit from public in terms of Section 58A of the Companies Act, 1956 and the rules framed thereunder.

6. Board of Directors

Mr. L Ganesh, director, retires from the Board by rotation and being eligible, has offered himself for re-appointment.

The notice convening the ensuing Annual General Meeting (AGM) includes the proposal for his re-appointment as director.

Mr. Krishnan S Waran, director, retires by rotation and does not seek re-election at the ensuing AGM. The Board records its appreciation for the valuable services rendered by Mr. Krishnan S Waran during his tenure as Director. The Board has decided not to fill-up the vacancy caused by the retirement of Mr. Krishnan S Waran at the ensuing AGM.

Mr Anil Kumar Nehru was co-opted to the Board during the year and would hold office up to the ensuing AGM of the Company. The Company has received notice signifying the intention to propose the appointment of Mr Anil Kumar Nehru as director of the Company, at the ensuing AGM.

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

7. Conservation of Energy and Natural resources

The Company is conscious of the imperative to protect environment and the natural resources for achieving sustainable economic growth and have started several initiatives in this regard such as conservation of energy and water and eco-friendly waste management systems.

8. Research and Development Activities

In view of the nature of activities of the Company, provisions of Section 217(1)(e) of the Companies Act, 1956 are not applicable.

9. Foreign exchange earnings and outgo

There was no foreign exchange earned during 2012-13.The foreign exchange outgo was Rs.1.09 crore on account of professional / consultancy charges and foreign travel.

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 ''A''.

11. Auditors

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

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

12. Directors'' Responsibility Statement

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

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

ii. Selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

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

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

13. Corporate Social Responsibility

The vision of Rane Group on Corporate Social Responsibility (CSR) is "To be a socially and environmentally responsive organization committed to improve quality of life within and outside." CSR activities of Rane Group are channelized through Rane Foundation, a public charitable and educational trust, in the social and environmental spectrum.

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

- Rane Polytechnic Technical Campus (RPTC)

- We have invested about Rs.10 crore over the last three years in establishing RPTC. For the academic year 2012-13, RPTC had 205 students in two disciplines viz. Mechanical and Civil Engineering.

- RPTC has also been approved by AICTE for offering an additional course of Mechatronics Engineering and increased intake for Mechanical Engineering. This takes the total intake capacity to 240 students per year.

- RPTC has been approved as one of the polytechnic colleges for the implementation of Canada India Institutional Cooperation Project (CIICP) by the State Project Coordination Unit established under DOTE.

- Under the CIICP umbrella, RPTC aims at offering a wide range of programs that meet the specific skill needs of the industry and community.

- Along with financial support, through collaborative efforts, specific and customized programs such as Student Psychology Management, Communication and Team building skills and IT utilization were organized for the teachers of Ganapathy Iyer Girls High School to enhance teaching effectiveness.

- We have delivered 100 man-hours to The Banyan helping with process improvement as well as lending expertise in competency enhancement to increase administrative efficiency.

- Provided financial and technical support to Kuppusamy Sastri Research Institute in digitizing their collection of rare manuscripts to preserve our rich literature and cultural heritage.

- Around 50 employees of the Rane Group along with their family members participated in The WIPRO Chennai Marathon TWCM 2012. TWCM partnered with United Way Chennai to support their efforts in the areas of education, health and livelihoods. Rane Group contributed towards this cause.

14. Corporate Governance Report

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

For and on behalf of the Board

Chennai L Lakshman L Ganesh

May 27, 2013 Executive Chairman Vice-Chairman


Mar 31, 2012

The Directors take the pleasure in presenting the 76th Annual Report together with the accounts for the year ended March 31, 2012.

1. Financial performance:

Your Company's investment profile is as given below:

Sl. Name of investee Products Ownership of No. company your Company

Subsidiary companies

1 Rane (Madras) Ltd. Manual steering and suspension systems 53.8%

2 Rane Engine Valve Ltd. Valves, valve guides, tappets 53.6%

3 Rane Diecast Ltd. Machined die cast products 78.7%

4 Rane Brake Lining Ltd. Brake linings, disc pads, composite brake blocs 41.6%

5 Rane Holdings America Inc. Providing business development services in North 100% American region for Rane Group Companies

Joint Venture companies

6 Rane TRW Steering Power steering systems and seat belt systems 50.0% Systems Ltd.

7 Rane NSK Steering Solid and energy absorbing steering columns, 49.0% Systems Ltd. intermediary shafts, electric power assisted steering systems

8 JMA Rane Marketing Ltd. Distribution company for auto component (Rane 49.0% and others)

Associate company

9 Kar Mobiles Ltd. Engine valves, collets and guides for internal 39.5% combustion engine.

10 Sas Mos HET Technologies Designing, prototyping and manufacturing 26.0% Pvt. Ltd. electrical inter-connection solutions, electronic design and integration for defense and aerospace applications.

The Company's income stream comprises of (i) dividend from the above investments, (ii) trademark fee for use of 'RANE' trademark and (iii) service fee from the group companies for providing services in the areas of management, information technology, business development and infrastructure.

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

(Rs.In Crores)

Particulars 2011 - 2012 2010 - 2011

Income 63.91 48.42

Profit on sale of Agricultural Land - 18.47

Profit before tax 38.11 43.14

Provision for tax 3.86 3.11

Profit after tax 34.25 40.03

Surplus brought forward 47.23 31.19

Amount available for appropriation 81.48 71.22

During the year, income of your Company increased by 32% over that of the previous year. The profit on sale of agricultural land of Rs18.47 crores contributed to higher profits in the previous year. The earnings per share for the year 2011-12 was Rs23.99 compared to last year Rs28.04.

