Your Board of Directors hereby present to you the Eighteenth Annual Report covering the
operational and financial performance together with the accounts for the year ended March
31, 2023 and other prescribed particulars:
1. State of Companys affairs
The financial year 2022-23 saw a pick-up in the business at the backdrop of a robust
growth of the Indian and global economy. The automotive and auto components industry faced
supply chain challenges due to semiconductor shortage, shipping and logistics constraints.
The Company scaled up the production in line with the demand and worked on several cost
optimization measures to mitigate the inflationary environment. The Company continued to
enhance its customer relationship and increased the volume of business across several
customers resulting in augmented customer base.
1.1. Financial Performance
The financial highlights of the year under review are as follows:
Particulars |
2022-23 |
2021-22 |
| Revenue from Operations |
598.80 |
505.55 |
| Other Income |
8.27 |
12.64 |
| Profit / loss before Depreciation, Finance |
|
|
| Costs, Exceptional items and Tax |
64.63 |
56.77 |
| Expense |
|
|
Less: Depreciation / Amortisation / Impairment |
20.00 |
21.42 |
Profit / loss before Finance Costs, Exceptional items and Tax Expense |
44.63 |
35.35 |
| Less: Finance Costs |
0.05 |
0.02 |
Profit / loss before Exceptional items and Tax Expense |
44.58 |
35.33 |
| Add / (less): Exceptional items |
- |
(0.66) |
| Profit / (loss) before Tax Expense |
44.58 |
34.67 |
| Less: Tax Expense (Current & Deferred) |
11.12 |
7.60 |
| Profit / (loss) for the year (1) |
33.46 |
27.07 |
| Total Comprehensive Income / (Loss) (2) |
0.34 |
(0.33) |
Total (1+2) |
33.80 |
26.74 |
| Balance of profit / (loss) for earlier years |
70.57 |
63.56 |
| Less: Transfer to Reserves |
5.80 |
- |
| Less: Dividend paid on Equity Shares |
(15.46) |
(19.32) |
| Less: Tax on Buyback of Shares |
- |
(0.41) |
| Balance carried forward |
83.11 |
70.57 |
The Key Performance Indicators, operational performance and summary on balance sheet
are furnished in page no. 1 of this annual report.
The Sales and other Operating Revenue for the FY 2022-23 increased by 17.15%
while the Profit Before Tax increased by 28.58% when compared to previous year. The
Earnings Per Share for the year 2022-23 was 43.29 as against 35.03 in the previous year.
The Company continues to be a subsidiary of Rane Holdings Limited (RHL / Holding
Company). There were no material changes or commitments, affecting the financial position
of the Company between the end of the financial year of the Company and date of this
report, apart from those disclosed in the financial statements section of this Annual
Report. There was no change in nature of business during the year.
1.2. Appropriation
The Board of Directors, taking into consideration, the operational performance and
financial position of the Company, have recommended a dividend of 250% (i.e., 25/- per
share of 10/- each, fully paid-up) for approval of shareholders at the ensuing 18th
Annual General Meeting (AGM) scheduled to be held on July 24, 2023. The total dividend
paid / payable on equity shares for FY 2022-23 would be 19.32 Crores.
On declaration of the dividend by the shareholders, it will be paid on August 03, 2023
to all the eligible shareholders, whose name appears in the register of members of the
Company as on July 17, 2023, being the Record Date fixed for this purpose, subject to
deduction of tax at source whereever applicable. The total of dividend paid / payable for
the FY 2022-23 would be 25/- per equity share of a face value of 10/- each. This
represents a payout ratio of 58%.
Considering the above, the Board has retained 83.11 Crores as surplus in the profit
and loss account. A sum of 44.44 Crores_ has been proposed by the Board to transfer
to_reserves.
Thedividendpay-outisinaccordancewiththeCompanys Dividend Distribution Policy. The
policy is available in the policies section of the Companys website at:
https://ranegroup.com/investors/rane-brake-lining-limited/.