2. Appropriation of Profit

Taking into account Rs47.23 crores being surplus of profit brought forward from previous year and the Profit after tax of Rs34.25 crores, a sum of Rs81.48 crores is available for appropriation as dividend. During the year, your directors have declared and paid an interim dividend at the rate of 60% (i.e., Rs6/- per equity share) on the equity capital for the year and have recommended a further 40% (i.e., Rs4/- per equity share) as final dividend, making for a total dividend of 100% for the year ended March 31, 2012. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs15.47 crores leaving the Company with retained profits of Rs66.01 crores. Out of the retained profits, a sum of Rs3.43 crores would be transferred to General Reserve account and the balance Rs62.58 crores would be retained as surplus profit in the Profit and Loss account.

3. Management Discussion & Analysis

Your Company holds strategic investment in subsidiaries, joint ventures and associates (collectively called 'Rane Group') engaged in the manufacturing and marketing of components for transportation industry and also provides management and other services to Rane Group. A detailed analysis of the automotive industry, group companies' performance etc. are discussed in a separate section in this Annual Report under the heading 'Management Discussion & Analysis'.

4. Investments

(a) SasMos HET Technologies Private Limited (SasMos)

During the year, your Company has acquired 26% shareholding in the equity capital of SasMos, a Bangalore based company engaged in designing, prototyping and manufacturing of electrical interconnection solutions, electronic design and integration for defense and aerospace applications. Mr L Ganesh and Mr Harish Lakshman, directors have been nominated by your Company to the board of SasMos.

(b) Rane Holdings America Inc., (RHAI)

Rane Holdings America Inc., (RHAI), was incorporated as a wholly owned subsidiary in Unites States of America, to anchor business development in North American region, for the Rane group companies. Your Company has invested USD 20,000 towards subscription of the entire equity capital of RHAI comprised in 20,000 shares of USD 1 each.

(c) Further Investments in Rane Diecast Limited (RDL)

To augment financial resources for operations and new projects, RDL raised further equity capital of Rs3.42 crores by way of rights issue. Your Company invested Rs2.70 crores by subscribing to the rights issue.

5. Consolidated financial statements

The following methodology as specified under applicable accounting standards have been applied in consolidating the financial results of the group companies in the consolidated financial results attached in the annual report:-

(a) Subsidiary companies - each line item of income, expenditure, assets and liabilities have been consolidated one hundred percent. Minority interests have been appropriately considered.

(b) Joint Venture companies - each line item of income, expenditure, assets and liabilities have been consolidated based on the percentage of share held in these companies.

(c) Associate companies - share in the profit after tax based on the percentage of share held has been consolidated.

The consolidated financial statements of the Company are prepared based on the audited financial statement of the subsidiary companies, joint-venture companies and associate companies, except in the case of JMA Rane Marketing Limited where the provisional accounts have been considered.

In accordance with the general exemption granted by Ministry of Corporate Affairs (MCA), New Delhi vide circular no.2/2011 dated February 8, 2011 the Company has not attached the financial statements of the subsidiary companies. However, the financial information of the subsidiary companies duly audited by the auditors are disclosed in this annual report.

As directed in the said circular, the Company undertakes to make available a soft or hard copy of the annual report and annual accounts of the subsidiary companies and the related detailed information to investors, as may be required by them, seeking such information at any point of time on demand. The annual accounts of the subsidiary companies has been posted in the website of the Company viz. http://rane.in and also be kept open for inspection by any investor at the registered office of the Company and that of the respective subsidiary companies. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary companies.

6. Fixed deposits

Your Company does not accept any deposit from public in terms of Section 58A of the Companies Act, 1956 and the rules framed there under.

7. Board of Directors

Mr. Harish Lakshman and Mr. Ravi Vira Gupta, directors, retire from the Board 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.

8. Conservation of Energy and Natural resources

Rane is conscious of the imperative to protect environment and the natural resources for achieving sustainable economic growth and have started several initiatives in this regard such as conservation of energy and water and eco-friendly waste management systems.

9. Research and development activities

In view of the nature of activities of the Company, provisions of Section 217(1)(e) of the Companies Act, 1956 are not applicable.

10. Foreign exchange earnings and outgo

There was no foreign exchange earned during 2011-12.The foreign exchange outgo was Rs1.11 crores on account of investment in wholly owned subsidiary, professional / consultancy charges and foreign travel.

11. 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 'A'.

12. Auditors

The Auditors, M/s Deloitte Haskins & Sells (DHS) 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 DHS to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. DHS has submitted the Peer Review Certificate issued to them by The Institute of Chartered Accountants of India.

13. Corporate social responsibility

The vision of Rane Group on Corporate Social Responsibility (CSR) is 'To be a socially and environmentally responsible corporate citizen.

The focus of Rane Group's social development initiatives has been in the three specific areas viz. (a) Education (b) Healthcare and (c) Community development.

CSR activities of Rane Group are channelized through Rane Foundation, a public charitable and educational trust. One of the major initiatives undertaken by Rane Foundation in the last two years was establishment of a self financed Polytechnic College named Rane Polytechnic Technical Campus in Sethurapatti Village, Tiruchirapalli, Tamil Nadu. Your Company extended financial support in the form of donation and interest free loans to this cause. Three of Rane's manufacturing units are located around this Village. The Polytechnic received approval from the All India Council of Technical Education (AICTE) and the Directorate of Technical Education, Tamilnadu, to start two courses, viz. Civil Engineering and Mechanical Engineering in the academic year 2011-12. The Vision of the Polytechnic is to turn out students with technical knowledge and industry specific skills at the end of their three year study and training so that they are readily employable by the industry.

14. 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.

15. Corporate Governance Report

The 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 'B'.

For and on behalf of the Board

Chennai L Lakshman L Ganesh

May 30, 2012 Executive Chairman Vice Chairman


Mar 31, 2011

Dear Members,

The Directors take the pleasure in presenting the 75th annual report together with the accounts for the year ended March 31, 2011.

1. Financial performance:

Your Company's investment profile is as given below:-

Ownership of Sl. Name of Investee Products your Company No. Company Subsidiary companies

1. Rane (Madras) Ltd. Manual steering and suspension systems 53.6%

2. Rane Engine Valve Ltd. Valves, valve guides, tappets 53.6%

3. Rane Diecast Ltd. Machined die cast products 78.7%

4. Rane Brake Lining Ltd. Brake linings, disc pads, composite brake blocs 41.6%

Joint Venture companies

5. Rane TRW Steering Systems Ltd. Power steering systems and seat belt systems 50.0%

6. Rane NSK Steering Systems Ltd. Solid and energy absorbing steering columns,intermediary shafts, electric power assisted steering systems 49.0%

7. JMA Rane Marketing Ltd. Distribution company for auto component (Rane and others) 49.0%

Associate company

8. Kar Mobiles Ltd. Engine valves for large marine / diesel engines,including electromotive application 37.4%



The Company's income stream comprises of (i) dividend from the above investments, (ii) trademark fee for use of 'RANE' trademark and (iii) service fee from the group companies for providing services in the areas of management, information technology, business development and infrastructure.

The financial highlights of the year under review are as follows: -

(Rs. million)

2010 - 11 2009 - 10

Income 484.21 451.41

Profit on sale of Agricultural Land 184.67 -

Profit before tax 431.37 273.87

Provision for tax 31.08 22.56

Profit after tax 400.29 251.31

Surplus brought forward 311.86 215.30

Amount available for appropriation 712.25 466.61



2. Appropriation

Profit available for appropriation is Rs.712.25 million. Your directors have declared and paid an interim dividend of 75% on the equity capital for the year ended March 31, 2011 and are pleased to recommend a further 50% as final dividend making for a total dividend for the year of 125%. The amount on this account inclusive of net tax on distributed profits and surcharge thereon, works out to Rs.202.40 million leaving the company with retained profits of Rs.512.35 million. Out of this, Rs.40.03 million is being transferred to the General Reserve and Rs.472.32 million being retained as surplus in the Profit and Loss Account.

3. Management Discussion & Analysis

The main activity of the Company is investing in Rane group companies that are engaged in the manufacture and marketing of auto components. The discussion and analysis of the automotive industry, group companies' performance etc. is given below:

a. Industry Structure and Developments:

Automotive Industry:

Volume Growth in %

Industry Segments 2010-11 2009-10

Passenger Cars 27 28

Utility Vehicles 17 24

Small Commercial Vehicles (One Ton & below) 36 8

Light Commercial Vehicles 22 77

Medium and Heavy Commercial Vehicles 38 30

Three Wheelers 29 25

Two Wheelers 27 25

Farm Tractors 22 27

Source: Society of Indian Automobile Manufacturers

Domestic

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 recovery in volumes from the later part of the year 2009 -10, continued in the year 2010 -11. The recovery of the US market helped increase in volumes and this complemented the growth in domestic volumes to help achieve higher sales performance.

The United States Dollar, the currency on which the Rane group companies mostly export, was relatively stable during the year. The strengthening of the rupee was marginal and the fluctuations were handled well with robust forex policy.

After market

Rane Group companies are significant players in the after market segment also. The after market growth during the previous year was more than fifteen percent.

b. Financial and operational performance

With a growth of 48% over that of the previous year, your Company's total income stood at Rs.668.88 million. The total income included Rs.184.67 million being profit on sale of agricultural land. Significant increase in sales of the group companies during last year resulted in your company earning an income from Trade Mark fee of Rs.108.68 million compared to Rs.78.65 million in the previous year. The service fee income had increased to Rs.197.54 million as against Rs.157.49 million in the previous year. The total dividend received during the year under review from the Group companies was Rs.156.02 million as against Rs.209.76 million reported in the previous year.

The profit after tax was Rs.400.29 million when compared to Rs.251.31 million in the previous year. The earnings per share registered a steep growth at Rs.28.04 over Rs.17.60 in the previous year.

c. Performance of Group companies

Rane Group companies operate in a single segment of manufacturing and marketing of automotive components such as steering linkages products, manual steering gears, power steering gears that includes both hydraulic and electric power assisted steering systems, steering columns, seat belts, brake linings and disc pads, engine valves etc.