1.3. Credit Rating
The Companys financial management and its ability to service its financial obligations
in a timely manner, has been re-affirmed by ICRA Limited for its credit facilities during
the year under review and this has been disclosed to stock exchanges and made available in
the Companys website. The Corporate Governance section of this Annual Report carries the
details of credit rating.
1.4. Share Capital
During the year under review, there was no change in capital structure of the Company
and as at the year ended March 31, 2023, the paid-up capital of the Company stood at
7,72,98,710/- consisting of 77,29,871 shares of 10/- each.
1.5. Management Discussion & Analysis
The business of your Company is manufacturing and marketing of auto components for
transportation industry viz., friction material (Disc Pads, Brake Shoes, Clutch Facings,
Clutch Buttons, Brake Linings and Brake Blocks). The analysis on the performance of the
industry, the Company, internal control systems, risk management are presented in the
Management Discussion and Analysis report forming part of this report and are provided in ‘Annexure
A.
1.6. Subsidiaries, Associate and Joint Venture Companies
The Company does not have any subsidiary, associate or joint venture. There was no
Company which has become or ceased to be Companys subsidiary, Joint venture or associate
during the financial year 2022-23.
2. Board of Directors, Committees and Management 2.1. Composition
The composition of the Board of Directors and its Committees, viz., Audit Committee,
Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate
Social Responsibility Committee and Risk Management Committee are constituted in
accordance with Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (SEBI LODR), wherever applicable. The Board of Directors
have also constituted an Executive Committee, and a Finance Committee. The Corporate
Governance Report given in ‘Annexure E contains an overview of the role,
terms of reference, meetings and composition of the Board of Directors of the Company and
its Committees.
The following were the changes in the composition of the Board of Directors and its
Committees: a. Mr. S Sandilya (DIN:00037542), Independent Director & Mr. Anil Kumar V
Epur (DIN:00202454), Independent Director ceased to be directors on completion of their
second term as Independent Directors of the Company at the 17th AGM held on
June 28, 2022. b. Mr. C N Srivatsan (DIN:00002194) was appointed as an Independent
Director by the Shareholders of the Company at its 17th AGM held on June 28,
2022 for a term of 5 (five) consecutive years, with effect from June 28, 2022 upto the
conclusion of the 22nd Annual General Meeting or June 27, 2027, whichever is
earlier. c. Mr. Ashok Malhotra (DIN:00029017) was appointed as an Independent Director by
the Shareholders of the Company at its 17th AGM held on June 28, 2022 to hold
office with effect from June 28, 2022, upto October 08, 2024.
The Board of Directors are of the opinion that the Director(s) proposed for appointment
/ re-appointment at the ensuing 18th AGM of the Company possess integrity,
necessary expertise, relevant experience and proficiency and the Corporate Governance
Report annexed to this report contains necessary disclosures regarding the Director(s).
The terms and conditions of appointment of Independent Directors have been disclosed in
the policies section of the website of the Company at:
https://ranegroup.com/investors/rane-brake-lining-limited/. All the Directors have
affirmed compliance with the Code of Conduct of the Company. The Independent Directors
have further affirmed that they satisfy the criteria laid down under section 149(6) of the
Companies Act, 2013 (Act) and Regulation 25 and other applicable regulations of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), as
amended from time to time. Further, in terms of Section 150 of the Companies Act, 2013
read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules,
2014, Independent Directors of the Company have confirmed that they have registered
themselves with the databank maintained by the Indian Institute of Corporate Affairs
(IICA) and have qualified the proficiency test, if applicable to them. The Board of
Directors at its first meeting of the FY 2022-23 has taken on record the declarations and
confirmations submitted by the Independent Directors. During the year, the Board had not
appointed any person as an Alternate Director for an Independent Director on the Board.
The Company has obtained a certificate from a Company Secretary in Practice that none of
the Directors on the Board of the Company has been debarred or disqualified from being
appointed or continuing as Directors of companies by the SEBI / Ministry of Corporate
Affairs or any such statutory authority.