An overview of the performance of Rane group companies during the year 2010 -11 is presented below:

(I) Subsidiary companies

i. Rane (Madras) Limited (RML)

RML grew by 39%, ending the year 2010 –11 with a sales and operating revenue of Rs.5,839.87 million. The operating profit for the year under review was Rs.308.37 million as against Rs.200.41 million in the previous year,representing an increase of 54%. Company's continued focus on cost controls and efficiency of operations at a higher level of volumes helped achieving a healthy profitability. The Company's effective hedging policy minimized currency fluctuation risk on realisation of export proceeds. Strong performance of RML pushed up the earnings per share to Rs.24.18 from Rs.13.59.

ii. Rane Engine Valve Limited (REVL)

With growth of 22% over that of the previous year, the sales and operating revenues of REVL were at Rs.2,884.54 million. The operating profit for the year under review was Rs.161.24 million as against Rs.70.01 million in the previous year, representing an increase of 130%. This was achieved not only due to a robust growth in sales but also effective cost reduction initiatives, consistent and stable output and a reasonably stable raw material cost trend for major part of the year. The earnings per share for the year 2010-11 steeply increased to Rs.20.97 from Rs.8.35 during the previous year.

iii. Rane Brake Lining Limited (RBL)

RBL registered a strong growth of 29% over the previous year, with the sales and operating revenues at Rs.3,058.41 million. The operating profit for the year under review was Rs.196.66 million as against Rs.149.33 million for the previous year. The impact of higher input costs were contained with cost control measures and improved operational efficiencies. The earnings per share for the year 2010-11 was Rs.19.31 as against Rs.12.78 in the previous year.

iv. Rane Diecast Limited (RDL)

The sales was Rs.407.50 million, higher compared to the previous year by 87%. The loss before tax for the year was Rs.53.94 million as against loss before tax of Rs.47.81 million in the previous year due to increase in repairs and maintenance costs, power & fuel cost and premium freight. In recognition of its production capabilities RDL has received export orders, execution of these orders commenced during the last quarter of this year. The volume of exports are expected to be significantly higher in the next year and with productivity improvement & cost rationalization measures, the Company is expected to turn profitable in the near term.

(II) Joint Venture companies

i. Rane TRW Steering Systems Limited (RTSSL)

The sales and operating revenue of RTSSL grew by 43% over the previous year to Rs.5,752.48 million. Due to the healthy increase in sales, the profit before tax increased from Rs.613.68 million to Rs.721.08 million registering an increase of 18%. Although the profits of the Company was affected due to higher delivery costs, the continued focus on cost controls and efficiency of operations at a higher level of volumes helped in achieving an healthy profitability.

ii. Rane NSK Steering Systems Limited (RNSSL)

Consequent to the introduction of NSK designed Electric Power assisted Steering system (EPS) during 2008, your Company signed a new joint venture agreement with NSK Ltd., Japan (NSK). Taking cognizance of the changing dynamics of the market, technology advancement in the Indian Auto component industry and for providing better service to customers, your Company had transferred 1% of shareholding in RNSSL to NSK. Accordingly, the shareholding of your Company in RNSSL has become 49%. Majority shareholding in the Company held by NSK will enhance its commitment to the Indian market, its global customers and would facilitate quicker response to customer needs in terms of value added products and latest technology.

The sales and operating revenue of RNSSL has marginally increased by 8% to Rs.1,758.60 million. The loss before tax for the year 2010-11 was Rs.33.17 million as against profit before tax of Rs.81.47 million in the previous year. One of the main causes for the loss, apart from the loss of contribution on account of reduced sales of electrically power assisted steering systems, was on account of incurrence of premium freight primarily due to inability of RNSSL's suppliers to supply child parts on time. Another contributing factor was the lag in implementation of cost savings projects due to delay in obtaining customer approval.

iii. JMA Rane Marketing Limited (JMA Rane)

JMA Rane is a joint venture company between your Company and Jallundur Motor Agency Company Ltd. JMA Rane is a trading company dealing with automobile components. The provisional accounts of JMA Rane for the year ended March 31, 2011 has been used for consolidation. During the year under review, the sales of JMA Rane increased to Rs.504.97 million from Rs.445.27 million in the previous year. The profit before tax was Rs.34.47 million which was a marginal reduction from that of Rs.35.28 million in the previous year. This was mainly due to mix and pressure on price realisations.

(III) Associate company

Kar Mobiles Limited (KML)

The sales and operating revenue of KML at Rs.959.37 million is an increase of 15% over that of the previous year. The Profit Before Tax for the current year was Rs.47.76 Million as against Rs.44.43 million in the previous year. Remedial measures taken by the Company to mitigate exchange risk, implement productivity and yield improvement projects to contain employee and raw material costs have resulted in the marginal increase in the Profit Before Tax. The earnings per share for the current year was Rs.13.99 as against Rs.13.07 during the previous year.

d. Outlook

The domestic automotive industry is expected to continue its growth in the coming years in view of steady growth rate of our GDP, rising number of middle class and higher disposable income. With a favourable forecast of the monsoon, Farm Tractors segment is likely to continue its growth and would be closely monitored for timely ramping up of capacity.

Prices of commodities like steel, aluminum have already hardened and the cascading effect would impact on all commodity prices.

Focus on capacity utilisation, optimal cost structure, quality and productivity is the key to sustain and improve the higher levels performance. The contracts remaining to be executed on capital account will result in enhancement of our capacity to meet the customer demand.

Increase in the interest rates and tightening in the liquidity in the market could moderate the buoyancy in the growth seen hitherto.

e. Strengths, opportunities, threats and risks

Rane Group's strength continues in areas of:-

- Market Leadership

- Brand Equity

- Human Resources

- Total Quality Management (TQM)

and the group would strive in its efforts to develop and improve in these areas of its strengths.

India's process engineering skills applied to the redesigning of production processes, raw material availability, quality assurance and availability of technically skilled manpower has provided a distinct global advantage of cost and quality. On these strengths, India has become not only a major auto components outsourcing hub for several automobile manufacturers but also made global OEMs' to set up and make their Indian operations the hub for global supply. All these have provided your company opportunity for accelerated growth.

The preparedness in development of new products and meeting capacity requirements in time are key in realising the full benefits of the opportunity.

The main threats to which auto component industry is exposed to are:-

- increasing price pressure from OEMs from whom the major portion of the future growth is likely to come,

- increase in commodity prices arising out of natural calamities in Japan and Australia and political instability in certain parts of the world,

- volume increase that requires ramp up of capacities in a short span of time, affecting profitable growth,

- dumping of Chinese products.

f. Internal control systems and risk management

An independent agency carries out internal audit of all the Company locations across the country. The Audit Committee of the Board approves the audit plan in the beginning of the financial year in consultation with the internal auditors, the statutory auditors and the operating management. The findings of the internal auditors are placed before the Audit Committee for review. The response of the operating management and counter measures proposed are discussed at the Audit Committee meetings. The process not only seeks to ensure the reliability of control systems and compliance with laws and regulations but also covers resources utilization and system efficacy.

Risk Management is an integral part of the business process. The Company has mapped the risks at the business processes and enterprise levels and has evolved a risk management framework. Internal audit focuses on these risks at all sub-process levels. Mitigative measures have been put in place in respect of these risks. These would be periodically reviewed by the Board of Directors.

g. Human resource development and industrial relations

Your Company gives significant importance to Human Resource Development (HRD) and stable industrial relations. The management is continuously working on the development of human capital which is very vital for achieving the goals and realizing the Vision of the Company in an ever-changing and challenging business environment. “Rane Institute for Employee Development” is a group resource that imparts training for enhancing leadership and managerial skills. On an average each employee across all segments and divisions is trained for 2% of their working time.

Total Employee Involvement is a key element of Total Quality Management (TQM) that enables continuous improvement to all business processes. New strategies like multi-skilling, competency enhancement programs and enhancing managerial depth are being progressively implemented to optimise employee costs and improve productivity.

In our journey towards becoming an Employer of Choice, your Company is implementing a number of initiatives. The Company conducts regular Employee Opinion Surveys, the outcome of which is shared with the employees, deliberated and acted upon. Specific HR initiatives are rolled out to enhance employee engagement. During the year a unique Strategic Leadership Program was co-created with and delivered by Indian Institute of Management, Bangalore for the leadership team of your company.

Rane Group won the prestigious National Award for “Excellence in Training” from the Employer Branding Institute and figures in the top forty Best Employers for the year 2010 -11.

As at the end of March 31, 2011, the total number of employees stood at 62.

h. Cautionary statement

The information and opinion expressed in this report may contain certain forward looking statements, which the management believes are true to the best of its knowledge at the time of its preparation. Actual results may differ materially from those either expressed or implied in this report.

4. Consolidated financial statements

The following methodology as specified under applicable accounting standards have been applied in consolidating the financial results of the group companies in the consolidated financial results attached in the annual report:-

a. Subsidiary companies – each line item of income,expenditure, assets and liabilities have been consolidated one hundred percent. Minority interests have been appropriately considered.

b. Joint Venture companies – each line item of income, expenditure, assets and liabilities have been consolidated based on the percentage of share held in these companies.

c. Associate company – share in the profit after tax based on the percentage of share held has been consolidated.

The Ministry of Corporate Affairs (MCA), New Delhi, vide general circular No. 2/2011 dated February 8, 2011, has granted a general exemption to companies from attaching the subsidiaries' financial statements, subject to complying with conditions stated in the circular. In reply to the application made by the company ahead of this general exemption, the company also received a specific confirmation from MCA vide letter No.47/171/ 2011-CL-III dated February 15, 2011 referring the general exemption and directing compliance with the same.

Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company.

Financial Information of the subsidiary companies, duly audited by the auditors, as required by the said circular, is disclosed in the Annual Report. The Company undertakes that it will make available a soft or hard copy of the annual report and annual accounts of the subsidiary companies and the related detailed information to investors, as may be required by them, seeking such information at any point of time on demand. The annual accounts of the subsidiary companies will be posted in the website of the Company viz. http://rane.in and also be kept open for inspection by any investor at the registered office of the Company and that of the respective subsidiary companies. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary companies.

5. Fixed deposits

Your Company does not accept any deposit falling under the provisions of Section 58A of the Companies Act, 1956 and the rules framed there under.

6. Board of Directors

Mr. Krishnan S Waran and Mr. Shujaat Khan retire by rotation and being eligible, offer themselves for reappointment.

Mr. Anjanikumar Choudhari was co-opted as an Additional Director by the Board of Directors at the meeting held on October 27, 2010. He holds office up to the ensuing Annual General Meeting. Notice has been received from a shareholder signifying the intention to propose the appointment of Mr. Anjanikumar Choudhari as Director of the Company at the ensuing Annual General Meeting.

During the year, subject to approval of shareholders at the ensuing annual general meeting, Mr. L Lakshman was re-appointed as Managing Director of the Company in the designation of Executive Chairman and Mr L Ganesh was re-appointed as Joint Managing Director of the Company in the designation of Vice-Chairman, for a period of three years with effect from April 1, 2011.

7. Conservation of energy, research and development activities

In view of the nature of activities of the Company, provisions of Section 217(1)(e) of the Companies Act, 1956 are not applicable.

8. Foreign exchange earnings and outgo

There was no foreign exchange earned during 2010-11. The foreign exchange outgo was Rs.13.40 million on account of professional / consultancy charges and foreign travel.

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 'A'.

10. Auditors

M/s D Rangaswamy & Co., Chartered Accountants, Chennai and M/s Deloitte Haskins & Sells, Chartered Accountants, Chennai, the Joint statutory auditors of the Company retire at the ensuing Annual General Meeting. M/s D Rangaswamy & Co., have expressed a desire to relinquish the audit. Your directors wish to place on record appreciation of the services rendered by them during their association with the company.