2.2. Retirement by rotation
Mr. Yasuji Ishii (DIN:08078748) retires by rotation at the ensuing 18th AGM,
being eligible, he offers himself for re-appointment. The proposal for re-appointment of
Mr. Yasuji Ishii as a Director is included in the notice convening the 18th
AGM.
2.3. Board and Committee Meetings
The schedule of meetings of the Board of Directors and Committees of the Board is
circulated to the Directors in advance. During the year, five (5) Board Meetings were
convened and held, the details of which are given in the Corporate Governance Report. The
gap between two consecutive meetings of the Board of Directors was less than 120 days. The
details of committee meetings are provided in the Corporate Governance Report. For
eligible matters, the Board / its Committees may also accord approvals through resolutions
passed by circulation, between two meetings.
2.4. Meeting of Independent Directors
A meeting of Independent Directors was held to assess the quality, quantity and
timeliness of flow of information between the management and the Board. The Independent
Directors expressed that the current flow of information was timely and of superior
quality and enables them to effectively perform their duties.
2.5. Board Evaluation
An annual evaluation of the performance of the Board, functioning of its committees,
individual directors and the Chairman of the Board was carried out based on the criteria
set by the Nomination and Remuneration Committee. A structured questionnaire was sent to
all the directors seeking feedback and any comments on various parameters as recommended
by the Nomination and Remuneration Committee.
Board diversity and skill set to review strategies, risk management dimensions and
processes, flow of information, adequacy and timeliness of agenda materials, effectiveness
of presentations and more importantly the processes of reviewing strategic matters, annual
operating plan, strategic business plans and guiding the management, were the key focus
areas for evaluation of the Board and its Committee functioning. Ensuring top-level policy
framework, creating an open environment for exchange of views besides ensuring effective
mechanism for implementing Board action points were the areas on which the Board of
Directors evaluated the performance of the Chairman.
Individual directors, including Independent Directors performance and contributions
were evaluated through peer evaluation based on evaluation criteria determined by
Nomination and Remuneration Committee. Contributions to Board decisions and discussions
and attributes like staying up to date on recent trends, being aware of macro level
developments and networking skills were the areas considered for framing the evaluation
criteria of directors besides commitment, competency and sectoral knowledge.
The Chairman after detailed consideration of all the feedback, comments and suggestions
received from the directors, discussed with the Board a proposed action plan on matters
requiring attention of the Board. The evaluation framework includes mechanism to share
evaluation feedback on individual directors to the Nomination and Remuneration Committee,
wherever required.
2.6. Familiarisation program for Independent Directors
The details of familiarisation program for Independent Directors have been disclosed in
the policies section of the website of the Company and available at the web-link:
https://ranegroup.com/investors/rane-brake-lining-limited/
2.7. Key Managerial Personnel
During the year under review there are no changes in the Key Managerial Personnel of
the Company.
As at the year ended March 31, 2023, Mr. R Balakrishnan, President & Manager, Mr. J
Ananth, Senior Vice President – Finance & Chief Financial Officer (CFO) and Mr.
Venkatraman, Secretary, hold the office of Key Managerial Personnel (KMP), respectively,
within the meaning of Section 2(51) of the Companies Act, 2013.
2.8. Remuneration policy
The policy contains criteria for determining qualifications, positive attributes,
independence of a Director and also covers aspects of remuneration which is reasonable and
sufficient to attract, retain and motivate Directors / high potential employees to run the
Company successfully.
The policy on appointment and remuneration of Directors, KMP and Senior Management
Personnel (SMP) as laid down by the NRC of the Board has been disclosed in the policies
section of the website of the Company and is available at the web-link at
https://ranegroup.com/investors/rane-brake-lining-limited/.
There has been no change in this policy during the financial year 2022-23.