M/s Deloitte Haskins & Sells have expressed their willingness to continue as statutory auditors of the company. The company has received letter from them to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

11. Corporate Social Responsibility (CSR)

The vision of Rane Group on Corporate Social Responsibility (CSR) is “To be a socially and environmentally responsible corporate citizen.”

Education, Healthcare and Environment are the core themes of Rane's CSR programmes.

CSR activities of Rane Group are channelized through Rane Foundation, a public charitable and education trust. As a major step in the field of education, Rane is establishing an Engineering Polytechnic College in Tiruchirapalli.

Rane's environment conservation and sustainability initiatives include wind power generation, water conservation and waste management.

12. Directors' responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors here by 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 Governance Report

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

For and on behalf of the Board

L Lakshman Executive Chairman

L Ganesh Vice - Chairman

Chennai May 30, 2011


Mar 31, 2010

The Directors have pleasure in presenting their 74th annual report together with the accounts for the year ended March 31, 2010.

1. Financial performance:

Your Company has investments in Rane group companies which are in the auto components Industry. Your Company has invested in the following companies:-

Sl. Name of investee Products Ownership of your Company company No.

Subsidiary companies

1. Rane (Madras) Ltd. Manual steering and suspension systems 53.5%

2. Rane Engine Valve Ltd. Valves, valve guides, tappets 53.5%

3. Rane Diecast Ltd. Machined die cast products78.7%

4. Rane Brake Lining Ltd. Brake linings, disc pads, composite brake blocs 41.6%

Joint Venture companies

5. Rane TRW Steering Systems Ltd. Power steering systems and seat belt systems 50.0%

6. Rane NSK Steering Systems Ltd. Solid and energy absorbing steering columns, intermediary shafts, electric power assisted steering systems 50.0%

7. JMA Rane Marketing Ltd. Distribution company for auto component (Rane and others) 49.0%

Associate company

8. Kar Mobiles Ltd. Engine valves for large marine / diesel engines, including electromotive application 37.4%

Your Companys income comprises of dividend from these investments, trademark fee from the group companies for use of the RANE trademark and fee from the group companies for management, information technology, business development and infrastructure services provided by your Company.

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

(Rs. million)

2009-10 2008-09

Income 451.44 349.67

Profit before tax 273.87 182.85

Provision for tax 22.56 19.89

Profit after tax 251.31 162.96

Surplus brought forward 215.30 125.75

Amount available for appropriation 466.61 288.71

Your Company derived income for the year 2009-10 mainly from a) Dividend income of Rs.210 million (previous year Rs.124 million) from investments in group companies which are all in the Auto Components Industry b) Service fees of Rs.157 million (previous year Rs.145 million) for rendering corporate services to the entire group companies consisting of Finance, HR, Secretarial and Information Technology including maintaining ERP etc; and c) Trade mark fee of Rs.79 million (previous year Rs.64 million) for using the trademark “Rane” by group companies.

2. Appropriation

Profit available for appropriation is Rs.466.61 million. Your directors have declared and paid an interim dividend of 60% on the equity capital for the year ended March 31, 2010 and are pleased to recommend a further 20% as final dividend making for a total dividend for the year of 80%. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs.129.62 million leaving the company with retained profits of Rs.336.99 million. Out of this, Rs.25.13 million is being transferred to the General Reserve and Rs.311.86 million being retained as surplus in the Profit and Loss Account.

3. Management Discussion & Analysis

Since the main activity of the Company is investing in Rane group companies engaged in the auto components Industry, the discussion and analysis mainly of the automotive industry, group companies performance etc. would be relevant.

The domestic market continues its strong recovery which started in January 2009. Heavy and Light Commercial Vehicle segments recovered strongly in the second half of the year. The Passenger Cars continued to do extremely well and had a record year. The Farm Tractors achieved its highest ever production in the current financial year.

The aftermarket continued to be very robust during the year.

For Exports, the year was difficult due to the effects of slowdown in the US and European markets. Besides lower consumption, there were inventory corrections by customers. There were some signs of improvement from December 2009.

b. Financial and operational performance

Your Companys total income at Rs. 451 million represents a growth of 30% over that of the previous year. Service fees had increased from Rs. 145 million to Rs. 157 million. Trade Mark fee had increase from Rs. 64 million in the previous year to Rs.79 million for 2009-10 due to increase in sales of the group companies. Dividend from Group companies increased to Rs.210 million from Rs. 124 million in the previous year.

The profit after tax at Rs. 251 million was higher by Rs. 88 million compared to the previous year. The earnings per share at Rs. 17.60 were higher than previous years figure of Rs. 11.41.

c. Performance of Group companies

All of your Companys investments are strategic and long term in nature and are exclusively in the Rane Group of companies. These companies in turn operate in the domain of manufacturing and marketing of automotive components such as steering linkages, steering gears (manual and power), steering columns, seat belts, brake linings and disc pads, engine valves, etc.

A brief performance review of the subsidiary, joint ventures and associate companies for the year 2009-10 are as follows:

(I) Subsidiary companies

i. Rane (Madras) Limited (RML)

Sales and Operating Revenues at Rs.4,197 million represents a growth of 19%. This is mainly due to the increases in sales in all segments other than exports. The operating profit for the year under review was Rs.200.41 million as against Rs.12.01 million in the previous year. This was achieved not only due to a robust growth in sales but also effective cost reduction initiatives and a reasonably stable raw material cost situation. Compared to the previous year the foreign exchange volatility was also far less

which helped the performance. As a result of the good performance, the earnings per share has gone up from Rs.0.36 per share to Rs.13.59 per share.

ii. Rane Engine Valve Limited (REVL)

Sales and operating revenues at Rs.2,360 million represents a growth of 7% over that of the previous year. This was due to increase in the sales in all segments other than stationary engines and exports. The operating profit for the year under review was Rs.70.01 million as against Rs.39.12 million in the previous year. The cost reduction measures including rationalizing manpower, more efficient management of working capital including reduction of inventory, reduced capital expenditure in order conserve liquidity etc. taken by REVL last year continued this year and these were responsible for improvement in the Profits. The earnings per share for the current year was Rs.8.35 as against Rs. 4.29 during the previous year.

During the year, REVL added two state of the art manufacturing lines in its plant in Trichy for manufacture of Engine Valves. These investments will contribute to increase in sales during the fiscal 2010–11.

iii. Rane Brake Lining Limited (RBL)

The shareholders had approved an amendment to the Articles of Association of RBL, which authorizes, your Company to appoint majority of the Board of Directors of RBL. As a result, RBL has become a board controlled subsidiary of your Company.

The sales and operating revenues of RBL at Rs.2,363 million had increased by 23% over that of the previous year. All the product segments witnessed healthy growth of over the previous year except that for institutional sales, which had a very marginal decline. The operating profit for the year under review was Rs.149 million as against Rs.43 million for the previous year.

The state of the art expansion project in Trichy that was completed in the previous year with the technical assistance from Nisshinbo Brakes Inc., Japan played a significant role in the increased business during the current year.

iv. Rane Diecast Limited (RDL)

During the year under review, the sales was Rs.217 million and was lower compared to the previous year by 11% primarily due to slow down in the export market. RDL however reduced its losses by efficient management of raw material costs. RDL also implemented productivity improvement & cost rationalization measures. The export market is showing signs of revival and RDL is expected to turnaround during the fiscal 2010 -11.

v. Rane Investments Limited (RIL)

In terms of the scheme of merger approved by the Madras High Court, RIL, a wholly owned subsidiary of your Company was merged with your Company effective April 1, 2009. RIL held 50% equity in Rane TRW Steering Systems Limited, a joint venture company with TRW Automotive JV LLC, USA and together with your Company, 50% in Rane NSK Steering Systems Limited, another joint venture company established with NSK Ltd., Japan. Apart from these, RIL also held some investments in group companies Rane Engine Valve Limited and Rane Brake Lining Limited. In terms of the Court Order all assets and liabilities of RIL have been transferred and vested with your Company.

II) Joint Venture companies

i. Rane TRW Steering Systems Limited (RTSSL) The sales and operating revenue of RTSSL at Rs.4,058 million is an increase of 38% over that of the previous year. The OEM market grew by 18%, the aftermarket sales grew by 12% and exports grew by 88%. Due to the healthy increase in sales, the profit before tax increased from Rs.312 million to Rs.614 million i.e., an increase of 97%.

ii. Rane NSK Steering Systems Limited (RNSSL) The sales and operating revenue of other joint venture company, RNSSL had increased by 111% over the previous year primarily due to increase in volumes of all the customers. As a consequence of this increase RNSSL earned a profit before tax of Rs.82 million as against a loss of Rs.17 million.

iii. JMA Rane Marketing Limited (JMA Rane) JMA Rane trades in automobile components and the provisional accounts of this JMA Rane for the year ended March 31, 2010 has been used for consolidation. The sales increased to Rs.445 million as against Rs.378 million for the previous year. The profit before tax improved from Rs.23 million in the previous to Rs.33 million during the current fiscal.

III) Associate company

Kar Mobiles Limited (KML)

The adverse situation in the export markets impacted KMLs sales being lower by 14% compared to that of the previous year. While the aftermarket sales improved by 27%, export sales declined by 40% over that of the previous year. Despite this drop in sales, KMLs profit before tax increased from Rs.15 million to Rs.44 million primarily due to significant savings in the raw material and other costs. The slow but certain revival in the export market is expected to increase the sales in the fiscal 2010-11.

d. Outlook

Domestic market is expected to continue its strong growth. Passenger Car and Two wheelers are expected to register significant growth with new products launches. Light and Heavy commercial vehicles and tractors are expected to continue its growth momentum although at a lower rate. The Aftermarket demand continues to be strong.

Export market, which has also shown positive signs, is likely to improve further in the current year and your company is well placed to further grow in this segment.

Prices of commodities like steel and oil have started hardening but the general expectation is that the increases will be moderate. The recent trend of strengthening of the Indian currency is causing concern. The continuance of subsidised exports from China and the maintenance of artificial peg on their currency could adversely affect Indian exports in the medium term.

All Rane group companies will continue to focus on improving productivity and quality besides cost reduction initiatives to sustain the improved performance.

e. Strengths, opportunities, threats and risks

Rane Group companies would continue to improve their

strengths in areas of:- Market Leadership Brand Equity Human Resources Total Quality Management (TQM).

The manufacturing facilities already established in India by auto majors, their commitment to increase the capacity as well as the interest shown by other global auto manufactures to set up facilities in India and to make the Indian operations the hub for global supply are opportunities that Rane group would make use for growth.

The main threats are as follows:- - Dumping from China and cheaper imports from other low cost countries.

- Strengthening of Rupee affecting exports.