In accordance with the said policy, approval was obtained from the shareholders in
terms of Regulation 17(6)(ca) of the SEBI (Listing Obligations and Disclosure
Requirements), Regulations, 2015 (SEBI LODR) at the 17th AGM held on June 28,
2022, for payment of commission to Mr. L Ganesh, Chairman, for an amount exceeding 50% of
total annual remuneration payable to other Non-Executive Director, for the FY 2022-23. The
details of remuneration paid / payable to the Directors during the financial year 2022-23
is furnished in the Corporate Governance report annexed to this report of the Board.
3. Audit and allied matters 3.1. Audit Committee
The composition, terms of reference and meetings of the Audit Committee are disclosed
in the Corporate Governance section of the Annual Report. The Audit Committee of the Board
acts in accordance with the terms of reference, which is in compliance with the provisions
of Section 177 of the Companies Act, 2013 (Act) and Regulation 18 of SEBI LODR and other
applicable provisions of SEBI LODR, as amended from time to time.
3.2. Statutory Auditor
M/s BSR & Co., LLP, Chartered Accountants (BSR) (Firm Registration Number
101248W/W-100022), hold the office of Statutory Auditors of the Company, in terms of
Section 139 of the Companies Act, 2013 read with applicable rules thereunder and as per
the members approval accorded at the 17th Annual General Meeting, for a first
term of five consecutive years i.e., from the conclusion of the 17th AGM (2022)
till conclusion of 22nd AGM (2027).
The Statutory Auditors report to the members for the year ended March 31, 2023 does
not contain any qualification, reservation, adverse remark or disclaimer. Also there has
been no instance of fraud reported by the statutory auditors for the period under review.
3.3. Cost Audit & Maintenance of cost records
The Company maintains cost records as prescribed by the Central Government under
Section 148(1) of the act in respect of certain specified products manufactured by it.
However, the requirement for appointment of Cost Auditor and Cost Audit under the
Companies (Cost Records and Audit) Rules, 2014 is not applicable to the Company.
3.4. Secretarial Auditor
M/s. S Krishnamurthy & Co., a firm of Company Secretaries in practice, have been
appointed by the Board of Directors as Secretarial Auditors for the FY 2022-23. The
Secretarial Audit report pursuant to Section 204 of the Companies Act, 2013 is annexed in ‘Annexure
B and was taken on record by the Board of Directors at their meeting held on May 03,
2023. The report does not contain any qualification, reservation, adverse remark or
disclaimer.
3.5. Internal Auditor
The Company had appointed M/s. Deloitte Touche Tohmatsu India LLP as Internal Auditors
for a period of one year from January 01, 2022 till December 31, 2022. Based on the
recommendation of Audit Committee and after considering the proposal from the management,
the Board of Directors of the Company at their Meeting held on February 09, 2023 approved
the re-appointment of M/s. Deloitte Touche Tohmatsu India LLP for a further period of 1
(one) year commencing from January 01, 2023 to December 31, 2023.
Their scope of work includes review of processes for safeguarding the assets of the
Company, review of operational efficiency, effectiveness of systems and processes, review
of statutory and legal compliances with applicable statutes / laws and assessing the
internal control strengths in all these areas including financial reporting. Internal
Auditor findings are discussed with the process owners and suitable corrective actions
taken as per the directions of the Audit Committee on a regular basis to improve
efficiency in operations. The Internal Auditor reports directly to the Audit Committee.
The Committee, while reviewing their performance, scope, functioning, periodicity and
methodology for conducting the internal audit, has taken into consideration their
confirmation to the effect that their infrastructure viz., internal audit structure,
staffing and seniority of the officials proposed to be deployed etc., are adequate and
commensurate to the scope, functioning, periodicity and methodology for conducting the
internal audit.
4. 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: a. in the preparation of the annual accounts,
the applicable accounting standards had been followed and there were no material
departures; b. they had selected such accounting policies and applied them consistently
and made judgements and estimates that were reasonable and prudent so as to give a true
and fair view of the state of affairs of the Company at the end of the financial year and
of the profit of the Company for the year under review; c. they had taken proper and
sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company, preventing and detecting
fraud and other irregularities; d. they had prepared the financial statements for the
financial year on a ‘going concern basis; e. they had laid down internal financial
controls to be followed by the Company and such internal financial controls were adequate
and were operating effectively; and f. they had devised proper systems to ensure
compliance with the provisions of all applicable laws and such systems were adequate and
operating effectively.