- More competition since there are no growth opportunities for MNCs elsewhere.

f. Internal control systems and risk management Your Company continues to engage the services of an

independent agency to carry out internal audit of all the Company locations across the country. The Audit Committee of the Board approves the audit plan in the beginning of the financial year in consultation with the internal auditors, the statutory auditors and the operating management. The findings of the internal auditors are placed before the Audit Committee for review. The response of the operating management and counter measures proposed are discussed at the Audit Committee meetings. The process not only seeks to ensure the reliability of control systems and compliance with laws and regulations but also covers resources utilization and system efficacy.

Risk Management is an integral part of the business process. The Company has mapped the risks at the business processes and enterprise levels and has evolved a risk management framework. Mitigative measures have been put in place in respect of these risks. These would be periodically reviewed by the Board of Directors.

g. Human resource development and industrial relations

Your Company attaches significant importance to Human Resource Development (HRD) and harmonious industrial relations. The management is continuously working on the development of human capital which is very vital for achieving the goals and realizing the Vision of the Company in an ever- changing and challenging business environment. “Rane Institute for Employee Development” is a group resource that imparts training for enhancing leadership and managerial skills. On an average each employee across all segments and divisions has undergone 5 days of training during the year.

Total Employee Involvement is at the core of Total Quality Management (TQM) that enables continuous improvement to all business processes. The Company conducts regular Employee Opinion Surveys, the outcome of which is shared with the employees, deliberated and acted upon. Specific HR initiatives are rolled out to improve employee engagement. New strategies like multi skilling, competency enhancement programs and enhancing functional and domain depth and managerial bandwidth are being progressively implemented to optimise employee costs and improve productivity.

The total number of employees on the rolls of your Company is 51.

h. Cautionary statement

The information and opinion expressed in this report may

contain certain forward looking statements, which the management believes are true to the best of its knowledge at the time of its preparation. Actual results may differ materially from those either expressed or implied in this report.

4. Consolidated financial statements

The following methodology as specified under applicable accounting standards have been applied in consolidating the financial results of the group companies in the consolidated financial results attached in the annual report:- 1. Subsidiary companies – each line item of income, expenditure, assets and liabilities have been consolidated one hundred percent. Minority interests have been appropriately considered.

2. Joint Venture companies – each line item of income, expenditure, assets and liabilities have been consolidated based on the percentage of share held in these companies.

3. Associate company – share in the profit after tax based on the percentage of share held has been consolidated.

The Ministry of Corporate Affairs, New Delhi, vide order no. 47/158/2010- CL-III dated March 15, 2010, has granted approval that the requirement to attach various documents in respect of the subsidiary companies, as set out in Sub-section (1) of Section 212 of the Companies Act, 1956, shall not apply to the Company. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company.

Financial Information of the subsidiary companies, as required by the said order, is disclosed in the Annual Report. The Company undertakes that it will make available the hard copy of the annual report and annual accounts of the subsidiary companies and the related detailed information to investors seeking such information at any point of time on demand. The annual accounts of the subsidiary companies will be posted in the website of the Company viz. http://rane.in and also be kept open for inspection by any investor at the registered office of the Company and that of the respective subsidiary companies. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary companies.

5. Fixed deposits

Your Company has not accepted any deposit falling under the provisions of Section 58A of the Companies Act, 1956 and the rules framed thereunder.

6. Board of Directors

Mr. L Ganesh and Mr. V Narayanan retire by rotation and being eligible, offer themselves for reappointment.

During the year, Mr. L Ganesh was appointed as Joint Managing Director of the Company in the designation of Vice-Chairman. Mr. D Vijay Mohan resigned from the board of the Company. The board places on record its appreciation for the services rendered by him during his tenure as director in the Company.

7. Conservation of energy, research and development activities

In view of the nature of activities of the Company, provisions of Section 217(1)(e) of the Companies Act, 1956 are not applicable.

8. Foreign exchange earnings and outgo

There was no foreign exchange earned during 2009-10. The foreign exchange outgo was Rs. 7.28 million on account of professional / consultancy charges and foreign travel.

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 A.

10. Auditors

M/s D Rangaswamy & Co., Chartered Accountants, Chennai, the auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. In view of the proposed implementation of the International Financial Reporting Standards (IFRS) your directors recommend the appointment of Deloitte Haskins & Sells, a Chartered Accountants firm of international repute, also as auditors of the Company from the financial year 2010-11 to conduct joint audit. The Company has received letters from each of them to the effect that their appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956.

11. Corporate social responsibility

The vision of Rane Group on Corporate Social Responsibility (CSR) is, “To be a socially and environmentally responsive organization committed to improve quality of life within and outside”.

CSR activities of the Group are channelized through Rane

Foundation, a public charitable and educational trust. These initiatives in the social and environmental spectrum are classified as below:- Education Promotion of Education at all levels within organisation

Regular and ongoing interaction with Educational institutions

High School for Girls

Rural Education at plant locations

During the year under review, Rane Foundation has embarked on a project of setting up a Polytechnic College near Trichy in the state of Tamilnadu with contributions from Rane group companies. The first academic year is expected to commence from June 2011.

Healthcare Occupational health & safety

Promotion of health consciousness within organisation

Promotion of Rural health at Plant locations

Empowerment of Women Promotion of Women employment

Promotion of Women Self Help Groups (SHG) at Plant locations

Water Conservation and Harvesting Rain water harvesting at Plants

Water Conservation

Percolation / Irrigation tanks Check/stop dams

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 Governance Report

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

For and on behalf of the Board

Chennai

Lakshman L Ganesh

May 28, 2010 Executive Chairman Vice Chairman

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