5. Related Party Transactions (RPT)
All RPT that were entered into during the financial year were on an arms length basis
and were in the ordinary course of business. There are no materially significant RPT made
by the Company with related parties which require approval of the shareholders / which
have potential conflict with the interest of the Company at large.
All RPT are placed before the Audit Committee and the Board, wherever required, for
approval. Prior omnibus approval of the Audit Committee is obtained for the transactions
which are entered into in the ordinary course of business and are repetitive in nature.
The transactions entered into pursuant to the omnibus approval so granted are reviewed by
the Audit Committee on a quarterly basis. All the RPT that requires prior approval of the
Audit Committee is being approved by the Independent Directors who are the members of the
Committee.
The Company has put in place a proper system for identification and monitoring of such
transactions. Save as disclosed in this report none of the Directors or Key Managerial
Personnel has any pecuniary relationships or transactions with the Company. The policy on
Related Party Transaction as approved by the Board has been disclosed in the policies
section of the website of the Company and available at the web link: https://ranegroup.com/investors/rane-brake-lining-limited/.
None of the Directors or Key Managerial Personnel or Senior Management Personnel have any
material financial and commercial transactions (except receipt of remuneration, as
applicable), which may have potential conflict with interest of the Company at large.
6. Corporate Social Responsibility (CSR)
The Rane Groups vision on Corporate Social Responsibility (CSR) is: "To be a
socially and environmentally responsible corporate citizen". The CSR activities
of Rane Group focus on four specific areas, viz., (a) Education; (b) Healthcare; (c)
Community Development; and (d) Environment.
The CSR Committee of the Board is responsible for recommending CSR projects and
activities to the Board in line with the CSR policy. The CSR Committee monitors and
reviews the implementation of CSR activities periodically.
The CSR activities undertaken by the Company are in line with the CSR Policy and
recommendations of the CSR Committee comprising Mr. L Ganesh, Committee Chairman, Mr.
Harish Lakshman, Member of the Board and Dr. Brinda Jagirdar, Independent Director
(effective June 30, 2022), as its members.
During the year, the Company has contributed a sum of 0.44 Crores on various CSR
activities as per the CSR policy and recommendations of the CSR Committee. The ‘Annexure
C to this report contains the annual report on CSR activities of the Company for FY
2022-23. The CSR policy of the Company has been disclosed in the policies section of the
website of the Company and available at the weblink:
https://ranegroup.com/investors/rane-brake-lining-limited/. Further, in terms of the CSR
Rules, the Chief Financial Officer has issued a certificate to the CSR Committee that the
funds disbursed for CSR have been used, for the purpose and in the manner approved by the
Board for financial year 2022- 2023.
7. Energy conservation, technology absorption and foreign exchange earnings and
outgo
The ‘Annexure D to this report contains the information on conservation of
energy, technology absorption and foreign exchange earnings and outgo as required under
Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014.
8. Corporate Governance Report
Your Company is committed to maintaining the highest standards of corporate governance
and effective compliance with the regulatory norms under the SEBI regulations and other
laws and regulations applicable to the Company. The Corporate Governance Report and the
certificate issued by the Statutory Auditors are available in ‘Annexure E to
this report.
9. Particulars of Directors, Key Managerial Personnel and Employees
The statement in terms of Section 197(12) read with Rule 5 of the Companies
(Appointment and remuneration of Managerial Personnel) Rules, 2014 is enclosed as an ‘Annexure
to this report.
Pursuant to Section 136(1) of the Companies Act, 2013, the report of the Board of
Directors is being sent to the shareholders of the Company excluding the statement
prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014. The statement is available for inspection by the shareholders at
the Registered Office of the Company during business hours.
10. Risk Management
The Risk Management Committee of the Board periodically reviews the risk management
policy and its procedures.
The Company has in place a Risk Management Policy covering internal and external risks
including information security, cyber security, Environmental, Social and Governance (ESG)
related etc., measures for risk mitigation including systems and processes for internal
control to identify risks associated with the Company and measures to mitigate such risks.
The details of composition, scope and the meetings held during the year are provided as
part of the Corporate Governance report in ‘Annexure E to this report.
11. Other disclosures a. Details of loan, guarantees and investments, if any, 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 policies approved
and adopted by the Board have been made available on
Annual Report 2022-23 15 the Corporate Governance section of the website of the
Company at the weblink: https://ranegroup.com/investors/rane-brake-lining-limited/. e. The
copy of the Annual Return is available on the Corporate Governance section of the website
of the Company at the weblink: https://ranegroup.com/investors/rane-brake-lining-limited/.
f. The Company has complied with the applicable secretarial standards viz., SS-1 on
meetings of Board of Directors and SS-2 on General Meetings issued by Institute of Company
Secretaries of India as per section 118(10) of the Companies Act, 2013. g. The requirement
for Business Responsibility and Sustainability Reporting is not applicable for the year
under review to the Company since it does not fall under the top 1,000 listed companies
based on market capitalisation. h. The details regarding unclaimed / unpaid shares and
dividend transferred / proposed to be transferred to the Investor Education and Protection
Fund (IEPF) and other relevant details in this regard, have been provided in the corporate
governance section of this annual report. i. The Company does not accept any deposits
falling under the provisions of section 73 of the Companies Act, 2013 and the rules framed
thereunder. j. 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. The policy which is also available on the
intranet portal of the Company provides adequate safeguard against victimisation and has
provided direct access to the Chairman of the Audit Committee for the employees to state
their complaints / grievances. k. The Company has always provided a congenial atmosphere
for work that is free from discrimination and harassment and has provided equal
opportunities of employment to all irrespective of their caste, religion, colour, marital
status and gender. The Company believes that women should be able to do their work in a
safe and respectful environment that encourages maximum productivity. The Company has a
zero tolerance towards sexual harassment. The Company has adopted a policy on prevention
of sexual harassment of women at work place and put in place proper dissemination
mechanism across the Company. The Company has carried out awareness programmes / sessions
on the mechanism established under this policy, across its various locations. The Company
has complied with the provisions relating to the constitution of Internal Complaints
Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 (POSH) comprising of Presiding Officers and members with an
appropriate mix of employees and external subject matter experts. During the period, the
details of complaints received / resolved or pending are as under: No. of complaints
received during the financial year – Nil No. of complaints disposed off during the
financial year – Nil No. of complaints pending as on end of the financial year –
Nil l. The Company has not printed physical copies of the Annual Report for distribution
in view of the exemptions available vide General circular 10/2022 dated December 28, 2022,
issued by the Ministry of Corporate Affairs ("MCA") read with previous circulars
and SEBI Circular dated January 05, 2023. The full Annual Report will be made available on
the website of the Company and will also be disseminated to the stock exchanges where
shares of the Company are listed. The electronic copies of the annual report and the
notice convening the 18th AGM would be sent to all the members whose e-mail
addresses were registered with the Company or their respective Depository Participants
(DP).
Annual General Meeting m. The 18th AGM would be conducted through
video conferencing or other audio visual means on Monday, July 24, 2023 at 14:00 hrs (IST)
as per the framework notified by the Ministry of Corporate Affairs. The notice convening
the 18th AGM contains detailed instructions and notes in this regard. Acknowledgement
We thank our Customers, Investors, Suppliers, Vendors, Bankers, Government and
Regulatory Authorities and other Business Associates for their continued support in
successful performance of the Company. We place on record our appreciation for the
committed services of all our employees.
|
For and on behalf of the Board |
Harish Lakshman |
Ganesh Lakshminarayan |
| Director |
Chairman |
| DIN:00012602 |
DIN:00012583 |
+91-9892691696
